bdo investor presentation website nov 2014 · 2018. 4. 25. · presentation outline i. overview ii....

1

Best Bank in the Philippines

Investor Presentation

November 2014

Presentation Outline

I. OVERVIEW

II. FINANCIAL HIGHLIGHTS

III. OWNERSHIP, BOARD, AND MANAGEMENT

IV. CORPORATE GOVERNANCE AND CORPORATE SOCIAL RESPONSIBILITY

IV. AWARDS AND CITATIONS

4

• The Philippines’ largest bank with total assets of P1.8 Tn (USD 38.9 Bn).

• A full service universal bank with one of the widest networks of more than 860 operating branches and over 2,500 ATMs nationwide.

• Has one of the country’s strongest Board of Directors in terms of banking experience and corporate governance.

• Part of the SM Group, one of the country’s largest conglomerates.

About BDO

5

Acquired GE Money Bank

Est. as Acme Savings Bank

Acquired by SM Group

KB license

Merged with Dao Heng Bank Philippines

Acquired 1st e-Bank’s banking business

Acquired Banco Santander Philippines

Acquired UOB Philippines’ branch banking business

Merged with Equitable PCI Bank.Acquired Amex Savings Bank Philippines

AssetsP13 BN

P36 BN

P77 BNP121 BN

P149 BN

P234 BN

P862 BN

P1.0 TN

Commercial Bank Expansion

19761968 1994

P617 BN

Acquired Rural Bank of San Juan’s banking business

P1.2 TN P1.7 TN

U/KB license

Milestones• Expansion through organic growth and M&A

20011996 2002 2003 2005 2007 2009 20122010 2013 2014

Acquired Citi Savings Bank, DB Trust and Real Bank

6

• Deposit and related products

• Over-the-counter transactions

• Cross-selling distribution platform

• Cash management services

• Electronic banking

• ATMs

• Prepaid cards

• Merchant acquiring

• Remittances

• Brokerage

• Bancassurance

• Investment management

• Unit investment trust funds

• Living trusts

• Retirement funds

• Special trusts / custodianship

• Auto

• Mortgage

• Credit cards

• Personal loans

• Merchant payment processing

• Corporate and middle market lending

• Trade finance

• Specialized lending

• Financial Institutions

• Cross-border financing

• Underwriting and distribution of Fixed income and equity securities

• Financial advisory

• Project finance

• Loan syndication

• Wealth advisory

• Customized portfolio management

• Fixed income dealership

• Foreign exchange transactions

• Portfolio management

• Liquidity management

• Direct lease, sale and leaseback arrangements

• Installment paper purchases

• Receivable discounting and factoring

Full Service Bank

Branch BankingTransaction

BankingInsurance Trust Banking Consumer Lending

Corporate & Institutional

Banking

Investment Banking

Private Banking Treasury Services Leasing & Finance

• Complete range of financial products and services

7

Market Reach• Wide and extensive coverage in key areas

NorthAmerica

3

Europe

15Middle East

1

SEA, HK, Taiwan &

Korea

10

863 Domestic Branches

29 International Offices

2,516 Domestic ATMs

as of 31 Oct 2014

Luzon 263

Philippines

863

M. Manila 445

Visayas 93

Mindanao 62

as of 31 Oct 2014

8

Notes:1 According to The Asian Banker, Global Finance, The Asset, & Trade Finance Magazine2 According to The Asset3 In terms of cardholder base & merchant acquiring gross billings4 In terms of corporate issuances5 Among insurance brokers in terms of premiums produced

Business Franchise

#1Loans

#1Deposits

#1Remittance

#1Trust and Asset

Mgt

#1Private Banking

Leading TradeServices Provider 1

Major Player in Cash Management 2

#1 Credit Cards 3

#2 Leasing & Finance

#1 Investment Banking 4

#1 LocalInsurance

Brokerage 5

• Market-leading positions in almost all business lin es

Total Assets

(in PHP billions)

Source: Company data, consolidated statements of c ondition (SOC). Ranking as at 30 June 2014

Note: Financials prepared by banks under BSP’s SOC requirements differ slightly from reported fina ncials under SEC guidelines due to certain differences in accounting rules requested by the two authorities

Industry Ranking

Gross Customer Loans

Customer Deposits Assets Under Management

• No. 1 among Philippine banks

9

1,700

1,4421,285

942

581455 430 422 385 366

MBT BPI LBP PNB China RCBC DBP SECB UBP

BDO Market Share – 17%

(in PHP billions)

973

708641

309 267 267 232170 129 129

BPI MBT LBP PNB China RCBC SECB DBP UBP

(in PHP billions)


1,365

1,077 1,073

808

437 388301 298 252 218

MBT BPI LBP PNB China RCBC UBP DBP SECB

(in PHP billions)

BDO Market Share – 18%775

492

335

219

92 84 63 63 60 57

BPI MBT SChart UCPB RCBC HSBC China PNB LBP


BDO UNIBANK, INC. PHILIPPINE PARENT BANK

• With equity investments in allied and non-allied en terprises

Organizational Structure

Financial Companies Insurance Companies Real Estate Companies Service Companies

BDO Private Bank, Inc. (100%)

BDO Capital & Investment Corporation (100%)

BDO Securities Corporation (100%)

CBN Grupo International

Holdings B.V. (60%)

Averon Holdings Corporation (100%)

PCIB Securities, Inc . (100%)

Express Padala (HK) Ltd. (100%)

Express Padala Frankfurt GmbH (100%)

BDO Leasing and Finance, Inc. (87%); BDO Capital & Investment Corporation

(11.11%)

BDO Rental, Inc. (100%)

Citibank Savings, Inc. (99.99%)

ArmstrongSecurities, Inc. (80%)

BDO Remit (Italia) S.p.A. (100%)

BDO Remit Limited (100%)

BDO Remit (Macau) Ltd. (100%)

BDO Remit (USA), Inc. (100%)

BDO Insurance Brokers, Inc. (100%)

Generali Pilipinas Holding Co., Inc. (BDO – 38.05% &

BDO Cap – 1.95%)

BDORO Europe Ltd. (100%)

Equimark-NFC Development Corp. (60%)

SM Keppel Land, Inc. (50%)

Taal Land, Inc. (33%)

NorthPine Land, Inc. (20%)

Manila North Tollways Corp. (12%)

BDO Strategic Holdings Inc. (100%)

10

The Banker Top 1000 World Banks – Tier 1 Capital

11

Tier 1 Capital Ranking of Banks(as of 31 December 2013)

World Rank Local Rank Country Name of Bank

Tier 1 Capital ($ Mn)

Current Previous

264 262 7 CHE Basier Kantonalbank 3,433

265 237 9 IND IDBI 3,429

266 303 11 ESP Ibercaja 3,421

267 284 38 USA Raymond James 3,419

268 251 1 PHL BDO Unibank, Inc. 3,413

269 230 4 IDN Bank Negara Indonesia 3,406

270 273 5 AUT Bawag PSK 3,371

271 267 17 DEU Aareal Bank 3,361

272 344 30 CHN Bank of Hangzhou 3,360

273 271 6 MYS Bank Rakyat 3,351

The Banker Top Philippine Banks – Tier 1 Capital

12

Tier 1 Capital Ranking of Banks(as of 31 December 2013)

World Rank Local Rank Name of Bank

Tier 1 Capital ($ Mn)Current Previous

268 251 1 BDO Unibank, Inc. 3,413

314 333 2 Metropolitan Bank & Trust 2,758

382 386 3 Bank of the Philippine Islands 2,108

506 642 4 Philippine National Bank 1,394

590 655 5 Rizal Commercial Banking Corp. 1,099

680 663 6 Security Bank 880

681 702 7 China Banking Corporation 878

751 765 8 Union Bank of the Philippines 736

13

Credit Ratings

Moody’s23 Sept 14

Fitch17 Jul 14

Capital Intelligence25 Aug 14

Issuer/Debt Rating (IDR)

Long Term Baa3 BB+ BBB-

Short Term Prime-3 A3

Outlook Positive Positive Stable

Bank Financial Strength Rating (BFSR) D+ bb+ BBB-

Outlook Stable Positive

Baseline Credit Assessment (BCA) baa3

Adjusted BCA Rating baa3

Source: Moody’s, Fitch and Capital Intelligence

14

Trading Fact Sheet

Type Common Shares Stock Ticker BDO ISIN PHY077751022 Exchange Philippine Stock Exchage Par Value P10.00 Outstanding No. of Shares 3,580,875,328 Foreign Owneship Up to 40%

Type Sponsored Level 1 ADR ADR Ticker BDOUY ISIN US05537Y3045 Ratio 1 ADR = 10 Ordinary Shares Depositary Bank Deutsche Bank Trust Company Americas Contact Details ADR Broker Helpline Tel (New York) + 1 212 250 9100 Tel (London) + 44 207 547 6500 Email [email protected] ADR website www.adr.db.com

Depositary Bank's Local Custodian Deutsche Bank AG, Manila Branch

Stock Details

American Depositary Receipts (ADR) Program Details


I. OVERVIEW





16

(in PHP billion) 9M14 9M13 YoY %

Interest Income 46.5 41.2 13%

Interest Expense 9.0 10.2 -12%

Net Interest Income 37.5 31.0 21%

Non-interest Income 21.8 25.8 -15%

Fee Income 12.9 11.5 12%

Trading & FX 6.0 11.9 -49%

Others 2.9 2.4 20%

Gross Op Income 59.3 56.8 4%

Operating Expense 36.9 32.1 15%

Pre-Provision Op Profit 22.4 24.7 -9%

Provisions 3.9 5.1 -24%

Taxes 1.8 1.4 29%

Net Income 16.7 18.2 -8%

9M14 Income Statement

17

(in PHP billion) 2009 2010 2011 2012 2013

Interest Income 48.8 49.9 50.5 54.0 56.6

Interest Expense 18.3 15.8 16.9 17.9 13.4

Net Interest Income 30.6 34.2 33.6 36.1 43.2

Non-interest Income 15.5 17.8 20.9 24.4 31.8

Fee Income 9.6 10.4 12.3 13.4 15.5

Trading & FX 3.6 5.8 5.6 8.2 12.8

Others 2.3 1.6 3.0 2.8 3.6

Gross Op Income 46.0 52.0 54.5 60.5 75.0

Operating Expense 32.1 34.8 35.8 39.5 43.3

Pre-Prov Op Profit 13.9 17.2 18.7 21.0 31.7

Provisions 6.2 6.7 6.1 4.9 7.0

Taxes 1.7 1.6 1.7 1.6 2.1

Net Income 6.0 8.8 10.8 14.5 22.6

2009 to 2013 Income Statement

(in PHP billion) 3Q14 3Q13 YoY %

Resources

Reserve Assets 481.5 410.7 17%

Investment Securities 195.4 212.7 -8%

Gross Customer Loans 1,031.8 846.4 22%

Investment Properties 10.3 10.8 -5%

Other Assets 32.0 24.9 28%

Total Resources 1,751.0 1,505.5 16%

Liabilities

Deposits 1,424.9 1,202.8 18%

Bills Payable/Sub-Debt 84.4 68.0 24%

Other Liabilities 68.7 75.0 -8%

Total Liabilities 1,578.0 1,345.8 17%

Total Capital 173.0 159.7 8%

Total Liabilities & Capital 1,751.0 1,505.5 16%

18

3Q14 Balance Sheet

19

(in PHP billion) 2009 2010 2011 2012 2013

Resources

Reserve Assets 176.6 229.6 203.5 201.2 491.5

Investment Securities 171.7 197.3 188.4 237.3 227.9

Gross Customer Loans 472.7 541.5 670.1 769.0 911.5

Investment Properties (net) 13.8 12.0 10.1 9.1 10.4

Other Assets 27.2 20.5 22.1 25.0 31.5

Total Resources 862.0 1,000.9 1,094.2 1,241.6 1,672.8

Liabilities

Deposits 694.7 782.6 858.6 931.6 1,345.3

Bills Payable/Sub-Notes 54.6 89.0 97.7 100.4 97.3

Other Liabilities 44.9 40.5 44.1 55.2 65.8

Total Liabilities 794.2 912.1 1,000.4 1,087.2 1,508.4

Total Capital 67.9 88.7 93.8 154.4 164.4

Total Liabilities & Capital 862.0 1,000.9 1,094.2 1,241 .6 1,672.8

2009 to 2013 Balance Sheet

20

Financial Performance Indicators (Consolidated)2009 2010 2011 2012 2013 9M14

Profitability

Return on Ave. Common Equity 10.4% 11.9% 12.4% 12.0% 14.5% 13.5%*Return on Average Assets 0.7% 1.0% 1.0% 1.2% 1.6% 1.3%*

Margins and LiquidityNet Interest Margin (NIM) 4.1% 4.1% 3.5% 3.4% 3.3% 3.1%*Loans to Deposit Ratio 68.0% 69.2% 78.1% 82.5% 67.8% 72.0%Liquid Assets to Total Assets 40.2% 42.6% 35.8% 35.3% 43.0% 38.0%

Cost EfficiencyCost to Income Ratio 69.8% 66.9% 65.6% 65.2% 57.7% 62.2%Cost to Assets Ratio 3.9% 3.7% 3.4% 3.4% 3.0% 2.9%*

Asset QualityNPL Ratio 5.0% 4.7% 3.4% 2.8% 1.6% 1.4%NPL Cover 79.8% 92.1% 106.0% 125.7% 170.7% 183.9%

Capital Basel II Basel III

CET1 12.7%Tier 1 Ratio 8.4% 10.0% 10.0% 15.2% 14.3% 13.2%Capital Adequacy Ratio 12.4% 13.8% 15.6% 19.1% 15.4% 14.1%

* Annualized basis

15%

24%

15%

19%

22%

9%

19%16%

16%

20%

0%

5%

10%

15%

20%

25%

30%

2010 2011 2012 2013 3Q14

BDO

Industry

21

• BDO loan growth continued to stay above industry av erage

Loan Growth

783859

932

1,3451,425

0

150

300

450

600

750

900

1,050

1,200

1,350

1,500

2010 2011 2012 2013 3Q14

(P bn)

22

Deposit Growth

YoY∆ 13% 10% 9% 44% 18%*

• Higher than industry average deposit growth

Net Income

23

• Sustained growth with record profits

8.8

10.8

14.5

22.6

16.7

0

2

4

6

8

10

12

14

16

18

20

22

24

2009 2010 2011 2012 2013 9M14

(P bn)

6.0

12.7%10.0% 10.0%

15.2% 14.3%

0.5%4.0%

5.6%

4.0%

1.1%0.9%

0%

5%

10%

15%

20%

2010 2011 2012 2013 3Q14Basel III

Tier 2

Tier 1 -10%

CET1 - 8.5%

24

Note:Minimum CET1 and Tier 1 ratios under Basel III are inclusive of the 2.5% capital conservation buffer

Capital Adequacy Ratio (Consolidated)• Comfortably above Basel III standards to support me dium

term growth plans

14.1%13.8%

15.8%

19.2%

15.4%Basel IIMin Req

CAR

Tier 1

Basel IIIMin Req

Basel II


I. OVERVIEW





26

Shareholder Structure

Source: Top 100 Shareholders as of 30 Sept 2014

• Majority owned by the SM Group

SM Investments Corp. 40.9%

PCD Nominee Corp. (Non-Filipino) 31.3%

PCD Nominee Corp. (Filipino) 10.1% Multi-Realty Development Corporation 8.8%

Sybase Equity Investments Corporation 5.1%

Sub-Total, Top Shareholders 96.2%

Top Shareholders as of 30 Sept 2014

Financial Services

27

Property

Retail

Access to SM’s customer network

• Almost 16,000 Philippine tenants

• More than 5,000 suppliers• 3.5 million average daily foot

traffic• In-house business• Home mortgage financing

for SM property projects

New business opportunity

• Goodwill from the SM franchise

• Joint product development

SM expertise• Middle market knowledge• Expertise in retail market

and real estate

Branch locations• Branches, ATMs in SM malls

• Leading residential condominium developer in Metro Manila in terms of units sold

• Among the fastest growing commercial, resorts and hotel developers in the Philippines

• Largest local retail chain with 255 stores nationwide

• Dominant domestic mall developer/operator - 49 malls with GFA of over almost 7.3 mn sqm

• Biggest domestic banking operations• Interests in BDO and China Bank

The SM Group• Harnessing synergies with the country’s largest con glomerates

� 8 directors out of 11 have an average of 34 years o f banking experience

� 2 directors are practicing attorneys, and the other a Philippine bar topnotcher and member of the State B ar of New York

• One of the strongest Board of Directors in the indu stry with extensive banking and related experience

ExperiencedBankers

PracticingLawyers

� 1 director is a successful businessmen who has made his mark in the field of retailing

SuccessfulEntrepreneurs

Board of Directors

28

Board of Directors

Henry T. Sy SeniorChairman Emeritus — first appointed to the Board in 1976

� Founder and Chairman of the SM Group of Companies

� Started his entrepreneurship career in 1958

� Chairman of SMIC, SM Prime Holdings and SM Dev. Corp.

Jesus A. Jacinto Jr.Vice Chairman — first appointed to the Board in 1996

� Chairman and President of BDO Insurance Brokers

� Chairman and President of Jaces Corp.

� MBA Columbia University

Teresita T. SyChairperson — first appointed to the Board in 1977

� Serves as Director in multiple subsidiaries of BDO

� Vice Chairperson of SMIC and Director of other SM Group companies, including Multi-Reality Dev. Corp.

Antonio C. PacisDirector — first appointed to the Board in 2004

� Director of BDO Capital

� Corporate lawyer since 1967

� Degree from Harvard Law School

Josefina N. TanDirector — first appointed to the Board in 2007

� President of BDO Private Bank

� Former Director of EPCIB from 2005 to 2007

� Former Director of Banco de Oro from 2001 to 2005

Nestor V. TanPresident — first appointed to the Board in 1998

� Holds Directorships of numerous BDO subsidiaries

� Director of the Bankers Association of the Philippines

� MBA Wharton School

Cheo Chai HongDirector — first appointed to the Board in 2010

� Director of UOB (Philippines), UOB Global Capital Private, UOB (Thai) and Encus International

� Head of Corporate Planning and International of UOB Group

Jimmy T. TangIndependent Director — first appointed to the Board in 1984

� Serves as Independent Director since 2002

� Previously served as Director since 1984

� Chairman and President of AVESCO Group of Companies

Gilberto C. TeodoroIndependent Director – first appointed to the Board in 2014

� Served as Secretary of National Defense from 2007-2009

� Masters of Laws from Harvard Law School

� Topnotcher, 1989 Philippine Bar Examinations

Jones M. Castro Jr.Independent Director — first appointed to the Board in 2012

� Served as Head for South Asia and SEA at Wells Fargo Bank

� MBA Stanford University

Jose F. BuenaventuraIndependent Director — first appointed to the Board in 2013

� Senior Partner of Romulo Mabanta Buenaventura Sayoc & De Los Angeles Law Offices since 1976

� Master of Laws from Georgetown University Law Center

Christopher A. Bell-KnightDirector — re-elected to the Board in 2013

� Previously served as BDO Director from May 2005 - Sep 2010

� Former VP and Country Head of the Bank of Nova Scotia

� Associate of the Chartered Institute of Bankers - British

• With broad business and professional experience

29

Corporate Support

Walter C. Wassmer Head — Business Lending

� With BDO since 1997

� 33-year banking experience

Rolando C. Tanchanco Head — Consumer Lending



Jaime C. Yu Head — Branch Banking



Pedro M. Florescio III Head — Treasury



ServicesIntermediation

Nestor V. Tan President� With BDO since 1997� 32-year banking experience

Ador A. Abrogena Head — Trust and Investments� With BDO since 1990� 36-year banking experience

Jonathan C. Diokno Head — Remittance Origination� With BDO since 2001� 20-year banking experience

Josefina N. Tan Head — Private Banking� With BDO since 2003� 38-year banking experience

Eduardo V. Francisco Head — Investment Banking� With BDO since 1999� 27-year banking experience

Emmanuel T. Narciso SVP — Transaction Banking� With BDO since 2011� 30-year banking experience

Evylene C. Sison Head — Asset Management� With BDO since 2010� 23-year banking experience

Maria Theresa L. Tan General Manager — BDO Insurance� With BDO since 2009� 22-year banking and insurance experience

Geneva T. GloriaHead — Remittance Distribution� With BDO since 2003� 26-year banking experience

Senior Management Team

• With extensive professional banking expertise

30

Anthony Chua Head — Global Operations� With BDO since 2014� Over 30 years of banking

experience

Ricardo V. Martin Head — IT Group



Dennis B. Velasquez Head — Central Operations



Evelyn L. Villanueva Head — Risk Management



Evelyn C. Salagubang Head — Human Resources


� 20-year experience in HR

Luis S. Reyes Jr. Head — IR & Corplan



Rafael G. Besa Head — Marketing



Vacant Head — Compliance & Legal

Lucy Co Dy Head — Comptrollership




I. OVERVIEW





32

Corporate Governance

Five (5) principles of CG practices:

• Accountability• Fairness• Integrity• Transparency• Performance

• Strict adherence to best practices and ethical stan dards

Structure and mechanisms in place:

• Independent Directors• Segregation of roles• Checks & Balances • Code of Conduct &

Business Ethics

Full transparency and timely information

disclosures

Protection of stakeholders’ rights and interests

33

Corporate Governance• Compliant with regulatory requirements

Board

Corporate Governance

Minimum no. of Independent Directors (2) 4 Independent Directors

Cert. Of Attendance – Board Members

Cert. Of Qualification of Ind. Directors

Corporate Governance Manual

CG Guidelines Disclosure Template

SEC Annual Corp Governance Report

Leading Practices on Corp Governance

Code of Conduct and Business Ethics

34

Corporate Governance• Recognition for CG initiatives

Silver Awardee Corp Governance Scorecard

Awardee for ten (10) consecutive years

Among the Top 50 Publicly-Listed Companies in the ACGS Scorecard 2013

35

Corporate Social Responsibility

Disaster Response

• Relief operations using the SM supply chain and gro und handling by BDO branches

• Rehabilitation and reconstruction

• Shelter/housing and resettlement areas, health cent ers, school buildings/classrooms and multi-purpose halls

Community Development & Capacity Building

• Sustainable livelihood, skills training & practical education

• BDO Foundation Micro-Finance Center for microfinance training and development programs

BDO Foundation’s Advocacies

• Project BANGKA (motorized boats with fishing nets f or San Dionisio fishing village in Iloilo)

36

Corporate Social Responsibility

• Construction/modernization of public health centers / facilities

• BDO-World Wide Fund for Nature (WWF) Philippines Partnership Project

• Go Green Program

Healthcare

Green/Environmental Initiatives

• Energy conservation/efficiency, proper solid and ha zardous waste disposal

• Tree planting, vegetable growing projects

BDO Foundation’s Advocacies


I. OVERVIEW





“. . . the first time Finance Asia has given this award to a Philippine bank . . .”

Institutional Awards and Citations, 2013-2014

Best Asian Bank


Strongest Bank in the Philippines

Best Bank in the Philippines


Best Equity House

in the Philippines

Best Retail Bank

in the Philippines

Best Private Bank

In the Philippines

Best Investment Bankin the Philippines


Excellence In CorporateGovernance

Platinum Award

Excellence In Investor Relations

Most Organized Investor Relations

Among the Best Senior Management IR Support

Platinum Award

Among the Best Investor Relations Companies in the

Philippines

Excellence In Investor Relations

Nestor V. TanOne of Asia’s Best CEOs

(Investor Relations)

Luis S. Reyes, Jr.One of the Best IR

Professionals (Phils)

Pedro M. FlorescioOne of Asia’s Best CFOs

(Investor Relations)

Best FX Bank/ Provider

Best in Trade Finance

Fund House of the Year

Institutional Awards and Citations, 2013 - 2014

Leading Counterparty Bank

Thank you.www.bdo.com.ph

bdo investor presentation website nov 2014 · 2018. 4. 25. · presentation outline i. overview ii....

Documents