Bank of the Philippine Islands: Steady Ship Amidst Turbulence


Shares still up despite recent market turmoil

Up merely a percentage point, Bank of the Philippine Islands (BPI) has survived the tremble in the Philippine market so far this year.

BPI, the third largest bank in the Philippines by assets, reported a healthy 13% rise in revenue, otherwise known as interest income in financials, and an even stronger increase in profits at 17% in 2017.

Book value, meanwhile, grew by 9.4% to 180.7 billion year over year having indicated a price-book value multiple of 2.4x compared to its industry multiple of 3x.

In 2017, BPI’s Common Equity Tier 1 ratio was at 11.84% compared to 12.10%. The Bangko Sentral ng Pilipinas has a minimum regulatory requirement of 6%.

Gross 90-day non-performing loans ratio declined to 1.29% from 1.46%.

A more important metric, net interest margin, which shows BPI’s profitability improved to 2.91% in 2017 compared to 2.85% a year earlier.

“We come out of 2017 stronger than ever.”

“While the Bank has grown significantly in the past several years, we intend to continue to invest in people, technology and branches to support and benefit from a surging Philippine economy. Inclusive, profitable growth will be our focus.”

BPI President and CEO Cezar P. Consing

In the past three years, BPI raised 29.8 billion in financing activities while having provided 21.2 billion in dividends to shareholders.

BPI also ended with 322 billion in cash as of December 2017.

COL Financial, a reputable brokerage in the country, has a hold recommendation with a 114/share value.  Personal estimates, meanwhile, indicated a per share figure of 127/share.

Disclosure: No shares in BPI.

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