SHARES in Bank of the Philippine Islands (BPI) inched up last week following news of the Ayala-led lender’s plans to complete its integration with Robinsons Bank Corp.’s (RBC) branches this year.
Data from the Philippine Stock Exchange showed the Ayala-led lender ranking 10th in value turnover with P947.10 million worth of 7.96 million shares changing hands from Jan. 13 to 17.
BPI shares finished at P121.50 apiece on Friday, inching up by 0.5% from its P120.90 close on Jan. 10.
For the year, the stock dipped by 0.4%.
Aniceto K. Pangan, equity trader at Diversified Securities, Inc., said that market sentiment may have been affected by US President-Elect Donald J. Trump’s inauguration.
Additionally, Mr. Pangan said that the integration of Robinsons Bank into BPI is expected to enhance cross-selling of consumer loan products, which will add to its interest income and boost profits.
Likewise, for Toby Allan C. Arce, head of sales trading at Globalinks Securities and Stocks, Inc., the broader local stock market faced mixed sentiments due to global economic concerns which likely affected BPI.
“The ongoing integration with RBC may have caused investor speculation. While mergers generally signal growth potential, the integration process introduces temporary uncertainties,” Mr. Arce said.
In a report published last week, BPI Chief Executive Officer Jose Teodoro K. Limcaoco said to reporters at a central bank event that the Ayala-led lender expects that all branches of Robinsons Bank Corp. (RBC) will be rebranded by the end of the year, following their merger on Jan. 1, 2024.
Meanwhile, Robinsons Bank President and Chief Executive Officer Elfren Antonio S. Sarte said that RBC will be fully integrated into BPI’s systems within 12 to 18 months.
For Mr. Arce, this integration of RBC into BPI’s operations is a strategic move that is already beginning to boost profitability and that the bank’s offer of consumer loan products is anticipated to enhance revenue streams.
He added that investors are likely to view this as a sign of expansion, but the actual impacts will be clearer as integration milestones are achieved.
He also said that RBC’s incorporation aligns with the Ayala-led bank’s broader strategy to dominate the Philippine banking sector, which is expected to support its valuation in the medium to long term.
As to the impact this will have on its customers, Mr. Arce said that the rebranding of RBC’s branches is expected to improve accessibility for BPI’s customers and standardize service offerings across branches.
For Mr. Pangan: “With the rebranding of Robinsons Bank to BPI, BPI will further boost its presence in those areas where RBC now operates, thereby further increasing their clients.”
In the third quarter, BPI’s attributable net income went up 29.4% to P17.42 billion. Likewise, the Ayala lender’s nine-month attributable bottom line rose 24.3% to P47.99 billion from P38.62 billion previously.
“For the fourth quarter of 2024, revenue gains from cross-selling and operational synergies may position BPI for a robust year-end performance,” Mr. Arce said.
Projected net revenues, he said, are estimated to reach P44.7 billion while net income is projected at P15.4 billion.
Additionally, he said that full-year earnings could exceed P63 billion, assuming sustained growth in the last quarter of 2024.
Mr. Arce said that market players could consider BPI due to its market leadership and strong financial health, as well as the potential growth opportunities that could result from the merger.
Though, he cautioned that short-term uncertainty during the integration process could discourage risk-averse investors.
“Barring any significant market news or events, BPI’s support level may range between P117.00 and P115.00, while resistance is estimated to range between P125.00 and P127.00,” Mr. Arce said.
For Mr. Pangan, he said that the easing of overnight lending rates may impact the bottom line, making it normal for a market correction to occur during this period of uncertainty with US President-Elect Trump, especially given his protectionist stance.
He pegged BPI’s immediate support level at P116.00 per share and immediate resistance level at P125.00. — Abigail Marie P. Yraola
