By Lourdes O. Pilar, Reseacher
INVESTORS snapped up shares in Ayala-led Bank of the Philippine Islands (BPI) after it reported strong fourth-quarter earnings.
A total of P1.28-billion worth of 12.79 million BPI shares were traded from Jan. 31 to Feb. 4, data from the Philippine Stock Exchange (PSE) showed, making it the fourth most actively traded issue last week.
Shares in the fourth-largest universal and commercial bank in terms of total assets finished at P100.00 apiece on Friday, up 0.71% week on week from the P99.30 close on Jan. 28. For the year, the stock gained 9.8%.
Analysts pointed to BPI’s strong quarterly earnings report that made it one of the most active stocks last week.
“Banks and financials were generally strong this week, up 2.5% week-on-week, so this likely contributed to higher volume for BPI,” COL Financial Group, Inc. Research Analyst Adrian Alexander N. Yu said in an e-mail.
“In addition, BPI reported strong full year 2021 earnings result of P23.9 billion, up 11.5% year on year driven by lower provisions and strong fee income,” he added.
In a separate e-mail, Regina Capital Development Corp. Head of Research Luis A. Limlingan said investors expected a strong earnings result which caused a sharp rise in BPI’s price a trading session prior to disclosure.
“That’s why on the day of the press release publication, some have decided to top slice from their attractive positions already,” Mr. Limlingan said.
Diversified Securities, Inc. Equity Trader Aniceto K. Pangan said in a mobile phone message on Friday: “Investors reacted positively as price appreciated from P94.50 per share to as high as P100.50 after earnings went up by more than 51% in fourth quarter boosted by income from fees as performance of most business lines surpassing 2019 or pre pandemic levels.”
In its disclosure to the PSE, BPI’s net income rose by 51.2% year on year to P6.4 billion in the October-to-December period.
This brought the bank’s bottom line for the full year of 2021 to P23.88 billion, a 11.5% gain from the previous year, driven by lower provisions and record-high fee income.
Total revenues edged lower by 4.2% to P97.4 billion last year, as net interest income dipped by 3.7% year on year to P69.58 billion.
BPI’s net interest margin dropped by 19 basis points from to 3.3% from 3.5% amid lower yields across most loan portfolios and treasury assets.
Meanwhile, non-interest income declined by 5.5% to P27.82 billion in 2021 due to lower trading income but this was strengthened by a 23.2% boost in fee income, with the performance rebound in most business lines surpassing 2019 levels.
This year, Mr. Yu expects BPI’s revenue to reach P105.6 billion with earnings of P29 billion.
Mr. Limlingan said BPI would benefit from sustained improvement in bank lending, even with the Omicron virus variant around.
He projected BPI’s first-quarter net income to hit mid to high double-digit growth, which would likely be the trend throughout 2022.
“With the strong price action [last] week, we are looking at BPI sustaining the uptrend and hopefully breaking above P100.00 per share,” Mr. Yu said.
Mr. Yu gave BPI a strong support level at P93.00-P96.00 per share and resistance of P100.00 apiece.
Mr. Limlingan pegged BPI’s support at P94.80 per share and its resistance at P101.55.
“BPI’s probably going into consolidation mode next week, given the surge in its price this week,” added Mr. Limlingan.
For Mr. Pangan, the bank “may sustain its momentum going forward barring any surge in transmission rates that may limit ease in restrictions. Also, as long as global inflation rate could be managed to normal levels with gradual monetary policy applications.”
Mr. Pangan’s immediate support for BPI is P93.10 per share and its immediate resistance at P102.50 per share.
