A Growing Bank with Big Values 2014 ANNUAL REPORT WHO WE ARE VISION RobinsonsBank as a wholly owned JG Summit Group company was We want to fulfill the financial needs of our customers, established in November 1997 to further broaden JG Summit’s financial help them create and manage wealth, and be the best reach. It has for its cornerstone a business portfolio of market leaders, consumer bank in the country. a solid financial position, a formidable management team, and a vision of leading the country to global competitiveness and making life better for every Filipino. RobinsonsBank is now positioned not only to be more responsive in meeting the banking requirements of its retail customers and business partners, but also to fully serve the general banking public MISSION via its wide array of products and services — Deposits, Loans, Trust & Treasury, Remittance and other deposit-related products, available in all To build a lasting relationship with our customers its branches nationwide. characterized by excellence, concern for the individual, CONTENTS and integrity. To respond to their banking needs by providing quality and 01 Vision and Mission 06 Message of the Chairman innovative products and services. and President & CEO 10 Operational Highlights To create leaders out of our employees within an 14 Human Resources environment that inspires growth, creativity, and a passion 20 Board of Directors for excellence. 30 Table of Organization 34 Corporate Governance 38 Risk Management To safeguard the interests of our shareholders while 54 Corporate Social Responsibility optimizing return on investments. 57 Financial Statements 163 Branch Network To be the focus of financial synergy within the JG Summit 171 Products and Services group of companies & its business partners. ABOUT 172 JG Summit Businesses THE COVER RobinsonsBank is a growing organization that is rooted in its “Customers first” tradition. It has forged lasting bonds with its clients, nurturing professional relationships with CORE VALUES unwavering trust and service that is dependable and consistently efficient. RobinsonsBank believes in partnerships that endure through challenges and are enriched Concern for the Individual • Excellence by milestones — whether big or small — that make a powerful impact on people’s lives. Leadership • Teamwork • Integrity • Change RobinsonsBank aims to make banking easier for its clients in every possible way, so that it brings further success in other aspects of their lives. The cover art reflects the Bank’s belief that the organization will only grow if it continues to show great care for its clients. This is one investment that has infinite returns. 2014 Annual Report 1 QUICK LOOK: ROBINSONSBANK IN 2014 Total Assets Deposit Levels (In million pesos) (In million pesos) 41,211 38,773 33,961 49,173 45,877 41,276 2012 2013 2014 2012 2013 2014 In 2014, RobinsonsBank’s total assets were reported at Php 49.1 billion, manifesting a 7.2% increase over 2013’s figure. On the other hand, the Bank’s deposit liabilities ended the year at Php 41.2 billion, a 6.3% increase from P38.7 billion in 2013. Loan Portfolio-Net Capital Funds (In million pesos) (In million pesos) 5,673 5,766 5,287 22,583 18,279 18,810 2012 2013 2014 2012 2013 2014 RobinsonsBank’s net loan portfolio amounted to Php 22.5 billion, increasing by 20.1% from 2013. In terms of absolute amounts, RobinsonsBank’s capital grew to Php 5.7 billion for the year 2014, or a 9.1% increase from the previous year’s level. Loan Concentration per Industry Capital Adequacy Real estate, renting business services 29.2% Wholesle and retail trade 15.5% 26.2% Manufacturing 13.1% 23.2% Loans to the individuals for consumption 11.6% Electricity, gas and water supply 7.7% 15.8% other community, social and... 6.9% Construction 6.1% Others @< 5% share 10.0% 2012 2013 2014 The loan portfolio mix is comprised of 75% commercial loans and 25% consumer loans. In terms of per industry breakdown, the As for RobinsonsBank’s capital adequacy ratio (CAR) for combined credit, market and operational risks, it dipped to 15.8% due to bulk of the portfolio is in real estate, renting business services at 29.2%. higher risk-taking and strategic initiatives. 2 RobinsonsBank 2014 Annual Report 3 Net Interest Income Net Income (In million pesos) (In million pesos) 1,903 410 406 1,600 1,170 147 2012 2013 2014 2012 2013 2014 RobinsonsBank concluded 2014 with Php 1.9 billion in net interest income, or an increase of 19% over the previous year’s number. Following the reduction in non-interest income and increase in operating expenses, RobisonsBank’s net income for the year 2014 was posted at Php 147 million. Given the overall low interest rate market sentiment, the Bank focused more on developing its resources and expanding its network in preparation for the integration in the region. Income Mix (In million pesos) NPL Levels vs Coverage 513 (In million pesos) 698 1,040 698 897 878 1,903 1,600 Non Interest Income 1,170 69.3% Net Interest Income 58.0% 59.0% 2012 2013 2014 The Bank’s non-interest income — inclusive of gains from trading and foreign exchange transactions — presented a drop to Php 513 million from the 2013’s Php 698 million. 2012 2013 2014 The Bank’s non-performing loans (NPL) level increased to Php 1.0 billion compared to last year’s Php 0.8 billion. This level rendered to an overall gross NPL ratio of 4.5%, or 2.6% if net of provisions. The Bank’s NPL cover improved to 69.3% from Operating Expenses 59.0%; as the Bank embarked on setting-up additional provisions during the year. (In million pesos) Branches & ATMs as of 2014 2,187 1,739 1,329 Branches ATMs MBOs 2012 2013 2014 RobinsonsBank 92 171 5 Meanwhile, operating expenses — which include manpower, occupancy, provisions, depreciation and amortization, among others — rose to Php 2.1 billion. That is a 25.7% increase from the previous year’s level, as the Bank made significant Legazpi Savings Bank 11 4 infrastructure investments in IT and branch network expansion. 103 175 5 4 RobinsonsBank 2014 Annual Report 5 “2014 was a challenging year for domestic banks. It was the year that was characterized by volatility and global economic headwinds that impacted our domestic markets. However, at the back of the challenging times, RobinsonsBank continued to grow its core businesses.” MESSAGE OF THE CHAIRMAN AND PRESIDENT & CEO LANCE Y. GOKONGWEI ELFREN ANTONIO S. SARTE Chairman President & CEO 6 RobinsonsBank 2014 Annual Report 7 OPERATIONAL HIGHLIGHTS 2014 ACHIEVEMENTS We remain committed to 2014 was a challenging year for domestic banks. It was the our customers in delivering year that was characterized by volatility and global economic headwinds that impacted our domestic markets. However, at an exceptional banking the back of the challenging times, RobinsonsBank continued to grow its core businesses. The Bank’s net loan portfolio experience. We are grew to Php 22.5 billion, an increase of 20.1% over last year. Our deposit levels increased by 6.3% to Php 41.2 billion at continuously working to the end of 2014. Our capital of Php 5.7 billion reflected a growth of 9.1% from the previous year. We ended the year delight our customers and with total asset size of Php 49.1 billion, a 7.2% increase over 2013. We remain profitable with a net income of to ensure that we meet Php 147 million. their needs. We thank The Bank embarked and completed key technology initiatives to underpin its growth in the coming years. We completed our customers and our our migration to a new core banking platform which will provide us with the flexibility to provide relevant products employees for continuing that resonate with our clients, and the scalability to acquire new customers to experience with us an invigorated Bank. this journey with us in We deployed a world-class loans origination system that making this a great bank. will enable us to scale up our consumer business. Similarly, Legazpi Savings Bank also completed full migration and integration of its new core banking system to support its expanding retail loan portfolio. MOVING FORWARD Lance Gokongwei Chairman We look forward to 2015 with our Roadmap 2020 which will bring us into an expansion mode and will be supported by a robust capital base. Our customer-focused strategy will be complementing our growth in loans and deposits with cash management services and new products at the front and center to support our core businesses. Elfren Antonio S. Sarte President & CEO A GROWING BANK THAT LISTENS TO ITS CUSTOMERS 8 RobinsonsBank OPERATIONAL HIGHLIGHTS 2013MAY 2013DECEMBER 2014AUGUST RobinsonsBank The Bank launched The Bank launched acquired Legazpi the Loan Origination the Core Banking HOW WE’VE Savings Bank. System which is the System with the aim front-end application of providing better system for Consumer and more efficient Loans services for clients. RobinsonsBankGROWN has taken the sure-and-steady route in its growth. It believes that every step it takes matters and so all its moves have been done only after careful study. Over the years, it has not wavered in its commitment to its clients’ welfare and its people’s needs. The driving force of RobinsonsBank is the fact that it has continued its tradition of personalized, client-centered service as it rises to global standards. JG Summit Holdings Inc. (JGSHI) and Robinsons Holdings, Inc. (RHI) jointly acquired The Royal Merger of the Bank of Scotland savings bank and RobinsonsBank (Phils.). The the commercial bank acquired the commercial bank with Robinsons RobinsonsBank branches of ABN was later renamed Bank Corporation opened for business Amro Savings Bank as Robinsons Bank (RobinsonsBank) as as a savings bank.