Metropolitan Bank & Trust Co. · PSE:MBT
Metropolitan Bank & Trust — FY2020 Earnings Presentation
43 slides from Metropolitan Bank & Trust's earnings presentation, February 2021
Slide 1: FY 2020 MBT Company Presentation
PRIVATE AND PROPRIETARY © Metropolitan Bank & Trust Company | Investor Relations | February 2021 | FY 2020 MBT Company Presentation This material was produced by Metrobank for information purposes only and is intended to be used in presentations by the Bank at investor meetings and does not constitu
Slide 2: Panelists
PRIVATE AND PROPRIETARY Panelists TOTO TANSINGCO FABIAN S. DEE BLIZ CUNA Treasurer & President Head, Head, Financial Markets Enterprise Services © Metropolitan Bank & Trust Company | Investor Relations | February 2021 | FY 2020 MBT Company Presentation This material was produced by Metrobank for inf
Slide 3: Panelists
PRIVATE AND PROPRIETARY Panelists MONJ DEL ROSARIO MINDA OLONAN MAYET CAPARAS Head, Consumer Business Head, Investor Relations Head, Institutional Banking © Metropolitan Bank & Trust Company | Investor Relations | February 2021 | FY 2020 MBT Company Presentation This material was produced by Metroba
Slide 4: Macroeconomic View
PRIVATE AND PROPRIETARY MACROECONOMIC VIEW © Metropolitan Bank & Trust Company | Investor Relations | February 2021 | FY 2020 MBT Company Presentation 4 This material was produced by Metrobank for information purposes only and is intended to be used in presentations by the Bank at investor meetings
Slide 5: Shaking off the 2020 slowdown
PRIVATE AND PROPRIETARY Shaking off the 2020 slowdown Pandemic caused a steep 9.5% GDP decline in 2020 Household spending contracted by 8% 6.4 7.2 7.5 6.6 6.5 6.4 6.1 6.4 5.7 5.4 6.3 6.7 6.0 6.0 5.5 6.3 5.8 6.2 5.5 5.5 6.2 5.6 6.0 5.7 0.2 -0.7 -8.3 -7.2 -9.3 -11.5 -15.3 -16.9 1Q17 2Q17 3Q17 4Q17 1Q1
Slide 6: 2021: Modest Recovery Expectations
PRIVATE AND PROPRIETARY 2021: Modest Recovery Expectations Stable Dollar inflows from remittances and IT-BPM Business & consumer confidence starting to recover USDbn Next 3 months Business Consumer 56.4 57.5 49.9 51.4 53.4 43.5 47.3 56.1 Overseas 39.1 29.5 52.0 Filipino 34.6 28.9 30.1 51.3 25.8 26.9
Slide 7: Accomodative monetary policy to support economy
PRIVATE AND PROPRIETARY Accomodative monetary policy to support economy RRR cuts boost liquidity Deep policy rate cuts to record-low level 20% 20% 20% 20% 4.75% 4.50% 18% 18% 4.00% 4.00% 4.00% 3.50% 14% 12% 3.00% 2.00% 2013 2014 2015 2016 2017 2018 2019 2020 2013 2014 2015 2016 2017 2018 2019 2020 S
Slide 8: GDP Forecasts
PRIVATE AND PROPRIETARY Metrobank Economic Research Forecasts As of February 2021 2019A 2020A 2021F GDP 6.0% -9.5% 6.4% Inflation 2.5% 2.6% 4.1% BSP RRP rate 4.0% 2.0% 2.50% - 2.75% RRR 14% 12% 10% USDPHP Trend 50.6 48.0 49.3 With directional bias DBCC* 6.5% - 7.5% ADB 6.5% GDP Forecasts DISCLAIMER
Slide 9: Banking Industry: Loan slowdown amid ample liquidity
PRIVATE AND PROPRIETARY Banking Industry: Loan slowdown amid ample liquidity Loan growth significantly tempered by economic slowdown Deposit and M3 growth sustained amid ample market liquidity Loan growth Deposit growth 20% 19% 34% 16% 17% 16% 14% 11% 12% 14% 12% 8% 9% 9% 10% -0.7% 2013 2014 2015 20
Slide 10: Financial Performance FY 2020
PRIVATE AND PROPRIETARY FINANCIAL PERFORMANCE FY 2020 © Metropolitan Bank & Trust Company | Investor Relations | February 2021 | FY 2020 MBT Company Presentation 10 This material was produced by Metrobank for information purposes only and is intended to be used in presentations by the Bank at invest
Slide 11: Healthy core income growth support aggressive provisioning
PRIVATE AND PROPRIETARY Healthy core income growth support aggressive provisioning Strong results across all metrics tempered by proactive provisioning and reserves build-up Resilient core business; continued build-up of reserves • Strong +12% NII growth • Revenues +14% driven by NII and robust trad
Slide 12: Solid net interest income despite economic slowdown
PRIVATE AND PROPRIETARY Solid net interest income despite economic slowdown Sustained growth in Net Interest Income propelled by strong CASA growth and lower funding cost Modest 2020 interest income growth supported by better margins …but trend is declining due to impact of rate cuts Pbn NII NIM Pbn
Slide 13: Loan portfolio performance aligned with economic growth
PRIVATE AND PROPRIETARY Loan portfolio performance aligned with economic growth Contraction in loan portfolio reflective of the slowdown across industries and gross capital formation Contraction in gross loan portfolio GDP weakness reflected in loan decline; funds parked in CASA Pbn Commercial Consu
Slide 14: Commercial lending reflective of GDP contraction
PRIVATE AND PROPRIETARY Commercial lending reflective of GDP contraction Slowdown in commercial loans as economic uncertainty disrupted business inventory cycle and deferred expansion plans Commercial Loans Breakdown Short term working capital loans drove the slowdown Pbn SME Corporate Long Term (Mo
Slide 15: Retail portfolio slows amid weak consumption spending
PRIVATE AND PROPRIETARY Retail portfolio slows amid weak consumption spending Economic uncertainty has constrained spending to essential goods and deterred big-ticket spending Consumer Loans Breakdown Consumer Loans By Product Pbn Others Auto Housing Credit Card 353 350 334 340 325 317 19% 20% 22% 3
Slide 16: Robust CASA growth reflects strong deposit franchise
PRIVATE AND PROPRIETARY Robust CASA growth reflects strong deposit franchise CASA growth partly driven by borrowers parking their excess funds in CASA Robust CASA enables TD decline CASA Deposits per Branch Pbn CASA TDs +22% YoY 1,714 1,714 1,701 1,734 1,797 +5% YoY 1.4 1,528 1,557 1,389 486 -24% Yo
Slide 17: Resilient net interest margin supported by low funding cost
PRIVATE AND PROPRIETARY Resilient net interest margin supported by low funding cost Sustained NIM expansion despite loan contraction on the back of stable loan yield and reduced funding cost NIM* kept stable despite interest rate volatility Funding cost falls faster than asset yields NIM Policy rate
Slide 18: Loan yield trends point to downside risk
PRIVATE AND PROPRIETARY Loan yield trends point to downside risk Corporate & Commercial Loan Yields Consumer Loan Yields Pbn Pbn Gross Loans Gross Loan Yield Gross Loans Gross Loan Yield 2,200 4.9% 4.8% 6.0% 11.5% 12.6% 4.7% 4.6% 1,800 11.4% 11.1% 14.0% 1,700 4.2% 5.0% 1,600 1,400 10.1% 12.0% 10.0%
Slide 19: Other income driven by robust trading gains
PRIVATE AND PROPRIETARY Other income driven by robust trading gains Realized strong trading gains which offset weak fee income due to decline in business volumes Non-Interest Income Breakdown Quarterly trading gains normalize Pbn Others Gain On Asset Sales Pbn 20.0 Leasing Service Fees & Trust 18.0
Slide 20: Subdued cost growth
PRIVATE AND PROPRIETARY Subdued cost growth Revenue growth has consistently outpaced cost growth, leading to improved cost-income ratio Operating Expenses Breakdown 4Q20 opex uptick driven by delayed billings Pbn Others Occupancy & equipment Pbn Depreciation Taxes & licenses 20.0 18.0 15.1 15.0 15.1
Slide 21: Rising digital transactions
PRIVATE AND PROPRIETARY Rising digital transactions Active push for e-channels accelerated digital transactions under pandemic conditions 15% 24% Clients enrolled in e-channels as of 4Q 2020 18% 82% 85% Continued digitization post-ECQ 2019 2020 mobile app downloads +71% 1Q 2020 vs. 4Q 2020 % E-Chann
Slide 22: Proactive provisioning provides buffer for anticipated risks
PRIVATE AND PROPRIETARY Proactive provisioning provides buffer for anticipated risks Aggressive provisioning despite manageable NPL formation Conservative provisioning stance Raising NPL cover to a high 163% Pbn Provisions for Credit Cumulative Total Allowance Est. Credit Cost (bps) 70.0 330 350 400
Slide 23: Asset quality remains manageable
PRIVATE AND PROPRIETARY Asset quality remains manageable NPL and Past Due Restructured Loans Past Due ratio NPL ratio Pbn Restructured Loans Ratio to Gross Loans 3.7% 3.0% 4.0% 2.4% 2.5% 2.1% 2.1% 2.1% 1.9% 3.0% 1.7% 2.0% 2.3% 2.4% 6.0 0.4% 1.0% 1.5% 1.5% 1.5% 1.3% 1.4% 1.6% 1.2% 0.4% 0.0% 0.2% 60.0
Slide 24: Other asset quality indicators remain stable
PRIVATE AND PROPRIETARY Other asset quality indicators remain stable Real and other properties acquired (ROPA) Non Performing Assets (NPA) Pbn ROPA Ratio to Gross Loans Pbn NPA NPA Ratio 0.8% 15.0 0.9% 50.0 1.9% 0.8% 0.8% 1.6% 1.7% 0.7% 0.7% 0.7% 13.0 0.7% 0.7% 0.7% 0.8% 45.0 1.7% 1.4% 1.4% 1.3% 1.4
Slide 25: Consumer segment drives NPL formation
PRIVATE AND PROPRIETARY Consumer segment drives NPL formation Corporate & Commercial NPL ratio Consumer NPL ratio Pbn NPLs NPL ratio Pbn NPLs NPL ratio 30 1.2% 1.3% 1.4% 3.0% 5.0% 5.6% 25 0.9% 1.0% 1.1% 2.0% 30 6.0% 5.0% 2.6% 1.0% 25 20 2.3% 2.3% 2.3% 17 4.0% 16 0.0% 20 3.0% 15 -1.0% 2.0% 15 10 12 1
Slide 26: Strong balance sheet, healthy capital levels provide ample support
PRIVATE AND PROPRIETARY Strong balance sheet, healthy capital levels provide ample support The Bank is highly liquid and well-capitalized, with capital and liquidity ratios comfortably above the regulatory threshold Capital Ratios Basel III Leverage Ratio, Liquidity Coverage Ratio CAR CET-1 BLR LCR
Slide 27: Special Dividend Declaration
PRIVATE AND PROPRIETARY Special Dividend Declaration Key information: • Pandemic has tempered near-term growth prospects. Capital planning indicate that demand for risk assets will likely remain muted Dividend per PhP4.00 share (PhP1.00 regular & • Strong NPL risk buffers in place. Aggressive provis
Slide 28: Capital Ratios Lead Peers and Industry
PRIVATE AND PROPRIETARY Capital Ratios Lead Peers and Industry After special dividend pay-out, MBT still has ample capitalization above peers and the minimum threshold set by the BSP 31 December 2009 31 December 2020 CAR Tier 1 CAR CET1 20.2 19.3 19.1 16.0 18.2 14.7 16.7 17.1 14.3 16.2 13.0 14.3 12.
Slide 29: 2021 Outlook – Positives and Challenges Ahead
PRIVATE AND PROPRIETARY 2021 Outlook – Positives and Challenges Ahead • Modest loan recovery in 2H21, in line with expected • Margin pressure as full impact of interest rate cuts (i.e. GDP rebound interest rate cap on credit cards; full-year policy rate cut transmission) take effect • Recovery in fe
Slide 30: Key strategies to enhance returns
PRIVATE AND PROPRIETARY Key strategies to enhance returns Topline Growth Drivers Improving Efficiency • Maintain stronghold in commercial banking Target cost-income ratio to low-50s Capitalize on MBT’s capacity to extend credit, based on client cash flows and investment needs Migration to e-ch
Slide 31: Summary
PRIVATE AND PROPRIETARY SUMMARY The COVID-19 pandemic has disrupted the economy, adversely affecting business expansion plans and consumption spending. Despite challenges, Metrobank’s core business performance is resilient : solid NII growth, stable NIMs, strong CASA, robust trading income, and subd
Slide 32: Financial Summary
PRIVATE AND PROPRIETARY Financial Summary In PHP billion Balance Sheet FY 2019 FY 2020 YoY Income Statement FY 2019 FY 2020 YoY Total Assets 2,450 2,455 +0% Net Interest Income 77.0 86.1 +12% Loans and Receivables, Gross 1,492 1,297 -13% Total Deposits 1,714 1,797 +5% Non Interest Income 29.9 35.8 +
Slide 33: Additional Information
PRIVATE AND PROPRIETARY Additional Information © Metropolitan Bank & Trust Company | Investor Relations | February 2021 | FY 2020 MBT Company Presentation 33 This material was produced by Metrobank for information purposes only and is intended to be used in presentations by the Bank at investor meet
Slide 34: Metropolitan Bank & Trust Company (Metrobank)
PRIVATE AND PROPRIETARY Metropolitan Bank & Trust Company (Metrobank) Overview Financial Data (PHP bn) FY20 DIVERSIFIED Total Assets 2,455 50+ YEARS OF MULTI-AWARDED FINANCIAL CONGLOMERATE TRADING INFORMATION Loans and Receivables, Net Total Deposits 1,272 1,797 MBT PM | MBT.PS Ticker SERVICE EXCELL
Slide 35: Ownership and Investment Information
PRIVATE AND PROPRIETARY Ownership and Investment Information CORPORATE STRUCTURE MARKET DATA Trading information Ticker: GTCAP PM / GTCAP.PS Market cap: USD2.7 Bn Ty Family Ticker (Bloomberg | Reuters) MBT PM | MBT.PS & Other Free Related float Par value (PHP) 20.00 Parties Outstanding shares 4,497,
Slide 36: Extensive Domestic and Overseas Coverage
PRIVATE AND PROPRIETARY Extensive Domestic and Overseas Coverage Domestic Branch and ATM Networks Overseas Network Coverage 950+ branches 30+ Branches, subsidiaries, 2,300+ offices ATMs 140+ Remittance tie-ups 150+ Remittance agents © Metropolitan Bank & Trust Company | Investor Relations | February
Slide 37: Outstanding Debt Issuances & Investment Grade Credit Ratings
PRIVATE AND PROPRIETARY Outstanding Debt Issuances & Investment Grade Credit Ratings Debt Issuance Details Debt Maturity Profile (PHP Bn) Baa2 Dec-20 Issue Coupon Maturity Amount Stable Type 2021 2022 2023 2024 2025 2026 Date Rate Date (PHP Bn) • Very high likelihood of support from the Nov-14 4.250
Slide 38: COVID-19 Initiatives
PRIVATE AND PROPRIETARY COVID-19 Initiatives For Employees For Clients For Communities Waived Interbank Fund Transfer Fees Flexible work arrangements Until 31 March 2021 Shifting schedules, remote work, redeployment to nearer worksite Through InstaPay and PesoNet Additional allowances and benefits 3
Slide 39: 2019 Sustainability Measures
PRIVATE AND PROPRIETARY 2019 Sustainability Measures 16% 23% 6% PHP605Bn Estimated Contribution of Outstanding Loans to UN SDGs 13% 24% 16% © Metropolitan Bank & Trust Company | Investor Relations | February 2021 | FY 2020 MBT Company Presentation 39 This material was produced by Metrobank for infor
Slide 40: Recent Developments
PRIVATE AND PROPRIETARY Recent Developments Approval of Merger Unissued 2020 2019 2018 19.0 Effective 03 January 2020 28.0 0.5 USD2 Billion P100 Billion 10.5 Medium-Term BSP approval Bond Note P25 billion LTNCDs Programme Programme Jan. 2020 – Jan. 2021 1.5 42.5 Exercise of call option P6.5 billion
Slide 41: Recent Awards and Recognition
PRIVATE AND PROPRIETARY Recent Awards and Recognition Most Recommended 3rd Most Helpful Bank Top Sellside - Corporate Best Top Investment House in Corporate & Government Bonds; Retail Bank in the in the Philippines; Asian G3 Bonds; 4th in Philippines; 4th in 38th in Asia Pacific Governance Securitie
Slide 42: For more information, please visit our website
PRIVATE AND PROPRIETARY For more information, please visit our website: Latest Annual Reports 2019 2018 2017 Financial Reports SEC 17-A SEC 17-Q BSP SOC Investor Relations https://metrobank.com.ph/about-us/investor-relations-program For your comments and queries contact us via: Annual Corporate Gove
Slide 43: 43 This material was produced by Metrobank for information purposes only and is intended
PRIVATE AND PROPRIETARY by © Metropolitan Bank & Trust Company | Investor Relations | February 2021 | FY 2020 MBT Company Presentation 43 This material was produced by Metrobank for information purposes only and is intended to be used in presentations by the Bank at investor meetings and does not co
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