Metropolitan Bank & Trust Company Issuer Summary

Report date: 2026-05-13
Issuer: Metropolitan Bank & Trust Company
Sector: Philippines banking
Primary credit focus: Issuer credit, domestic senior bank bonds, credit foundation for foreign-currency senior notes, linkage with the sovereign and banking system, consumer credit cycle

1. Business Snapshot and Recent Developments

Metropolitan Bank & Trust Company, commonly known as Metrobank, is a large privately owned universal bank in the Philippines. The company describes itself as a banking group providing a broad range of financial services, including corporate and institutional banking, retail banking, investment banking, leasing and finance, bancassurance, and credit cards. From a credit-analysis perspective, it should therefore be viewed not as a simple retail bank or a pure market-based financial institution, but as a full-service bank combining relationships with large domestic corporates, retail deposits, consumer loans, securities and markets activities, and affiliated financial subsidiaries.

The first point to avoid misunderstanding is that Metrobank is not a government-owned bank. It is listed on the Philippine Stock Exchange, and the company’s About Us page states that, as of March 2025, GT Capital Holdings, Inc. owned 37.2%, the Ty family and other related parties owned 14.8%, and public shareholders owned 47.9%. By contrast, the top-shareholders table in the 1Q26 Form 17-Q shows GT Capital Holdings, Inc. at 39.84%, so the figures differ depending on the disclosure date. Fitch views the bank as highly systemically important and assigns it a Government Support Rating, but this is different from an explicit government guarantee. Bondholders need to distinguish among the possibility of government support, the bank’s standalone credit strength, and the legal obligations of the issuing bank itself.

Metrobank’s corporate profile can be summarised as “a large privately owned Philippine bank with a domestic deposit base and major corporate relationships.” The company states that it has more than 960 domestic branches and more than 2,200 ATMs. At end-2025, total assets were PHP3.9tn, net loans were PHP2.0tn, deposits were PHP2.7tn, and total equity was PHP432.2bn. Total assets increased 10.2% yoy in 2025, and the company states that it maintained its position as the second-largest private universal bank in the Philippines by assets. This scale matters for bank-bond investors. Large banks tend to retain deposit stickiness, corporate relationships, payments business, and institutional contact with the government and central bank, while also having stronger linkage with the domestic economy and sovereign credit.

In its 2025 results, the bank reported net income attributable to parent of PHP49.7bn. On company disclosure, this was a record-high profit and represented 3.3% yoy growth. Net interest income increased 9.2% yoy to PHP124.6bn, non-interest income increased 11.6% yoy to PHP33.5bn, expense growth was contained, and the company-disclosed cost-to-income ratio improved from 53.8% in 2024 to 50.7% in 2025. Loan growth, the consumer business, and transaction- and FX-related revenues supported earnings, while provision for credit and impairment losses rose from PHP6.4bn in 2024 to PHP11.9bn in 2025. From a credit perspective, both points need to be recognised at the same time: the earnings base remains strong, but credit costs may be normalising or entering an upward phase.

There was no major deterioration in earnings in 1Q26 either. According to the company’s 5 May 2026 release, net income attributable to parent was PHP12.6bn in 1Q26, net interest income was PHP33.4bn, NIM was 3.7%, and gross loans increased 9.2% yoy. Corporate and commercial loans increased 8.6%, while consumer loans increased 11.2%. Deposits were PHP2.6tn, the CASA ratio was 59.2%, and the loan-to-deposit ratio was 76.6%, indicating that the bank continues to have a structure in which loans are well supported by deposits. On the non-interest side, fee and trust income increased 11.8% to PHP5.1bn, offsetting weakness in more volatile trading income.

However, the 1Q26 figures are not simply an improvement story. The NPL ratio was 1.75%, not materially worse than 1.7% at end-2025, but NPL cover declined from 140.8% at end-2025 to 137.1%. CAR declined from 16.8% at end-2025 to 14.9% at end-March 2026, and the CET1 ratio declined from 16.1% to 14.2%. This decline needs to be disaggregated into quarterly capital calculation, risk-weighted assets as the denominator, dividends, valuation differences, growth, and other factors; it should not be concluded mechanically that capital quality has deteriorated sharply. Nevertheless, the level at which the capital ratios stabilise while loan growth continues should be placed at the centre of monitoring from initial coverage.

Focusing only on the credit interpretation of the most recent key facts:

The appropriate credit framing for Metrobank at this stage is to hold together two perspectives: it is a “large bank with high profitability and strong capital,” and it is also “a bank linked to the Philippine sovereign, consumer credit, and interest-rate cycle.” In its April 2026 rating action, Fitch pointed to the rise in the Stage 3 loan ratio, the size of credit-card receivables, and potential vulnerability under consumer stress. Metrobank should therefore be characterised not as a bank with a non-performing loan problem, but as a still-healthy large bank where the consumer credit cycle and sovereign linkage should not be understated.

2. Industry Position and Franchise Strength

Metrobank’s business foundation in the Philippine banking market is supported by its scale as a large privately owned domestic bank, its deposit base, corporate relationships, and branch network. The company positions itself as a premier universal bank with more than 60 years of track record, providing a wide range of services to large domestic and international corporates, middle-market companies, SMEs, high-net-worth individuals, and retail customers. In credit analysis, this description should not simply be accepted as a strength in itself; it needs to be translated into deposit stability, loan diversification, pricing power, capital-market access, and resilience against funding outflows under stress.

The first strength is the deposit base. Deposits at end-2025 were PHP2.66tn, comprising demand deposits of PHP642.4bn, savings deposits of PHP932.7bn, and time deposits of PHP1.09tn. Company releases show a CASA ratio of 59.2% in both 2025 and 1Q26. For the credit strength of a large bank, how low-cost and how sticky deposits are affects both earnings and liquidity. A high CASA ratio makes it easier to contain the increase in funding costs against loan growth and tends to support margins when interest rates rise. Conversely, in periods of declining interest rates or intensifying deposit competition, CASA balance retention, shifts into time deposits, and the lagged behaviour of deposit costs need to be monitored.

The second strength is its position as a large corporate and commercial bank. Metrobank states that it has relationships with major conglomerates, domestic companies, multinational companies, and middle-market and SME clients. Fitch also views the bank as having long-standing relationships with leading Philippine companies and a domestic deposit market share of more than 12%. This kind of corporate-relationship base connects loans, deposits, payments, cash management, FX, bond underwriting, and investment banking. From a credit perspective, what matters more than loan growth in a single year is whether customer relationships and deposits remain even in weak economic years.

The third strength is scale and systemic importance. The company states that it had total assets of PHP3.9tn at end-2025 and maintained its position as the second-largest privately owned universal bank in the country. Fitch assigns a Government Support Rating of bbb- and incorporates the bank’s high systemic importance into its support assessment. However, because the Viability Rating is also bbb-, the Fitch notation reviewed here should not be read as implying an explicit government-support notch uplift. As this review did not confirm whether the BSP discloses the specific names of D-SIBs, this report does not state that Metrobank “is included in the BSP’s published D-SIB list.”

At the same time, the strengths of the Philippine banking market are also constraints. The domestic economy, sovereign rating, Philippine peso liquidity, domestic interest rates, and foreign investors’ emerging-market risk appetite can easily flow through to bank credit and funding conditions. In its April 2026 release, Fitch referred to the change in the Philippine sovereign outlook to Negative and stated that it had revised the outlook for Metrobank’s funding and liquidity profile in the same direction as the sovereign. This indicates that even if Metrobank’s own deposits and LCR are strong, banking-system liquidity conditions cannot be fully separated from sovereign credit.

There are also competitive constraints. Being a large bank supports deposits and corporate relationships, but it does not allow the bank to avoid loan competition, deposit competition, digital investment, or competition in cards and consumer finance among large domestic banks. Metrobank’s 2025 NIM was 3.6%, down from 3.8% in 2024 and 3.9% in 2023. It improved to 3.7% in 1Q26, but over the long term deposit costs, loan mix, the share of cards and consumer loans, and securities portfolio yields need to be assessed together.

Metrobank’s franchise assessment can be summarised as follows: its deposit and corporate base and systemic importance as a large privately owned bank are clear, but its credit profile cannot be separated from the Philippine macro, sovereign, and consumer credit cycle.

3. Segment Assessment

In assessing Metrobank’s business segments, it is necessary to first note that segment-level profit and segment-level RWA available from official materials are limited. In the 2025 Financial Statements and 1Q26 Form 17-Q reviewed for this report, detailed risk capital by segment across corporate, commercial, consumer, cards, leasing, investment banking, and insurance-related businesses was not confirmed. The table below is therefore not a strict segment-level profitability analysis, but a credit interpretation based on the company’s business description, loan growth, revenue line items, and Fitch’s comments on consumer credit.

Corporate and commercial banking is the core of the credit profile and also connects to deposits, payments, FX, and investment banking. Consumer banking and cards increase yields and fees, but in periods of household stress, delinquencies and charge-offs tend to emerge faster. Consumer loans increased 13.9% in 2025, card receivables increased 19.9%, and Fitch notes that card receivables account for almost 10% of total loans. This should therefore remain a Metrobank-specific monitoring item.

Investment and markets activities and fee and trust income contribute to revenue diversification, but market-related revenues are sensitive to interest rates, FX, bond valuations, and liquidity. Investment securities at end-2025 were large at PHP1.54tn, and the quality of these securities as liquid assets, interest-rate sensitivity, FVOCI valuation differences, and currency composition require further confirmation. In conclusion, Metrobank’s growth should be viewed not only as “loan-volume expansion,” but as a question of “which risk assets are being added and at what credit cost.”

4. Financial Profile and Analysis

Metrobank’s financial profile remains sufficient for an investment-grade bank in terms of profitability, asset quality, capital, and liquidity. At the same time, from 2025 through 1Q26, higher credit costs, a modest rise in the NPL ratio, lower capital ratios, and growth in consumer loans are all visible. Credit analysis therefore needs to distinguish between the still-solid absolute level of the metrics and the direction of change.

Key financial indicators are shown below. Unless otherwise stated, amounts are in PHP mn and are based on the company’s 2025 Financial Statements on a consolidated basis.

Profitability is an important factor supporting the current credit profile. Net interest income in 2025 was PHP124.6bn, increasing by about 19% over three years. This reflected a combination of loan growth, asset yields, and the deposit base. NIM declined from 3.9% in 2023 to 3.8% in 2024 and 3.6% in 2025, but the absolute level remains high for a large emerging-market bank. The credit focus is not the level of NIM alone, but whether the bank can offset margin compression with loan growth or fee income when deposit costs rise or interest rates decline.

Non-interest income increased to PHP33.5bn in 2025. The breakdown included service charges and commissions of PHP17.9bn, trading and securities gains of PHP4.7bn, FX gains of PHP3.5bn, and trust income of PHP1.3bn. Growth in fee income is positive for revenue diversification. On the other hand, market-related revenues are volatile, and FX gains were negative in 2024. Therefore, 2025 market revenues should not be fixed as normal earnings; net interest income and fee income should be treated as the main credit pillars, while market-related revenues are a supplementary upside factor.

On expenses, the company-disclosed cost-to-income ratio improved to 50.7% in 2025 from 53.8% in 2024. However, in 1Q26, operating expenses increased 9.8% yoy to PHP21.1bn, with the company citing transaction-related taxes and technology costs as the main drivers. Higher expenses may be reasonable as growth investment, but they pressure ROE if revenue growth slows.

Credit costs were a major change in 2025. Provision for credit and impairment losses increased from PHP6.4bn in 2024 to PHP11.9bn in 2025. Dividing 2025 provisions by the simple average of 2024-2025 net loans and receivables gives a simplified credit cost of about 0.6%. However, this is not an official company-disclosed credit-cost metric, so comparisons require caution. The NPL ratio rose from 1.4% at end-2024 to 1.7% at end-2025, and the Stage 3 loan ratio used by Fitch also rose to 1.8% at end-2025. NPL and Stage 3 can be read as similar concepts, but their definitions and denominators are not necessarily identical. NPL cover was high at 140.8% in the company release, but declined to 137.1% in 1Q26. The current level is not weak, but given the growth in consumer loans and card receivables, early delinquency indicators and the forward-looking nature of provisioning need to be monitored.

Key 1Q26 indicators are shown below. Some balance-sheet and income-statement items are based on the Form 17-Q, while some ratios and growth rates are based on the company release.

Capital is Metrobank’s most important credit buffer. At end-2025, the CET1 ratio was 16.1% and CAR was 16.8%, well above the Basel III minimum ratios stated in the bank’s Financial Statements: CET1 6.0%, Tier 1 7.5%, and CAR 10.0%. Fitch also assesses the bank’s CET1 as the highest among large bank peers. However, because the applicability and level of the BSP’s D-SIB additional buffer were not confirmed in the primary sources reviewed for this report, the full headroom against the entire regulatory stack is not asserted. The 1Q26 CET1 ratio of 14.2% still provides room, but the decline from end-2025 should be examined in the next update to identify whether growth, dividends, RWA, or valuation differences were the main driver.

Liquidity is strong. LCR was 181.7% at end-2025 and 151.1% in 1Q26, and the loan-to-deposit ratio was 76.6%. On a consolidated basis, this indicates a structure in which loans are well supported by deposits. However, currency-specific LCR, foreign-currency liquidity, access to the swap market, and matching against foreign-currency bond maturities have not been sufficiently confirmed in this review. Therefore, peso liquidity and the overall LCR are strong, but for foreign-currency bond investment, currency-specific funding should be separately checked.

The scale of investment securities should not be overlooked. Investment securities were PHP1.54tn at end-2025, accounting for roughly 40% of total assets. They are central to liquidity, earnings, and interest-rate risk management, but this review has not sufficiently analysed interest-rate sensitivity by maturity, currency, and FVOCI / amortized cost classification. Overall, Metrobank’s financial profile supports the current issuer credit, but as loan growth and consumer credit expansion continue, the direction of NPLs, Stage 3, Stage 2, credit costs, NPL cover, CET1, and LCR will determine the credit view.

5. Structural Considerations for Bondholders

The first structural issue for bondholders is that the issuer is the operating bank itself. Metrobank is not a bank holding company; it is an operating bank with deposits, loans, securities, and bank bonds. Therefore, structural subordination through dependence on subsidiary dividends, as in holding-company debt, is not the central issue. On the other hand, creditors of the operating bank sit in the same capital structure as depositors, preferential regulatory treatment, resolution regimes, secured transactions, and possible intervention by the central bank and supervisors. Even ordinary senior bank bonds need to be assessed in the context of regulation, resolution, and deposit protection, unlike corporate bonds issued by non-financial companies.

The second structural issue is the difference between government support and legal guarantee. Fitch assigns a Government Support Rating of bbb- and incorporates the possibility of support based on the bank’s systemic importance. However, this does not mean that the government legally guarantees principal and interest payments on individual bonds. In the Fitch notation reviewed here, the VR and GSR are at the same level, so an explicit support notch uplift should not be assumed. The materials reviewed for this report did not confirm any explicit Philippine government guarantee on Metrobank’s domestic or foreign-currency bonds.

The third structural issue is ownership and related-party risk. Metrobank is a large privately owned bank influenced by GT Capital Holdings and the Ty family / related parties. Major shareholders and group relationships may be positive for the customer base, corporate relationships, and governance stability. On the other hand, bank-bond investors should check related-party exposures, large exposures, intra-group transactions, and credit extended to directors and major shareholders or their related interests. The 2025 Financial Statements include items such as capital deductions related to DOSRI, but this initial report has not conducted a detailed analysis of related-party transactions. This remains a confirmation item for the next update or before investment in a specific bond.

The fourth structural issue is that investors should look at different risks in domestic bonds and foreign-currency bonds. For domestic bonds, the peso deposit base, access to the domestic capital market, BSP regulation, PDEx listing, and domestic investor demand are important. For foreign-currency bonds, sovereign ratings, foreign-currency liquidity, international investors’ appetite for emerging-market bank risk, US dollar funding costs, and FX stress become more prominent. Even if the issuer credit of Metrobank is the same, the way risk appears differs by currency, governing law, issuance market, maturity, subordination, and investor base.

The PDEx issuer page showed at least two listed domestic bonds as of May 2026. MBT Series D Bonds Due 2026 amount to PHP19bn with a 3.6000% coupon, and Series F ASEAN Sustainability Bonds Due 2027 amount to PHP35bn with a 5.4727% coupon. The PDS release dated 14 April 2026 states that Series F was upsized from an initial issuance target of PHP5bn to PHP35bn, with participation from a broad range of institutional and retail investors. This is positive evidence of access to the domestic bond market. However, recovery ranking, security, early redemption, cross-default, tax, and use-of-proceeds management for the sustainability bond cannot be asserted without reviewing the relevant offering documents.

In the 1Q26 Form 17-Q, Bonds payable were PHP86.7bn, while Bills payable and securities sold under repurchase agreements were PHP467.8bn. Deposits are the main source of overall bank funding, and bonds are a supplementary funding source. However, under money-market stress, repos, short-term funding, bond maturities, and foreign-currency funding can tighten at the same time. For foreign-currency bonds in particular, it is necessary to check not only domestic liquidity supported by peso deposits, but also foreign-currency liquidity, the swap market, and central-bank or market access.

The issuer_summary alone is not sufficient for investment decisions on individual bonds. This report organises issuer credit and does not review all outstanding bonds’ Offering Circulars, subordination, change of control, events of default, cross default, negative pledge, or use of proceeds for sustainability bonds. Therefore, relative value and covenant risk for individual instruments remain unconfirmed items.

6. Capital Structure, Liquidity and Funding

Metrobank’s funding structure is deposit-led. At end-2025, deposits were PHP2.66tn versus net loans of PHP1.98tn. In the 1Q26 company release as well, deposits were PHP2.6tn and the loan-to-deposit ratio was 76.6%, indicating headroom to support loans with deposits. For bank-bond investors, this is the most important defensive line. Banks with thick deposits are more likely to avoid immediately shrinking their loan portfolios even if market funding temporarily becomes expensive.

The deposit mix is also relatively good. Demand deposits and savings deposits at end-2025 totalled PHP1.58tn, and the company-disclosed CASA ratio was 59.2%. The CASA ratio was also 59.2% in 1Q26. Low-cost deposits support NIM, but when competition intensifies, shifts into time deposits and higher deposit costs can occur. In the Philippine banking market, interest-rate levels, government securities yields, competition from mutual funds and money-market products, and competition with digital banks affect deposit costs. The maintenance of the CASA ratio is therefore not merely a funding indicator, but also an earnings-monitoring indicator.

Liquidity metrics are strong. LCR was 181.7% at end-2025 and 151.1% in 1Q26. An LCR above 150% indicates headroom against short-term stress. However, because it has declined from end-2025, the credit view would need to be revisited if loan growth, securities valuation, repo funding, and foreign-currency liquidity deteriorated simultaneously and LCR fell sharply.

The capital structure is centred on common equity Tier 1. At end-2025, CET1 capital after regulatory adjustments was PHP381.3bn, RWA was PHP2.37tn, and the CET1 ratio was 16.12%. Tier 2 capital consisted mainly of general loan-loss reserves, and the Financial Statements show Tier 2 capital of PHP16.5bn and zero unsecured subordinated debt at end-2025. This indicates that the capital structure is heavily dependent on thick CET1. For bank-bond investors, the core issues are senior issuer credit, deposits, CET1, RWA, and retained earnings, rather than a complex AT1 or Tier 2 loss-absorption stack.

That said, the decline in capital ratios should be monitored. The 1Q26 company release shows a CET1 ratio of 14.2% and CAR of 14.9%, down from end-2025. These levels are still sufficient, but if loan growth continues, RWA increases, and dividends or market valuation differences pressure capital, capital headroom will gradually narrow. Fitch identifies CET1 materially below 12% for a prolonged period as a negative rating sensitivity. In initial coverage of Metrobank, a CET1 ratio in the 14% range is not treated as a danger level, but the next review should confirm whether it returns to the 16% range, stabilises in the 14% range, or falls further.

Funding and liquidity can be summarised as follows:

Metrobank’s funding assessment is currently strong. Deposits, CASA, LCR, and CET1 are all credit-supportive factors. The first items to monitor are not deposit outflows, but simultaneous changes in NIM, credit costs, CET1, and LCR. If loan growth remains strong while consumer credit costs rise, CET1 declines, and LCR falls further, the assessment of current headroom would change.

7. Rating Agency View

Rating-agency views are important in Metrobank’s credit analysis. The assessment of its foreign-currency bonds and by international investors is strongly linked not only to standalone bank credit, but also to the Philippine sovereign rating, the likelihood of banking-system support, and the government support rating. However, rating-agency views are not a substitute for analysis.

The company’s IR page states that Metrobank has investment-grade ratings of Moody’s Baa2 and Fitch BBB-, in line with the Philippine sovereign rating. The latest primary Moody’s release text has not been confirmed in this review, so this report does not assert Moody’s detailed upgrade or downgrade triggers. Secondary reporting states that Moody’s affirmed the investment-grade ratings of large Philippine banks, including Metrobank, in May 2025 and assessed their capital, liquidity, and profitability, but a primary report needs to be checked for formal analysis.

For Fitch, a republication of the 28 April 2026 release was reviewed. In that release, Metrobank’s Long-Term IDR is BBB-, the Outlook is Stable, the Viability Rating is bbb-, and the Government Support Rating is bbb-. Fitch states that the bank’s Long-Term IDR is driven by its VR and backstopped by its GSR. In other words, Metrobank has standalone credit strength equivalent to the lower end of investment grade, while government-support expectations are assessed as a backstop at the same level. Based only on the notation reviewed here, an additional support notch should not be assumed.

Fitch’s positive assessment mainly lies in the franchise, capital, and liquidity. The release states that Metrobank has a solid franchise and competitive position in the Philippines and has demonstrated above-industry-average financial performance through the credit cycle. It also assesses the bank’s CET1 ratio of 16.1% at end-2025 as the highest among large bank peers. In addition, it views the liquid balance sheet, reflected in a loan-to-deposit ratio of 74% at end-2025, as a key rating strength.

Fitch’s caution points are consumer credit, profitability, and sovereign linkage. The release states that the Stage 3 loan ratio rose to 1.8% at end-2025, mainly reflecting credit impairment in credit-card receivables and auto finance. It also notes that credit-card receivables accounted for almost 10% of total loans at end-2025 and that if consumers are pressured by an inflationary environment or slower growth, the bank could become vulnerable to impairments and charge-offs. On profitability, Fitch expects short-term pressure from higher credit costs and slower consumer-loan growth, with recovery in 2027.

Rating sensitivities are also useful in practice. Fitch identifies deterioration in core capital, such as a CET1 ratio materially below 12% for a sustained period, or a Stage 3 loan ratio persistently above 4%, as negative factors for the VR. Conversely, it states that an upgrade of the VR could be driven by a Stage 3 loan ratio remaining persistently below 1.5%, improvement in core profitability metrics to above 3.5% over several years, and maintenance of the CET1 ratio above 16%. These are rating-agency criteria, not mechanical buy-sell rules for investors, but they are useful monitoring indicators.

Fitch’s government-support assessment has a dual meaning for bond investors. On one hand, because Metrobank is treated as a systemically important bank, support expectations are likely to remain in the issuer credit even if standalone credit temporarily weakens. On the other hand, because the support assessment depends on the Philippine sovereign, a deterioration in the sovereign rating or outlook could flow through to the bank rating ceiling or support assessment. Fitch states that the GSR is likely to be downgraded if the sovereign is downgraded. Therefore, in assessing Metrobank’s foreign-currency bonds, it is necessary to monitor not only the bank’s own NPLs and CET1, but also the direction of the Philippine sovereign. The GSR should be treated as a rating-agency assessment of possible support under stress, not as a legal guarantee.

The rating-agency view and this report’s credit assessment are broadly aligned. Metrobank has a strong domestic franchise, good capital, and thick liquidity. At the same time, consumer credit, NIM, and sovereign linkage are constraints. Because this report has not confirmed market data or Offering Circulars, it does not address relative value or rating notching for individual bonds.

8. Credit Positioning

Metrobank’s credit positioning is best placed as an investment-grade bank among large Philippine banks, supported by its deposit base, capital, profitability, and systemic importance. Unlike smaller banks, consumer-finance companies, or non-banks, deposits and corporate relationships support the credit floor. On the other hand, it should not be treated as a developed-market megabank or a highly rated bank fully independent from the sovereign. It is a large emerging-market bank linked to the Philippine sovereign rating, domestic macro conditions, banking-system liquidity, and the consumer credit cycle.

Compared with other large domestic banks, Metrobank sits alongside BDO Unibank and Bank of the Philippine Islands as one of the major privately owned banks. This initial report has not prepared a detailed comparison table against BDO and BPI using aligned primary sources, so it does not assert a granular relative ranking. However, the fact that Fitch assesses Metrobank’s CET1 ratio as the highest among large peers, and that the company describes itself as the second-largest private universal bank in the country, means capital and scale are credit-supportive factors even within the group of large domestic banks.

For domestic peso bonds, deposits, domestic investors, the PDEx market, BSP regulation, and domestic liquidity are likely to provide support. For foreign-currency bonds, in addition to the same issuer credit, sovereign risk, foreign-currency liquidity, US dollar rates, EM bank spreads, and international investors’ risk tolerance matter. This report has not reviewed live spreads or all Offering Circulars, so it does not make specific cheap/rich calls or assess the terms of individual bonds.

9. Key Credit Strengths and Constraints

Metrobank’s credit strength is supported by deposits, capital, profitability, liquidity, and scale. In bank credit, the question is not ROE in good years, but whether deposits remain in bad years, capital absorbs losses, liquidity supports short-term debt, and earnings can absorb credit costs. Metrobank currently satisfies these conditions to a considerable extent.

The main strengths are total assets of PHP3.88tn at end-2025, deposits of PHP2.66tn, a CASA ratio of 59.2%, end-2025 CET1 of 16.1%, LCR of 181.7%, and net income attributable to parent of PHP49.7bn. In 1Q26, the bank also maintained a loan-to-deposit ratio of 76.6%, LCR of 151.1%, and net income of PHP12.6bn. It is not a bank where immediate short-term liquidity crisis or insolvency is the central issue. The April 2026 PHP35bn domestic bond issuance also confirms access to the domestic market.

The main constraints are sovereign linkage, consumer credit, credit costs, NIM decline, lower capital ratios, the securities portfolio, and unconfirmed individual bond terms. Fitch points to the rise in the Stage 3 loan ratio to 1.8% at end-2025 and the size of card receivables, while company disclosures also show provisions increasing to PHP11.9bn in 2025. Expansion in cards and consumer loans increases NIM and ROE in good times, but increases NPLs and charge-offs in bad times.

Metrobank is therefore not a “weak bank,” but neither is it a bank for which consumer credit, capital ratios, and the sovereign outlook can be ignored. The conclusion from initial coverage is that senior issuer credit has meaningful resilience, while foreign-currency liquidity, Offering Circulars, live spreads, and related-party and large exposures should be additionally checked for investment decisions.

10. Downside Scenarios and Monitoring Triggers

Metrobank’s downside path lies less in sudden deposit outflows or a liquidity crisis and more in a simultaneous deterioration in consumer credit, credit costs, NIM, capital ratios, and the sovereign outlook. Based on current NPL, CET1, and LCR levels, the likelihood of a near-term sharp deterioration in issuer credit is not high. However, for banks growing consumer loans, Stage 2, delinquencies, credit costs, charge-offs, and declining NPL cover need to be monitored before the NPL ratio rises.

The first focus is cards and consumer loans. Card receivables are high-yielding and support NIM and fees in normal times, but if household income, inflation, or employment deteriorates, delinquencies tend to appear quickly. As Fitch points out, if card receivables account for almost 10% of total loans, this is not a small ancillary business. The next focus is a path in which NIM decline, expense growth, and higher credit costs overlap, weakening ROE and internal capital generation at the same time.

On capital, the 1Q26 CET1 ratio of 14.2% remains sufficient, but it has declined from 16.1% at end-2025. If loan growth, consumer loans, dividends, securities valuation, and RWA growth combine to cause a continued decline in CET1, the current capital assessment would weaken. In addition, a sovereign downgrade, pressure on foreign-currency liquidity, sharp changes in domestic interest rates, and stress in the government securities market could affect issuer ratings, market funding, and foreign-currency bond spreads. Related-party exposures, large exposures, and sector concentration also remain in the downside analysis because they were not reviewed in detail.

Monitoring items are as follows:

In practice, no single indicator should determine the view. Even if the NPL ratio rises slightly from 1.75%, issuer credit is likely to remain intact if NPL cover, ROE, CET1, and LCR remain sufficient. Conversely, if Stage 2 increases, NPL cover declines, provisions rise, and CET1 and LCR also fall, the credit view should become more cautious early.

11. Credit View and Monitoring Focus

The current credit level is sufficient for Metrobank to maintain investment-grade issuer credit as a large privately owned Philippine bank, and the basic repayment and refinancing capacity for senior bank bonds is supported by the deposit base, earnings power, capital, and liquidity. The direction of credit quality is not deteriorating sharply because of strong capital and deposits, but given consumer credit, credit costs, lower capital ratios, and the sovereign outlook, the appropriate stance is flat to moderately cautious rather than one of active improvement. Based on end-2025 CET1 of 16.1%, 1Q26 CET1 of 14.2%, LCR of 151.1%, and an NPL ratio of 1.75%, the likelihood of a rapid near-term change in credit quality is not high, but the view needs to be revisited if deterioration in card and consumer loans, continued CET1 decline, and sovereign rating weakness occur together.

The largest factors supporting this credit strength are deposit-led funding and thick capital. Deposits were PHP2.66tn at end-2025, the company-disclosed CASA ratio was 59.2%, and the 1Q26 loan-to-deposit ratio was 76.6%. This indicates a structure in which the loan portfolio is not excessively dependent on market funding. The CET1 ratio was also 16.1% at end-2025, and Fitch assesses it as high among large bank peers. These are reasons why the issuer credit would not immediately break down even if credit costs increase to some extent.

Earnings also support credit. Net income attributable to parent was PHP49.7bn in 2025 and PHP12.6bn in 1Q26, while ROE was 12.3% in 2025. NII was PHP124.6bn in 2025 and PHP33.4bn in 1Q26, and core earnings remain strong. Fee and trust income is also increasing. Metrobank is therefore not a bank that relies only on capital for loss absorption; it is a bank that can absorb a certain level of credit costs through earnings.

The largest constraints are the consumer credit cycle and sovereign linkage. Growth in consumer loans and card receivables supports profitability, but under household stress it increases delinquencies and charge-offs. Fitch’s statement that card receivables account for almost 10% of total loans is important in assessing future credit costs. The NPL ratio is still low, but NPL cover declined to 137.1% in 1Q26, and provisions increased in 2025. Whether asset quality stabilises from here or gradually deteriorates from consumer credit is the key fork in the credit view.

Sovereign linkage should also be treated both as a support factor and as a constraint. As a systemically important large bank, Metrobank benefits from government-support expectations, but that support assessment is constrained by the credit strength of the Philippine sovereign. For foreign-currency bond investors, even if bank-specific metrics are sound, the sovereign rating, foreign-currency liquidity, and international investors’ tolerance for EM risk affect spreads and funding conditions. The government support rating is not an explicit guarantee and should not be confused with legal protection for individual bonds.

By security class, this report focuses on senior issuer credit. Domestic senior bonds are supported by deposits, LCR, domestic investor demand, and PDEx market access. Foreign-currency senior bonds are subject to the same issuer credit, but sovereign risk, foreign-currency liquidity, and international-market risk premia are more influential. If subordinated debt or loss-absorbing instruments exist, a different assessment from senior debt would be needed, but this review has not confirmed the terms of all instruments.

The credit view would improve if the NPL ratio and Stage 3 remained low and stable, losses on consumer loans and card receivables were fully absorbable within earnings, the CET1 ratio stabilised or recovered in the 14-16% range, LCR maintained headroom above 150%, and Moody’s / Fitch investment-grade ratings and the sovereign outlook stabilised. Conversely, if card and consumer-loan delinquencies increase, NPL cover declines, provisions rise, CET1 falls, LCR declines, and the sovereign rating deteriorates at the same time, the current headroom in senior credit would narrow.

The current conclusion is to position Metrobank as “an investment-grade credit with strong deposits, capital, and liquidity as a large Philippine bank, but with consumer credit and sovereign linkage requiring monitoring.” The issuer credit has defensive capacity, and this is not yet a case where near-term credit deterioration is the central scenario. However, to anticipate improvement more strongly, the quality of consumer loans, the stability of capital ratios, a more settled sovereign outlook, and confirmation of individual bond terms are needed. Because live spreads have not been reviewed, this report does not make relative-value or buy / sell / hold judgments.

12. Short Summary & Conclusion

Metropolitan Bank & Trust Company is a large privately owned universal bank in the Philippines, and its senior issuer credit is supported by a thick deposit base, investment-grade ratings, high capital ratios, and strong liquidity. Earnings in 2025 and 1Q26 remain sound, but consumer loans and card receivables, credit costs, the decline in the CET1 ratio, and linkage with the Philippine sovereign are the key monitoring issues.

13. Sources

Company and primary sources

• Metrobank company profile / about us, accessed 2026-05-13. Used to confirm the company profile, establishment, business activities, PSE listing, ownership structure, and group overview.
  https://www.metrobank.com.ph/about-us
• Metrobank investor relations page, accessed 2026-05-13. Used to confirm the franchise, branch and ATM network, 2024 highlights, and Moody’s / Fitch rating line.
  https://www.metrobank.com.ph/about-us/investor-relations
• Metrobank company disclosures page, accessed 2026-05-13. Used to confirm 2025 highlights, annual materials, regulatory filing links, and 2025 CET1, CAR, NPL cover, and LCR.
  https://www.metrobank.com.ph/about-us/company-disclosures
• Metrobank 2025 Financial Statements. Used to confirm total assets, loans, deposits, revenue, profit, NIM, ROE, ROA, NPL, capital ratios, and Basel III capital tables for 2023-2025.
  https://web-assets.metrobank.com.ph/1776766197-metrobank-2025-financial-statements.pdf
• Metrobank SEC Form 17-A annual reports page, accessed 2026-05-13. Used to confirm the location of the 2025 Form 17-A.
  https://www.metrobank.com.ph/articles/about-us/regulatory-filings-sec17a
• Metrobank SEC Form 17-Q for the quarter ended March 31, 2026. Used to confirm the 1Q26 balance sheet, income statement, shareholders, Bonds payable, Bills payable and SSURA, legal proceedings, and related items.
  https://web-assets.metrobank.com.ph/1777946998-metrobank_sec-17q-march-31-2026-quarterly-report_05may2026.pdf
• Metrobank press release, "Metrobank posts income of PHP12.6 billion in 1Q26", May 5, 2026. Used to confirm 1Q26 net income, NII, NIM, loan growth, deposits, CASA ratio, loan-to-deposit ratio, NPL, NPL cover, CET1, CAR, and LCR.
  https://www.metrobank.com.ph/articles/metrobank-net-income-first-quarter-2026
• PDS issuer page for Metropolitan Bank & Trust Company, accessed 2026-05-13. Used to confirm PDEx-listed domestic bonds, Series D / Series F, issue amounts, coupons, and disclosure history.
  https://www.pds.com.ph/issuer_list/metropolitan-bank-trust-company-mbt/
• PDS news release, "Metropolitan Bank & Trust Company Returns to PDEx with PHP 35 billion Worth of ASEAN Sustainability Bonds", April 14, 2026. Used to confirm the issue size, demand, and use of proceeds for the Series F ASEAN Sustainability Bonds due 2027.
  https://www.pds.com.ph/news_releases/metropolitan-bank-trust-company-returns-to-pdex-with-php-35-billion-worth-of-asean-sustainability-bonds/

Rating and secondary sources

• Fitch Ratings release republication, "Fitch Affirms the Philippines' Metrobank at 'BBB-'; Outlook Stable", April 28, 2026. Used to confirm the Fitch IDR, VR, GSR, Stage 3, card receivables, capital, and rating sensitivities. If the direct Fitch page can be confirmed, it should be prioritised in the next review.
  https://www.marketscreener.com/news/fitch-affirms-the-philippines-metrobank-at-bbb-outlook-stable-ce7f59ddd08ef726
• Malaya Business Insight, "Moody's affirms BDO, BPI, Metrobank investment-grade credit ratings", May 28, 2025. Used as secondary confirmation of Moody’s Baa2 / Stable. Treated as a supplementary source because the primary release has not been confirmed.
  https://malaya.com.ph/business/business-news/moodys-affirms-bdo-bpi-metrobank-investment-grade-credit-ratings/
• S&P Global Market Intelligence, "Major Philippine banks likely to grow earnings amid economic tailwinds", August 25, 2025. Used only as supplementary sector context for large Philippine banks.
  https://www.spglobal.com/market-intelligence/en/news-insights/articles/2025/8/major-philippine-banks-likely-to-grow-earnings-amid-economic-tailwinds-92192071

Unverified / Pending items