{"id":323092,"date":"2023-05-09T07:49:28","date_gmt":"2023-05-08T23:49:28","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=323092"},"modified":"2023-05-09T07:49:29","modified_gmt":"2023-05-08T23:49:29","slug":"stock-in-focus-bdo-unibank-inc-bdo-9-may-2023-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-bdo-unibank-inc-bdo-9-may-2023-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: BDO Unibank, Inc. (BDO) – 9 May 2023 by Regina Capital Development Corp."},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>BDO<\/td><\/tr>
Company Name<\/strong><\/td>BDO Unibank Inc.<\/td><\/tr>
Broker<\/strong><\/td>Regina Capital Development Corp.<\/td><\/tr>
Opinion Issued on<\/strong><\/td>9 May 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 160.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

In line with the beat in our initial estimates, we are reinforcing our BUY recommnedation while revising our Target Price to P160.00\/share. This better reflects our high single-digit loan growth expectation for the bank amid the relatively improving capacity of the public.<\/p>\n\n\n\n

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Analysis and Opinion<\/h2>\n\n\n\n

Another stellar feat for BDO Unibank, Inc. (BDO). In the 1st quarter (1Q) of 2023, BDO reported Net Income (NI) of P16.53 billion, reflective of a 40.44% year-on-year (y\/y) increase, buoyed by its strong core biz.<\/p>\n\n\n\n

BDO\u2019s NII went up by +27.95% y\/y to P43.39 billion on wider net interest margin (NIM) at 4.58% (+55bps y\/y) as the bank repriced its loans upward. Note that this was despite the -6.30bps drop in its CASA to Loans Ratio at 95.3% in 1Q 2023.<\/p>\n\n\n\n

During the quarter, the bank\u2019s loan portfolio rose by +8% y\/y to P2.58 billion, with the consumer segment posting the fastest growth with +16% y\/y to P610 million amid reopening of the local economy. Meanwhile, both the middle market and corporate segments registered each grew +6% y\/y on rising working capital requirements to P674 million and P1.30 billion, respectively.<\/p>\n\n\n\n

On the other hand, non-NII stood at P18.92 billion (up 13% y\/y) in 1Q 2023 mainly on better insurance premiums (+16.28% y\/y) and trading & FX gains (+25% y\/y). Asset quality remained manageable at 1.98% as of end-Mar, prompting BDO to cut its loan loss provisions by -14.69% y\/y to P3.19 billion. <\/p>\n\n\n\n

Nonetheless, its NPL cover of 170% provides more than sufficient buffer for potential headwinds brought by elevated inflation and rising interest rates on BDO\u2019s loan quality. After all, consumer loans were just 24% of BDO\u2019s loan portfolio and 49% of which were secured for these were Mortgage loans.<\/p>\n\n\n\n

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Check how many brokers recommend this stock<\/h2>\n\n\n\n
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All Stock Rankings<\/a><\/blockquote>