Metrobank to sustain mid-to high-teen loan growth

With its P60-billion fresh capital build-up program and a fast-growing domestic economy, Ty family-led Metropolitan Bank & Trust Co. expects to sustain a medium to high-teen growth in its lending activities in the years ahead.

For the stock rights offering (SRO), eligible shareholders are entitled to subscribe to one share for every 3.976 Metrobank common shares held as of the record date March 21. The ex-date is set for March 16 (Friday), which means that new investors have up to March 15 (Thursday) to buy Metrobank shares to be eligible for SRO entitlement.

The offer price of P75 per share was based on a 22-percent discount to the 10-day volume-weighted average price of Metrobank common shares listed on the Philippine Stock Exchange. The offer period is from March 22 to April 4.

“Metrobank will use the SRO proceeds for growth and ROE (return on equity) enhancement. The new capital will allow Metrobank to sustain its loan growth momentum across various segments – top corporates, mid-market and small and medium enterprises,” Metrobank head of investor relations Juan Placido Mapa III said in a text message on Thursday.

In addition, a portion of the proceeds will be used to increase Metrobank’s ownership in Metrobank Card corporation.

Last year, Metrobank grew its loan book by 19 percent, outpacing the average industry growth of 17 percent.

Mapa said Metrobank would likely sustain a mid- to high-teen loan growth over the medium term assuming that the domestic economy would grow by 6-7 percent a year.

Assuming the full subscription of its P60-billion stock rights offering, leading online stock brokerage COL Financial estimated that the bank’s core or tier 1 capital adequacy ratio would increase by 3 percentage points to 14 percent of risk assets, well above the minimum of 11 percent 2019 CET1 (common equity tier 1) ratio required by the Bangko Sentral ng Pilipinas.

“Based on our estimates, this should allow the bank to support its asset growth for the next three years,” COL said.

With the larger capital base, COL said this would dilute the bank’s 2018 ROE from 11 percent to 10 percent, but the brokerage is maintaining its “buy” rating with a fair value estimate of P112 per share. Post-SRO, COL’s fair value estimate on Metrobank is P104.50 per share.

“We continue to like Metrobank as it is expected to be one of the major beneficiaries of the growing demand for loans given its size, and highly liquid and healthy balance sheet,” COL said.