Best Asian Bank
1 1 April 2014
Investor Presentation Presentation Outline
I. OVERVIEW
II. FINANCIAL HIGHLIGHTS
III. OWNERSHIP, BOARD, AND MANAGEMENT
IV. AWARDS AND CITATIONS About BDO
• The Philippines’ largest bank as at 31 Dec 2013 with total assets of P1.7 Tn (USD 37.7 Bn).
• A full service universal bank with one of the widest networks of over 800 operating branches and more than 2,200 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.
4 Full Service Bank Complete range of financial products and services
Branch Transaction Consumer Insurance Trust Banking Banking Banking Lending
Deposit and Cash management Brokerage Investment Auto related products services Bancassurance management Mortgage Over-the-counter Electronic banking Unit investment Credit cards transactions trust funds ATMs Personal loans Cross-selling Prepaid cards Living trusts distribution platform Merchant acquiring Retirement funds Remittances Special trusts / custodianship Corporate & Investment Private Treasury Leasing & Institutional Banking Banking Services Finance Banking Corporate and Underwriting and Wealth advisory Fixed income Direct lease, sale middle market distribution of Customized portfolio dealership and leaseback lending Fixed income and management Foreign exchange arrangements Trade finance equity securities transactions Installment paper Specialized lending Financial advisory Portfolio purchases Financial Institutions Project finance management Receivable discounting Cross-border Loan syndication Liquidity and factoring financing management
5 Market Reach
Wide and extensive coverage in key areas Philippines 824
Middle Europe East 2 1 North Luzon 248 America SEA, HK & M. Manila 427 3 Taiwan 8 Visayas 90
Mindanao 59 824 Domestic Branches 14 International Offices 2,339 Domestic ATM’s
as of 8 April 2014 6 Industry Ranking No. 1 among Philippine banks Total Assets Gross Customer Loans (in PHP billions) (in PHP billions) 1,678 911
1,378 BDO Market Share – 17% 645 BDO Market Share – 21% 1,183 606 843 599 282 437 253 224 427 412 391 347 213 162 125 118
MBT BPI LBP PNB DBP RCBC China UBP SECB BPI MBT LBP PNB China RCBC SECB DBP UBP
Customer Deposits Assets Under Management (in PHP billions) (in PHP billions) 1,345 773 BDO Market Share – 18% BDO Market Share – 30% 1,017 991 576
706 325 460 354 218 299 297 251 233 95 79 67 66 64 57
MBT BPI LBP PNB China UBP RCBC DBP UCPB BPI MBT SChart UCPB RCBC China HSBC DBP LBP
Source: Company data, consolidated statements of condition (SOC). Ranking as at 31 December 2013
Note: Financials prepared by banks under BSP’s SOC requirements differ slightly from reported financials under SEC guidelines due to certain differences in accounting rules requested by the two authorities 7 Business Franchise Market-leading positions in almost all business lines
#1 #1 #1 #1 #1 Trust and Private Loans Deposits Remittance Asset Mgt Banking
Leading Trade Major Player in Services Provider1 Cash Management2
#2 #1 #1 Local #1 Leasing & Investment Insurance Credit Cards3 Finance Banking4 Brokerage5
Notes: 1 According to The Asian Banker, Global Finance, The Asset, & Trade Finance Magazine 2 According to The Asset 3 In terms of cardholder base & merchant acquiring gross billings 4 In terms of corporate issuances 8 5 No. 1 among insurance brokers in terms of commissions earned for 2012; No. 3 in terms of premiums produced (No. 1 among local firms) Milestones Expansion through organic growth and M&A Acquired Citi Savings Bank
P1.2 TN P1.7 TN Acquired UOB Philippines’ Acquired GE branch banking business Money Bank Acquired 1st e-Bank’s Acquired Rural banking business P617 BN P1.0 TN Bank of San Juan Acquired by P862 BN SM Group Merged with Dao Heng Bank Philippines P149 BN Est. as Acme Merged with Equitable KB license P234 BN Savings Bank PCI Bank. P36 BN Acquired Amex Savings P121 BN Acquired Bank Philippines Banco P77 BN Santander Assets U/KB license Philippines P13 BN 1968 1976 1994 1996 2001 2002 2003 2005 2007 2009 2010 2012 2013 2014
Commercial Bank Expansion
9 Trading Fact Sheet
Stock Details
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%
American Depositary Receipts (ADR) Program Details
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 10 Presentation Outline
I. OVERVIEW
II. FINANCIAL HIGHLIGHTS
III. OWNERSHIP, BOARD, AND MANAGEMENT
IV. AWARDS AND CITATIONS 2009 to 2013 Income Statement
(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 16.7 17.9 13.4 Net Interest Income 30.6 34.2 33.8 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 54.7 60.6 75.0 Operating Expense 32.1 34.8 36.3 39.5 43.2 Pre-Prov Op Profit 13.9 17.2 18.4 21.1 31.8 Provisions 6.2 6.7 6.1 4.9 7.0 Taxes 1.7 1.6 1.6 1.6 2.1 Net Income 6.0 8.8 10.5 14.5 22.6
12 2009 to 2013 Balance Sheet
(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 25.1 25.0 31.5 Total Resources 862.0 1,000.9 1,097.3 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 72.2 94.2 Other Liabilities 44.9 40.5 44.4 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 97.0 154.4 164.4 Total Liabilities & Capital 862.0 1,000.9 1,097.3 1,241.6 1,672.8
13 Key Growth Indicators Steady expansion in core businesses
Gross Customer Loans Deposits
(P bn) (P bn) 1,450 1,000
900 1,300 1,345 800 911 1,150
700 769 1,000 600 670 850 932 500 859 542 700 783 400 473 695 550 637 300 393 400 200
100 250
0 100 2008 2009 2010 2011 2012 2013 2008 2009 2010 2011 2012 2013
YoY Gr 32% 20% 15% 24% 15% 19% YoY Gr 43% 9% 13% 10% 9% 44%
14 Net Income
Sustained growth with record profits in 2013
(P bn) 24 22 22.6 20 18 16 14 12 14.5 10 10.5 8 8.8 6 4 6.0 2 2.2 0 2008 2009 2010 2011 2012 2013
15 Capital Adequacy Ratio (Consolidated) Strong capital base to support growth Comfortably above Basel III requirements
20% 19.1%
3.9% 15.6% 17.1% 14.5% Tier 2 15% 13.5% 14.0% 1.2% 5.6% Tier 1 12.4% 4.6% 4.0% 15.2% 14.6% 4.5% 4.1% 10% Min Total CAR per Basel II 9.9% 10.0% 10.0% 9.0% 8.3% Min Tier 1 per 5% Basel II
0% 2007 2008 2009 2010 2011 2012 2013
16 The Banker Top 1000 World Banks – Tier 1 Capital
Tier 1 Capital Ranking of Philippine Banks (as of 31 December 2012)
World Rank Country Name of Tier 1 Capital
Current Previous Rank Bank (in USD mn) 251 396 1 BDO Unibank, Inc. 3,413
333 375 2 Metropolitan Bank & Trust 2,400
386 409 3 Bank of the Phil. Islands 1,985
642 645 4 Rizal Commercial Banking 902
655 706 5 Security Bank 871
663 n/a 6 China Bank 858
702 768 7 Union Bank of the Phils. 759
765 699 8 Philippine National Bank 644
986 n/a 9 Philtrust Bank 355
992 n/a 10 East West Banking Corp. 351
17 Credit Ratings
Moody's Fitch Capital Intelligence Date 31 Mar 2014 16 May 2013 8 Oct 2013
Issuer/Debt Rating (IDR) - Long Term Baa3 BB+ BB+ - Short Term Prime-3 B Outlook Positive Stable Positive
Bank Financial Strength Rating D+ bb+ BBB- (BFSR)/Individual/Viability Rating Outlook Stable Stable
Baseline Credit Assessment (BCA) baa3 Adjusted BCA Rating baa3
Source: Moodys, Fitch and Capital Intelligence
18 Presentation Outline
I. OVERVIEW
II. FINANCIAL HIGHLIGHTS
III. OWNERSHIP, BOARD, AND MANAGEMENT
IV. AWARDS AND CITATIONS Shareholder Structure Majority owned by the SM Group
Top Shareholders as of 31 Dec 2013 SM Investments Corp. 40.9% PCD Nominee Corp. (Non-Filipino) 30.0% PCD Nominee Corp. (Filipino) 11.2% Multi-Realty Development Corporation 8.8% Sybase Equity Investments Corporation 5.1% Sub-Total, Top Shareholders 96.0%
Source: Top 100 Shareholders as of 31 Dec 2013
20 The SM Group Harnessing synergies with the country’s largest conglomerate
Access to SM’s • Largest local retail chain with 241 customer network stores nationwide • Almost 16,000 Philippine Retail • Dominant domestic mall tenants developer/operator - 48 malls with • More than 5,000 suppliers GFA of almost 6.2 mn sqm • 3.5 million average daily foot traffic • In-house business • Home mortgage financing for SM property projects Financial • Biggest domestic banking operations New business Services • Interests in BDO and China Bank opportunity • Goodwill from the SM franchise • Joint product development • Leading residential condominium SM expertise developer in Metro Manila in terms • Middle market knowledge of units sold • Expertise in retail market Property • Among the fastest growing and real estate commercial, resorts and hotel Branch locations developers in the Philippines • Branches, ATMs in SM malls
21 Board of Directors
One of the strongest Board of Directors in the industry
Experienced . 7 directors out of 11 have over 100 years’ combined experience Bankers from both local and foreign banking institutions
. 2 directors are successful businessmen who have made their Successful Entrepreneurs mark in the fields of retailing, real estate, and commercial operations
Practicing . 2 directors are practicing attorneys who head their own law firms Lawyers
22 Board of Directors
With broad business and professional experience
Teresita T. Sy Henry T. Sy Senior Chairperson — first appointed to the Board in 1977 Chairman Emeritus — first appointed to the Board in 1976 Serves as Director in multiple subsidiaries of BDO Founder and Chairman of the SM Group of Companies Vice Chairperson of SMIC and Director of other SM Group Started his entrepreneurship career in 1958 companies, including Multi-Reality Dev. Corp. Chairman of SMIC, SM Prime Holdings and SM Dev. Corp.
Jesus A. Jacinto Jr. Henry T. Sy Jr. Vice Chairman — first appointed to the Board in 1996 Director — first appointed to the Board in 2007 Chairman and President of BDO Insurance Brokers Vice Chairman of SMIC and of SM Dev. Corp. Chairman and President of Jaces Corp. President of National Grid Corporation of the Philippines MBA Columbia University Director in several companies within SM Group
Christopher A. Bell-Knight Nestor V. Tan Director — re-elected to the Board in 2013 President — first appointed to the Board in 1998 Previously served as BDO Director from May 2005 - Sep 2010 Holds Directorships of numerous BDO subsidiaries Former VP and Country Head of the Bank of Nova Scotia Director of the Bankers Association of the Philippines Associate of the Chartered Institute of Bankers - British MBA Wharton School
Antonio C. Pacis Jimmy T. Tang Director — first appointed to the Board in 2004 Independent Director — first appointed to the Board in 1984 Director of BDO Capital Serves as Independent Director since 2002 Corporate lawyer since 1967 Previously served as Director since 1984 Degree from Harvard Law School Chairman and President of AVESCO Group of Companies
Josefina N. Tan Jones M. Castro Jr. Director — first appointed to the Board in 2007 Independent Director — first appointed to the Board in 2012 President of BDO Private Bank Served as Head for South Asia and SEA at Wells Fargo Bank Former Director of EPCIB from 2005 to 2007 MBA Stanford University Former Director of Banco de Oro from 2001 to 2005
Cheo Chai Hong Jose F. Buenaventura Director — first appointed to the Board in 2010 Independent Director — first appointed to the Board in 2013 Director of UOB (Philippines), UOB Global Capital Private, Senior Partner of Romulo Mabanta Buenaventura Sayoc & De UOB (Thai) and Encus International Los Angeles Law Offices since 1976 Head of Corporate Planning and International of UOB Group Master of Laws from Georgetown University Law Center 23 Senior Management Team
With extensive professional banking expertise
Nestor V. Tan President With BDO since 1997 30-year banking experience
Intermediation Services
Walter C. Wassmer Ador A. Abrogena Maria Theresa L. Tan Head — Business Lending Head — Trust and Investments General Manager — BDO Insurance With BDO since 1997 With BDO since 1990 With BDO since 2009 34-year banking experience 20-year banking and insurance experience 31-year banking experience
Jonathan C. Diokno Geneva T. Gloria Head — Remittance Origination Head — Remittance Distribution Rolando C. Tanchanco With BDO since 2001 With BDO since 2003 Head — Consumer Lending 18-year banking experience 24-year banking experience With BDO since 2004 23-year banking experience Josefina N. Tan Emmanuel T. Narciso Head — Private Banking SVP — Transaction Banking With BDO since 2003 With BDO since 2011 36-year banking experience 28-year banking experience Jaime C. Yu Head — Branch Banking With BDO since 1997 Eduardo V. Francisco Evylene C. Sison 29-year banking experience Head — Investment Banking Head — Asset Management With BDO since 1999 With BDO since 2010 25-year banking experience 21-year banking experience
Pedro M. Florescio III Head — Treasury With BDO since 2001 27-year banking experience
Corporate Support
Arthur L. Tan Evelyn L. Villanueva Luis S. Reyes Jr. Ricardo V. Martin Head — IT Operations Head — Risk Management Head — IR & Corplan Head — Compliance & Legal With BDO since 2002 With BDO since 2002 With BDO since 2003 With BDO since 2001 15-year banking experience 31-year banking experience 30-year banking experience 31-year banking experience
Dennis B. Velasquez Evelyn C. Salagubang Rafael G. Besa Lucy Co Dy Head — Central Operations Head — Human Resources Head — Marketing Head — Comptrollership With BDO since 1995 With BDO since 2007 With BDO since 2007 With BDO since 1985 31-year banking experience 18-year experience in HR 7-year banking experience 35-year banking experience 24 Organizational Structure With equity investments in allied and non-allied enterprises
BDO UNIBANK, INC. PHILIPPINE PARENT BANK
Financial Companies Insurance Companies Real Estate Companies Service Companies
BDO Private Bank, Inc. BDO Leasing and Finance, BDO Insurance Brokers, BDORO Europe Ltd. Manila North Tollways Corp. (100%) Inc. (87%); BDO Capital & Inc. (100%) (100%) (12%) Investment Corporation BDO Capital & Investment (11.11%) Generali Pilipinas Holding Equimark-NFC Corporation (100%) Co., Inc. (BDO – 38.05% & Development Corp. (60%) BDO Rental, Inc. BDO Cap – 1.95%) BDO Securities (100%) Corporation (100%) SM Keppel Land, Inc. (50%) Citibank Savings, Inc. CBN Grupo (99.99%) International Taal Land, Inc. Holdings B.V. (60%) (33%) BDO Strategic Holdings Inc. (100%) Averon Holdings NorthPine Land, Inc. Corporation (100%) (20%) ArmstrongSecurities, Inc. (80%) PCIB Securities, Inc. (100%) BDO Remit (Italia) S.p.A. (100%) Express Padala (HK) Ltd. (100%) BDO Remit Limited (100%)
Express Padala Frankfurt BDO Remit (Macau) GmbH (100%) Ltd. (100%)
BDO Remit (USA), Inc. (100%) Presentation Outline
I. OVERVIEW
II. FINANCIAL HIGHLIGHTS
III. OWNERSHIP, BOARD, AND MANAGEMENT
IV. AWARDS AND CITATIONS Institutional Awards and Citations, 2013-2014
Best Asian Bank
“. . . the first time Finance Asia has given this award to a Philippine bank . . .”
27 Institutional Awards and Citations, 2013-2014
Best Bank in the Philippines
EUROMONEY
28 Institutional Awards and Citations, 2013-2014
Best Private Bank in the Philippines
29 Institutional Awards and Citations, 2013-2014
Best Investment Bank in the Philippines
30 Institutional Awards and Citations, 2013
Best Bond House Best Equity House
31 Institutional Awards and Citations, 2013
Excellence in Corporate Governance
Annual Platinum Award Recognition
32 Institutional Awards and Citations, 2013
Excellence in Investor Relations
Most Organized Among the Best Platinum Award Investor Relations Investor Relations Companies in the Among the Best Philippines Senior Management IR Support
33 Individual Awards and Citations, 2013
Excellence in Investor Relations
Nestor V. Tan Luis S. Reyes, Jr. Pedro M. Florescio One of Asia’s Best CEOs One of the Best IR One of Asia’s Best CFOs (Investor Relations) Professionals (Phils) (Investor Relations)
34 Individual Awards and Citations, 2013-2014
Teresita T. Sy Chairperson - BDO
One of Asia’s Best CEOs One of Forbes Asia’s Among the 8 Most Powerful (Investor Relations) Most Powerful Women Women in Southeast Asia
35 Product/Transaction Awards & Citations, 2013
Best Retail Bank in the Philippines
36 Product/Transaction Awards & Citations, 2013
Fund House of the Year
BDO Trust and Investments Group
37 Product/Transaction Awards & Citations, 2013
Best in Trade Leading Counter- Finance party Bank
38 Product/Transaction Awards & Citations, 2013
Best FX Bank/Provider
39 Product/Transaction Awards & Citations, 2013
Credit Card Initiative Gold Trusted Brand of the Year
40 Thank you. www.bdo.com.ph