Investor Presentation · 2020. 2. 3. · Investment/Capital Spending to GDP Ratio (%) Moderate GDP...

THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.

Investor

Presentation

4Q 2019


Macroeconomic Overview

2

THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.3

A reflection of the improvement in capital spending

PH: One of the Fastest Growing Economies in ASEAN

PH Investment Spending Almost at par with regional average

Investment/Capital Spending to GDP Ratio (%)

Moderate GDP at 5.9%, but rising per capita income

GDP Per Capita and Real Growth

PHL Current Account Balance vs. Year End USD/PHP

Consumer Debt as % of GDP at 9.8%, has significant upside Peso depreciation has been driven by current account deficit

PH Total Outstanding Loans and Consumer Loans (as % of GDP)


PH Banking Industry Overview

4

Lower Interest Rates Banking Industry Highlights

Lower interest rates, with average inflation at 2.5% Loan growth continues to moderate at 8.7% Deposit growth also on a downtrend, with M3 at 9.8% Industry LDR at 79.9%

90D T-Bill Average Inflation

With lower inflation in 2019, BSP loosened monetary policy

Date Reserve Requirement Ratio

01/01/2019 18.00%

5/31/2019 17.00%

06/28/2019 16.50%

07/26/2019 16.00%

11/1/2019 15.00%

12/1/2019 14.00%

Date Key Policy Rate

01/01/2019 4.75%

5/9/2019 4.50%

8/8/2019 4.25%

9/26/2019 4.00%

11.6%

8.8%6.5%

16.5% 13.7% 8.7%

75.6% 79.0% 79.9%

11.9%9.5% 9.8%

0.0%

20.0%

40.0%

60.0%

80.0%

100.0%

0.0%

10.0%

20.0%

30.0%

2017 2018 Nov-19

LDR

M3

, Lo

an &

De

po

sits

Gro

wth

LDRM3Deposit Growth Loan Growth

2.0%

5.1% 4.6%

2.9%

5.2%

2.5%

0.0%

2.0%

4.0%

6.0%

0.0%

4.0%

8.0%

12.0%

16.0%

2017 2018 2019

Ave

rage

Infl

atio

n

90

D T

-Bill


2019 Financial and Operating

Highlights

5


C/I

NIM

2017 2018 2019

2.19% 2.27%2.40%

54.26%55.53%

53.08%

2017 2018 2019

1.27%

1.20%

1.38%

12.75%

2.91%3.11%

3.35%

2017 2018 2019

ROA

6

Strong revenues driven by solid core income Higher NIMs Significant increase in trading income Lower NPLs and Higher Loss Coverage

Robust financial results

22.42B23.08B

28.80B

Up24.8%

Net Income and ROE

10.21%

10.97%

2017 2018 2019

Non-InterestIncomeNet InterestIncome48.04B 55.84B 65.94B

22.98B22.68B

28.39B

Revenues

71.02B78.52B

94.33B

ROA and NIM Cost to Income and Cost to Asset2017 2018 2019

38.53B 43.60B 50.08B

Operating Expense2017 2018 2019

Provisions

3.80B 4.92B 5.82B

Up20.1%ROE

C/AUp 14.8%

Up 18.3%


2017 2018 2019

16.09%12.74%

2017 2018 20192017 2018 2019

7

Strong Balance Sheet

• Loans grew by 8.9%• Investment Securities higher

by 3.8% (₱ 12.7B)• Liquidity Coverage Ratio at

166.7%• Net Stable Funding Ratio at

126.2%• LDR increased from 85.4% to

87.0%

• Deposits grew by 6.9%• Tapped the capital markets for

alternative funding sources• Issued a total of ₱ 9.6B in peso

borrowings and CHF 100M and USD 300M in foreign currency borrowings

• CASA ratio fell from 71.9% to 69.1%• Borrowings as a percentage of

Liabilities decreased from 9.1% to 7.8%

• Strong capital position with CET1 and CAR well above regulatory requirements

• Declared ₱ 8.1B in cash dividends

1.90T2.09T 2.21T

1.20T 1.35T 1.48T

Assets

5.7% Assets

8.9% Loans

Liabilities

1.56T 1.59T 1.70T

0.08T0.17T

0.15T-9.6%

Borrowings

6.9% Deposits

Capital

181B 249B 270B

11.84% 15.19% 15.17%*CET1

CAR 16.07%*

* 2019 - indicative


48.055.8

65.9

23.322.7

28.471.378.5

94.3

0

20

40

60

80

100

2017 2018 2019

20192018

20% growth in revenue Core income up on higher NIMs

8

Strong Revenue Base

Shift to high-margin loans supported by increasing loan yields despite policy rate cuts

19.1%*Includes DST; Net of GRT

20.1%

Net RevenuesAmounts in P bn

Non Interest IncomeNet Interest Income* Net Revenues

YoY Growth

57.7% 71.1% % to Total Revenues

NIM

Asset Yield

COF

18.1%

25.2%

Net Interest IncomeAmounts in P bn

69.9%67.4%

48.055.8

65.9

0

20

40

60

80

100

2017 2018 2019

3.99%

4.47%

5.16%

2.91%3.11%

3.35%

1.18%1.52%

2.04%


253.8 287.9

2018 2019

4.3 5.0

2018 2019

55.1 57.8

2018 20191,210 1,223 1,268

1,355 1,349 1,354 1,372

1,475

400

600

800

1,000

1,200

1,400

1,600

1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19

76.2%79.7%

82.2%85.4% 83.9%

81.7%84.7% 87.0%

Faster growth for retail loans compared to 2018, with replacement ratios >1 maintained

Strong growth in Credit Card Loans (CCL) and related fees

Microfinance loan volume doubled, SME loans starting to pick up2017 2018 2019

Corporate 78.9% 77.0% 76.1%

Consumer/SME 21.1% 23.0% 23.6%

Consumer 18.5% 18.4% 19.2%

SME 2.5% 4.6% 4.4%

Microfinance 0.0% 0.2% 0.3%

9

Moderate Loan Growth

Growth in high-margin businesses sustained

Auto (in P bn) Mortgage (in P bn)

CCL (in P bn) Fees (in P bn)

+15.5%+22.3%

+12.0%+4.9%

December 2019 YTD Auto Mortgage

Average replacement ratio 1.09 1.47

Microfinance (in P bn)

Full year loan volume reflects moderate growth trend

Corporate growth maintained while gradually increasing share of Consumer & SME

YoY Growth

8.9%

Quarterly loan volume and LDRs(2018-2019, in P bn and %)

+2.0x

+7.9%

SME (in P bn)

+5.8%

Corporate Loans

132.7148.6

2018 2019

61.5 75.2

2018 2019

2.1

4.3

2018 2019

62.8 66.5

2018 2019

1,057.0

1,140.0

2018 2019Consumer Loans

+13.4%

(In P bn)


1

10

2.7%

17.6%

CASA Time Total Deposits

Deposits/Total LiabilitiesTotal Liabilities (in P bn)Deposits (in P bn)

Sustained growth in retail and corporate deposits Customer deposits account for almost 90% of total funding, of which 61% are retail clients

Quarterly deposit volume and CASA Ratio(2018-2019, in P bn and %) YoY Growth

6.9%

Stable Funding Franchise

The Bank’s 2019 LCR and NSFR are both above 100%, much higher than the internal triggers and regulatory requirements

On August 27, 2019, S&P Global Ratings assigned ‘BBB+’ long-term issuer credit rating (ICR) to the Bank, at par with the Philippine sovereign rating of ‘BBB+’. BPI is the first private domestic bank in the Philippines to achieve investment-grade ratings of bbb+/BBB+ in both Stand-alone Credit Profile and ICR ratings.

Issue Date: September 3, 2019 Amount Raised: USD 300 million Issue Price: 99.641 Coupon: 2.500%

Issue Date: August 29, 2019 Amount Raised: CHF 100 million Issue Price: 100.040% Coupon: 0.000%

CHF ASEAN Green Bond Issuance USD ASEAN Green Bond Issuance

Tapping alternative funding sources through milestone transactions

Issue Date: November 25, 2019 Amount Raised: PHP 9.6 billion Interest Rate: 4.30% p.a. payable quarterly

Issue Date: October 25, 2019 Amount Raised: Over PHP 3 billion Issue Price: 4.00% p.a. payable quarterly

LTNCTDs Issuance BPI Family Bank Maiden Bond Issuance

1,136 1,156 1,142 1,140 1,131 1,133 1,120 1,171

451 379 401 446 477 526 500 524

1,587 1,535 1,542 1,586 1,608 1,658 1,620 1,695

-

400

800

1,200

1,600

2,000

1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19

71.6%75.3% 74.0%

71.9% 70.3%68.3% 69.1% 69.1%

1,431 1,562 1,586

1,695 1,558

1,720 1,834 1,932

91.9% 90.8%86.5% 87.8%

-

400

800

1,200

1,600

2,000

2016 2017 2018 2019


4.9 4.6 4.5 5.8 5.7 5.4 5.7 5.5

1.1 0.6 0.6

0.7 1.0 1.4 3.1

0.5 6.0

5.2 5.1

6.4 6.7 6.8

8.8

6.1

0

3

6

9

12

1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19

11

YoY Growth

Non-Interest Income on the uptrend

Fees, Comms., Others Trading Income Non-Interest Income

(In P bn)

25.2%

114.7%

12.3%

Steadily growing fee-based income, up 12%Coming from diversified income sources

and new revenue streams Significant securities trading income in 2019

Fees, Comms, Others Trading Income Non-Interest Income

% to 2019 Total Non-Interest Income(In P bn)

19.9 19.8 22.3

3.4 2.8

6.1 23.3 22.7

28.4

0

10

20

30

40

2017 2018 2019

Cards, 17.6%

Securities Brokerage, 0.8%

Investment Banking, 1.6%

Retail Loans, 3.8%

Remittance, 3.1%

Digital Channels, 3.6%

Asset Sales, 4.6%

Leasing, 7.0%

Forex, 7.3%

Transaction Banking, 8.4%

Insurance, 8.1%

Trust, 11.2%

Service Charges, 1.6%

Sec Trading, 14.1%

Deposit, 9.9%


3.7 3.9 3.8 3.9 4.1 4.5 4.3 4.6

3.2 3.8 3.6 4.5 3.7 4.1 4.4 4.3 1.6

2.0 1.7 2.0 2.0

2.0 2.4 2.2 1.3

1.7 1.7 1.2 2.3 1.6 1.7 1.9

9.7 11.5 10.9 11.5 12.1 12.2 12.8 13.0

-

10.0

20.0

1Q 18 2Q 18 3Q 18 4Q 18 1Q 19 2Q 19 3Q 19 4Q 19

55.5%

53.1%

15.3 17.5

15.1 16.5

7.2 8.7

5.9

7.5 43.6

50.1

-

20.0

40.0

60.0

2018 2019

12

Amounts in P bn

Board-reported

Manpower

Others

Premises*

CIR

Technology

Total Opex

Operational Efficiency

QuarterlyFull year

14.9%

14.2%

8.8%

26.0%

19.9%

With effective cost management, Cost-to-Income ratio improved to 53%

YoY Growth

* Includes 3Q 2019 transition adjustment and impact of PFRS 16 (Leases)

52.8%

61.1%

55.2%53.2% 53.0% 52.8% 51.0%

55.7%


25.4 25.2 25.5 25.1 24.8

85.5%

92.6%97.5%

99.3%102.14%

2018 1Q 19 2Q 19 3Q 19 4Q 19

1.85% 1.85% 1.86% 1.81%

1.66%

NPL Level(in P bn)

91.3% 95.7%100.7% 102.7% 104.8%

Good Asset Quality

* Allowance for loan losses** NPL cover excludes reserves for contingent exposures*** Loss cover includes reserves for contingent exposures

13

Total Allowance Provision for Losses Credit Cost

NPLCover**

NPL RatioLoss Cover***

NPL Cover Industry - NPL CoverLoss Cover

Lower NPL at 1.66% NPL Cover increased to 102% Credit Cost steady at 43 bps

88.3% 92.6% 97.5% 99.3% 102.1%91.3% 95.7% 100.7% 102.7% 104.8%105.2% 95.7%

93.3% 92.0%

0%

40%

80%

120%

160%

2018 1Q 19 2Q 19 3Q 19 4Q 19

18.2 20.3

22.4 25.4 4.8 3.8

4.9 5.8

0.53% 0.36% 0.40% 0.43%

-

10

20

30

40

2016 2017 2018 2019


1.39 1.27 1.20 1.34 1.341.42 1.38

1.20 1.17 1.12 1.17 1.24 1.30

10.46% 10.17%9.40% 9.64% 9.84% 10.27%

0.0

1.0

2.0

3.0

4.0

2016 2017 2018 1Q 19 2Q 19 3Q 19 4Q 19

13.7%14.9%

13.6% 13.0% 12.7%

16.1% 16.1%

13.0%14.0%

12.7%12.1% 11.8%

15.2% 15.2%

2013 2014 2015 2016 2017 2018 2019*

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

6,402 7,077 7,078 7,086 7,089 7,598 8,108

18,811 18,039 18,23422,050 22,416 23,078

28,803

0

5,000

10,000

15,000

20,000

25,000

30,000

35,000

40,000

2013 2014 2015 2016 2017 2018 2019

Strong capital position underpinned by sustained internal capital generation

14

3

10% Regulatory Minimum

CAR

Strong Capital and Earnings

CAR CET1

Assets/Equity (in x)

BPI - ROA Industry - ROA BPI - ROE Industry - ROE

Modest financial leverage

Above industry profitability metrics

No need to raise capital to support future growth

YTDfigures

Consistent dividend payments

Net Profit to shareholders (in P mn)Dividends (in P mn) Payout ratio

11.410.1 10.1 10.5 10.5

8.3 8.2

5.0

10.0

15.0

20.0

2013 2014 2015 2016 2017 2018 2019

34.0%

39.2% 38.8%

32.1% 31.6% 32.9%

28.2%

* 2019 - indicative

13.77%12.75%

10.21% 10.66% 10.71% 11.26% 10.97%


21,860 22,205

2018 2019

1.76 1.90

2018 2019

671 671 671 671 682 694 705

6 6 4 10 103

200 300

143 143 143 150 157

162

162

820 820 818 831 942

1,056 1,167

0

200

400

600

800

1,000

1,200

1,400

2013 2014 2015 2016 2017 2018 2019

BanKo achieved target of 300 branches,moderate build-out for BPI branches Digital penetration now more than 20%

15

2

Online/Mobile Active Usersrolling 3 mos (in mn)

Elink/Bizlink Active Usersrolling 3 mos (actual)

YoY Growth %Penetration %

Ave. Deposit per Branch* = P1.955 bn

Local BranchesActual Count

BFB

BanKo

BPI

Total22.2%22.6%

Note: Based on a growing customer base

23.6%23.6%

* BPI and BFB only

Reallocating manpower to supportgrowth in consumer and SME

2017 2019 p

SME 287 760 +473

Consumer 1,795 1,887 +92

Microfinance 956 2,816 +1,860

Branches 7,556 9,761 +2,205

Headcount for Consumer/SME

10,594 15,224 +4,630

p% vs 2017 +44%

Total BPI Headcount

17,046 21,429+4,383 +25%

Branch and Digital Channels

8.0%

2.0%


Appendix

16


Macroeconomic & Industry Indicators

Source: Bangko Sentral ng Pilipinas & Philippine Statistics Office1 M3 as of November 20192 Customer Loans (Loans and Receivables, net of Allowance for Credit Losses)

2013 2014 2015 2016 2017 2018 2019

GDP Growth 6.1% 6.6% 6.7% 6.6% 6.6% 6.1% 5.9%

Inflation 3.6% 2.9% 0.3% 2.0% 2.9% 5.2% 2.5%

M31 31.8% 11.2% 9.4% 12.8% 11.9% 9.5% 7.7%

90D T-bill 0.3% 1.3% 1.7% 1.4% 2.0% 5.1% 4.6%

Overnight RRP 3.5% 4.0% 4.0% 3.0% 3.0% 4.75% 4.0%

Industry (in P bn except ratios) 2013 2014 2015 2016 2017 2018 Nov 2019

Customer Loans 2 4,896.95 5,832.38 6,527.27 7,612.12 8,865.60 10,077.93 9,774.60

Deposits 7,608.87 8,524.55 9,231.34 10,506.56 11,726.97 12,764.13 13,312.31

Loan Growth 15.8% 19.1% 11.9% 16.6% 16.5% 13.7% 8.7%

Deposits Growth 32.2% 12.0% 8.3% 13.8% 11.6% 8.8% 6.5%


Strong revenue and controlled opex led to robust performance Solid core income due to NIM expansion, supported by growing fee income Substantial increase in trading gains in the declining rate environment Higher Comprehensive Income on positive mark to market valuation of securities

18

Revenues

Net Int Income

Net Income

Non-Int Income

in Php billion

Operating Expenses

Compre Income

2018 2019 r

Provisions

PPOP

Profitability

78.52 94.33 +20.1%

55.84 65.94 +18.1%

22.68 28.39 +25.2%

43.60 50.08 +14.8%

34.92 44.26 +26.7%

4.92 5.82 +18.3%

23.08 28.80 +24.8%

21.88 28.77 +31.5%


Total Assets

Deposits

Net Loans

AUM

in Php billion

Gross Loans

LDR

CASA Ratio

Equity - BPI

Balance Sheet

2018 2019 r

2,085 2,205 +5.7%

1,369 1,492 +8.9%

1,355 1,475 +8.9%

1,586 1,695 +6.9%

249 270 +8.5%

692 832 +20.1%

85.44% 87.02% +1.6 ppt

71.89% 69.08% -2.8 ppt

Moderate Balance Sheet growth, tracking industry levels


December 2019 Financial Highlights

YoY FY

in PHP bn in USD mn in PHP bn in USD mn in PHP bn in USD mn in PHP bn in USD mn r r

Balance Sheet

Assets 2,085.23 39.66 2,205.03 43.55 5.7% 5.7%

Net Loans 1,354.90 25.77 1,475.34 29.14 8.9% 8.9%

Deposits 1,585.75 30.16 1,695.34 33.48 6.9% 6.9%

CASA 1,139.93 21.68 1,171.20 23.13 2.7% 2.7%

Capital 248.52 4.73 269.58 5.32 8.5% 8.5%

4Q YoY FY YoY

Income Statement r r

Net Revenues 21.64 0.41 78.52 1.49 23.33 0.46 94.33 1.86 7.8% 20.1%

Net Interest Income 15.21 0.29 55.84 1.06 17.28 0.34 65.94 1.30 13.6% 18.1%

Non-Interest Income 6.43 0.12 22.68 0.43 6.05 0.12 28.39 0.56 -5.9% 25.2%

Opex 11.52 0.22 43.60 0.83 12.99 0.26 50.08 0.99 12.8% 14.8%

Pre-Prov Operating Profit 10.12 0.19 34.92 0.66 10.34 0.20 44.26 0.87 2.2% 26.7%

Provisions 2.08 0.04 4.92 0.09 1.25 0.02 5.82 0.11 -40.0% 18.3%

Net Income 6.07 0.12 23.08 0.44 6.77 0.13 28.80 0.57 11.6% 24.8%

Comprehensive Income 6.58 0.13 21.88 0.42 5.65 0.11 28.77 0.57 -14.1% 31.5%

FY 2019 4Q 2018 FY 2018 4Q 2019


* 2019 - indicative

December 2019 Financial Highlights

YoY

r ppt

Balance Sheet

LDR 85.44% 87.02% 1.58%

Profitability

NIM 3.11% 3.35% 0.24%

CIR 55.53% 53.08% -2.44%

ROE 10.21% 10.97% 0.76%

ROA 1.20% 1.38% 0.18%

Asset Quality

NPL Ratio 1.85% 1.66% -0.19%

NPL Cover 85.45% 102.14% 16.69%

Capital*

CAR 16.09% 16.07% -0.02%

CET1 15.19% 15.17% -0.02%

Dec 2018 Dec 2019


Various, 5.0%

RCAM1, 7.3%

Ayala Corp2, 48.6%

Public Float,39.2%

Shareholders

As of December 31, 2019

1 Roman Catholic Archdiocese of Manila2 Includes share in Liontide Holdings Inc.

Fundamentals Description

Stock Price P87.90 per share

BV per share P59.81

P-B Ratio 1.5x

P-E Ratio 14.1x

Dividends P1.80 per share

Market Cap P396.17 bn

Trading Fact Sheet Description

Type Common

Stock Ticker BPI

ISIN PHY0967S1694

Exchange Philippine Stock Exchange

Par Value 10.00

Outstanding Shares 4,507,071,644

Foreign Ownership 31.5%

Shareholders & Equity Profile


Cezar “Bong” ConsingPresident & CEO

Risk Management

John-C Syquia

JojoOcampo

MonJocson

TereMarcial Javier

EVP EVP EVP & COO EVP & CFO

Strategy and Finance

MayetteGayares

SVP & CRO

GinbeeGo

BFB President

EricLuchangco

SVP

An-anKingSVP

CathySantamariaSVP & CMO

JoviAlonso

SVP & CCO

Sheila Tan

AMTC President

Chief CreditCredit

As of January 31, 2020

Corporate Banking

Mass Retail Products

Business Banking

Core Retail Products

Sales & Service Channels

MarketingWealth

Management

EnterpriseServices

BPI Management Team

Dino Gasmen

SVP & Treasurer

Global MarketsGlobal

Markets


BPI Management Team Bios

Cezar "Bong" Consing

President &CEO

23 years with BPI

• Elected President and CEO since 2013

• Director of BPI from 1995-2000, 2004-2007 and 2010-present

• Former Head of Investment Banking, J.P. Morgan Asia Pacific

• Currently also serving on the boards of various subsidiaries of BPI

MonJocson

EVP & COO

4 years with BPI

• Chief Operating Officer since January 2019, and Head of Enterprise Services

• Formerly Vice President & General Manager of IBM Global Services and Managing Director of IBM Philippines

• Served on the Economic Development Board of Singapore

• Vice-Chairman, CyberSecurity Committee of the Bankers Association of the Philippines

Tere Marcial Javier

EVP & CFO

• Chief Finance Officer and Head of Strategy and Finance since April 2017

• 25 years of banking experience

• Serving on the Board of BPI Europe, PLC., BPI MS, BPI Global Payments, BPI Payment Holdings

• Previously served on the BPI Trust Committee and Board of BPI Investment Management, Inc.

• Previously held senior positions in Corporate Banking and Asset Management & Trust

25 years with BPI

John-CSyquia

EVP

4 years with BPI

• Head of Corporate Banking since January 2018

• Former President of BPI Capital Corp.

• Over 29 years of experience in financial services

• Previously ,Country Head of Corporate Clients for Standard Chartered Bank, Head of Corporate Finance at ING Bank Manila, and Head of Strategy and Business Development at ING Asia Pacific Ltd

JojoOcampo

EVP

24 years with BPI

• Head of Mass Retail, Former Chief Marketing Officer

• Serving on the Boards of BPI Payment Holdings Inc, BPI Global Payments, BPI Direct BanKo, AF Payments Inc, and Zalora


• Previously held several positions in Unsecured Lending Cards, Payments, Remittances, Deposits, Kiosk Banking & Customer Segments



BPI Management Team Bios


Dino GasmenSVP &Treasurer

6 years with BPI

• Assumed position of Treasurer and Head of the BPI's Global Markets in January 2020


• Chairman of BPI's Asset & Liability Committee

• 17 years in HSBC Manila with stints in the UK, Indonesia, and Vietnam

Eric LuchangcoSVP

6 years with BPI

• Head of Business Banking since June 2019

• Previously headed Corporate Credit Products Group, was head of Debt Capital Markets for BPI Capital and served on the Board of BPI Securities

• 23 years of experience in financial services

• Previously worked with Daiwa Capital Markets

GinbeeGoBFB President

16 years with BPI

• President of BPI Family Savings Bank since June 2017


• Previously served as SVP of Retail Loans Group and Card Banking Group

• Director of Transunion Phils & Chairman of BPI Payment Holdings, Inc.

• Secretary & Trustee of Chamber of Thrift Banks

An-an KingSVP

34 years with BPI

• Head of Branch Sales and Service Channels since October 2018

• Served as BFB Director (2015-2017), Chairman of BPI Remittance Centre (HK) Ltc. (2016-2018)


• Chair, Unibank WoW Committee and Excellence Retail Awards Committee

Cathy SantamariaSVP & CMO

8 years with BPI

• Chief Marketing Officer since November 2018

• Over 31 years of marketing experience

• Previously segment head of Globe Telecom Touch Mobile and Mobile Business

• Former Marketing Director, Kraft Food Philippines; Kraft Foods International Head of Business Development and General Manager

• Vice President, Bank Marketing Association of the Philippines (2018)

Jovi AlonsoSVP & CCO

23 years with BPI

• Chief Credit Officer since January 2017

• Previously involved in Corporate Relationship Management Asian Corporations and PEZA Divisions

• Serving on the Boards of BPI Century Tokyo Lease & Rental Corps


• Formerly Japan Desk Head in the World Corporation Group of Citibank, N.A. Manila Branch

Sheila TanAMTC President

6 years with BPI

• 3 years with BPI Asset Management and Trust Corp; Chief Operating Officer (2017-2018)

• Previously headed Strategic Advisory at BPI Capital (2013-2017)

• In the practice of law for more than 25 years

• Former Co-Managing Director of Ayala Group Legal and Chief Legal Counsel of Ayala Land, Inc

Mayette GayaresSVP &CRO

35 years with BPI

• Chief Risk Officer since January 2018, Former Chief Compliance Officer (2012-2017)


• Member, Risk Management Committee of the Bankers Association of the Philippines

• Previously served as Director and Treasurer of ABCOMP, Voting Member of the Bankers Institute of the Philippines


Bank of Philippine Islands Overview

The first bank in the Philippines and Southeast Asia, and the longest tenured bank with almost 170 years of continuous operating history, with highly reputable shareholders, the largest of which include the Ayala Group, the Roman Catholic Church and GIC

Award winning, universal banking franchise licensed by the Bangko Sentral ng Pilipinas, offering a broad range of financialsolutions catering to both retail and corporate clients

BPI has a local distribution network of 1,167 branches & branch-lite units (BLUs), 3 international offices, 2,822 ATMs & CAM, and a manpower complement of 21,429 employees as of December 2019

Customer base has almost doubled since 2010 to 8.7 million customers in December 2019 owing to the Bank’s strong brand recognition

Retail Banking

Corporate Banking

Small and Medium SizedEnterprises (“SMEs”) Business

Banking Group

Responsible for the Bank’s distribution network of 1,167 branches & BLUs and 2,822 ATMs & CAMsProvides private banking, preferred banking, personal banking and overseas Filipino banking services

Provides deposit and lending solutions to a broad range of multinationals, large and medium domesticconglomeratesProducts and services offered include cash management, electronic payments, trade finance, investmentbanking and other solutions

Other key segments

Focused on the needs of the small and medium sized enterprise segmentTailored credit processes and credit-scoring models offer quick and efficient capital solutions to SME clients

Asset management and trust business operated through BPI Asset Management and Trust CorporationInsurance services provided through BPLAC and BPI/MS1

Leasing and rental services through BPI Century Tokyo

1 BPLAC is the Bank’s life insurance joint venture with Philippine American Life and General Insurance Company. BPI/MS is the Bank’s non-life insurance joint venture with Mitsui Sumitomo Insurance Group (“Mitsui”)

Main Operating Business Segments

MicrofinanceProvides services to self-employed micro-entrepreneurs, advice from BanKopares & BanKomares Quick turnaround times and lower interest rates vs traditional money-lenders

BPI at a glance

Balance Sheet 2013 2018 5yr CAGR 2019 YoY

Total assets 1,195.4 2,085.2 11.8% 2,205.0 5.7%

Net loans 635.2 1,354.9 16.4% 1,475.3 8.9%

Deposits 988.6 1,585.7 9.9% 1,695.3 6.9%

CASA 685.2 1,139.9 10.7% 1,171.2 2.7%

Capital 104.5 248.5 18.9% 269.6 8.5%

Income Statement

Revenues 52.5 78.5 8.4% 94.3 20.1%

Net interest income 30.3 55.8 13.0% 65.9 18.1%

Non Interest Income 22.2 22.7 0.5% 28.4 25.2%

Operating expense 26.7 43.6 10.3% 50.1 14.8%

Pre-provision Operating Profit 25.8 34.9 6.2% 44.3 26.7%

Net Income 18.8 23.1 4.2% 28.8 24.8%

Key ratios

NIM 3.1% 3.1% 3.3%

Asset Yield 4.5% 4.5% 5.2%

Cost of Deposits 1.2% 1.4% 1.5%

Cost of Funds 1.5% 1.5% 2.0%

Cost to Assets 2.7% 2.3% 2.4%

Cost to Income 55.5% 55.5% 53.1%

ROE 18.1% 10.2% 11.0%

ROA 1.9% 1.2% 1.4%

CASA 69.3% 71.9% 69.1%

Loan-to-Deposit 64.3% 85.4% 87.0%

Credit Cost (in bps ) 49bps 40bps 43bps

NPL ratio 1.7% 1.9% 1.7%

NPL coverage ratio 108.7% 85.5% 102.1%

CAR 13.7% 16.1% 16.1%

CET1 13.0% 15.2% 15.2%


Bank Standalone

Rating

Extraordinary

Support Level

Operating

Environment Risk

Anchor

BBB- bbb-

SACP: Risk Position Adequate (0)

Senior Unsecured Baa2Support Rating

Floor

SACP: Funding &

Liquidity

Average and

Strong (0)

Moody's 2

Counterparty Risk

Rating

Bank Deposits

Counterparty Risk

Assessment

Foreign Currency:

Short-Term IDR

Support Rating

Outlook

Long-Term Issuer

Credit Rating

Short-Term Issuer

Credit Rating

SACP*

SACP: Business

Position

Capital

Intelligence 4

Stable***

bbb

BBB

S&P 1

Outlook

Financial Strength

Foreign Currency:

Long-Term IDR**

Stable

Fitch 3

Outlook

Core Financial

Strength

Long-Term

Foreign Currency

Baseline Credit

Assessment

Baa2/P-2

Baa1/P-2

Outlook

A3F3Short-Term

Foreign Currency

High

Stable

BBB+

A-2

bbb+

Strong (+1)

bbb-Adj. Baseline

Credit Assessmentbaa2

Local Currency:

Long-Term IDRBBB-

baa2

Baa1(cr)/P-2(cr)

Stable

-

BBB-

2

bbb-

Strong (+1)

SACP: Anchor

SACP: Capital &

Earnings

At par with Philippine Sovereign Rating (Moody’s, Capital Intelligence, and S&P)

27

BBB ESG Rating

Sustainable development goals touched on by BPI:

/1 As of August 2019 /2 As of May 2019 /3 As of January 2019 /4 As of October 2019 /5 As of August 2019* Stand Alone Credit Profile (SACP)** Issuer Default Ratings*** Outlook for Long-term Foreign Currency Rating & Bank Standalone Rating

5

Credit and Sustainability Ratings

THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.28 BPI’s Green Bond Framework is aligned with leading industry practices and supports our long-term environmental and social commitments

We have developed a Green Finance Framework under which we intend to issue:

Green Bonds and/or Loans – proceeds allocated to selected Eligible Green Projects

The Framework has been established to continue our thrust to promote positive environmental and social practices in our core markets

PROJECT EVALUATION AND SELECTION

We will follow the guidelines below in evaluating and selecting the Eligible Green Projects:

Pre Qualification: Projects are identified, evaluated and nominated by BPI’s Sustainable Energy Finance and Specialized Lending Team(together “SEF/SLT”)

Inclusion in the Green Finance Portfolio: SEF/SLT Head / Vice Chairman of the Green Finance Committee (“GFC”) validates and signs off on the Eligible Green Projects list

Green Finance Committee: On a semi-annual basis, validate and approve historical enrolments, review monitoring and reporting of issued Green Bonds and deployment of net proceeds

BPI ensures that all loans included for allocation under the Green Finance Portfolio comply with national, local, and environmental laws at the time of issuance

REPORTING

We will provide annual progress reports to be reviewed and approved by the Green Finance Committee andSenior Management, covering:

A list of approved Eligible Green Projects, including amounts allocated; and

Remaining balance of unallocated proceeds

External auditor will be engaged to provide independent verification on our reporting and management of proceeds in accordance with this Framework

Impact Reporting will be completed where relevant and possible

USE OF PROCEEDS

Net proceeds will be allocated to Eligible Green Projects in the following categories:

Renewable Energy

Energy Efficiency

Sustainable Water & Wastewater Management

Pollution Prevention & Control

Green Buildings

Projects financed or refinanced may be at BPI or at any of the BPI Group entities

Net proceeds of any BPI Green Bond and/or Loan will not be used towards financing and/or refinancing of fossil fuel related assets and activities

2

4MANAGEMENT OF PROCEEDS

An amount equal to the proceeds will be allocated to finance designated Eligible Green Projects across the BPI Group

Internal systems in place governing:

Tracking of proceeds via a separate register

Policy for deployment of unallocated proceeds

Substitution of assets – an amount equal to the net proceeds will be allocated to projects that comply with the Eligibility Criteria, reallocating to replacement projects in the event that a previous project is sold, paid in full, or no longer eligible

1

3

Green Finance Framework


Project Finance29

Corporate Bankingand Investment Banking Trade and Supply Chain Remittance

Equity Capital Markets Debt Capital Markets

Best Trade

Finance Bank

2018

Best Trade

Finance Bank

2018

Best Supply

Chain Bank

2018

“BPI Pamana Padala”,

Remittance Product and

Service of the Year Award

2018

Outstanding

PhilPaSS REMIT

Participant Award

2018

BPI recognized for its

Remittance Services

2018

Renewable Deal of the

Year, Asia Pacific

(Star Energy)

2017

Best Philippines

Capital Markets Deal

(AC Perpetual Bond)

2017

Best ECM House

Philippines

2018

Best Corporate and

Investment Bank

Philippines

2018

Best Corporate and

Investment Bank

Philippines

2017

Best Investment

Bank

Philippines

2018

Best Trade and Supply

Chain House

2018

Best FX Bank for

Corporates and FI

2019

Best Investment Bank

2019

11Best Bank for Cash

Management

Philippines2019

Awardee - Top 10

Innovations in Cash

Management: Corporate

Cash Deposit Machine

2019

Cash Management

Best Wealth

Management Provider

Philippines

2018

BPI recognized for its

Financial Initiatives for

OFW

2018

Awardee - Top 5

Corporate Securities

Market Maker

2018

Awardee - Top 5

PDDTS-PvP

Participant Award

2018

Best New Bond Award

2018

BPI received 2-arrow

recognition in ACGS

2018

Corporate Governance

Asset Management

BPI Foundation

“Best Bank CSR in the

Philippines”

“Best Corporate &

Investment Bank in the

Philippines”

2019

11

Risk Management

BSP Special Citation:

BPI – Prudential

Reporting Innovation

2018

House of the Year,

Philippines

Year 2018 & 2014

Best Bank

Philippines

2018 & 2017

Microfinance

Best Bank for

Microfinance

2019

As of December 31, 2019

2019 Distinctions

ASEAN Risk Champion

2019


For your comments and queries contact us via:

[email protected]

Tel: (632) 8246 5862

DISCLAIMER: This presentation has been prepared by the Bank of the Philippine Islands (“BPI” or the “Company”) solely forinformational purposes. All contents hereof are the sole and exclusive property of BPI. Nothing in this presentation shall beconsidered a solicitation, offer, advice or recommendation to investors or potential investors in relation to holding, purchasing orselling securities or other financial products or instruments. In all cases, interested parties should conduct their own investigationand analysis of the Company and the data set forth in this presentation. BPI makes no representation or warranty as to theaccuracy or completeness of information in this presentation and shall not have any liability for any representations (expressed orimplied) regarding information contained in, or for any inaccuracies or errors in, or omissions from, this presentation.This presentation may contain forward looking statements including statements regarding the Company’s intent, belief or currentexpectations with respect to BPI’s [businesses and operations, market conditions, results of operation and financial condition,capital adequacy, specific provisions and risk management practices]. Readers are cautioned not to place undue reliance on theseforward looking statements. BPI does not undertake any obligation to publicly release the result of occurrence of unanticipatedevents. While due care has been used in the preparation of forecast information, actual results may vary in a materially positive ornegative manner. Forecasts and hypothetical examples are subject to uncertainty and contingencies outside BPI’s control.

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