{"id":323673,"date":"2023-06-15T00:01:00","date_gmt":"2023-06-14T16:01:00","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=323673"},"modified":"2023-06-14T23:20:02","modified_gmt":"2023-06-14T15:20:02","slug":"stock-in-focus-philippine-national-bank-pnb-15-june-2023-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-philippine-national-bank-pnb-15-june-2023-by-ap-securities\/","title":{"rendered":"Stock in Focus: Philippine National Bank (PNB) – 15 June 2023 by AP Securities"},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>PNB<\/td><\/tr>
Company Name<\/strong><\/td>Philippine National Bank<\/td><\/tr>
Broker<\/strong><\/td>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>15 June 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Sell<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 25.48<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

Target Price-wise, the price upside for PNB is high but we would recommend a Sell for now given the bank’s subpar asset quality. Investors can buy back the stock later on, if valuations remain attractive and earnings start to recover.<\/p>\n\n\n\n

<\/div>\n\n\n\n

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

Beginning June 30, the Reserve Requirement Ratio (RRR) for banks will be reduced by 250bps to 9.5%. This decrease is larger than previous expectations of 200bps, which would have taken the RRR down to only 10%. As such, the liquidity boost which this would provide would further stimulate banks\u2019 lending capacity. <\/p>\n\n\n\n

On another note however, the latest data from the BSP also showed that asset quality continued to decline sequentially. While still down year-on-year (YoY), the non-performing loans (NPL) ratio for April showed an uptick of 8bps relative to March, bringing its year-to-date increase to 13bps.<\/p>\n\n\n\n

As long as NPL ratios manage to stay lower compared to year-ago levels, we do not expect the sequential increases to significantly alter the provisioning plans of banks in the country, with the exception of PNB and SECB. Among the major banks with available data, PNB is one of the banks with i.) the highest NPL ratios; and ii.) the lowest NPL coverage (below the 100% mark). <\/p>\n\n\n\n

As a result, given the sequential downtrend in asset quality, we believe that both PNB and SECB could have their profitability compromised from a provisioning standpoint.<\/p>\n\n\n\n

<\/div>\n\n\n\n

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