May 17, 2015

BPI nets P4.9b in 1Q15

In a disclosure to the Exchange, Bank of the Philippine Islands (BPI) said that it netted P4.9b in 1Q15, 36% YoY. This equates to annualized RoE of 13.8% and RoA of 1.5%.

Net interest income grew 15% to P9.4b on the back of the 15% asset growth and 14% loan growth. Corporate loans grew 13% while consumer loans increased 16%. On the other hand, non-interest income grew 23% YoY to P5.1b due to increases in fee income, insurance income and trading gains.

Operating expenses only grew 8.8%, a relatively manageable level considering the bank’s business expansion. Meanwhile, the bank’s NPL ratio improved to 1.7% from 1.9% in the same period last year, while NPL cover remained high at 112%.

Our take: BPI’s 1Q15 results are in-line with our expectations and consensus estimates, accounting for 24% of 2015E estimates. In its press release, the bank mentioned that it saw a slight improvement in margins in 1Q15. This bodes well for the bank, as this may signal a bottoming-out of margins.

This means that the bank’s asset and loan growth should translate to a commensurate increase in its net interest income. It is also noteworthy that the bank kept opex growth at manageable levels even as it has increased manpower count to fill key positions in the bank. – WealthSec