The Ayala-led Bank of the Philippine Islands (BPI) nearly beat our forecast after it recorded a 4th Quarter (4Q) 2020 net income of P4.20 billion, down -38.85% year-on-year (y/y). Its core business remained relatively stable, with the NII edging by low-single-digits higher during the period. However, provisioning remained aggressive over anticipation of increasing non-performing loans (NPLs).

The bank’s balance sheet is reflective of the current economic environment. The loan base slipped by around -4.6% y/y to P1.4 trillion. BPI’s deposit base, on the other hand, increased by around +1.2% y/y to P1.7 trillion. We initially forecasted a low-single-digit deposit base expansion as well.


Overall, BPI performed well within our expectations. Our forecasts already priced in the trends that started occurring during the pandemic (ie: bullish impairment, increasing NPLs, anemic demand for loans and deposits). We maintain our BUY recommendation on BPI with a Target Price of PHP 82.00 per share.


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