Banco de Oro Universal Bank: Earnings beat UBSe; strong loans growth more than offsets elevated credit costs

研报英文原文证据摘录

Banco de Oro Universal Bank: Earnings beat UBSe; strong loans growth more than offsets elevated credit costs

ected 12/26E 15.95 16.21

12/27E 18.79 18.04

Asset quality trends were largely in line with expectations. NPL ratio declined by 4bps q/q 12/28E 21.35 20.18

to 1.64%, compared with a flat q/q trend for the banking system. Credit costs increased

modestly q/q to 68bps but were better than our estimate of 75bps. This brought 1H26 Aakash Rawat, CFA

credit costs to 67bps, above management's FY26 guidance range of 55-60bps. Analyst

Nevertheless, we view the elevated provisioning in 1H26 as largely anticipated and aakash.rawat@ubs.com

+65-6495 8283

continue to expect some normalization in 2H26. NPL formation and write-off ratios

remained somewhat elevated relative to longer-term averages, reflecting ongoing Benjamin Tan

macroeconomic challenges. As a result, NPL coverage was broadly unchanged despite Analyst

the higher provisioning levels during the quarter. Capital levels remains comfortable, benjamin.tan-yx@ubs.com

+65-6495 3239

with the CET1 ratio at 13.1%.

Valuation: Buy-rated; DDM-PT P180

Overall, this was a decent set of results. Strong loan growth and disciplined cost

management more than offset the expected pressure from elevated NPL formation and

credit costs. The macro backdrop remains challenging, and the risk of further earnings

downgrades persists. However, with BDO trading at 0.9x P/B for an expected ROE of

approximately 13%, we believe current valuations more than reflect asset quality

concerns and broader macro headwinds. We maintain our Buy rating and DDM-derived

target price of P180, primarily on valuation grounds. We believe a sustained re-rating is

likely only once macroeconomic conditions improve and the domestic political