Metropolitan Bank & Trust Co. · PSE:MBT
Metropolitan Bank & Trust — 9M 2021 Earnings Presentation
46 slides from Metropolitan Bank & Trust's earnings presentation, November 2021
Slide 1: 9M 2021 Earnings Call
9M 2021 EARNINGS CALL
Slide 2: Presenters
FABIAN RAMON TOTO DEE DEL ROSARIO TANSINGCO MYLENE CAPARAS RENE MINDA DE BORJA OLONAN \ = *
Slide 3: Macroeconomic View
PRIVATE AND PROPRIETARY MACROECONOMIC VIEW © Metropolitan Bank & Trust Company | Investor Relations | November 2021 | MBT Company Presentation 3 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
Slide 4: Economy improves amid ongoing vaccination, new cases decelerate
PRIVATE AND PROPRIETARY Economy improves amid ongoing vaccination, new cases decelerate Measured recovery pace seen Local vaccination program gains traction 11.8 Share of people vaccinated against COVID-19, as of October 30, 2021 6.3 6.1 4.8 6.1 5.9 5.6 6.3 6.6 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.
Slide 5: Overall expectations remain cautious
PRIVATE AND PROPRIETARY Overall expectations remain cautious Unemployment rate remains elevated Confidence levels steady in 3Q21 Capacity utilization still low Next 3 months 17.6% Business Consumer 76.5 76.1 75.5 75.1 74.9 60.0 56.1 52.0 50.0 42.8 40.3 42.3 47.6 37.4 70.1 10.0% 69.6 69.8 40.0 31.4 3
Slide 6: Monetary policy still accommodative in the near term
PRIVATE AND PROPRIETARY Monetary policy still accommodative in the near term Inflation rate driven up by higher food prices Steepening yield curve 9M 2020 YE 2020 1H 2021 9M 2021 5.50 4.8% 5.00 Movement (in bps) 9M21 avg: 4.5% 4.50 FY20 avg: 2.6% Jul-20 Jul-21 Jan-20 Jun-20 Aug-20 Sep-20 Jun-21 Aug-
Slide 7: GDP Forecasts
PRIVATE AND PROPRIETARY Metrobank Economic Research Forecasts As of October 2021 2019A 2020A 2021F 2022F GDP 6.0% -9.6% 4.8% 6.1% Inflation 2.5% 2.6% 4.5% 3.4% BSP RRP rate 4.0% 2.0% 2.0% 2.5% USDPHP Trend 50.6 48.0 50.6 51.7 With directional bias DBCC* 4.0% - 5.0% 7.0% - 9.0% ADB 4.5% 5.5% GDP Fore
Slide 8: Banking Industry: Mild loan recovery but rising NPLs
PRIVATE AND PROPRIETARY Banking Industry: Mild loan recovery but rising NPLs Recovery in loan growth amid rising asset quality pressures Deposit growth sustained amid ample market liquidity Loan growth Deposit growth CASA growth 20% 31% 40% 17% 19% 16% 14% 16% 35% 11% 30% 25% 34% 16% 18% 12% 13% 15%
Slide 9: Financial Performance 9M 2021
PRIVATE AND PROPRIETARY FINANCIAL PERFORMANCE 9M 2021 © Metropolitan Bank & Trust Company | Investor Relations | November 2021 | MBT Company Presentation 9 This material was produced by Metrobank for information purposes only and is intended to be used in presentations by the Bank at investor meetin
Slide 10: Robust net income amid low provisions from stable asset quality
PRIVATE AND PROPRIETARY Robust net income amid low provisions from stable asset quality Net Interest Income Fees and Other Non-Interest Income Trading & FX gains Operating expenses Provisions for credit losses Taxes and NCI YoY YoY 150.0 50.0 21.6 11.0 16.1 +46% 8.5 6.5 6.1 3.0 1.9 2.8 7.8 3.9 4.4 +
Slide 11: Net interest income still soft but NIMs starting to stabilize
PRIVATE AND PROPRIETARY Net interest income still soft but NIMs starting to stabilize Weak net interest income driven by lower asset yields Margins starting to stabilize Pbn Interest Income Interest expense Pbn NII Quarterly NIM 56.2 65.9 56.3 110.0 90.0 • Lower lending rates ; 30.0 4.07% credit car
Slide 12: Loan demand still muted; some green shoots in corporate demand
PRIVATE AND PROPRIETARY Loan demand still muted; some green shoots in corporate demand Contraction in gross loan portfolio continues Excess client funds still parked in CASA Pbn Commercial Consumer MBT Gross Loans MBT CASA GDP -12% -8% -4% +12% -4% YoY 1,297 22% 22% 1,272 +1% QoQ 1,207 1,210 1,220 1
Slide 13: Signs of gradual recovery in commercial demand
PRIVATE AND PROPRIETARY Signs of gradual recovery in commercial demand Mild pick-up in demand vs. 2Q21 QoQ recovery in short term working capital loans Pbn SME Corporate Long Term (More than 1 Year) Short Term (Up to 1 Year) 1,200 -1% YoY 962 995 +2% QoQ -19% YoY 1,000 920 933 950 24% 25% 26% 30% 33
Slide 14: CASA to loans ratio still high
PRIVATE AND PROPRIETARY CASA to loans ratio still high Parent Corporate and Commercial CASA to Loans ratio Parent CASA to Loans ratio, selected industries 100% 120% 109% 107% Wholesale and 88% 110% 90% 86% 104% 84% Commercial/SME Retail Trade CASA +12% YoY 98% CASA + 5% YoY 78% 100% 80% 92% 73% 90%
Slide 15: Retail demand remains weak, still cautious on big ticket spending
PRIVATE AND PROPRIETARY Retail demand remains weak, still cautious on big ticket spending Consumer Loans Breakdown Consumer Loans By Product Pbn Others Auto Housing Credit Card 310 303 286 29% 31% 30% 31% 32% 276 270 -13% YoY 91 93 87 86 87 -4% YoY 34% 35% 36% 36% 36% 107 106 103 101 98 -8% YoY 35%
Slide 16: Healthy CASA growth
PRIVATE AND PROPRIETARY Healthy CASA growth Robust CASA growth; lower high-cost TDs CASA ratio remains elevated Pbn CASA TDs CASA TDs 29% 27% 25% 26% 25% 1,817 1,851 +7% YoY 1,734 1,797 1,738 71% 73% 75% 74% 75% 475 464 -8% YoY 486 431 506 3Q20 4Q20 1Q21 2Q21 3Q21 CASA Deposits per Branch 1.8 Pbn 1.
Slide 17: Net interest margin staying steady
PRIVATE AND PROPRIETARY Net interest margin staying steady Asset yields and funding costs stabilizing Mild pick-up in credit card yields 25.0% Quarterly NIM Asset yield Loan yield 22% 22% Funding cost Deposit cost Credit Cards 20% 20.0% 20% 6.9% 7.50% 6.4% 6.5% 6.50% 6.0% 5.7% 5.8% 5.7% 15% 15% 5.2%
Slide 18: Steady fee income, lower trading & FX gains
PRIVATE AND PROPRIETARY Steady fee income, lower trading & FX gains Non-Interest Income Breakdown Fee-based income stabilizing Pbn Others Leasing Pbn Fee income Trust income Service Fees & Trust Trading & FX gains YoY 12.0 7.0 10.9 +11% 35.0 11.0 6.0 +13% 30.5 14.0 10.0 9.8 1.2 5.0 YoY 3.6 3.8 3.7 +
Slide 19: Keeping single digit cost growth
PRIVATE AND PROPRIETARY Keeping single digit cost growth Operating Expenses Breakdown Cost-To-Income Ratio Pbn Others Occupancy & equipment Depreciation Taxes & licenses Manpower 60.0 38.0 65.0% YoY 59.0% 57.2% 33.0 60.0% 50.0 +1% 54.6% 54.6% 43.9 44.4 55.0% 28.0 40.0 50.0% 49.6% 23.0 +3% 18.6 19.1
Slide 20: Digital metrics on retail clients
PRIVATE AND PROPRIETARY Digital metrics on retail clients 27% Digital users among retail clients as of 9M 2021 3Q21 87% 13% vs 23% in 9M 2020 2020 85% 15% 88% Active users +66% YoY +61% YoY among Transaction Transaction 2019 82% 18% enrolled retail count amount as of 9M 2021 % E-Channels to Total fi
Slide 21: Digital metrics on corporate clients
PRIVATE AND PROPRIETARY Digital metrics on corporate clients 37% 65% Digital users among Active users among corporate clients enrolled corporates as of 9M 2021 as of 1H 2021 26% as of 9M 2021 6% as of 9M 2021 of transaction volume go of transaction value go through digital channels through digital c
Slide 22: Stable NPLs and ample reserves give room to lower provisions
PRIVATE AND PROPRIETARY Stable NPLs and ample reserves give room to lower provisions Easing credit costs Hefty provision cover Est. Credit Cost (bps) 600 504 500 382 400 300 200 137 168 150 98 188% 191% 80 100 179% 174% 0 Pbn Cumulative Total Allowance Quarterly Provisions for Credit 163% 166% 60.0
Slide 23: Improving asset quality trend
PRIVATE AND PROPRIETARY Improving asset quality trend NPL and Past Due loans continue to taper off NPL and Past Due ratios much lower than industry Past Due ratio Industry Past Due Pbn Past Due NPL 5.3% 5.4% 5.3% 5.0% 6.0% 4.5% 5.0% 60.0 60.0 3.5% 3.1% 4.0% 47 3.8% 3.0% 50.0 50.0 3.4% 3.0% 3.0% 2.9%
Slide 24: Asset quality still stable
PRIVATE AND PROPRIETARY Asset quality still stable Rising restructured loans ratio, but still sub-1% Combined NPLs/Restructured still below Industry NPL Ratio Ratio to Gross Loans Industry Restructured Loans Ratio Industry NPL Ratio 4.5% 3.1% Combined NPL + Restructured Loans as Ratio to Gross Loans
Slide 25: Reaping benefits of proactive asset quality management
PRIVATE AND PROPRIETARY Reaping benefits of proactive asset quality management Easing commercial NPL ratio… …as well as consumer NPL ratio NPLs NPL ratio NPL ratio Industry Consumer NPL ratio 16.0% 9.3% 9.7% 9.9% 25 3.0% 14.0% 8.5% 1.8% 1.7% 1.6% 1.5% 1.6% 12.0% 23 1.2% 2.0% 1.1% 10.0% 5.6% 21 1.0%
Slide 26: Consumer NPLs well below industry levels
PRIVATE AND PROPRIETARY Consumer NPLs well below industry levels Auto Home Credit Cards NPLs NPL ratio Industry NPLs NPL ratio Industry NPLs NPL ratio Industry 9.2% 9.4% 9.4% 8.9% 12.4% 20 14.0% 12.1% 20 8.4% 20 13.0% 15% 18 10.7% 12.0% 18 8.5% 18 9.7% 11.0% 8.5% 16 10.0% 16 16 7.5% 9.0% 14 14 10% 1
Slide 27: 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 Pbn ROPA Ratio to Gross Loans NPA NPA Ratio 0.8% 0.8% 0.8% 15.0 0.8% 0.8% 0.9% 50.0 1.7% 1.9% 0.8% 1.6% 1.6% 13.0 0.7% 0.8% 45.0 1.5% 1.5% 1.7% 0.7% 1.3% 1.4
Slide 28: Strong balance sheet, healthy capital levels provide ample support
PRIVATE AND PROPRIETARY Strong balance sheet, healthy capital levels provide ample support Capital Ratios significantly above minimum thresholds Formidable Basel III Leverage Ratio, Liquidity Coverage Ratio CAR CET-1 BLR LCR 19.9% 20.2% 20.7% 19.8% 19.0% 19.3% 350% 307% 303% 15.0% 296% 300% 11.7% 11
Slide 29: 2021/22 Outlook – Positives and Challenges Ahead
PRIVATE AND PROPRIETARY 2021/22 Outlook – Positives and Challenges Ahead • Sustained pick-up in loans as economy recovers. • Delay in economic recovery due to threat of new lockdowns and global market developments. • NIM recovery on prospects of rising benchmark rates/yields higher NIMs • Impending
Slide 30: Summary
PRIVATE AND PROPRIETARY SUMMARY Metrobank continues to deliver strong earnings growth as proactive NPL management has enabled the Bank to lower provisions. We will continue with our prudent risk management strategy even as asset quality continues to improve. Healthy growth in fees and other income a
Slide 31: Financial Summary
PRIVATE AND PROPRIETARY Financial Summary In PHP billion Balance Sheet 9M 2020 9M 2021 YoY Income Statement 9M 2020 9M 2021 YoY Total Assets 2,351 2,429 +3% Net Interest Income 65.9 56.3 -14% Loans and Receivables, Gross 1,272 1,220 -4% Total Deposits 1,734 1,851 +7% Non Interest Income 30.5 19.5 -3
Slide 32: Additional Information
PRIVATE AND PROPRIETARY Additional Information © Metropolitan Bank & Trust Company | Investor Relations | November 2021 | MBT Company Presentation 32 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
Slide 33: Metropolitan Bank & Trust Company (Metrobank)
PRIVATE AND PROPRIETARY Metropolitan Bank & Trust Company (Metrobank) Overview Financial Data (PHP bn) 9M21 DIVERSIFIED Total Assets 2,429 59 YEARS OF MULTI-AWARDED FINANCIAL CONGLOMERATE TRADING INFORMATION MBT PM | MBT.PS Ticker Loans and Receivables, Net Total Deposits 1,174 1,851 SERVICE EXCELLE
Slide 34: Ownership and Investment Information
PRIVATE AND PROPRIETARY Ownership and Investment Information CORPORATE STRUCTURE MARKET DATA Trading information Ticker: GTCAP PM / GTCAP.PS Market cap: USD2.4 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 35: Extensive Domestic and Overseas Coverage
PRIVATE AND PROPRIETARY Extensive Domestic and Overseas Coverage 17,000+ employee base Domestic Branch and ATM Networks Overseas Network Coverage 950+ 30+ branches Branches, subsidiaries, offices 2,300+ ATMs 140+ Remittance tie-ups 150+ Remittance agents © Metropolitan Bank & Trust Company | Investo
Slide 36: Recent Awards and Recognition
PRIVATE AND PROPRIETARY Recent Awards and Recognition Best Local Currency Most Recommended Best Best Bond Individuals 8th Best Workplace Strongest Bank to Grow Your Career Retail Bank in the Domestic Bank in Securities House #1 in Trading, Philippines; 4th in in the Philippines #2 & #3 in Sales, – P
Slide 37: 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 38: 2020 Sustainability Measures
PRIVATE AND PROPRIETARY 2020 Sustainability Measures Reduce environmental 9% impact 13% 18% Php606.9Bn Estimated 14% Support Sustainability Contribution of social causes Commitment Outstanding Loans to UN SDGs 24% 20% Improve our governance standards Source: 2020 Sustainability Report © Metropolitan
Slide 39: Debt Issuances
PRIVATE AND PROPRIETARY Debt Issuances Unissued 19.0 Bond Issuance 2021 28.0 0.5 Php19.0 billion USD2 Billion 2020 Php100 Billion Bond 10.5 Medium-Term 5.25Y Peso Notes Note Listed June 2021 Programme 2019 Programme 1.9x oversubscribed 1.5 3.60% interest rate, 35bps above 2018 42.5 benchmark rate ©
Slide 40: 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 May-21 Issue Coupon Maturity Amount Stable Type Date Rate Date (PHP Bn) • Very high likelihood of support from the 2021 28.00 Philippine government in times
Slide 41: Loan Portfolio Breakdown
PRIVATE AND PROPRIETARY Loan Portfolio Breakdown MBT Loan Portfolio By Industry UKB Loan Portfolio By Industry 14% 14% 13% 13% 13% 12% 12% 12% 12% 12% 13% 11% 11% 11% 11% 11% 13% 13% 13% 12% 17% 19% 19% 19% 20% 20% 17% 17% 17% 17% Trade Manufacturing 9% 11% 11% 12% 10% 10% 10% 10% 10% 11% Real estat
Slide 42: Currency Breakdown
PRIVATE AND PROPRIETARY Currency Breakdown LOAN PORTFOLIO DEPOSITS Foreign Foreign Currency, Currency, 17% 19% Philippine Philippine Peso, 83% Peso, 81% © Metropolitan Bank & Trust Company | Investor Relations | November 2021 | MBT Company Presentation 42 This material was produced by Metrobank for
Slide 43: COVID-19 Initiatives
PRIVATE AND PROPRIETARY COVID-19 Initiatives For Employees For Clients For Communities Flexible work arrangements Shifting schedules, remote work, redeployment to nearer worksite Adjusted Interbank Fund Transfer Fees Halved to P50 per transaction (from P100) for PESONet Starting 2 November 2021 Addi
Slide 44: Special Dividend Declaration in 2021
PRIVATE AND PROPRIETARY Special Dividend Declaration in 2021 Ongoing pandemic has tempered near-term growth prospects Capital planning indicates muted demand for risk assets Key information Cash Php1.00 regular Strong NPL risk buffers already in place Dividends Php3.00 special per share Proactive pr
Slide 45: For more information, please visit our website
PRIVATE AND PROPRIETARY For more information, please visit our website: Latest Annual Reports 2020 2019 2018 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 co
Slide 46: 46 This material was produced by Metrobank for information purposes only and is intended
PRIVATE AND PROPRIETARY by © Metropolitan Bank & Trust Company | Investor Relations | November 2021 | MBT Company Presentation 46 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 constitute
Metropolitan Bank & Trust Company — 9M 2021 Earnings Presentation on 6ix