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It has been highly suspected by plenty of traders and investors that when companies buy back their shares or when directors, let alone its own president is buying, the insiders know best about their companies and we should follow their footsteps. Should we then be following Vice Chairman and CEO Antonio Moncupa, Jonathan Gotianun and CEO Frank Gaisano increasing stakes on their companies? Let’s discuss.
Mr. Antonio C. Moncupa, Jr. is the Vice Chairman since May 01, 2017 and Chief Executive Officer of East West Banking Corporation (“EastWest”) since 2007. He has been on the EastWest Board as Director and CEO since 2007. He concurrently serves as Director of Pasberfund Realty Holdings, EastWest Rural Bank, Inc., Bancnet, Inc., Philippine Rural Reconstruction Movement, East West Ageas Life Insurance Corp., and East West Leasing & Finance Corp. Prior to EastWest, he was the Executive Vice President and Chief Financial Officer of the International Exchange Bank. He holds a double degree in Economics and Accounting from the De La Salle University and a Master’s in Business Administration degree from the University of Chicago.
Mr. Frank S. Gaisano serves as the Chairman and Chief Executive Officer at AB Capital & Investment Corporation. He has been the Chief Executive Officer and Chairman at Metro Retail Stores Group, Inc. since 2012 and has been its Director since August 28, 2003. Mr. Gaisano serves as a Treasurer of Filipino Fund Inc. Mr. Gaisano serves as Managing Director of Vicsal Development Corporation. Mr. Gaisano serves as President of Direct Model Holdings Inc. He serves as Corporate Secretary of Vicsal Securities and Stock Brokerage Inc. He served as President of Filipino Fund Inc. since February 21, 2007. Mr. Gaisano also serves as Chairman of AB Capital & Investment Corporation. He serves as Chairman of Pacific Mall Corp. He has been a Director of Filipino Fund Inc. since September 2003. He serves as Director of the following corporations: Grand Holidays Inc. Maric Ventures Inc., Metro Legaspi Dev. Corp., Lucena City Value Shoppers Inc., Taft Property Venture Development Corporation, Vicsal Securities and Stock Brokerage Inc., Grand Enterprise Corporation, Midland Development Corporation and Tabok Properties Inc. He has been a Director of Metro Retail Stores Group, Inc. since 2003. He serves as Trustee of Vicsal Foundation Inc. He serves as a Director of Vicsal Development Corporation, Taft Punta Engaño Property Inc. and HTLand, Inc. He is a board-certified civil engineer. He served as Chairman of the Board of Filipino Fund Inc. He served as Acting Co Chairman of Filipino Fund Inc. since February 21, 2007. He is a holder of a Bachelor of Science degree in Civil Engineering which he received from the Cebu Institute of Technology in 1978 and M.B.A from the California State University.
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Eastwest’s recent 9M18 filing shows while revenues were sustained at 18.85B, income has fallen from P3.72 B to P3.24B. This 500M peso difference stemmed from an increase in their costs. This translates to 10.7% return on equity and 1.4% return on assets. 9M18 dropped 13% primarily from one-off items. Note that as of Nov 2017, public school teachers’ lending programs was suspended and was only resumed in late June 2018 causing loan contribution to drop. Nevertheless, net interest income grew by 6% to 14.5B despite the EWRB and higher deposit costs due to Consumer Lending Businesses.
CLB refers to creditcards, auto, home and personal loans which were up 14% yoy. Operating expenses increased to P11.1B due to higher fees spent on advertising, training, transaction taxes and licenses.
At current price of 12.16, EW trades with a marketcap of 26.27B pesos.
Based on the most recent filing on the bank’s statement of condition, they have a total asset pool of P319B from their headoffice and branches and if on a consolidated amount have P339B of assets. We can see that a bulk of these assets are in loans and receivables with P198B which shows the bank is doing its best to convert the cash of the deposits into higher returning assets.
Gross Total Loan portfolio for the quarter is at P205B. NPL increased to 2.88% from 2.4% suggesting some deterioration in collection but still within standard industry rates.
The largest personal shareholder of Eastwest is Lourdes Josephine Gotianun Yap followed by Jonathan Gotianun and Antonio Moncupa. Together these three own 1.65% of the entire bank. Rightly so, they are the major decision makers running the bank’s day to day operations so we are watching them.
Question is Why is Antonio Moncupa Bullish and Buying Eastwest as stated in Insider filings? What’s in store for its future?
In its Q218 Filing, the presidents Bobby Reyes and Vice Chairman Antonio Moncupa acknowledged that they remain committed to giving credit access to teachers and while its EWRB had some issues during the first half, they’re happy it has been resolved and public school teachers are now back for salary loans. Note that EW remains committed to being a consumer focused bank with 72% of its total loan portfolio or P162.8B for consumers while business loans at P61.8B remain flat or the 28% of the portfolio.
This year 2018’s setback of EW was primarily stemming from the suspension of new loans to teachers but this is a one-off issue. The company raised P15B at 4.625% until 2023 from the LTNCDs which will be used to expand EastWest’s long-term deposit base, as well as support major funding needs of the bank. LTNCDs are peso-denominated, negotiable certificates of time deposits which carry relatively higher interest rates and have longer maturity period than regular time deposits.
Book Value Per Share (BVPS) = ( Total Equity — Preferred Stock) /
Shares Outstanding
- Given 2018 had a 50% stock dividends, the new effective book value per share is 17.33
- At 12, the company trades at .69X Trailing P/B
Next Post: — We’ll discuss Frank Gaisano’s Buying Activities.
