{"id":326773,"date":"2024-02-16T01:31:45","date_gmt":"2024-02-15T17:31:45","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=326773"},"modified":"2024-02-16T01:55:27","modified_gmt":"2024-02-15T17:55:27","slug":"stock-in-focus-bank-of-the-philippine-islands-bpi-15-feb-2024-by-regina-capital-development-corp","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-bank-of-the-philippine-islands-bpi-15-feb-2024-by-regina-capital-development-corp\/","title":{"rendered":"Stock in Focus: Bank of the Philippine Islands (BPI) – 15 Feb 2024 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>15 Feb 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Buy<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 130.70<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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Overall, BPI’s latest earnings performance exhibits resilience and growth potential, with strong loan and revenue expansion offsetting some cost pressures. In line with this, we are revising our Target Price to P130.70\/share.<\/p>\n\n\n\n

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

The Bank of the Philippine Islands (BPI) booked a 4Q 2023 Net Income (NI) of P13.1 billion, up 44.3% year-on-year (y\/y), pushing its 2023 bottomline up by +30.5% y\/y to P51.7 billion \u2014 dubbed by the bank as its highest full-year NI. The impressive bottomline growth was driven by record revenues and the significant drop in loan loss provisions booked.<\/p>\n\n\n\n

Revenue streams saw a notable uptick, with total revenues edging up by +16.7% y\/y to P138.3 billion. However, operating expenses increased by +19.2% y\/y, mainly due to higher manpower and technology costs. Net Interest Margin (NIM) stood at 4.14% higher than the 3.75% recorded in 4Q 2022.<\/p>\n\n\n\n

Despite this, BPI maintained strong asset quality, with an NPL ratio at 1.84% and robust provisions. The company expects credit costs to normalize closer to pre-pandemic levels and anticipates favorable economic conditions, highlighted by low unemployment and declining inflation. However, the shift in deposits from CASA to bought deposits due to rising interest rates poses funding cost challenges.<\/p>\n\n\n\n

The bank’s loan and deposit portfolios witnessed healthy growth, and its financial position remained robust, with total assets reaching P2.9 trillion and total equity at P357.2 billion, supported by strong capital adequacy ratios well above regulatory requirements. During the briefing, the management expects a strong double-digit loan growth, particularly on the consumer loans side. <\/p>\n\n\n\n

Additionally, BPI anticipates a moderation in cost growth for 2024, aligning with mid-teens expansion in opex. Revenue growth is projected to outpace cost growth, with the aim of achieving a cost-to-income ratio target of sub 50% by 2026E. BPI expects its 10% to 12% growth outlook, inclusive of delayed infrastructure projects and organic growth from Robinson’s bank loan growth, to further bolster its financial performance.<\/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>