{"id":325198,"date":"2023-10-05T01:06:46","date_gmt":"2023-10-04T17:06:46","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=325198"},"modified":"2023-10-05T01:06:47","modified_gmt":"2023-10-04T17:06:47","slug":"stock-in-focus-unionbank-of-the-philippines-ubp-5-oct-2023-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-unionbank-of-the-philippines-ubp-5-oct-2023-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: Unionbank of the Philippines (UBP) – 5 Oct 2023 by Regina Capital Development Corp."},"content":{"rendered":"\n

Summary of Broker’s Recommendation<\/h2>\n\n\n\n
Stock Code<\/strong><\/td>UBP<\/td><\/tr>
Company Name<\/strong><\/td>Unionbank of the Philippines<\/td><\/tr>
Broker<\/strong><\/td>Regina Capital Development Corp.<\/td><\/tr>
Opinion Issued on<\/strong><\/td>5 Oct 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 97.50<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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In line with the bank\u2019s recent performance, we are revising our Target Price to P97.50\/share. This provides a significant upside potential from UBP\u2019s closing last traded price of P70.70\/share. Thus, we are keeping our BUY recommendation on UBP.<\/p>\n\n\n\n

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

Unionbank of the Philippines (UBP) had a strong 1st half (1H) 2023 performance, with a +6% year-on-year (y\/y) increase in bottomline to P6.4 billion and a +60% y\/y spike in net revenues to P34.4 billion. This growth was supported by a +41% y\/y increase in Net Interest Income (NII) to P24 billion, primarily from a +43% y\/y rise in UBP’s loan portfolio and wider Net Interest Margin (NIM) at 5.2%.<\/p>\n\n\n\n

UBP focused on high-yielding consumer loans, constituting 55% of total loans, helping offset rising funding costs. However, opex rose by +82% y\/y to P21.8 billion due to integration costs related to Citi’s consumer unit acquisition and UnionDigital’s establishment. Despite the strong performance, UBP saw an uptick in non-performing loans (NPL) during 1H 2023, increasing by +10bps y\/y to 5.00%, higher than the industry’s NPL ratio of 3.16%.<\/p>\n\n\n\n

UBP’s strategic vision aims to become the largest and most profitable bank in the Philippines by 2025, leveraging diversified income streams, efficient cost management, and a robust customer base exceeding 12 million. However, focusing on riskier consumer loans may lead to a relatively higher NPL in the upcoming quarters.<\/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>