Metrobank in Q1: Defensive positioning with limited ROE upside
From AB Capital's The Opening Bell: Three Moves
Event
1Q26 net income hit P12.6 billion, +3% YoY and +1% QoQ, which is in line at 24% of consensus and 23% of AB Cap's (old) 2026E. PPOP growth was relatively weak at only 3% YoY, as strong NII was dragged by securities trading losses.
View
Loans expanded by around 9.2% YoY on disciplined growth strategy. Management reiterated a growth outlook of roughly 1.5-2.0x GDP, though they acknowledged macro headwinds could weigh on credit demand.
Catalyst
Asset quality metrics remain among the strongest in the sector with NPL ratio stable at 1.75% and coverage at 137%. Management highlighted stable early delinquencies but noted some softening in repayment indicators.
Action
Downgrade to Neutral. We cut our 2026E net income by 10.1% and our DDM-based TP by 13%. While MBT remains defensively positioned with strong capital and high NPL cover, ROE upside is limited given slower loan growth, lower NIM sensitivity, and higher exposure to mark-to-market volatility.
Disclaimer: The information, analyses, and views contained herein is based on sources which we, AB Capital Securities, believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. AB Capital Securities and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.
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