BPI Net Income 73.03% to Php20.45 Billion in 1H22; Stock Positioning for a Run-up
Ayala-led Bank of the Philippine Islands (BPI) saw its net income jump by 82.85% YoY to Php12.46 billion in 2Q22 from Php6.82 billion in 2Q21. This brought its bottom line higher by 73.03% to Php20.45 billion in the first semester of 2022 from Php11.82 billion in the same period in 2021. The said increase in its income was on the back of a double digit rise in its total interest income coupled with a decline in interest expense, notable drop in impairment losses, and a robust leap in its non-lending income. Its total interest income rose 11.91% to Php46.41 as a result of a 6.95% rise in interest income on loans and advances to Php38.08 billion and an 80.53% surge in interest income on FA at amortized cost to Php6.63 billion. The bank’s interest income on loans grew on the back of higher average asset volume despite lower yields. For the period, total loans saw a 14.40% expansion to Php1.60 trillion due to higher loan volumes across the board. Meanwhile, its non-lending income rose 28.43% to Php18.30 billion in the first half. The said advance was mainly on the back of a 38.79% leap in income from foreign exchange trading to Php1.27 billion and a 105.30% spike in other operating income to Php10.51 billion. Its fx trading gains grew due to increased transaction flows while its other operating income surged due to a one-time gain on sale of property.
From a technical standpoint, the stock has managed to rally by 14.05% to bring itself back at Php85.80 after it fell to a low of Php84.00 in June. In the process of doing so, the stock has invalidated an earlier downside break. It has likewise brought itself back above its key 50-day and 100-day moving averages. In the interim, though, the stock may enter a short run consolidation phase. Still, its ability to mark a series of higher low bases essentially places it in a position to break its key resistance at Php100.00. Note that a successful breach of the said ceiling may then lift it all the way back to its all-time peak of Php120.00.
BPI write-up from the Trading Edge Equity Advisor:
December 2, 2021
We are reiterating our technical buy call on the Bank of the Philippine Islands (BPI). Technically, one can see that the stock’s prior breakout from a notable horizontal channel remains valid given its ability to keep itself above its new support at its previous ceiling at Php90.00. Given this, we are still inclined to believe that the stock is still headed towards its measured target of Php100.00.
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*Consensus target price or average target price given by the major foreign and local brokers of various stocks on top of index names are available in our Equity Advisor!
