SHARES in Bank of the Philippine Islands (BPI) rose last week after the Ayala-led lender reported strong earnings for the first quarter, with the launch of an innovative app adding to lift the stock鈥檚 outlook.
Data from the Philippine Stock Exchange showed BPI ranking seventh in value turnover with P368.19 million worth of 3.66-million shares changing hands from April 17 to 20. Local financial markets were closed on Friday in observance of Eid al-Fitr.
BPI shares finished at P102.80 apiece on Thursday, inching up by 3.5% from its P99.30 close on April 14. For the year, the stock has increased slightly by 0.8%.
Joylin F. Telagen, research head at I.B. Gimenez Securities, Inc., attributed the listed bank鈥檚 movement last week to a striking first-quarter performance.
鈥淒espite higher operating expenses, BPI鈥檚 better performance was due to higher revenues (net interest income and non-interest income) brought by expanded average asset and improved net interest margin and lower provisions,鈥 Ms. Telagen said in an e-mail.
Additionally, Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce said that the launch of BPI鈥檚 new app with innovative features may have also been a factor.
In the first quarter, BPI reported almost a 52% year-on-year increase in net income to P12.1 billion after its total revenues grew by 25.1% to P31.7 billion.
In a disclosure to the local bourse, the bank attributed the solid performance to average asset base expansion, margin growth, and lower provisions.
Total revenues were driven by a 27.2% increase in net interest income with a 10% expansion in average asset base and a 52-basis-point increase in net margin to 3.94%.
Total operating expenses in the January-March period totaled P15.1 billion. The lender鈥檚 total loans amounted to P1.7 trillion while total deposits reached P2.1 trillion.
Meanwhile, the bank launched a future-ready mobile app that is built on a more modern system with features that promise improved user experience.
The app, BPI said, is part of its aggressive digital transformation journey and reinforces its solid footing as a digital banking leader in the Philippines.
鈥淚f the new mobile app is well-received by customers and gains traction in the market, it could potentially lead to increased customer satisfaction, higher engagement, and ultimately, increased revenues for the bank,鈥 Mr. Arce said.
Mr. Arce added that the positive outlook could result in a potential increase in BPI鈥檚 stock price in the short term. But he noted that the impact of the new mobile app on the bank鈥檚 performance may not be immediate or direct.
鈥淭he app鈥檚 success will depend on several factors,鈥 he said. 鈥淢oreover, the overall market and economic conditions will also play a crucial role in determining the bank鈥檚 stock movement in the coming weeks.鈥
Ms. Telagen sees BPI鈥檚 earnings for the second quarter to reach P14 billion and for the entire year to hit P49 billion.
She added that the bank performed well and that the financial sector is still the best performing among the sectors despite the recent banking crisis abroad. She advised market players to trade cautiously.
For Mr. Arce, BPI鈥檚 net income for the next quarter could grow to P12.4 billion and potentially end the year with estimated earnings of P45.5 billion.
鈥淪upport is estimated to be at P98.60, while resistance is at P104.00. However, a significant breakout from P102.30 could see the stock going to P106.00,鈥 Mr. Arce said.
Ms. Telagen pegged BPI鈥檚 support level at P99.00 and its resistance level at P114.00. 鈥 Abigail Marie P. Yraola
