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Metrobank's ($MBT) Nine-Month 2025 Story: Growth Amid Emerging Pressures


 Metrobank delivered ₱37.3 billion in net income attributable to equity holders for the first nine months of 2025, up 4.3% year-on-year, translating to EPS of ₱8.29. Core banking income remained strong with net interest income up 7.1% and other income rising 5.3%. Operating efficiency improved to 49.8%, signaling cost discipline.

On the balance sheet, assets grew 3.2% to ₱3.63 trillion, supported by loan expansion and a larger FVOCI securities portfolio. Equity rose 5.7%, aided by earnings and OCI recovery.

But beneath the headline growth, cracks are visible:

  • Margin compression: NIM slipped to 3.70% (from 3.90%), while reliance on SSURA funding surged +68.6%, adding rate volatility risk.
  • Credit risk signals: Provisions jumped +147% YoY to ₱8.7B; NPL ratio rose to 1.67%, with PSBank and ORIX Metro showing higher stress.
  • Funding mix & liquidity: Deposits fell –4.5% YTD, liquidity ratio eased to 46.5%, and operating cash flow remained negative.
  • Market risk exposure: FVOCI securities ballooned to ₱847B, increasing valuation sensitivity.
  • Volatile non-interest income: Trading gains collapsed in Q3 versus last year.
  • Return metrics softening: ROE dipped to 12.5% (from 12.9%), ROA to 1.39%.

Investor Takeaway

Metrobank’s story for 9M 2025 is one of resilient growth anchored on strong capital and disciplined cost control, but emerging headwinds—margin compression, rising credit costs, funding mix shifts, and market risk exposure—warrant close monitoring. Generous dividends (₱22.5 billion, ~60% payout) reinforce shareholder value, yet they also limit retained buffers amid a more complex risk landscape.

Valuation Perspective: Why MBT Remains Attractive

Despite these pressure points, Metrobank’s valuation continues to look compelling:

  • Current Price: ~₱69.00 (PSE) [edge.pse.com.ph]
  • Analyst Consensus Target: ~₱86.79 (12-month average) with highs up to ₱100.00 [ph.investing.com]
  • Potential Upside: +23% to +45% from current levels based on consensus and high-end targets.
  • Valuation Metrics:
    • P/E: ~6.3x vs peer average ~7.9x (BDO/BPI trade higher)
    • P/B: ~0.77x, well below book value (₱86.86/share)
    • Dividend Yield: ~7.25% (₱5/share annualized) [stockanalysis.com]
  • Capital Strength: CET1 at 16.3%, CAR at 16.99%, providing a strong buffer.

Why attractive? MBT offers a rare combination of deep value (low P/B, low P/E), high dividend yield, and solid capital ratios, making it appealing for long-term investors seeking income and upside potential.

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