BPHLF
Bank of the Philippine Islands
$2.00
Banks, Insurers & Asset Managers
85%
P/Tangible Book × ROE Quality
Mild
·
Conviction
Fair Value
Trading 3.4% below fair value
You pay
$2.00
Bear
$1.45
Fair
$2.07
Bull
$2.69
Bear
$1.45
-27.5%
ROTCE 4.0% → 0.30x TBV
Fair
$2.07
+3.6%
ROTCE 0.2% → 0.30x TBV
Bull
$2.69
+34.6%
ROTCE 0.3% → 0.30x TBV
Adjust Assumptions
0.2%
6.0%
Key Value Driver
ROTCE (0.2%) vs. cost of equity (6.0%)
Implied Market Multiple
1.47x
Summary
With ROTCE of 0.2% vs. 6.0% cost of equity, fair P/TBV is 0.30x on $1.36 tangible book, implying $2.07 per share.
Warnings
Traditional cash flow models don't work well for banks — lending activity distorts how much cash the business actually generates.
Common valuation shortcuts don't apply here — for banks, interest payments are a core business cost, not overhead.
Return on equity (0.2%) is below the minimum investors require (6.0%). This means the bank is worth less than the net assets on its books.
Financial statements were converted from PHP into USD using USDPHP at 0.0157 USD per PHP.
Key Risks
- Book value quality matters as much as level — check loan loss reserves
- Interest rate sensitivity creates non-linear earnings surprises
- Insurance reserving is actuarial, not financial — errors emerge slowly