BPI shares dip despite strong first-half results

BANK of the Philippine Islands (BPI) shares edged down week on week, with analysts pointing to market uncertainty and lower interest rates.

Its strong first-half earnings report did not boost investor interest.

Data from the Philippine Stock Exchange (PSE) showed that BPI was the seventh most actively traded issue for the July 14-18 period, with 11.59 million shares changing hands, valued at P1.4 billion.

The Ayala-led bank’s share price inched down by 0.8% week on week to P122 apiece as of Friday, from P123 on July 11.

This decline was also reflected in the financial sector, which fell by 0.9%, while the benchmark PSE index (PSEi) dropped by 2.4% week on week.

“Based on this, BPI’s performance was generally comparable with its peers and showed relatively less downside than the broader market,” Charmaine Co, an equity analyst at COL Financial Group, Inc., said in an e-mail on Friday.

Year to date, BPI shares remained unchanged. Meanwhile, the financial sector inched up by 2.8%, while the PSE index declined by 3.4% in the same period.

“Prior to the report, BPI had been declining over the past few weeks due to the continued reduction in interest rates, which could affect the firm’s net interest margin,” Jash Matthew M. Baylon, an equity analyst at The First Resources Management and Securities Corp., said in a Viber message.

“However, BPI’s [first-half] earnings showed that the firm achieved a sustainable net interest income, increasing by 16.2% to P71.2 billion despite the reduction in interest rates last April,” Mr. Baylon said.

In a disclosure to the local bourse on Thursday, BPI said its bottom line rose by 7.8% to P30.6 billion in the first semester, driven by strong revenue growth despite rising expenses and provisioning.

The bank’s revenues climbed by 14% to P92.6 billion in the six months to June.

Its operating expenses also increased by 11.7% during the period to P42.7 billion.

Meanwhile, the bank raised its provisioning to P7.3 billion as of end-June, up by 141.7% from a year ago.

“Macro uncertainties likely contributed to dampened investor sentiment and BPI’s share price decline over the past week,” COL Financial’s Ms. Co said.

“Elevated US inflation, concerns over tariffs, and continued peso depreciation weighed on the broader market,” she said.

“Additionally, investors may be cautious about the potential impact of domestic policy rate cuts on bank margins,” Ms. Co added.

The Philippines is actively negotiating for better trade terms with the United States following US President Donald J. Trump’s announcement of a 20% tariff on Philippine exports earlier this month.

The Bangko Sentral ng Pilipinas trimmed interest rates by another 25 basis points (bps) in June, bringing the key rate to a two-and-a-half-year low of 5.25%.

The central bank delivered three consecutive rate cuts starting in August 2024, before holding steady in February. It resumed easing in April with a 25-bp cut.

“For full-year 2025, we forecast BPI’s net income to grow by 7.2% to P66.52 billion, driven by sustained earnings from both non-interest income and net interest income, and an optimistic outlook for gross loans due to lower inflation and strong consumption,” Mr. Baylon said.

“On the positive side, strong loan expansion, sustained net interest margins, and solid fee income would support BPI’s earnings in the third quarter and full-year 2025,” Ms. Co said.

However, analysts warn investors to monitor external risks.

“Investors should monitor geopolitical risk and higher tariffs from the US. Although it indirectly affects the financial sector, it may still affect overall economic growth such as reduced consumer spending and demand for consumer loans,” Mr. Baylon said.

For Ms. Co’s part, she said that “risks to the outlook include the potential for elevated provisions if asset quality deteriorates, as well as broader global macroeconomic headwinds that could dampen investor sentiment and economic activity.”

“For [this] week, we anticipate BPI to continue its rebound, fueled by its robust earnings report,” Mr. Baylon said.

He placed BPI’s support price at P118 and resistance level at P124 to P130.

Ms. Co sees support at P115-116 and resistance near P125. — Leigh Patrick Q. Batoon