Metrobank's net income up 6% to US$111m in Q1

Interest income on loans also increased 22.7%.

According to Maybank Kim Eng, 1Q17 net income rose 6% YoY to PHP5.56b (US$111m) to account for 30% of our FY17E. MBT’s 1Q is seasonally strong. Moreover, interest income on loans jumped 22.7% YoY, nearly mirroring loan growth of 26.2%.

"This continued its trend from 3Q16 and compensated for a fall in interest earnings on investment securities. Total investments dropped 13% YoY to PHP390b. We estimate that 1Q17 loan yields and average asset yields were flat YoY at 5.48% and 4.73%, respectively."

Here's more from Maybank Kim Eng:

In addition, interest expense on deposits fell 0.4% YoY despite customer deposit growth of 16.5%. This was due to faster growth in low-cost CASA of 19.5%, which brought down average deposit costs by 11bps YoY to 0.76%.

We estimate that NIM improved 8bps to 3.68%. We haven’t factored the medium-term notes programme amounting to USD2b in our forecasts as the bank has yet to issue these notes. For FY17E, we are looking at a 15bp improvement in NIM to 3.67% on the back of 18% loan growth and a 13% increase in net interest income.