{"id":323826,"date":"2023-06-26T22:20:41","date_gmt":"2023-06-26T14:20:41","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=323826"},"modified":"2024-02-16T01:28:46","modified_gmt":"2024-02-15T17:28:46","slug":"stock-in-focus-bank-of-the-philippine-islands-bpi-26-june-2023-by-regina-capital-development-corp-2","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-bank-of-the-philippine-islands-bpi-26-june-2023-by-regina-capital-development-corp-2\/","title":{"rendered":"Stock in Focus: Bank of the Philippine Islands (BPI) – 26 June 2023 by Regina Capital Development Corp."},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>BPI<\/td><\/tr>
Company Name<\/strong><\/td>Bank of the Philippine Islands<\/td><\/tr>
Broker<\/strong><\/td>Regina Capital Development Corp.<\/td><\/tr>
Opinion Issued on<\/strong><\/td>26 June 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 117.20<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

The Bank of the Philippine Islands (BPI) surprised the street with its better-
than-expected performance in the 1st quarter (1Q) of 2023, prompting us to adjust our Target Price to P117.20 per share.<\/p>\n\n\n\n

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

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

BPI\u2019s stellar 1Q 2023 performance was highly attributed to the +27.22% year-on-year (y\/y) increase in its net interest income (NII) of P23.16 billion. This was further boosted by the -60% y\/y reduction in BPI\u2019s loan loss provisions, which was booked at P1 billion, as the macroeconomic backdrop improved.<\/p>\n\n\n\n

Moving in consonance with the upswing in BPI\u2019s NII was its NIMs. The latter expanded by 52bps to 3.94% on the back of the adjustments in policy rates resulting in recovery of asset yields. However, the current level of borrowing costs may dampen loan demand. That said, we echo the loan growth expectations of BPI\u2019s management\u2014seeing low to mid-teens consumer loan growth.<\/p>\n\n\n\n

Meanwhile, the growth in BPI\u2019s flow biz was mainly driven by higher underwriting fees and service charges. Additionally, the removal of the cap on credit card transactions positively affected its non-NII. Hence, BPI\u2019s 1Q 2023 non-NII of P7.56 billion (+18.62% y\/y).<\/p>\n\n\n\n

Expenses, on the other hand, went up by +19.70% y\/y to P15.06 billion largely due to the higher ops and marketing ops. BPI\u2019s CAR and CET1 ratios slightly slipped by -56bps y\/y to P16.58% and – 56bps y\/y to 15.70%, respectively. Despite this, BPI\u2019s capital rations remain above the BSP\u2019s min. requirements.<\/p>\n\n\n\n

Moreover, BPI\u2019s management shared that they are still in the process of securing regulatory approvals on the Rbank-BPI merger. Nevertheless, we don\u2019t see the transaction to dent BPI\u2019s asset quality.<\/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>