COVER SHEET

S.E.C. Registration Number

(Company's Full Name)

B A N C O D

B D O

(Business Address : No. Street City1 Town1 Province)

7 8 9 9

Atty. Elmer B. Serrano Contact Person

E

C o r p o r a t e

840-7000/702-6000 Company Telephone Number

C e n t e r

M a k a t i

Month Day

O R 0

Dept. Requiring this Doc.

A v e n u e

-1 Total No. of Stockholders

U N I B A N K ,

SEC Form 17-A FORM TYPE Month Day

I N C .

M a k a t i

Annual Meeting

m

C i t y

Secondary License Type, if Applicable

Amended Articles Number1 Section

Total Amount of Borrowings

I c Domestic Foreign

To be accomplished by SEC Personnel concerned

File Number LCU

Document I.D. Cashier

S T A M P S

Remarks = pls. use black ink for scanning purposes

SEC FORM 17-A

SECLlRlTlES AND EXCHANGE COMMISSION [ - -2.

I., l-. S s . . - 1

SEC FORM 17-A, AS AMENDED

ANNUAL REPORT PURSUANT TO SECTION 17 OF THE SECURI'I'IES REGULATION CODE AND SECTION

OF THE CORPORATION CODE OF 'THE PHILIPPINES

1. For the fiscal year ended: -...... December 31,2009

2. SEC Identification Number: .......................................... 34001 3. BlR Tax Identification No. .................................................................. 000-708-174-000

BANCO DE OR0 UNIBANK, INC. 4. Exact name of registrant as specified in its charter: ....................................................................................................................................... " .....................................................

5. Manila 6, 1 (SEC Use Only)

Province, Country or other j~~risdiction of Industry Classification Code: incorporation or organization

7. ._ .... BDO _ Corporate Center, u 7899 Makati Avenue, Makati City ............................. 0726 .. ...................................... Address of principal office Postal Code

8. .... (632) .. 840-7000 . .. Issuer's telephone number, including area code

9. Banco de Oro-EPCI, Inc., 12 AD6 Avenue, Ortinas Center, Mandaluyonn City Former name, former address, and former fiscal year, if changed since last report.

10. Securities registered pursuant to Sections 8 and 12 of the SRC, or Sec. 4 and 8 of the RSA

Title of Each Class

Title of Each Class

Common Stock, PhplO.OO par value

Number of Shares of Common Stock Outstanding and Amount of Debt Outstanding

11. Are any or all of these securities listed on a Stock Exchange. Yes [X ] N o [ ]

IV~~mber of Shares

2,339,768,510

If yes, state the name of such stock exchange and the classes of securities listed therein: Philippine Stock Exchange Common

12. Check whether the issuer:

(a) has fled all reports required to be filed by Section 17 of the SRC and SRC Rule 17.1 thereunder or Section 11 of the RSA and RSA Rule I l (a ) - I thereunder, and Sections 26 and 141 of 'The Corporation Code of the Philippines during the preceding twelve (12) months (or for such shorter period that the registrant was required to file such reports);

Yes [ X I 110 [ 1

(b) has been subject to such filing requirements for the past ninety (90) days.

Yes [ X I No [ I

13. Aggregate market value of the voting stock held by non-affiliates tlie registrant: P 32,432,401,638.00

TABLE OF CONTENTS

Paqe No.

PART I - BUSINESS AND GENERAL INFORMA'I'ION

Item 1 Business Item 2 Properties Item 3 Legal Proceedings Item 4 Submission of Matters to a Vote of Security Holders

PART II - OPERATIONAL AND FINANCIAL INFORMATION

Item 5 Iblarket for Registrant's Eql~ity and Related Stockholders Matters Item 6 Management's Discussion and Analysis or Plan of Operations Item 7 Financial Statements Item 8 Changes in and Disagreements With Accountants on Accounting

and Financial Disclosures

PART Ill - CONTROL AND COMPENSATION INFORMATION

Item 9 Directors and Executive Officers of the Registrant Item 10 Executive Compensation Item 11 Security Ownership of Certain Beneficial Owners and

Management Item 12 Certain Relationships and Related Transactions

PART IV - CORPORATE GOVERNANCE

Item 13 Corporate Governance

PART V - EXHIBITS AND SCHEDULES

(a) Exhibits (b) Reports on SEC Form 17-C (Current Report)

SIGNATURES

EXHIBITS & ANNEXES

Part I - Business and General information

Item 1. Business

1) Business Development

(a) Form and Year of Organization

Banco De Oro Unibank Inc. (BDO), originally known as Acme Savings Bank, was acquired by the SM Group in 1976. The SM Group is one of the largest conglomerates in the Philippines, with s~~bstantial interests in financial services, real estate development, and tourism and entertainment, founded around its core business in commercial centers and retailing. BDO listed its shares on the Philippine Stock Exchange (PSE) on 21 May 2002.

BDO is now the market leader in most of its core business lines following its merger with Equitable PC1 Bank (EPCI) in May 2007. The Bank offers a complete array of products and services, i.e. Retail Banking, Lending (Corporate, Commercial, Consumer, and SME), Treasury, Trust, Credit Cards, Corporate Cash Management and Remittances. Through its subsidiaries, the bank offers Leasing and Financing, Investment Banking, Private Banking, Bancassurance, Insurance Brokerage and Stock Brokerage services. As of December 31, 2009, it has one of the largest branch networks, with 706 operating branches and more than 1,300 ATMs nationwide.

Over .the past several years, the Bank has experienced significant growth. This resulted from organic growth arising from a wider array of products and services, as well as through mergers and acquisitions of banks. Sustaining earlier gains, the Bank is currently the largest bank in the Philippines in terms of assets, loans, deposits, and ranked second in terms of capital as of the end of the fourth quarter 2009. BDO's market shares of the commercial banking sector are as follows:

e Assets - 15% e Assets Under Management (Trust) - 26% e Customer Loans - 20% and e Deposits - 16%, and

BDO registered a net income of P6.1 billion for the year 2009. Net Interest Income surged by 33% to 430.6 billion given the larger level of earning assets and improved margins. Total resources grew by 7% year-on-year to 42362 billion due to the increase in both the Bank's liquid assets and customer receivables. Net Loans and Other Receivables rose by 7% with gross customer receivables expanding by 20% on sustained loan demand across all market segments. Total Deposit Liabilities went up by 9% on aggressive marketing efforts and additional branch redeployments. Trust Assets under Management also expanded 35% year-on-year to M 5 7 billion. Meanwhile, Total Equity grew 18% to P67.9 billion in 2009 from P57.8 billion in 2008.

BDO's diverse subsidiaries and investments in allied undertakings provide an extensive range of banking and other financial services. The Bank's subsidiaries and associates are as follows:

Philippine Subsidiaries % Interest Held BDO Private Bank, Inc. (BDO Private) 100% BDO Strategic Holdings, Inc. (BDOSHI, formerly EBCII) 100% BDO Leasing and Finance, Inc. 85% GE Monev Bank, Inc. IGEMBl 99% EBC straiegic ~old ings ~ o r ~ b r a t i o n (ESHC) 100% 0

BDO Technology Center, Inc. (BDO Technology) 100% Equimark - NFC Development Corp. 60% PClB Securities. Inc. 100% 1

BDO Insurance Brokers, Inc. IBDOI) 100%

Foreign Subsidiaries % Interest Held PC1 Express Padala (HK) Ltd. 100% PClB Europe, S.P.A 100% Ex~ress Padala HK Ltd. 100% Express Padala (USA), Inc. 100% Express Padala Frankfurt GbmH 100% ~ iu i t ab le PC1 Express Padala (Nederland) B.V. 100%

Associates: % Interest Held SM Keppel Land, Inc. 50% Generali Pilipinas Holdings, Inc. 40% Northpine Land Incorporated 20% Taal Land 33%

2) Business of Issuer

( i) Principal Products and Services

BANK PRODUCTS & SERVICES Peso Deposits: Regular CAI Smart Checking, Super Checking, Peso CA Payroll, Automatic Transfer (ATF) Accounts, Peso Passbook SA, Peso ATM, Peso SA Payroll, Optimum SA, Super Savings, Junior Savers Club, Power Teens Club, Club 60 Peso, Smart Guarantor, Peso Time p

Foreign Currency Deposits: Dollar SA, Club 60 Dollar, Dollar Super Saver. Mega Savings Dollar, Dollar Time Deposit, Dollar PRA Time Deposit, Three-Year Dollar Time Deposit; Five-Year Dollar Time Deposit, Third Currency Savings Deposit, Third Currency Time Deposit

Deposit-related Services: IWanager's Check, BDO Gift Check, Customized Check, Demand Draft, Telegraphic Transfer, Inter-branch Deposit, Deposit Pick-Up Services, Night Depository Service, Safe Deposit Box, Bills Payment Services Remittance Services: Credit to BDO Account, Cash Pick Up Anywhere (at BDO branches, SM locations, accredited rural bank partners and financial services partners), BDO Remit Cash Card, BDO Kabayan Savings Account (USD & PHP), BDO Kabayan Time Deposit Account, BDO Kabayan Shipping Dollar Savings Account, BDO Kabayan Current Account, Jollibee Padalang Langhap Sarap, Direct Deposit Program, and Other Services (Credit to Other Local Banks, Cash Door-to-Door, Global Money Transfers,). Trust Services: Unit Investment Trust Funds (BDO Peso Money Market Fund, BDO Peso Bond Fund, BDO GS Fund, BDO Peso Fixed Income Fund, BDO Institutional Fixed Income Fund, BDO Peso Balanced Fund, BDO Institutional Equity Fund, BDO Merit Fund, BDO Dollar Money Market Fund, BDO Dollar Bond Fund, BDO IWedium-Term Dollar Bond Fund), Customized Portfolio Management (Investment Management Accounts, Employee BenefitlRetirement Accounts, Personal PensionlRetirement Account, Pre-Need Trust Funds, lnstitutiondllCorporate Trust Funds, Dollar Trust Funds), Special Trust Services (Mortgage or Collateral Trust, FacilitylLoan Agency, Escrow Agency Services, RegistryiTransfer Agency, Paying Agency, Collection Agency, Receiving Bank, Safekeeping, Life Insurance Trl~st, Court Trusts, Non-Voting Trusts, Special Purpose Trust),

Treasury Dealership and Brokering Services: Treasury Bills & Bonds, Fixed Rate Treasury Notes, Commercial Papers, Foreign Currency Denominated Bonds, FX Forwards and Swaps, Interest Rate S w a ~ s Transaction Baiking: Cash Management Services: Integrated Collection Solutions - Bills Payment, Auto Debit Arrangements, Corporate Collections, Post Dated Check Warehousing, Armored Car Cash Deposit Pick-up, IWotorized Check Pick-Up; Integrated Disbl~rsement Solutions - Direct Credit, Check Printing, Payables Warehousing, Regular Payroll, Cashcard Payroll, Check Disburse; Government Collections - BIR e-Payment, SSS EC Link, Philhealth, HDMF, NHMFC; Liquidity Management - Account Sweeping Facility, Warehouse & Discounting Facility; Account and Information Services - Infolink; Electronic Banking: Expressnet, Megalink, Bancnet, VisalPlus, I\nasterCardlCirruslMaestro; Internet Banking - my BDO Internet Banking, Corporate Internet Banking; Phone Banking; Mobile Banking; Point-of-Sale (POS) Card Products: Debit Cards: BDO Smarteller ATM Card, BDO ATM Debit Card Mastercard, BDO ATM Debit Card Paypass, BDO ATM Credit Card Visa, Fasteller, Speedteller; Pre-paid Cards: BDO Cash Card, BDO Cash Card International, BDO Asenso Kabayan Cash Card, Smart Money, Fastcard Consumer Loans & Credit Cards: Consumer Loans: BDO Home Loan, BDO Contract-to-Sell Financing, BDO Auto Loan, BDO Personal Loan, BDO Corporate Employee Loan Program, BDO Business Mortgage Loan. BDO Credit Cards: BDO Mastercard, BDO American Express Card, BDO Visa Card, and BDO JCB Card, Co-Brand and Affinity Credit Cards, Tie-up Credit Cards, Corporate Credit Cards, and Commercial Credit Cards Commercial & Industrial Loans: Credit Lines, Bills Purchase Lines, Check Discounting Lines, Term Loans, Trust Loans, US Dollar Denominated Loans, LCiTR Financing, Stand-by LC, CTS Financing, Export Bills Purchase, Export Packaging Credit, FX Settlement, Sugar Quedan Financing, Receivables Purchase Facility

Special Loan & Guarantee Facilities: Funding Facilities - Countryside Loan Fund (CLF Ill), Credit Support for the Environment, Agribusiness and Small and Ibledium Enterprises (CREAM), Micro, Small and Medium Enterprises (MSME), Industrial Guarantee & Loan Fund (IGLF), Logistics Infrastructure Development Program (LIDP), Environmental Development Program (EDP), lndustry Support Loan Project (ISLP-JBIC 6), BSP Rediscounting Facility, SBGFC-SME Funding for Investments in Regional Markets (FIRM), SBGFC-SME Funding Access for Short-Term Loans (FAST), SSS Special Financing Program, SSS Industry Loan Program and SSS Financing Programs for Hospitals, Schools, and Tourism Projects. Guarantee Facilities - SBGFC Clean Loan Guarantee Facility, SBGFC Collateral-Short Guarantee Facility, SBGFC Collateral-Sharing Guarantee Facility, PhilExim Pre-Shipment & Post-Shipment Export Finance Guarantee Program, PhilExim Term Loan Guarantee Program (TLGP), PhilExim General Facility Program (GFP), PhilExini Orr~nibus Guarantee Line Under the General Facility Program, PhilExim Programs for Large Projects in Priority Sectors of the Government Foreign Exchange: Over-the-counter PurchaselSale of FX, PurchaselSale of Traveler's Checks, Sale of Foreign currency Demand Drafts lnvestment Banking.: BDO Capital and lnvestment Corp.: Debt, Equity and Quasi-Equity Underwriting; Loan Syndication; Project Finance; Securitization; Private Placement of Debt and Equity, Financial Advisory, Mergers and Acquisitions, Direct Investments, Debt Securities and Other Financial Assets Brokering and Dealership. BDO Securities Corp: Equity Securities Brokering and Dealershi f i (~esidentiall~ommercial), Business Interruption, ~ersonal l~om~rehensive GenerallProduct Liability, Contractors' All Risks, Erection All Risk, Machinery Breakdown, Electronic Equipment, Motor Vehicle, Marine Cargo InsurancelMarine H~.~IIIAviation, S~~re ty Bonds, Money Securities and Payroll, Fidelity Guarantee, Banker's Blanket Bond, Group Life, lndividuallGroup Personal Accident, Travel Personal Accident, Group HealthlHospitalizationl HMO Trade Services: ImportlExport Letters of Credit, Domestic Letters of Credit, Standby Letters of Credit, Documents Against Payment, Documents Against Acceptance, Open Account Agreements, Export Negotiations, Shipping Guarantees, Trust Receipt, Inventory Financing, BSP TR Rediscounting Wholesale Lending and Foreign Desks Group: Structured Trade Finance, International Desk,

Japan Desk, and China Desk Private Banking: Peso and Foreign Currency Settlement Accounts, Securities Custody and Safekeeping Accounts, Deposits, Securities Broking, Foreign Exchange, Derivatives, Consolidated Cash and Securities Statement, Wealth Advisory (Financial Planning, Financial Asset Consolidation, lnvestment Advisory and Management, Purpose Trust), Trust and Estate Advisory Leasing and Finance: Leasing: Financial and Operating Leases, Amortized Corr~mercial Loan (ACL), installment Paper purchase (IPP), Factoring

From the above mentioned products and services, the Bank's revenues are divided into two major categories, namely, (1) interest income from the Bank's deposit taking, lending and investing activities which accounts for 76% of revenues, and (2) other income (includes service chagres, fees & commissions, trading gain, foreign exchange gains, trust fees, income from sale of acquired assets and other miscellaneous income) which account for 24% of the Bank's revenues. Of the revenue accounts, the following contributes more than 10% to the total revenues:

Income Accounts % to Total Income 1. Interest Income on Loans & Other Receivables 52.2% 2. Interest Income on Investment & Tradina Securities 17.6% <

(ii) Distribution Methods of Products or Services

The Bank's products and services are available mainly through the branches, but select services are also accessible through other channels such as call centers, mobile and landline telephones, internet, and point-of-sale terminals. The Bank's extensive distribution network provides it good market coverage that is superior to many of its competitors. Aside from a branch in Hong Kong and a consolidated domestic network of 706 operating branches, the Bank has 1,354 ATM machines as of December 31,2009.

(iii) Status of Publicly Announced New Products or Service

The following products were launched last year and are fully operational: 1. Nov.l8,2009 - Asenso Kabayan Current Account 2. Oct. 19, 2009 - Kabayan Shipping Dollar Account 3. Dec. 8, 2009 - Direct Deposit Account

(iv) Competition

As of Decerrlber 2009, the Philippine commercial banking sector consisted of 38 commercial banks, 18 of which are private domestic banks, 17 are brancheslsubsidiaries of foreign corrlmercial banks and 3 are government-controlled banks. Of the 38 commercial banks, 17 are universal banks, of which 3 are branches of foreign banks.

Based on published statements of condition, the total assets of the commercial banking system as of December 31, 2009 reached P5.9 trillion. Domestic banks accounted for approximately 89% of the total while foreign banks contributed the remaining 11%. The five largest banks, namely, BDO, Metropolitan Bank and Trust Company, Bank of the Philippine Islands, Land Bank of the Philippines, and Development Bank of the Philippines, accounted for 55% of total assets.

As of December 31, 2009, the loans and receivables (net) of the commercial banking system amounted to P2.9 trillion, while total deposits was at M . 4 trillion. The total capital accounts of the commercial banking system amounted to P550 billion as of December 2009. Among the

commercial banks, BDO ranks first in terms of total assets, deposits, loans and receivables and t r ~ ~ s t , and second in terms of total capital.

(v) Transactions with andlor Dependence on Related Parties

In the ordinary course of business, the Bank has loans, deposits and other transactions with its related parties, and with certain directors, ofticers, stockholders and relatest interest (DOSRI). These loans and other transactions are made on the same terms as with other individuals and businesses of comparable risks and in corr~pliance with all regulatory requirements.

(vi) Patents, Trademarks, Licenses, Franchises, Concession, Royalty Agreement or labor contracts including duration

The Bank has registered the following trademarks with the Intellectual Property Oftice of the Philippines:

Trademark Duration Express Padala March 17,2008 to March 17,2018 We find ways April 7, 2008 to April 7, 2018

(vii) Governmental Approval of Principal Products or Services

The Bank secures approval from the Bangko Sentral ng Pilipinas for all its products and services.

(viii) Effect of Existing or Probable Governmental Regulations on the Business

Being a banking instit~~tion subject to the General Banking Law and banking regulations, the Bank is under the supervision of the BSP, whose approval BDO requires to undertake certain activities. The Bank strictly complies with the BSP requirements in terms of reserves, liquidity position, limits on loan exposure, cap on foreign exchange holdings, provision for losses, anti-money laundering provisions and other regulatory requirements.

(ix) Estimate of Amount Spent for Research and Development Activities

This is not applicable to the registrant.

(x) Total Number of Employees

As of December 31, 2009, the Bank has a total of 18,643 employees, broken down as follows:

Non-Officers Officers Executives TOTAL Total Head Office 3,076 3,376 496 6,948 Branches 8,107 2,827 125 11,059 Total for Subsidiaries 275 281 80 636

The Bank has an existing collective bargaining agreement (CBA) with the Banco De Oro National Union of Bank Employees covering substantially all of the Bank's staff level employees, other than those expressly excluded under the new CBA. This agreement is effective for a period of five (5) years, from 1 November 2005 to 31 October 2010, in so far as the representation aspect is concerned. The economic provisions of the CBA have been negotiated for the period until 31 October 2010. The Bank's has not suffered any strike in the past 21 years, and the Bank considers its relations with its employees and the Union to be good.

(xi) Risk Management

The Bank operates an integrated risk management system to address the risks it faces in its banking activities, including market, liquidity, credit and operational risks. 'The Bank's Risk Management Committee has overall responsibility for the Bank's risk management systems and sets risk management policies across the full range of risks to which the Bank is exposed. The Risk Management Committee is a Board-Level committee composed of three members of the Board of Directors including the President.

Within the Bank's overall risk management system, the Asset-Liability Committee (ALCO) is responsible for managing the Bank's balance sheet, including the Bank's liquidity, interest rate and foreign exchange related risks. In addition, ALCO formulates investment and financial policies by determining the asset allocation and funding mix strategies that are likely to yield the targeted balance sheet results. ALCO includes the President of the Bank and the respective heads of the Bank's Treasury, Lending, Comptrollership, Branches, Trust, and Risk Management Group (RMG).

Separately, the Risk Management Group (RMG) is mandated to adequately and consistently evaluate, manage, control, and monitor the overall risk profile of the Bank's activities across the different risk areas (i.e. credit, market, liquidity, and operationsl) to optimize the risk-reward balance and maximize retum on capital. RMG has responsibility for the setting of risk policies across the full range of risks to which the Bank is exposed to.

Item 2 - Properties

Description of Property

1) Principal Properties Owned

Presented below is a list of the Bank's real properties as of 31 December 2009 owned by the Bank and utilized as BDO branches: