Regis Partners said the P3 special dividend on top of its regular P1 dividend (equivalent to a dividend yield of 8 percent) was a “surprise” given that Metrobank’s net income of P13.8 billion in 2020 was 16 percent below market consensus of P16.5 billion.
Metrobank prioritized its defense over income by spending a “whopping” P40.8 billion provision which would expand its non-performing loans (NPL) coverage to 163 percent in 2020.
“This, together with CAR (capital adequacy ratio), of 20.2 percent – provides significant buffers for any new NPLs this year (2021),” said Regis.
COL Financial said Metrobank has one of the strongest capital position among banks in the country which enabled it to declare generous dividends.
COL Financial said Metrobank’s common equity tier 1 (CET1) of 19.3 percent) was significantly higher than the Bangko Sentral ng Pilipinas’ minimum requirement which would give it “sufficient buffer for any adverse scenario caused by the pandemic.”
“After paying out the dividends, MBT estimates its CET1 and CAR will decline to 18.2 percent and 19.1 percent. Nevertheless, note that this remains one of the highest in the industry. Moreover, with the current weak loan growth outlook, we view the large dividend payout positively as its large capital base is only dragging the bank’s ROE (return on equity),” COL Financial said.