{"id":326291,"date":"2024-01-05T12:32:51","date_gmt":"2024-01-05T04:32:51","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=326291"},"modified":"2024-01-05T12:32:54","modified_gmt":"2024-01-05T04:32:54","slug":"stock-in-focus-bank-of-the-philippine-islands-bpi-5-jan-2024-by-ap-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-bank-of-the-philippine-islands-bpi-5-jan-2024-by-ap-securities\/","title":{"rendered":"Stock in Focus: Bank of the Philippine Islands (BPI) – 5 Jan 2024 by AP 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>AP Securities<\/td><\/tr>
Opinion Issued on<\/strong><\/td>5 Jan 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 120.72<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
<\/div>\n\n\n\n

At our Target Price of 120.72 per share, we recommend a BUY on the bank on account of its still significant upside of 14.1%.<\/p>\n\n\n\n

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

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

Ayala bank swallows up RBC<\/h3>\n\n\n\n

As of Jan 1, 2024, BPI and Robinsons Bank Corp. (RBC) have now officially merged, with the former remaining as the surviving entity. The acquisition was conducted via a share-for-share swap based on both banks\u2019 book values as of June 30, 2022 with RBC being valued at a book value of P25.9-Billion and BPI likewise issuing 314-Million shares at a book value per share (BVPS) of P82.52. <\/p>\n\n\n\n

Total consideration paid by BPI amounts to P25.9-Billion, which means that RBC was valued at essentially 1.0x P\/B, a considerably hefty price tag when compared to the mean of current P\/B multiples of similarly-sized banks (BNCOM, EW, AUB) which stands at only 0.39x. However, it is likely that BPI was willing to pay such a premium due to the long-term synergies and strategic fit that RBC\u2019s exposure to digital bank GoTyme and retail-heavy presence would have with its own business model.<\/p>\n\n\n\n

Short-term costs, but long-term rewards<\/h3>\n\n\n\n

We expect the infusion of RBC into the BPI ecosystem to lead to short-term cost pressures in the initial year of the merger as a result of the surplus branches and employees that will be falling onto BPI\u2019s lap. The estimated cost impact from the merger amounts to P5.8-Billion this year. <\/p>\n\n\n\n

Nevertheless in the long-term, the payoff will come in the form of further stimulus to BPI\u2019s customer count and loan growth, something which RBC\u2019s 20% stake in GoTyme will greatly aid in. Given BPI\u2019s own foray into digital and mobile banking, we think that it is possible that greater integration between GoTyme and BPI\u2019s apps can be undertaken in the future.<\/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>