Metropolitan Bank & Trust Co. · PSE:MBT
Metropolitan Bank & Trust — FY2023 Earnings Presentation
40 slides from Metropolitan Bank & Trust's earnings presentation, Feb 26, 2024
Slide 1: Company Presentation
COMPANY PRESENTATION 26 February 2024
Slide 2: Full Year 2023 Financial Results Analysts' Briefing
Full Year 2023 Financial Results Analysts’ Briefing FABIAN TOTO MYLENE MONJ NELSON RENE MINDA DEE TANSINGCO CAPARAS DEL ROSARIO SEE DE BORJA OLONAN President Treasurer & Head, Institutional Head, Consumer Head, Branch Controller Investor Relations Head, Financial Banking Banking Banking Markets
Slide 3: Macroeconomic View
@ Metrobank A voure in good hands
Slide 4: Macro-economic backdrop
Macro-economic backdrop Inflation Policy rate GDP 2020 2021 2022 2023 Jan-24 2020 2021 2022 2023 2020 2021 2022 2M24 2.4% 3.9% 5.8% 6.0% 2.8% -9.5% 5.7% 7.6% 5.6% 2.0% 2.0% 5.5% 6.5% • January saw sustained inflation deceleration • 4Q23 GDP settled at 5.6% with weaker primarily driven by easing of p
Slide 5: Metrobank Economic Research Forecasts
Metrobank Economic Research Forecasts As of February 20, 2024 2021A 2022A 2023A 2024F GDP 5.7% 7.6% 5.6% 6.00% (2018=100) (DBCC1: 6.5-7.5%) (IMF: 6.0%) Inflation 3.9% 5.8% 6.0% 4.3% (2018=100) (DBCC1: 2.0-4.0%) (BSP, 3.92) BSP RRP rate 2.0% 5.5% 6.50% 5.50% With directional bias DISCLAIMER INFORMATI
Slide 6: Banking Industry: Loan and deposit growth slows; asset quality stable
Banking Industry: Loan and deposit growth slows; asset quality stable Slower loan growth, stable asset quality Easing CASA growth Loan growth Deposit growth CASA growth 17% 18% 14% 18% 20% 15% 9% 9% 11% 11% 11% 11% 9% 7% 8% 12% 15% 10% 8% 9% 9% 7% 9% 10% 4% 6% 10% 7% 8% 9% 7% 5% 14% 12% 9% 7% 9% 9%
Slide 7: Financial Performance FY 2023
FINANCIAL PERFORMANCE FY 2023
Slide 8: Sustaining strong earnings growth
Sustaining strong earnings growth Net Interest Income Fees and Other Non-Interest Income Trading & FX gains Operating expenses Provisions Taxes and NCI 200.0 Net Income YoY Net Income YoY 22.2 32.8 42.2 +29% 9.3 10.5 10.4 10.9 10.5 +12% 150.0 +1% 35.0 0.5 0.4 4.0 2.1 0.9 25.4 +8% 1.5 7.5 6.0 +3% 4.0
Slide 9: Expanding assets and stable margins boost NII
Expanding assets and stable margins boost NII Interest income continues to build up Margins stable Pbn Interest from Loans Interest expense from Deposits Pbn NII Annual NIM NII Quarterly NIM Interest from Investments Other Interest Expense 120.0 +23% YoY 4.90% +18% YoY Other Interest Income +4% QoQ
Slide 10: Loan book continues to expand
Loan book continues to expand Consumer outpaces commercial loan growth Loan portfolio mix near pre-pandemic level Pbn Consumer Corporate & Commercial Consumer Corporate & Commercial 1,567 1,470 +8% YoY 1,457 1,421 1,436 +7% QoQ 1,228 +5% YoY 1,164 1,125 1,144 78% 80% 79% 78% 78% 78% 1,122 +7% QoQ 29
Slide 11: Corporate loan demand on the recovery track
Corporate loan demand on the recovery track Top and middle market segment continues to expand Loans by remaining maturity Pbn SME Corporate & Middle Market Long term Short term 1,400 1,228 +5% YoY 1,164 1,144 1,200 1,122 1,125 +7% QoQ 1,000 40% 38% 37% 35% 35% -8% YoY 800 1,112 +6% YoY 1,046 1,011 1
Slide 12: Credit cards and auto loans continue to outperform
Credit cards and auto loans continue to outperform Consumer Loans Breakdown Consumer Loans By Product Pbn Others Auto Housing Credit Card & Others* 350 339 326 +16% YoY 311 292 299 +4% QoQ 300 146 +26% YoY 40% 40% 41% 42% 43% 138 128 +6% QoQ 250 116 120 200 150 93 -1% YoY 32% 31% 29% 28% 28% 92 92 9
Slide 13: CASA ratio easing
CASA ratio easing High cost deposits driving growth CASA ratio Pbn TDs CASA CASA TDs 37% 33% 38% 38% 41% 40% 2,500 2,347 2,383 +7% YoY 2,221 2,263 2,253 +2% QoQ 63% 67% 62% 62% 59% 60% 2,000 4Q19 4Q22 1Q23 2Q23 3Q23 4Q23 1,390 1,439 -3% YoY 1,406 1,401 1,500 1,480 +4% QoQ CASA Deposits per Branch 1.
Slide 14: Margins stabilizing
Margins stabilizing Asset yields and funding costs easing slightly Interest rates yields steady across most segments 18.0% Quarterly NIM Loan yield 16.0% 16.1% 15.4% Asset yield Investment securities yield 16.0% 14.3% 14.1% 14.3% Funding cost Deposit cost 13.5% 14.0% 7.4% 7.6% 7.4% Credit Cards 6.7%
Slide 15: Modest growth in non-interest income
Modest growth in non-interest income Fee income, gains from asset sales drive growth Modest fee income growth Pbn Others Asset sales Pbn Fee income Trust income Leasing Service Fees & Trust YoY 20.0 7.0 YoY Trading & FX gains 17.6 18.0 16.6 +6% 6.0 35.0 1.2 -21% YoY 16.0 1.5 14.0 5.0 4.3 4.4 4.3 4.5
Slide 16: Cost to income ratio improves despite elevated costs
Cost to income ratio improves despite elevated costs Transactions and technology related costs drive opex Lower annual cost-to-income ratio Pbn Others Occupancy & equipment Depreciation Taxes & licenses Manpower 25.0 90.0 YoY 60.0% 80.0 YoY 54.3% 53.9% 53.9% 52.1% 55.0% 69.5 20.0 18.3 51.6% 52.0% 50
Slide 17: Credit costs continue to remain manageable
Credit costs continue to remain manageable Credit costs at steady levels NPL cover remains substantial Est. Credit Cost (bps) 350 293 350 300 300 250 250 200 200 150 67 91 150 56 62 67 59 49 59 100 58 56 100 50 189% 184% 187% 50 - - 180% Pbn 172% Cumulative Total Allowance Provisions for Credit 60.0
Slide 18: Improving asset quality
Improving asset quality Past Due loans stable NPL and Past Due ratios continue to improve; well below industry Past Due ratio Industry Past Due Pbn Past Due NPL 4.1% 4.1% 4.2% 4.0% 3.8% 4.5% 4.0% 3.5% 60.0 3.0% 50.0 2.5% 2.0% 50.0 2.2% 2.3% 2.3% 2.1% 2.1% 1.5% 40.0 1.0% 32 33 32 31 32 40.0 0.5% 0.0%
Slide 19: NPLs + Restructured loans ratio well-below industry NPL ratio
NPLs + Restructured loans ratio well-below industry NPL ratio Marginal Restructured loans ratio Combined NPLs and Restructured loans declining MBT Restructured loans ratio Industry Restructured Loans Ratio Industry NPL Ratio MBT Combined NPL + Restructured Loans as Ratio to Gross Loans 8.0% 3.5% 2.6
Slide 20: Improving NPL trend
Improving NPL trend Commercial NPLs Consumer NPLs NPLs NPL ratio NPL ratio Industry Consumer NPL ratio 6.5% 6.4% 6.3% 10.0% 9.0% 6.0% 8.0% 35 1.7% 1.6% 1.6% 1.5% 1.4% 7.0% 6.0% 5.0% 2.8% 2.7% 0.0% 2.6% 2.6% 2.7% 30 4.0% 3.0% 2.0% 25 1.0% 20 -5.0% 0.0% 25 20 18 18 17 18 20 Pbn -10.0% 15 15 10 -15.0%
Slide 21: Slight pick up in consumer NPLs but ratios still well below industry levels
Slight pick up in consumer NPLs but ratios still well below industry levels Auto Home Credit Cards NPLs NPL ratio Industry NPLs NPL ratio Industry NPLs NPL ratio Industry 20 14.0% 20 15.0% 20 18 15% 12.0% 18 18 7.5% 16 7.5% 7.6% 7.1% 8.4% 7.9% 10.0% 16 16 7.5% 14 10.0% 7.0% 8.0% 14 14 10% 4.1% 12 6.
Slide 22: Other asset quality indicators remain healthy
Other asset quality indicators remain healthy Real and other properties acquired (ROPA) Non-Performing Assets (NPA) Pbn Pbn ROPA Ratio to Gross Loans NPA NPA Ratio 15.0 0.7% 0.7% 0.7% 0.7% 0.8% 1.3% 1.2% 1.3% 1.2% 1.2% 0.7% 50 1.5% 0.7% 13.0 45 1.0% 0.6% 11.0 40 0.5% 0.5% 9.0 35 0.0% 0.4% 7.0 30 -0.
Slide 23: Healthy capital and liquidity levels provide ample buffer against risks
Healthy capital and liquidity levels provide ample buffer against risks Capital ratios well above minimum thresholds High Basel III Leverage Ratio, Liquidity Coverage Ratio CAR CET-1 BLR LCR 21.00% 17.7% 17.6% 17.9% 18.4% 18.3% 21.0% 16.8% 16.8% 17.1% 17.6% 17.4% 350% 15.0% 270% 17.50% 17.5% 300% 24
Slide 24: Returns Improvement Strategy
Returns Improvement Strategy ROE Portfolio Growth 12.51% 10.29% • Grow loans portfolio by 1.5x-2.0x Real GDP 9.47% • Increase consumer to 25-30% of total portfolio 6.89% 4.36% Improve Operational Efficiency • Target low 50s CIR in the medium-term as 2019 2020 2021 2022 2023 efficiencies improve from
Slide 25: New Dividend Policy
New Dividend Policy 1. Growth prospects intact Sufficient buffer to meet healthy loan demand sustainably over the medium term Key information Regular Cash • Php3.00 2. Robust NPL risk buffers already in place Dividends • Semi-annual payout per share NPL cover continues to remain ample vs. risk of ri
Slide 26: Outlook – Positives and Challenges
Outlook – Positives and Challenges • Faster GDP growth and capital spending to lift loan • Macro risks to demand recovery and asset quality: demand in the medium term o External - geopolitical issues; global financial instabilities • Higher revenue base to support accelerated IT o Internal - renewed
Slide 27: Summary
SUMMARY Sustained solid performance on robust topline growth supported by expanding assets, better margins, improving efficiency levels and better asset quality. Strong balance sheet and liquidity ratios continue to ensure Metrobank’s ability to support client needs as the economy continue to expand
Slide 28: Financial Summary
Financial Summary In PHP billion Income FY FY 4Q 4Q Balance Sheet FY 2022 FY 2023 YoY YoY YoY Statement 2022 2023 2022 2023 Total Assets 2,843 3,105 +9% Net Interest 85.5 105.0 +23% 23.4 27.7 +18% Loans and Receivables, Gross 1,457 1,567 +8% Income Non Interest Total Deposits 2,221 2,383 +7% 27.5 29
Slide 29: Additional Information
@ Metrobank A voure in good hands
Slide 30: Metropolitan Bank & Trust Company (Metrobank)
Metropolitan Bank & Trust Company (Metrobank) Overview Financial Data (PHP bn) 4Q 2023 DIVERSIFIED Total Assets 3,105 60 YEARS OF MULTI-AWARDED FINANCIAL CONGLOMERATE TRADING INFORMATION MBT PM | MBT.PS Ticker Loans and Receivables, Gross Total Deposits 1,567 2,383 SERVICE EXCELLENCE USD 4.7 Bn Mark
Slide 31: Ownership and Investment Information
Ownership and Investment Information CORPORATE STRUCTURE MARKET DATA Trading information Ticker: GTCAP PM / GTCAP.PS Market cap: USD2.0 Bn Ty Family Ticker (Bloomberg | Reuters) MBT PM | MBT.PS & Other Free Related float Par value (PHP) 20.00 Parties Outstanding shares 4,497,415,555 37.2% 14.7% 48.0
Slide 32: Extensive Domestic and Overseas Coverage
Extensive Domestic and Overseas Coverage Total Group 18,000+ employee base Note: Includes Parent + Major Subs of the Bank Domestic Branch and ATM Networks Overseas Network Coverage 949 30+ branches Branches, subsidiaries, offices 2,326 ATMs 110+ Remittance tie-ups 160+ Remittance agents 2023 Metropo
Slide 33: Recent Awards and Recognition
Recent Awards and Recognition Best Domestic Best Best Service Best Bank Bank of the Year Strongest Bank Private Bank in the Philippines Domestic Bank in (Asian Bank) in the Philippines in the Philippines in the Philippines, the Philippines for the Philippines Best Bank for Ultra- 2023, 2022 High-Net
Slide 34: Sustainability Journey: Our Progress in 2023
Sustainability Journey: Our Progress in 2023 Enhancing the ESRM Framework: Improving our sustainability disclosures: We Weare guided are guided by ourby E&Sour E&S Risk Risk Appetite Appetite Statement (RAS) Statement (RAS) We have working to being more transparent We are guided by our E&S Risk Appe
Slide 35: Debt Issuances
Debt Issuances Unissued 2022 28.0 0.5 Bond Issuance 2021 76.3 USD2 Billion PHP23.7 billion PHP200* Medium-Term 42.5 Billion Bond 1.5Y Peso Notes 2020 Programme Note Programme Listed October 2022 2019 1.5 5.0% interest rate p.a. 19.0 23.7 2018 *Note: The Board of Directors of Metrobank approved to up
Slide 36: Outstanding Debt Issuances & Investment Grade Credit Ratings
Outstanding Debt Issuances & Investment Grade Credit Ratings Debt Issuance Details Debt Maturity Profile (PHP Bn) Baa2 Jul-23 Stable Issue Coupon Maturity Amount • Robust capitalization, with a proven Type Date Rate Date (PHP Bn) history of support from shareholders 2023 22.40 • Strong funding and l
Slide 37: Loan Portfolio Breakdown
Loan Portfolio Breakdown MBT Loan Portfolio By Industry Philippine Banks Loan Portfolio By Industry 15% 16% 16% 14% 14% 12% 12% 12% 12% 12% 11% 10% 10% 10% 10% 11% 10% 12% 13% 12% 15% 20% 20% 20% 20% 20% 15% 14% 15% 19% Trade 15% Manufacturing 9% 9% 9% 8% 12% 12% 9% 12% 13% Real estate 10% 10% 10% 1
Slide 38: Currency Breakdown
Currency Breakdown LOAN PORTFOLIO DEPOSITS Foreign Foreign Currency, Currency, 27% 17% Philippine Peso, 83% Philippine Peso, 73% 2023 Metropolitan Bank & Trust Company 38This document is for internal use only and may contain privileged, proprietary or otherwise private information. It must not be re
Slide 39: For more information, please visit our website
For more information, please visit our website: Latest Annual Reports 2022 2021 2020 Financial Reports SEC 17-A SEC 17-Q BSP SOC Investor Relations https://metrobank.com.ph/about-us/investor-relations-program Annual Corporate Governance Report For your comments and queries contact us via: https://me
Slide 40: Metrobank
& Metrobank You're in good hands THE BANKER ‘THE ASIAN BANKER’ THE STRONGEST BANK BIN THE PHILIPPINES 2023 t by balance shee
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