January 06, 2014

BPI targets P20b net income for 2014

Citing documents submitted to the Exchange by the company, the Philippine Daily Inquirer today reported that Bank of the Philippine Islands (BPI, Buy) expects net profit for FY14 to reach P20.2b. This represents a 10% YoY growth vs. the expected profit of P18.3b for FY13. The bank is reportedly expecting earnings growth to be driven by a 22% YoY increase in loans and 18% YoY increase in deposits. It also sees its net revenues growing in 2014 by 12% on a 15% YoY increase in net interest income and 8% YoY growth in non-interest income.

Our Take:BPI’s FY14 net income forecasts, which were submitted to the PSE in connection with its upcoming rights offering, are higher than our FY14 net income estimate of P17b but largely in line with the P19.9b consensus forecast. It appears that BPI is looking at a faster loan and deposit growth to be sustained with the expected increase in capital. We shall review our forecasts to consider the upcoming changes in BPI's capital structure. - WealthSec