Bank of Philippine Islands (BPI.PS): 2Q26 call takeaways: Tone turning more cautious; assessing sequential AQ trends

Research evidence excerpt

Bank of Philippine Islands (BPI.PS): 2Q26 call takeaways: Tone turning more cautious; assessing sequential AQ trends

Action |

29 Jul 2026 10:59:08 ET │ 16 pages

Bank of Philippine Islands (BPI.PS)

2Q26 call takeaways: Tone turning more cautious; assessing sequential

AQ trends

CITI'S TAKE Buy

Price (29 Jul 26 15:30) P103.40 BPI hosted an analyst briefing and the overall tone was more cautious

Target price P117.00↓ with credit underwriting standards tightened, moderating loans growth

guidance, and increasing provision buffers. Over the past year, investors from P132.00

have been concerned over BPI increasing retail loan mix and running down Expected share price return 13.2%

provisions buffer at the same time. Despite the shift in stance, the market Expected dividend yield 5.3%

is likely assessing asset quality risks following retail mix increasing from Expected total return 18.4%

20% in 2022 to 32% in 2Q26 but with significantly lower provisions buffer. Market Cap P547,644M

We hence prefer BDO over BPI for exposure into the PH banking sector.

US$8,912M

2Q26 in brief — [1] FY26e loan growth guidance revised to ~10% (from 10-12%) with

deteriorating market conditions, higher inflation, higher interest rates (2 more

expected rate hikes this year), and slower GDP growth. BPI also had tighter credit Yong Hong TanAC

parameters. 2Q26 loans +12%yoy/+2%qoq: Institutional loans +9%yoy/+2%qoq, +65-6657-7873

driven by capex-related loans and demand from utilities, storage, transportation, yong.hong.tan@citi.com

and communication, and Non-institutional loans +21%yoy/+3% led by SME loans

+75%yoy/+4%qoq, credit cards +29%yoy/+5%qoq, and personal loans

+21%yoy/flat qoq. Deliberate tighter credit underwriting across personal

microfinance +17%yoy/+2%qoq and SME sectors.