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The Bank of the Philippine Islands Story 2017

Bank of the Philippines Islands (BPI) had many success stories in 2017 to tell its stockholders
during the annual stockholders meeting held recently.

Efficient operations, prudent risk management and best-in-class risk-adjusted returns, just to
mention a few. These, as BPI tried to achieve the optimal mix between growth, profitability and
stability.

BPI Chair Jaime Augusto Zobel de Ayala (JAZA) told the stockholders who packed the Fairmont
Makati Ballroom last April 19 that 2017 marked the end of a five-year period which saw the
bank double in size while improving its risk matrix.

JAZA presented some of BPI’s operating highlights:

-The assets of the bank increased from almost a trillion pesos in 2012 to P1.9 trillion in 2017.
– Loans more than doubled in the last 5 years to P1.2 trillion in 2017, growing faster than
industry.
-Prudence in expanding its loan portfolio resulted in improvement in an already high asset
quality (1.29 % NPL).
-Net income of P22.4 Billion translated into a return on equity (ROE) of 12.8 % and return on
assets (ROA) of 1.3 %. Market capitalization was P426 Billion. All figures are among the highest
in the industry.
-Efforts to improve balance sheet efficiency resulted in a loan-to-deposit ratio (LDR) of 77 %.
-Cost to income ratio of 54.3 % is the best in the industry.
JAZA attributed superior results in 2017 to the strong performance of core intermediation
business and the provision of a complete range of services, from traditional banking to asset
management, brokerage and insurance services.
BPI ended the year with revenues of P71 Billion (up 6.7 %), net interest income of P48 billion
(up 13.4 %) and fees and commissions of 19.9 billion (up 15.6%).

Meanwhile, BPI’s subsidiaries and affilitates are front-runners in their respective fields, JAZA
said.

-BPI Asset Management and Trust company is the second largest asset manager among banks
in the country, and the most profitable.

-BPI Family Savings Bank is the largest thrift bank in the country.

-BPI-Philam is the fastest growing life insurance company in the whole country and already the
third largest in premium income.

-BPI/MS is the most profitable among non-life insurance company in the country and the fourth
largest in premiums written.

-BPI Century Tokyo Leasing is the fourth largest leasing company in the country.

-BPI Global Pay is the second largest merchant acquirer in the country.

JAZA ended his report by announcing BPI’s stock rights offering (scheduled for listing on May 4)
which will raise approximately P50 billion in new capital.

The current capital level is deemed commensurate to the nature and extent of the risks that the
bank has taken.

“(However) …the larger capital base will allow BPI to continue to contribute to, and benefit
from, the country’s growth, and in a manner that is accretive to earnings,” JAZA said.
(To be continued next week)

(Disclosure: This writer is currently an Independent Director of Bank of the Philippine Islands
and BPI Asset Management and Trust Company. )

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