{"id":325349,"date":"2023-10-18T00:01:00","date_gmt":"2023-10-17T16:01:00","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=325349"},"modified":"2023-10-17T23:50:17","modified_gmt":"2023-10-17T15:50:17","slug":"stock-in-focus-bank-of-the-philippine-islands-bpi-18-oct-2023-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-bank-of-the-philippine-islands-bpi-18-oct-2023-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: Bank of the Philippine Islands (BPI) – 18 Oct 2023 by RCBC Securities"},"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>RCBC Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>18 Oct 2023<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 124.30<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

We reiterate our BUY rating for BPI with our target price (TP) at Php124.30, which implies a 17.0% upside excluding our 2023 dividend yield forecast of 3.2%. We believe the bank will remain resilient amid inflationary pressures given its solid asset quality. We also see room for net interest margin (NIM) expansion and loan growth to continue to the high single-digits for the 2nd half (2H) of 2023.<\/p>\n\n\n\n

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

We believe BPI still has room for net interest margin (NIM) expansion as long as the BSP does not cut rates and as there are loans that still have to repriced. With PH Banks\u2019 non-performing loans (NPL) ratio slightly improving to 3.42% in August, breaching a new four-month low, we remain confident BPI will continue to be a defensive bank pick as it has the 2nd best asset quality in the industry.<\/p>\n\n\n\n

BPI’s core net income jumped by 51% to Php25.2 billion in the 1st half (1H) 2023 as net interest income rose by 27% to Php50.1 billion with NIM expanding by 56bps to 4.03% year-on-year (y\/y) and total loans and deposits grew by 10.5% and 7.6%, respectively. <\/p>\n\n\n\n

Non-interest income dropped by 15% to Php15.5 billion due to the property sale recognized last year. Excluding this one-off, non-interest would be 16.3% higher, primarily from the increase in fees from credit cards, service charges, and trading securities. <\/p>\n\n\n\n

OPEX climbed 21% to Php31.4bn from salary increases, investments in digitalization, and marketing campaigns. NPL ratio declined by 11bps to 1.88%, while NPL coverage ratio stood at 167.4%. CET1 was at 15.5%, while CAR was at 16.4% ROE stood at 15.5%.<\/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>