{"id":327951,"date":"2024-05-17T11:19:59","date_gmt":"2024-05-17T03:19:59","guid":{"rendered":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/?p=327951"},"modified":"2024-05-17T11:20:02","modified_gmt":"2024-05-17T03:20:02","slug":"stock-in-focus-bank-of-the-philippine-islands-bpi-17-may-2024-by-rcbc-securities","status":"publish","type":"post","link":"https:\/\/www.pinoyinvestor.com\/smartinvestor\/stock-in-focus-bank-of-the-philippine-islands-bpi-17-may-2024-by-rcbc-securities\/","title":{"rendered":"Stock in Focus: Bank of the Philippine Islands (BPI) – 17 May 2024 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>17 May 2024<\/td><\/tr>
Recommendation<\/strong><\/td>Hold<\/td><\/tr>
1-Year Target Price<\/strong><\/td>PHP 132.00<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n
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We slightly raised our target price (TP) for Bank of the Philippine Islands (BPI) by 2% to Php132.00 as we increased our net interest income forecasts because of the strong loan growth. Despite this, we shifted our call to a HOLD rating as earnings may be hampered by the uptick in NPL ratios and as we expect integration costs to come. BPI\u2019s share price is 20% up year-to-date (YTD), and we believe it already priced in the impact of its merger.<\/p>\n\n\n\n

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

Core net income forecasts raised<\/h3>\n\n\n\n

We raised our 2024\/2025 core net income forecasts by 6%\/2% as we increased our net interest income assumptions on expectations that rate cuts may happen in 4Q 2024 instead of the initial 1H 2024. Furthermore, we are looking at sustained loan growth next year with the expected rate cuts. However, higher operating expenses from the integration costs with RBC may temper earnings.<\/p>\n\n\n\n

Earnings results<\/h3>\n\n\n\n

BPI reported a record 1Q 2024 net income of Php15.3 billion, 26% higher year-on-year (y\/y), in line with estimates. Net interest income climbed 24%, supported by 18.7% loan growth, while net interest margin (NIM) expanded by 25bps. NPL ratio reached 2.12%, 30bps higher y\/y, with NPL coverage at 136.20%.<\/p>\n\n\n\n

High-teen double-digit loan growth<\/h3>\n\n\n\n

The robust 18.7% loan growth was primarily the result of its merger with Robinsons Bank Corp. (RBC) this year. Excluding RBC, BPI\u2019s loan growth would have been only 11.9% higher y\/y, although still higher than the industry loan growth of 9.3%. The largest loan contributor was the institutions segment, which grew by 13.2% on improved capex, followed by mortgage and credit cards, which expanded by 31.1% and 36.6%, respectively.<\/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>