Connect with us

Hi, what are you looking for?


Merger, negative earnings and dampened market sentiment drive BPI’s stock movement

By Ana Olivia A. Tirona

INVESTORS sold off Bank of the Philippine Islands (BPI) shares last week with analysts attributing the movement to the release of its fourth-quarter and full-year earnings, its recent merger with a subsidiary thrift bank, and overall negative market sentiment.

A total of 12.11 million shares worth P991.46 million were traded from Jan. 25 to 29, making BPI the 11th most traded stock, data from the Philippine Stock Exchange (PSE) showed.

BPI’s stock price closed at P79.45 apiece on Friday, 1.9% lower than its Jan. 22 closing price of P81 each. Year to date, the stock has fallen by 3.6%.

In a Viber message, Globalinks Securities and Stocks, Inc. Head of Sales Trading Toby Allan C. Arce attributed BPI’s stock movement last week primarily to investors digesting news of BPI’s merger with thrift bank subsidiary BPI Family Savings Bank (BFSB), as well as the former’s press release on its fourth-quarter and full-year 2020 earnings results.

In a separate Viber message, Timson Securities, Inc. trader Darren T. Pangan said BPI’s stock movements last week reflected what was happening in the market.

“The whole market sentiment in general remained cautious this week, and BPI mostly moved sideways, until came the last trading day when the stock closed below its major support area at P80,” Mr. Pangan said.

“The recent merger may have not significantly affected the stock immediately, as investors assess how the decision would impact the company’s performance over the long term,” he added.

BPI announced on Jan. 20 its plan to absorb its thrift unit, saying they hope to finalize the transaction within the year. It noted the merger will put under one bank the two lenders’ 8.5 million customers.

It said the reduction in the gap in the regulatory reserve requirements between commercial banks and thrift banks was also a factor for the move. The reserve requirement ratio for big and thrift banks currently stand at 12% and three percent, respectively.

BFSB is the country’s largest thrift bank with P287 billion in assets, P235 billion in deposits and P227 billion in loans. Meanwhile, its parent bank BPI has total assets worth P2.2 trillion, P1.7 trillion in deposits and P1.4-trillion worth of loans as of end-December 2020.

In a disclosure to the exchange last Friday, BPI reported a P21.4-billion net income in 2020, 25.7% lower than the P28.8 billion earned in 2019. Meanwhile, fourth-quarter net income was 37.4% lower at P6.8 billion.

BPI attributed the decline in earnings to the increase in its provisions for loan losses last year to P28 billion — five times more than the P5.6 billion in 2019 — amid the increase in non-performing loans due to a decline in economic activity.

“With BPI’s earnings slumping for the year 2020, we might have to observe how the industry’s corporate lending activities would turn out this year, as well as the employment status of the country as this would affect the company’s total deposits,” Timson Securities’ Mr. Pangan said, adding this year’s performance “may still be clouded with uncertainty.”

For Globalinks’ Mr. Arce: “BPI’s net income for 2021 may be seen climbing higher to about P23.935 billion as the integration with BPI Family is seen to improve operational efficiency, with the popularity of mobile and internet banking amid the coronavirus pandemic enhancing its robust digital infrastructure and rationalizing its branch network, as well as with a potential economic rebound in [second or third quarter].”

Mr. Arce added that the stock could “continue moving sideways in the coming weeks.”

“It has broken immediate support at P80 and could move to its next support at P78. Resistance is around P83 to 83.20,” he said.

“I am neutral on the stock in the near term, but it may outperform in the long term, with a 12-month average target price of P93.01,” he added.

Meanwhile, Timson Securities’ Mr. Pangan said BPI’s performance in the future may depend on how overall investor sentiment would be affected by developments on the procurement of COVID-19 vaccines as any progress would indicate faster economic reopening and recovery.

“With the stock ending below its immediate support at P80.00, next support area may be pegged at P75.00, while P87.00 is where its nearest resistance lies,” Mr. Pangan said.

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

Get the daily email that makes reading the news actually enjoyable. Stay informed and entertained, for free.
Your information is secure and your privacy is protected. By opting in you agree to receive emails from us. Remember that you can opt-out any time, we hate spam too!



  Spotlight is BusinessWorld’s sponsored section that allows advertisers to amplify their brand and connect with BusinessWorld’s audience by enabling them to publish their...


Notice of Annual Stockholders’ Meeting Notice is hereby given that the Annual Stockholders Meeting will be held on Monday, June 20, 2022 at 8:30...


Ferdinand R. Marcos, Jr speaks to foreign correspondents at his headquarters in Mandaluyong City, Philippines, May 11. — REUTERS By Kyle Aristophere T. Atienza,...


FORMER Socioeconomic Planning Secretary Arsenio S. Balisacan, former Labor Secretary Bienvenido E. Laguesma and migrant workers’ rights advocate Susan “Toots” Ople have accepted presumptive...


By Revin Mikhael D. Ochave, Reporter THE Philippine economy may expand at a slower pace if it fails to become a member of the...


Containers are seen at the Manila port area. — PHILIPPINE STAR/ EDD GUMBAN VARIOUS business groups, which include shipping companies, truckers, exporters, and customs...

You May Also Like


Having a good Instagram marketing agency to back up your Instagram account is an absolute must going into the new year. With competition stronger...


Ivermectin, an existing drug against parasites including head lice, has had a checkered history when it comes to treating COVID-19. The bulk of studies...


Insomnia is the most common sleep disorder in the global population. Therefore, it is a problem that many people suffer or have suffered throughout...


As a traditionally rigid insurance industry becomes bogged down by antiquated processes and operations, a handful of industry leaders are seeking to shake things...

Disclaimer:, its managers, its employees, and assigns (collectively "The Company") do not make any guarantee or warranty about what is advertised above. Information provided by this website is for research purposes only and should not be considered as personalized financial advice. The Company is not affiliated with, nor does it receive compensation from, any specific security. The Company is not registered or licensed by any governing body in any jurisdiction to give investing advice or provide investment recommendation. Any investments recommended here should be taken into consideration only after consulting with your investment advisor and after reviewing the prospectus or financial statements of the company.

Copyright © 2021 SmartRetirementReport. All Rights Reserved.