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OUTLIER: Metropolitan Bank & Trust Co. (MBT)

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Metropolitan Bank & Trust Co.
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By Marissa Mae M. Ramos

MACROECONOMIC CONCERNS dragged stocks, including that of Metropolitan Bank & Trust Co. (MBT), in the first trading week of October.

Data from the Philippine Stock Exchange showed the Ty-controlled Metrobank trading P739.440 million worth of 11.009 million shares from Oct. 1 to 5, making it the seventh most actively traded stock last week.

On a week-on-week basis, its share price was down by 1.19% to P66.2 apiece last Friday from its closing share price of P67 on Sept. 28. Year-to-date, the bank’s share price was down by 36.71%.

For Papa Securities Corp. deputy research head Arabelle C. Maghirang, concerns over the Philippine economy continue to adversely impact stock prices.

AP Securities, Inc. research analyst Rachelle C. Cruz attributed overall stock performance last week to the interest rate hikes.

“This is because in a rising rates environment and tightening system liquidity, banks are affected by higher funding costs,” she said.

Ms. Cruz noted that for MBT in particular, “[i]ntense market competition, especially in the corporate segment, resulted to sticky lending rates in the first half of 2018.”

“This will likely be the story also for the second half of 2018. In contrast, deposit rates have been adjusting faster — thus, NIM (net interest margin) upside will be limited,” she added.

Papa Securities’ Ms. Maghirang concurred: “The intact ratios of MBT… might not matter if the macroeconomic concerns would still persist in the market.”

According to its unaudited report, Metrobank’s net interest margin — the difference between interest income earned and interest paid — on their average earning assets for the first half of 2018 was at 3.77%, slightly higher than 3.72% of last year’s comparable period and 2017’s recorded 3.75%.

Investors continued to be cautious as Bangko Sentral ng Pilipinas in its Sept. 27 meeting fired off another 50-basis point (bp) increase in benchmark rates to demonstrate its commitment to temper price pressures and quell inflation expectations.

The central bank has hiked benchmark yields by a cumulative 150 bp since May. Further, latest inflation data show a 6.7% inflation rate in September — its highest in over nine years.

Prior to Friday’s inflation report, the Philippine Stock Exchange index entered bear market territory for the fourth time this year after closing at 7,132.36 last Tuesday, 21.3% below this year’s peak of 9,058.62 on Jan. 9.

Looking forward, Papa Securities’ Ms. Maghirang hopes for the next inflation report to be a “catalyst for positive sentiments” to help the equities market’s recovery.

For AP Securities’ Ms. Cruz, MBT’s stock price is expected to trade within the P64 support and P69 resistance levels this week “as there is no major catalyst to push the price higher.”

“For the year, I am looking at an earnings growth of 9% to P23 billion — driven mainly by its core lending business, as well as recovery of its fee-income segment,” she added.

According to its unaudited financial statements, Metrobank had already posted an P11.926-billion net income from January to June, up by 9.97% from 2017’s P10.845 billion.