BPI shares surge, yet investors await clarity on profits

On 4 November, Bank of the Philippine Islands (BPI) shares witnessed a significant surge of 7.93%, driving the share price to P100, with 3.04 million shares traded during this period. According to a Rappler report, this single-day surge was considerably higher than the 1.26% increase in the Philippine Stock Exchange Index. During the same period, Metrobank recorded a 4.39% increase and BDO a 2.27% increase, but BPI outperformed both banks.

However, the share price is still 13.87% below the levels of late 2025, though it is 6.38% above the previous P94 level. With rising share prices, the question of valuation has become more complex. At current prices, the market capitalisation of BPI's 5.296 billion outstanding shares is approximately P529.64 billion. This valuation is 1.10 times the book value per share of P91.11 in June, whereas it was 1.29 times at the end of 2025.

In September, the bank's headline equity was P488.6 billion, which requires detailed reconciliation. This June book value is neither the tangible book value, where goodwill and other intangible assets are deducted, nor is it the current liquidation estimate. Based on the net profit of P48.9 billion for the first nine months, the annual profit could be P65.2 billion, suggesting an 8.12 times P/E multiple. However, this metric is not entirely accurate, and investors should await administrative changes or new credit disclosures.

The bank's business is expanding, but it has not translated directly into profits. Total income increased by 9.8% in the first nine months, driven by a 13.6% increase in the loan portfolio and a 15.5% increase in fee income. Nevertheless, credit provisions rose by 69.2% to P19.88 billion, and operating expenses exceeded income, resulting in a 3.1% decrease in net profit. The bank is generating more business, but it has not resulted in higher bottom-line profits.

Some signs of relief have also been observed. In the third quarter, net income reached P16.07 billion as provisions decreased to P6.54 billion (down from P7.84 billion). However, pre-provision operating profit decreased from P27.96 billion to P27.23 billion. Lower credit charges supported net profit, but this does not prove that the distressed loan portfolio has improved.

Non-performing loan (NPL) figures are mixed. According to September data, the NPL ratio for the SME segment rose to 15.62%, although this segment accounts for only 2.7% of the total loan portfolio. For credit cards, this ratio was 5.44%, while personal lending was at 6.99% and microfinance at 13.95%. For the entire bank, the gross NPL balance increased by 6.1% from June to P68.05 billion. The bank's accounting NPL coverage ratio is 89.57%, which is lower than the regulatory guideline of 113.05%.

Maria Cristina “Ginbi” Go, who is preparing to inherit the loan book, will ultimately decide what BPI shareholders truly hold. Instead of making decisions based solely on rising prices, investors should focus on broader cash collections and transparent capital disclosures.