Bank of Philippine Island (BPI)

[Mr. Banker]

http://www.businessmirror.com.ph/home/banking-a-finance/26566-bpi-net-income-doubled-to-p58-billion-in-q1-2012

BPI net income doubled to P5.8 billion in Q1 2012
TUESDAY, 01 MAY 2012 19:03 JUN VALLECERA / REPORTER
A BUOYANT local stock market and prospects of still lower interest rates down the line pushed the Bank of the Philippine Islands to unload some of its securities holdings in the first three months and more than doubled its bottom line to P5.8 billion.
Year-ago net income was only P2.8 billion.

Even if one assumes a lower full year growth of just 15% (as against 100% suggested by 1st QTR results), today's big drop in BPI share price is so tempting. Is it worth violating most people's advice to keep away from the market?

[Mr. Banker]

http://www.businessmirror.com.ph/home/banking-a-finance/26566-bpi-net-income-doubled-to-p58-billion-in-q1-2012

BPI net income doubled to P5.8 billion in Q1 2012
TUESDAY, 01 MAY 2012 19:03 JUN VALLECERA / REPORTER
A BUOYANT local stock market and prospects of still lower interest rates down the line pushed the Bank of the Philippine Islands to unload some of its securities holdings in the first three months and more than doubled its bottom line to P5.8 billion.
Year-ago net income was only P2.8 billion.

Even if one assumes a lower full year growth of just 15% (as against 100% suggested by 1st QTR results), today's big drop in BPI share price is so tempting. Is it worth violating most people's advice to keep away from the market?

Got my answer today. The three day trade was worth it...65.10 to 68.10. Thanks BPI. Will try my luck anew if you go back to 65.

[Out of Stock]

^ i was waiting at 63 last week but did not get hit. congrats Mr.Banker!

[Mr. Banker]

^ i was waiting at 63 last week but did not get hit. congrats Mr.Banker!

Thanks...friend out of stock. I was elated when I was able to unload at its almost intraday high of 68.10 just before it fell to eventually close at 67.10. But yesterday, it rose +P2.00.

I just have to fall back on the adage..."a profit is a profit".

[antediluvianist]

"Will try my luck anew if you go back to 65."

I would get back in even at 65.50. Anyway, we think the same. For oldies like us, there are also the cash dividends that BPI reliably pays, in case the quickie route doesn't work too well next time ( but BPI has too many staff, fire some, Gigi).

[ahock]

I thought BDO has a lot of staff? madami pa din sa BPI?

[moisture888]

Source: 2011 Annual Reports

[ahock]

mas efficient pa din ang BPI.....

[antediluvianist]

Philippine banks are over staffed, by international standards ( like Philippine Airlines is). In time, the staffing rates will come down to international norms. BPI still is over staffed , although some other local banks are worse.

[Luckypick]

Banks here are not fully automated and very conservative with too much controls requiring manual procedures. These are some of the reasons why Philippine banks have higher staffing rates than their foreign counterparts. Also, the wages of skilled workers here in the Philippines is still cheap compared to SG, US, EU, HK, etc.

[ahock]

kaya nga for me if labor lang pag uusapan mura nga but if you have been to other countries and have experienced their services in terms of technology eh mamamangha ka din dahil sa pagiging efficient and wish we have the same thing sa Pinas.

[BASURERO]

BANK OF THE PHILIPPINE ISLANDS – BPI

CURRENT PRICE = PhP 77.05 (as of 091412)


P/E RATIO TEST:

2009 Earnings-per-share = PhP 2.6200
2010 Earnings-per-share = PhP 3.3800
2011 Earnings-per-share = PhP 3.6100
2012 1H Earnings-per-share = PhP 2.6600

Average earnings-per-share (based on the past 3 years and 2 quarters) = PhP 3.7325
Average price earnings ratio (based on the past 3 years and 2 quarters) = 20.64

Benjamin Graham recommends current price no more than 15 times average earnings (should be positive) over the past three years. This issue failed Graham’s price-earnings ratio test.

However, threshold value, P/E <15 should be taken as arbitrary level. Ratios do not tell us the whole story by itself. It is more useful to compare the ratios of one company to other companies in the same industry.


PRICE-TO-BOOK RATIO TEST:

Total Equity = PhP 92,294,289,000
Outstanding Shares = 3,556,356,173
Book-Value per Share = PhP 25.95
Price-to-Book ratio (PB) = 2.97

Graham recommends that current price should not be more than 1.5 times the book value last reported.
This issue failed Graham’s price-to-book ratio test.

However, threshold value, P/B <1.5 should be taken as arbitrary level. Ratios do not tell us the whole story by itself. It is more useful to compare the ratios of one company to other companies in the same industry.


NET-WORKING-CAPITAL OR “RARE BARGAIN” TEST:

Current Asset = PhP 842,765,791,000
Total Liabilities = PhP 806,812,901,000
Net Working Capital = PhP 35,952,890,000
Current Asset to Total Liabilities ratio = 1.04

* By “net-working-capital”, Graham means current assets (such as cash, marketable securities, and inventories) minus total liabilities (including preferred stock and long-term debt).

Current asset is greater than the total liabilities.
Graham recommends issues with positive net-working-capital.
This issue passed Graham’s net-working-capital or “RARE BARGAIN” test.


GRAHAM’S “BLENDED MULTIPLIER” TEST:

P/E = 20.64
P/B = 2.97
P/E*P/B = 61.29

Graham suggests that the product of P/E and P/B should not exceed 22.5 (should be positive).
This issue failed Graham’s “blended multiplier” test.

However, threshold value, P/E*P/B <22.5 should be taken as arbitrary level. Ratios do not tell us the whole story by itself. It is more useful to compare the ratios of one company to other companies in the same industry.


LIMITATION OF THE ANALYSIS:

EPS calculation does not isolate “other income” and “extra-ordinary income”.

Analysis does not include earnings stability, dividend records, earnings growth and futures earnings (or forward P/E ratio).

Analysis does not include banking industry’s key performance indicators such as: Return on Average Equity, Return on Average Assets, Capital Adequacy Ratio, Non Performing Loan Ratio, etc..

For future plans and prospects, read below reference.


REFERENCE:

http://www.pse.com.ph/resource/corpt/20 ... un2012.pdf
http://www.pse.com.ph/resource/corpt/20 ... ec2011.pdf

[kakuro]

With the recent disclosure, DBS sold its shares at PhP 70 a piece. 10% discount from the current market price.