Investors tepid on BPI amid nod on merger with Robinsons Bank

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THE share price of Bank of the Philippine Islands (BPI) moved sideways last week after shareholders approved its proposed merger with Robinsons Bank in a move seen to boost the former’s revenues and market presence.

A total of 11.84 million BPI shares worth P1.32 billion were traded from Jan. 16 to 20, data from the Philippine Stock Exchange (PSE) show.

The Ayala-led bank’s share price went down by 0.1% week on week, finishing at P109.90 apiece on Friday from its P110-per-share close the previous week. Year to date, however, the stock has risen by 7.7%.

“The merger was seen as a bullish move for both companies as the two companies can unlock various synergies. However, we think this is a good move for Robinsons Bank,” Mercantile Securities Corp. Head Trader Jeff Radley C. See said in an e-mail interview.

Regina Capital Development Corp. Head of Sales Luis A Limlingan said in a separate e-mail that the market anticipated the approval of BPI’s merger with Robinsons Bank days ahead, which led to its rally above P108.

“A day after the PR (press release) was released, BPI rallied by almost 3%, implying that the investing public generally viewed the merger positively,” he said.

On Jan. 17, the Ayala group’s banking arm secured shareholders’ approval of its merger with Robinsons Bank, with the former as the surviving entity.

BPI President and Chief Executive Officer Jose Teodoro K. Limcaoco said on Tuesday that the merger is expected to boost BPI’s customer and deposit base, and tap into the Filipino-Chinese market, which other banks have an advantage over BPI.

The Ayala-Gokongwei tie-up is expected to boost BPI’s bottom line this year as well.

Mr. Limcaoco said that Robinsons Bank is estimated to contribute up to 7% to BPI’s revenues and add 5% to 6% to its net income. He forecast BPI’s bottom line to have reached around P41 billion in 2022, and around P43 billion this year, with Robinsons Bank’s contribution to be around P2 billion.

BPI reported a third-quarter net income of P10.14 billion, up by 77.3% from P5.72 billion in the same quarter in 2021.

In the nine months to September last year, BPI’s net income grew by 74% to P30.70 billion from P17.64 billion in the same period in 2021.

However, Regina Capital’s Mr. Limlingan warned of other factors that could affect the local bourse, and BPI directly.

“As always, investors should keep their tabs on how the BSP (Bangko Sentral ng Pilipinas) will react to the upcoming Fed’s policy meeting. This is because a sharp unexpected increase in our local benchmark rate could potentially dampen loan demand and strain the paying capacity of BPI’s borrowers,” Mr. Limlingan said.

For the week, analysts are looking out for profit taking on BPI’s stock as it is currently trading at a 52-week high.

Mercantile Securities’ Mr. See placed BPI’s support levels at P100-P105 and resistance levels at P115-P125.

Meanwhile, Mr. Limlingan placed the bank’s support and resistance levels at P106.20 and P115.40, respectively.

“On the technical front, BPI’s already at a premium to its historical key price levels. Therefore, profit taking may take place in the next few days,” he said. — Bernadette Therese M. Gadon