Metropolitan Bank & Trust Co. · PSE:MBT
Metropolitan Bank & Trust — Q3 2023 Earnings Presentation
44 slides from Metropolitan Bank & Trust's earnings presentation, Oct 27, 2023
Slide 1: Company Presentation
<> Metrobank A vourre in good hands COMPANY PRESENTATION
Slide 2: 2 This document is for internal use only and may contain privileged, proprietary or
2023 Metropolitan Bank & Trust Company 2 This document is for internal use only and may contain privileged, proprietary or otherwise private information. It must not be released to other parties in whatever form without prior consent to the authors.
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 9M23 Sept-23 2020 2021 2022 Oct-23 2020 2021 2022 1Q23 2Q23 2.4% 3.9% 5.8% 6.6% 6.1% 2.0% 2.0% 5.5% 6.5% -9.5% 5.7% 7.6% 6.4% 4.3% • Slower growth in 2Q23 driven by moderating • Re-acceleration of inflation rose starting Aug • 25 bps r
Slide 5: Metrobank Economic Research Forecasts
Metrobank Economic Research Forecasts As of October 27, 2023 2021A 2022A 2023F 2024F GDP 5.7% 7.6% 5.5% 6 – 7% (2018=100) (DBCC1: 6.0-7.0%) (DBCC1: 6.5-8.0%) (IMF: 5.3%) (IMF: 6.0%) Inflation 3.9% 5.8% 6.4% 4.6% (2018=100) (DBCC1: 5.0-7.0%) (DBCC1: 2.0-4.0%) (BSP, 5.6%2) (BSP, 3.32) BSP RRP rate 2.0
Slide 6: Banking Industry: Loan growth moderates
Banking Industry: Loan growth moderates Easing loan growth, stable NPL Easing deposit and CASA growth Loan growth Deposit growth CASA growth 17% 18% 14% 18% 20% 15% 9% 9% 11% 11% 11% 11% 9% 8% 12% 10% 8% 9% 9% 9% 10% 8% 8% 15% 4% 6% 10% 7% 7% 5% 14% 12% 9% 7% 9% 9% 7% 7% 5% 6% 4% 0% -1.2% -5% 2% 1%
Slide 7: Financial Performance 9M 2023
FINANCIAL PERFORMANCE 9M 2023
Slide 8: Sustaining robust earnings growth
Sustaining robust earnings growth Net Interest Income Fees and Other Non-Interest Income Trading & FX gains Operating expenses Provisions for credit losses Taxes and NCI 150.0 Net Income YoY Net Income YoY 23.4 31.8 +36% 7.8 9.3 10.5 10.4 10.9 +39% 35.0 0.5 100.0 3.6 +45% 2.1 0.9 7.5 19.4 1.5 5.9 +2
Slide 9: Expanding assets and higher margins boost NII
Expanding assets and higher margins boost NII Interest income continues to build up Margins still on an uptrend Pbn Interest from Loans Interest expense from Deposits Pbn NII Quarterly NIM Interest from Investments Other Interest Expense Other Interest Income 29.0 3.97% 4.05% 3.86% 48.0 4.0% Higher
Slide 10: Loan book continues to expand
Loan book continues to expand Consumer outpaces commercial growth Loan portfolio mix near pre-pandemic level Pbn Consumer Corporate & Commercial Consumer Corporate & Commercial 1,470 +7% YoY 1,457 1,421 1,436 +2% QoQ 1,372 1,144 +5% YoY 77% 78% 1,164 1,122 1,125 80% 80% 79% 78% 1,092 +2% QoQ 280 292
Slide 11: Corporate loan demand moderating
Corporate loan demand moderating Top and middle market segment continues to expand Loans by remaining maturity Pbn SME Corporate & Middle Market Long term Short term 1,400 1,164 +5% YoY 1,200 1,122 1,125 1,144 +2% QoQ 1,092 1,000 37% 40% 38% 37% 35% 800 -1% YoY +6% YoY 1,046 1,011 1,018 1,035 600 98
Slide 12: Credit cards and auto loans leading consumer segment recovery
Credit cards and auto loans leading consumer segment recovery Consumer Loans Breakdown Consumer Loans By Product Pbn Others Auto Housing Credit Card & Others* 350 326 311 +16% YoY 292 299 300 280 +5% QoQ 38% 40% 40% 41% 42% 138 128 +29% YoY 250 116 120 107 +8% QoQ 200 150 33% 32% 31% 29% 28% 92 92 -
Slide 13: CASA ratio eases
CASA ratio eases Modest growth in total deposits CASA ratio decreasing Pbn TDs CASA CASA TDs 37% 29% 33% 38% 38% 41% 2,500 2,347 +15% YoY 2,221 2,263 2,253 +4% QoQ 2,049 63% 71% 67% 62% 62% 59% 2,000 4Q19 3Q22 4Q22 1Q23 2Q23 3Q23 1,390 -5% YoY 1,406 1,401 1,500 1,480 -1% QoQ Steady CASA Deposits per
Slide 14: Sustained margin improvement
Sustained margin improvement Rising asset yields offsetting high funding costs Stable to improving yields across segments 18.0% Quarterly NIM Loan yield 16.0% 16.1% Asset yield Investment securities yield 16.0% 14.1% 14.3% Funding cost Deposit cost 13.5% 14.0% 7.4% 7.6% Credit Cards 6.7% 7.5% 12.0%
Slide 15: Healthy non-interest income
Healthy non-interest income Recovery in trading, asset sales support non-interest income Modest fee income growth Pbn Others Asset sales Pbn Fee income Trust income Leasing Service Fees & Trust YoY 7.0 YoY Trading & FX gains 13.2 14.0 12.3 +7% 6.0 30.0 12.0 0.9 -19% 1.2 4.5 5.0 4.2 4.3 4.4 4.3 +7% Y
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 cost-to-income ratio sustained Pbn Others Occupancy & equipment Depreciation Taxes & licenses Manpower 25.0 70.0 YoY 60.0% 60.0 YoY 55.0% 54.5% 54.3% 20.0 51.6% 51.8% 51.5% 51.2 +15% 17.6
Slide 17: Credit costs continue to remain manageable
Credit costs continue to remain manageable Credit costs continues to ease Provision cover remains substantial Est. Credit Cost (bps) 350 293 350 300 300 250 250 200 200 150 67 91 150 56 62 67 59 49 100 58 57 57 100 189% 187% 70 50 50 60 - 184% - 172% 50 Pbn 40 172% Cumulative Total Allowance 30 Prov
Slide 18: Healthy asset quality with NPL ratios well below industry levels
Healthy asset quality with NPL ratios well below industry levels Past Due loans easing NPL and Past Due ratios much lower than industry Past Due ratio Industry Past Due Pbn Past Due NPL 4.0% 4.1% 4.1% 4.2% 3.8% 4.5% 4.0% 3.5% 60.0 3.0% 50.0 2.5% 2.5% 2.0% 50.0 2.2% 2.3% 2.3% 2.1% 1.5% 35 40.0 1.0% 3
Slide 19: NPLs + Restructured loans ratio still lower than industry NPL ratio
NPLs + Restructured loans ratio still lower than industry NPL ratio Marginal Restructured loans ratio Combined NPLs and Restructured loans stable Ratio to Gross Loans Industry Restructured Loans Ratio Industry NPL Ratio MBT Combined NPL + Restructured Loans as Ratio to Gross Loans 2.8% 2.6% 2.6% 2.5
Slide 20: Stable NPL trend
Stable NPL trend Commercial NPLs Consumer NPLs NPLs NPL ratio NPL ratio Industry Consumer NPL ratio 7.2% 12.0% 10.0% 6.5% 6.4% 6.3% 35 1.9% 1.7% 1.6% 1.6% 1.5% 8.0% 6.0% 0.0% 30 4.0% 2.8% 2.8% 2.6% 2.7% 2.6% Pbn 2.0% 25 21 20 -5.0% 0.0% 25 20 18 18 17 20 Pbn -10.0% 15 15 10 -15.0% 10 8 8 8 8 8 5 5 -
Slide 21: Consumer NPLs well below industry levels
Consumer NPLs 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% 7.9% 12.0% 18 18 7.5% 16 9.3% 7.5% 7.6% 8.4% 7.9% 10.0% 16 16 7.5% 14 10.0% 10% 14 14 8.0% 12 5.0% 3.9% 6.0% 12 12 3.8% 3.8% 10 2.9% 2.9
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 0.8% 0.7% 0.7% 0.7% 0.7% 0.8% 50 2.0% 1.4% 1.3% 1.3% 13.0 0.7% 45 1.2% 1.2% 1.5% 0.6% 1.0% 11.0 40 0.5% 0.5% 9.0 35 0.4% 0.0% 7.0 3
Slide 23: Healthy capital and liquidity levels provide ample support
Healthy capital and liquidity levels provide ample support Capital ratios well above minimum thresholds High Basel III Leverage Ratio, Liquidity Coverage Ratio CAR CET-1 BLR LCR 21.00% 18.4% 21.0% 17.2% 17.7% 17.6% 17.9% 16.3% 16.8% 16.8% 17.1% 17.6% 15.0% 350% 17.50% 17.5% 300% 249% 232% 245% 243%
Slide 24: Improving digital metrics on retail clients
Improving digital metrics on retail clients 2019 2020 2021 2022 9M 2023 Digital penetration rate on a continuous upward trend, now at 36%, with 1.8M total digital users 575K 730K 920K 1.3M 1.4M 36% 34% 33% 30% 9M 2023 Active base up 24% YoY 26% 23% Sustained growth in 19% mobile app downloads as +45
Slide 25: Outlook – Positives and Challenges
Outlook – Positives and Challenges • Loans to benefit from seasonal demand pick-up in • Macro risks to demand recovery and asset quality: 4Q with potential uplift from capital spending in the o External - geopolitical issues; global financial medium term instabilities o Internal - inflationary press
Slide 26: Summary
SUMMARY Sustained solid performance on robust topline growth supported by expanding assets, better margins and healthy non-interest income growth Strong balance sheet and liquidity ratios continue to ensure Metrobank’s ability to support client needs as the economy continue to expand in the medium t
Slide 27: Financial Summary
Financial Summary In PHP billion Income 9M 9M 3Q 3Q Balance Sheet 9M 2022 9M 2023 YoY YoY YoY Statement 2022 2023 2022 2023 Total Assets 2,733 2,957 +8% Net Interest 62.1 77.2 +24% 22.3 26.7 +20% Loans and Receivables, Gross 1,372 1,470 +7% Income Non Interest Total Deposits 2,049 2,347 +15% 20.1 23
Slide 28: Additional Information
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Slide 29: Metropolitan Bank & Trust Company (Metrobank)
Metropolitan Bank & Trust Company (Metrobank) Overview Financial Data (PHP bn) 3Q 2023 DIVERSIFIED Total Assets 2,957 60 YEARS OF MULTI-AWARDED FINANCIAL CONGLOMERATE TRADING INFORMATION MBT PM | MBT.PS Ticker Loans and Receivables, Gross Total Deposits 1,470 2,347 SERVICE EXCELLENCE USD 4.3 Bn Mark
Slide 30: 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 31: Extensive Domestic and Overseas Coverage
Extensive Domestic and Overseas Coverage Total Group 17,000+ employee base Domestic Branch and ATM Networks Overseas Network Coverage 948 30+ branches Branches, subsidiaries, offices 2,321 ATMs 110+ Remittance tie-ups 160+ Remittance agents 2023 Metropolitan Bank & Trust Company 31This document is f
Slide 32: Key Objectives and Strategies
Key Objectives and Strategies Financial Growth Attract And Increase Retain The Customer Best People Base Strengthen Improve Control Customer Framework Satisfaction Increase Widen Digital Operational Banking Efficiency Capabilities 2023 Metropolitan Bank & Trust Company 32This document is for interna
Slide 33: Recent Awards and Recognition
Recent Awards and Recognition Best Domestic Best Best Service Best Bank Strongest Bank Private Bank Bank of the Year Domestic Bank in (Asian Bank) in the Philippines in the Philippines in the Philippines in the Philippines, the Philippines for the Philippines Best Bank for Ultra- 2023, 2022, 2021 Hi
Slide 34: Special dividend declaration in 2023
Special dividend declaration in 2023 1. Improving growth prospects Sufficient buffer to cover healthy loan demand over the medium term Key information Regular Cash • Php1.60 2. Strong NPL risk buffers already in place Dividends • Semi-annual payout per share NPL cover remains ample vs. risk of risin
Slide 35: Sustainability Journey: Our Progress in 2022
Sustainability Journey: Our Progress in 2022 Enhancing the ESRM Framework We Weare guided are guided by ourby E&Sour E&S Risk Risk Appetite Appetite Statement (RAS) Statement (RAS) We have low tolerance for E&S risks that adversely affect the business, and are committed to mitigating the negative im
Slide 36: Sustainability Journey: Our Progress in 2022
Sustainability Journey: Our Progress in 2022 Improving our disclosures: Our 2022 Sustainability Report Moving Forward We disclose the Bank’s contributions to all 17 United Nations Sustainable Development Goals We will support the Philippine Development Plan (UN SDG) in addition to our Sustainability
Slide 37: Sustainability Journey: Our Progress in 2022
Sustainability Journey: Our Progress in 2022 Philippine Development Plan Headline Socioeconomic Targets Build resilient infrastructure, promote Transform the production sectors through innovation. The Philippines inclusive and sustainable industrialization aims to continue its progress among the inn
Slide 38: Metrobank Sustainability Agenda
Metrobank Sustainability Agenda Support business activities that seek to reduce poverty and hunger, promote inclusive and equitable growth, quality education, build resilient infrastructure, and encourage innovation ➢PHP 3.8 Billion loans extended to ➢PHP135.2 billion in commercial loans micro and s
Slide 39: 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 40: 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 41: Loan Portfolio Breakdown
Loan Portfolio Breakdown MBT Loan Portfolio By Industry Philippine Banks Loan Portfolio By Industry 14% 15% 16% 16% 14% 12% 12% 12% 12% 11% 11% 11% 10% 10% 10% 13% 11% 10% 13% 12% 15% 20% 20% 20% 20% 20% 16% 15% 14% 15% Trade 15% Manufacturing 9% 9% 9% 12% 12% 9% 9% 13% 12% Real estate 10% 10% 10% 1
Slide 42: Currency Breakdown
Currency Breakdown LOAN PORTFOLIO DEPOSITS Foreign Foreign Currency, Currency, 17% 20% Philippine Philippine Peso, 83% Peso, 80% 2023 Metropolitan Bank & Trust Company 42This document is for internal use only and may contain privileged, proprietary or otherwise private information. It must not be re
Slide 43: 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 44: The Asian Banker Strongest Banks 2022
THE ASIAN BANKER™ STRONGEST BANKS 2022 by balance sheet
Metropolitan Bank & Trust Company — Q3 2023 Earnings Presentation on 6ix