Loans surprise, asset quality steady within an in-line 1H26

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Metrobank

Loans surprise, asset quality steady within

an in-line 1H26

Maintain Rating: BUY | PO: 89.00 PHP | Price: 65.70 PHP

Flat 1H26 with NII gains muted by soft NII, provisions

03 August 2026

MBT 2Q26 net income fell 2% YoY to P12.3bn, leading to a flat 1H26 net income of

P24.9bn. Results are in-line with our expectations at 48% of our FY26E, in contrast to

modest misses at BDO and BPI. OI was up 4%/5% in 2Q/1H26 as strong NII gains

(+12%) more than offset a 24% decline in Non-II. Loans grew 12%, accelerating from

1Q's +9% amidst flattish NIMs. Trading gains plummeted 76% on the change in BSP

policy rate path, overshadowing fee income (+9%). Opex up 10% YoY, bringing CIR up

3ppts to 52%. 2Q provisions rose 21%/25% QoQ/YoY with 1H credit cost at 74bps.

Equity

Loans accelerate, AQ stable but monitoring credit cards

Gross loans rose 12% YoY and 4% QoQ, outperforming our initial expectation of a

slowing loan growth environment (+8% YoY FY26E). The pick-up in demand primarily

came from the corporate book in relation to energy, logistics and inventory restocking.

Consumer growth was steady at +11%. Meanwhile, NIMs were stable at 3.74%, which

MBT expects to maintain for 2H26. AQ was still healthy with NPL cover at 133% and

NPL ratio at 1.8%. MBT notes some stress is coming from the mass market segments at

credit cards though remains manageable with adequate provisions already in place.

Credit cost guidance maintained at 70bps - Buy

MBT noted that the QoQ uptick in provisions was mainly driven by macroeconomic

assumption changes to the ECL model and not due to movement in NPL stages. With

MBT maintaining their 70bps guidance for 2026, this should imply easing credit costs in

2H vs the ~80bps credit cost booked in 2Q. Meanwhile, 2Q NUGL on FVOCI saw a

P0.8bn profit suggesting the trading book stabilized after a P16.4bn loss booked in 1Q.

Capital remains adequate with CET1 ratio at 14.2%. Maintain our Buy rating on MBT.

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