Philippine Business Bank Q3 profit: P768M (up 178% y/y)

Philippine Business Bank [PBB 9.07, down 1.4%; 99% avgVol] [link] posted a Q3 net income of P768 million, up 178% y/y from its Q3/23 net income of P276 million, and up 47% q/q from its Q2/24 net income of P521 million. PBB’s 9M net income is up 57% to P1.8 billion. The Yao Family’s bank said that its dramatically increased performance was due to its “ability to capitalize on the high-interest rate environment”, plus “effective cost management”, and “a 50% growth of fee-based income”. PBB said that it increased its 9M net interest income by 16.1% due to its “focus on expanding its high-yielding consumer business and the continued support of the SME sector.”

MB bottom-line: This result shows that high interest rates have helped the second-tier banks as much (or more) than the top-tier banks, but unfortunately for shareholders, this boost hasn’t translated directly into the share price. Sure, PBB is up 4% YTD and around 7% over the past year, but that pales in comparison to the 89% increase for Chinabank [CBC], the ~42% increases for BPI [BPI] and Metrobank [MBT], or even the 16% increase for BDO [BDO]. As someone who does not invest in the banking industry, I’m not familiar with the mechanisms that would cause this massive discrepancy in stock performance. Are there any readers or analysts out there who are able to provide some context? If so, I’d love to share your feedback with the community!

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