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Bank of the Philippine Islands: Q3 2026 profit fell 8.1%, and a 4.9% dividend yield now carries the valuation

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Bank of the Philippine Islands

Bank of the Philippine Islands reported third-quarter 2026 results at the end of September: operating profit came to PHP 20,684.1 mn, net profit to PHP 16,111.6 mn, down 8.1% year on year. Over the trailing twelve months the bank earned PHP 65,249.8 mn of net profit on net interest income of PHP 162,300.0 mn. Our conclusion: the share is rather attractive – on the portal's model it trades 12% below fair value, and a 4.9% dividend yield supports the valuation at a P/E of 8.0. Our view: the share is rather attractive at the current price; upside on the portal model +12%.

Our view: is there upside

Our view in numbers

MetricOur read
VerdictRather attractive
Upside on the portal model+12%
How the model worksfinancials model: annualised earnings to market cap, i.e. ROE against P/B
Dividend yield, 12m4.9%
Strongest case forA 4.9% dividend yield at a P/E of 8.0 and a 13.2% return on equity pays holders to wait while twelve-month profit holds at PHP 65,249.8 mn.
Strongest case againstThird-quarter 2026 net profit fell 8.1% to PHP 16,111.6 mn, and if that is not a one-off, both the dividend base and the 12% model cushion will shrink.
What would change the viewThe verdict moves up a step if quarterly net profit returns to growth above PHP 16,111.6 mn, and down if the annual profit decline is confirmed.

Key takeaways

— Third-quarter 2026 net profit fell 8.1% to PHP 16,111.6 mn, and that is the only confirmed growth rate in the report

— Operating profit of PHP 20,684.1 mn against net profit of PHP 16,111.6 mn shows that the gap between operating and net results absorbs about a fifth of operating profit

— Over the trailing twelve months the bank earned PHP 65,249.8 mn on net interest income of PHP 162,300.0 mn, so net margin holds near 40% of interest income

— A 4.9% dividend yield at a P/E of 8.0 makes the payout the main argument for the share while quarterly profit falls

— On the portal's model the share trades 12% below fair value, and that is the only valuation anchor in the report

— The share is held in the portal's live PH Banks strategy, but that is a fact about the strategy's composition, not an argument for the verdict

Key figures, PHP bn

MetricQ3 2025Q3 2026Change
Net interest income49.8——
EBITDA24.0——
Operating profit22.520.7-8.2%
Net profit17.516.1-8.1%
Capex1.09——
EBITDA margin48.2%——
Net margin35.2%——

Third-quarter 2026 net profit fell 8.1% to PHP 16,111.6 mn, and that is the only confirmed growth rate in the report

In the third quarter of 2026 the bank earned PHP 16,111.6 mn of net profit – 8.1% less than in the same quarter a year earlier. That is the only rate the report gives for the reported period, and it is negative.

The quarterly series within the year is incomplete in the facts: it ends at the second quarter of 2026, so quarters cannot be compared with each other and no conclusion about acceleration or deceleration can be drawn. Only the year-on-year comparison of the third quarter is usable.

For a holder this means the bank's profit did not grow in the reported quarter, and the whole valuation of the share rests on how durable the trailing-twelve-month level of PHP 65,249.8 mn is.

Net interest income and profit by quarter

EBITDA margin

Revenue and EBITDA by quarter

Operating profit of PHP 20,684.1 mn against net profit of PHP 16,111.6 mn shows that the gap between operating and net results absorbs about a fifth of operating profit

Operating profit in the third quarter of 2026 was PHP 20,684.1 mn, net profit PHP 16,111.6 mn. The PHP 4,572.5 mn difference is about a fifth of the operating result, taken by charges and payments below the operating line.

The report does not break down that gap, so naming a specific item – provisions, tax or one-off charges – is not possible. What is visible is that the operating result is positive and clearly above net profit.

For valuation this matters in one respect: quarterly profit did not turn into a loss but declined moderately, and the operating base remains solid. It is what supports the trailing-twelve-month profit.

Net profit by quarter

Over the trailing twelve months the bank earned PHP 65,249.8 mn on net interest income of PHP 162,300.0 mn, so net margin holds near 40% of interest income

Over the trailing twelve months net profit was PHP 65,249.8 mn on net interest income of PHP 162,300.0 mn. Net profit is about 40% of interest income, so the bank's core business remains highly profitable.

Net interest income is the bank's main revenue source, and its twelve-month level sets the base from which all profit is earned. The report gives no annual rate for this line, so the direction of interest income cannot be stated.

A return on equity of 13.2% at this profit level confirms the bank earns steadily on capital. That is the key support for the dividend and for the share's valuation.

A 4.9% dividend yield at a P/E of 8.0 makes the payout the main argument for the share while quarterly profit falls

The trailing-twelve-month dividend yield is 4.9%, and at a P/E of 8.0 the payout is the main thing holding the share. Twelve-month profit of PHP 65,249.8 mn and a return on equity of 13.2% provide the base from which the dividend is funded.

The report does not disclose the payout ratio or the dividend policy, so there is nothing to build our estimate of the next payment on. Only the actual 4.9% yield and twelve-month profit can be used as anchors.

The risk to the payout is a further fall in quarterly profit: if the 8.1% decline continues, the dividend base narrows. For now twelve-month profit remains above the quarterly rate, and the 4.9% yield looks covered.

On the portal's model the share trades 12% below fair value, and that is the only valuation anchor in the report

On the portal's model the share's upside to fair value is +12%. This is our own estimate, built on a return on equity of 13.2% against a P/E of 8.0, not a market consensus and not a target price.

A P/E of 8.0 at a return on equity of 13.2% means the market pays less for the bank's profit than that profit earns on capital. A dividend yield of 4.9% adds almost five percent to that return.

A 12% discount to fair value is a moderate cushion, not a deep discount. It rests on twelve-month profit; if the 8.1% quarterly decline becomes an annual one, the cushion narrows.

Share price, three years

close, last point 2026-11-10

The share is held in the portal's live PH Banks strategy, but that is a fact about the strategy's composition, not an argument for the verdict

The Bank of the Philippine Islands share is held in the portal's live model strategy PH Banks. That is a fact about the strategy's composition, and it does not enter the assessment of the share's attractiveness.

The strategy selects securities by its own screen, so membership does not replace analysis of profit, dividend and valuation. The verdict below rests only on the report's figures and the portal's model.

Valuation on the latest reported figures

MetricValue
Market cap524 bn PHP
P/E (LTM)8.0
P/B1.09
ROE13.2%
Dividend yield (12m)4.9%

Bottom line

The report's strength remains its base: over twelve months the bank earned PHP 65,249.8 mn at a 13.2% return on equity, and quarterly operating profit of PHP 20,684.1 mn is positive. The weak spot is quarterly dynamics: net profit of PHP 16,111.6 mn is 8.1% below last year's, and the report does not explain what exactly consumed the result. A 4.9% dividend yield and a P/E of 8.0 make the share cheap on earnings, but the cushion to fair value on the portal's model – +12% – is moderate. The main question for a holder is whether twelve-month profit holds if the quarterly decline continues. Our conclusion: the share is rather attractive – on the portal's model it trades 12% below fair value. Our view: the share is rather attractive at the current price; upside on the portal model +12%.