Bank of the Philippine Islands (BPI) dropped significantly yesterday with an almost 4.14 percent decline in a single day — marking a 52-week low. The last time the stock was trading around these levels was in January 2016.
BPI booked a net income of PHP 11.03 billion for the first half of 2018. This figure is 5.7 percent of 665.20 million lower versus the same period in 2017.
It was mainly driven by lower non-interest income as well as higher operating expenses and taxes despite having higher net interest income and lower provisions.
On the other hand, revenues still saw an increase of 5.3 percent to PHP 37.22 billion from only PHP 35.34 billion a year ago.
BPI’s Income Records
Net interest income (NII) continued to take the largest share in net income. NII totaled PHP 26.21 billion, which is PHP 2.70 billion or 11.50 percent higher as the bank’s asset base also expanded by 9.30 percent at PHP 160.60 billion.
Net interest margin also expanded by eight basis points.
Interest income reached PHP 37.09 billion, a 15.90 percent or PHP 5.08 billion increase. Interest expense was also larger by 28 percent at PHP 10.87 billion.
It is driven by an increase in the interest expense on deposits at PHP 10.0 billion. This figure is PHP 2.08 billion higher, or 26.30 percent as the expense of documentary stamp taxes on deposits increased in the period.
Other income totaled PHP 11.01 billion, a 6.9 percent or PHP 816.62 million decline compared to the PHP 11.82 billion recorded in the same period in 2017. This was brought about by lower trading gains on securities and lower income attributable to insurance operations.
Other expenses were higher at PHP 21.22 billion, a rise of 16.30 percent or PHP 2.97 billion from only PHP 18.50 billion a year ago. Provision for income tax totaled PHP 2.97 billion, which is higher by 6.7 percent or 187.59 million.
Lower Return on Equity
Performance for the first half of the year showed that the return on equity was significantly lower at 10.80 percent versus the 13.70 percent recorded in 2017. Return on assets was also lower at 1.2 percent versus the 1.4 percent in the comparable period in 2017.
Net interest margin, which is computed as net interest income divided by average interest bearing assets, stood at 3.00 percent. It is higher by 8 basis points versus the same period in 2017.
Capital Adequacy Ratio (CAR) is a measure of the bank’s capital funds to cover its various risks. This is computed by dividing total qualifying capital by total risk-weighted assets.
BPI’s CAR is significantly better at 17.30 percent versus the 13.70 percent in the first semester of 2017. This is also above the BSP’s minimum requirement of 10 percent.
The stock is currently trading at 15.40x P/E, which is slightly lower than the industry’s 16.88x. The stock is aso trading at a cheaper P/BV ratio of 1.54 versus the 1.71 industry average.
Technical Analysis
The stock made a 52-week low yesterday. Using the weekly chart, it even appears that the stock has made a 2-year low.
The 15 EMA and 20 SMA have made a bearish crossover with the 200 SMA already, a bearish signal. The 50 SMA is poised to do the same.
Meanwhile, the volume has confirmed the downtrend. MACD is also bearish. RSI is also bearish and is nearing oversold levels.
Estimated support is at 79.90, followed by 75.04. On the other hand, the expected resistance is at 85.17. The stock is also down 36.62 percent from its highs for the year at around 129.
Volume
As of September 19, 2018, at 03:30 PM, the volume of BPI is 103.25% of the previous trading day. This stock’s latest volume is still below its 30-day volume average.
Remember the correlation between price and volume.
bullish price + volume above the 30-day volume average = bullish
bullish price + volume below the 30-day volume average = neutral
bearish price + volume above the 30-day volume average = bearish
bearish price + volume below the 30-day volume average = bearish
Risk Level
BPI has a LOW-RISK level due to its risk percentage of 21.15%.
Foreign Fund Flow
BPI registered a Net Foreign Selling worth P208,398,806.00 as of September 19, 2018. On a 30-day trading period, BPI is on a Net Foreign Selling worth PHP2,165,284,917.00.
Top 10 Players’ Sentiment
Trading participants of BPI with a 100% Buying and Selling Activity as of Sep-19-2018 at 03:30 PM:
52 out of 84 participants or 61.90% of all participants registered a 100% BUYING activity
2 out of 84 participants or 2.38% of all participants registered a 100% SELLING activity
Top 10 Players’ Buying Average: 80.1277
Top 10 Players’ Selling Average: 80.2686
The psychological average price of the top 10 players as of Sep-19-2018 is from 80.1277 to 80.2686.
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