Member Info for 3xcogitator

A new beginning, a fresh start..

"

New MB intends to carry out a reduction of capital by cancelling the New MB Bonus Shares and the Special Subscriber Shares as soon as possible after the New MB Bonus Shares are issued (the "New MB Reduction of Capital"), subject to the approval of the Court.

The cancellation of the New MB Bonus Shares and the Special Subscriber Shares would create a realised profit of New MB which, after the deduction of any realised losses of New MB, would be available for distribution.

New MB does not anticipate declaring a dividend in the near future.

"

@Bermondsey Yes, thanks for posting the link.

@Jonfon this was what happened on May 18th.

@Jonfon

At the London Value Investors Conference, someone took a screenshot of the MTRO presentation and posted on twitter.

MTRO too cheap to ignore

@Jonfon

You can find it on twitter. May 18th. Search for Metro Bank.

I was actually hoping somebody else would post the link.

Another beautiful weekend… MTRO significantly undervalued, too cheap to ignore…

turns out out it was in the London Value Investor Conference on 18th May. Upside: 814p

@Mrkag

The RNS was yesterday evening after market.

Beautiful weekend… MTRO significantly undervalued. profitable bank, too cheap to ignore… looking forward to the weeks ahead

Interesting…

“ Jamie Dimon the CEO of JP Morgan ($JPM) the world's largest bank says short selling of bank stocks should be banned & short sellers of bank stocks should be prosecuted ”

@RonnieH was a long time coming indeed.

Now that the company has shown profitability, what price would a takeover bid be?

value indeed.

Price-to-Book Value: 0.18

Forward Price-Earnings: between 2 and 4

all these are based on Mainstream analysts' estimates.

of course, forward multiples are attractive only to long term investors.

a lot of noise in this forum.

another 25bps.

20 billion x 0.25% = 50 million (29p/year)

With inflation does the Real value of your mortgage loan increase or decrease.

You missed one part of the equation. Inflation.

“As inflation rises, so should the value of your home. The loan-to-value (LTV) ratio of your mortgage will decrease as your home's value increases over time. In other words, your fixed-rate mortgage payments stay unchanged while your home's equity rises”

Not only Metro Bank has none of the issues those banks are facing, in some cases metro may actually benefit from the situation we are seeing.

For example, Metro benefits from rising rates because of the significantly shorter duration of their portfolio and is expected to report higher income because of it. Whereas SVB was actually hit by rising rates because of its long-dated treasury portfolio.

Another example: many reported that some US Community banks experience inflows of deposits. Google search the following headlines:

"America’s Smallest Lenders See Deposit Boost Amid Banking Turmoil on Wall Street."

"Community banks report inflows during tumultuous week."

Bloomberg, etc

Perhaps what the market may have missed is whether metro could eventually get IRB.

Metro is closer to IRB accreditation than I thought. For me IRB has always been a bonus because MTRO is this cheap.

They already have the system in place (by Moody’s) and went live in phases starting Q1 last year, hence they were somewhat optimistic though very cautious in their choice of words in 2022, that they could potentially get IRB in 2022.

And from the recent annual and pillar reports, it seems their regulatory reporting system is ready for IRB and for immediate use anytime the regulator approves the IRB. If I read this right, IMHO it could come any time now. Or maybe in H1.

what an opportunity to add more MTRO

Metro's weighted avg portofolio pricing duration is 1.7 years excluding cash and 1.3 year including cash.
Moreover, its Loan to Deposit ratio is only 82%.
Lastly, the business model is significantly different (clients, loan, deposit, concentration, etc).

I had a BUY opinion on 17th Aug 2022, the sp was 84.30p.
It declined to 69.9p in October before the SP doubled by end of Jan, and more by February. 155+p

short term vs long-er term. All based on fundamentals.

“Currently it is around 66% with NTAV easing slightly to £740 million, but a 10% discount implies a stock target of 400p.”

https://www.ii.co.uk/analysis-commentary/stockwatch-why-theres-more-upside-share-after-80-rally-ii527146

Results for Year ended 31 December 2022 were very good, profitable Q4 being the highlight.

As usual, CEO made very conservative guidance (and so far almost always exceed them), even John Cronin who used to be bearish and a skeptic knew Metro could generate better ROTE. AIRB progress is encouraging, needs patience, and it will be key to maximize ROTE potential.

As expected, current management wants to pursue Growth Mode by opening new stores. IMHO this is where the recent activist Caius will disagree, Metro could pursue other options. Now that metro bank is making money, there will be more options. What will it be, I don’t know. Exciting time ahead.

the company's guidance implies £155m per year is possible by 2024.
(with AIRB which they have been cautiously optimistic. it's a bonus if they get this.)

Nonetheless BoErate is now 4.0%, a game-changer, a further upside from the plan.
We will hear the latest update next week.

a PE of 10 that would imply MTRO 900p per share (1.55 B market cap) by 2024

_