bdo and philippine banking -...
TRANSCRIPT
5 October 2017
BDO and
Philippine Banking
2
Looking Back
1967
3
Banco De Oro early 1990s Aurora Boulevard, Cubao, Quezon City
1967
4
―The lady who started it all‖
Industry Ranking in Total Assets
1997 U/KBs P bn
1 MBT 247
2 PNB 242
3 BPI 166
4 LBP 156
5 PCIB 152
6 FEBTC 144
7 Citi 119
8 BA 109
9 RCBC 103
10 EBC 102
20 BDO 39
5
1967
6
Banco De Oro circa 1997
Ortigas Center
Getting Started
7
―To be the preferred bank in every market we serve”
Milestones
1967
KB license
1994
Acquired by SM Group
1976
Assets
P13 BN
Est. as
Acme
Savings
Bank
• Expansion through organic growth and M&As
Milestones • Expansion through organic growth and M&As
1967
KB license
1994
P77 BN
Merged with Dao Heng
Bank Philippines
2001
P36 BN
U/KB license
1996
Acquired 1st e-Bank’s banking business
P121 BN
2002
Acquired UOB Philippines’ branch banking business
P234 BN
2005
Acquired by SM Group
1976
Assets
P13 BN
Est. as
Acme
Savings
Bank
2003
Acquired Banco Santander Philippines
P149 BN
Niche Strategy
• Expansion through organic growth and M&As
IPO
1997 U/KBs P bn
1 MBT 247
2 PNB 242
3 BPI 166
4 LBP 156
5 PCIB 152
6 FEBTC 144
7 Citi 119
8 BA 109
9 RCBC 103
10 EBC 102
20 BDO 39
Industry Ranking in Total Assets
Industry Ranking in Total Assets 1997 U/KBs P bn 2002 U/KBs P bn
1 MBT 247 1 MBT 434
2 PNB 242 2 BPI 332
3 BPI 166 3 EPCI 261
4 LBP 156 4 LBP 248
5 PCIB 152 5 Citi 217
6 FEBTC 144 6 PNB 186
7 Citi 119 7 RCBC 156
8 BA 109 8 DBP 151
9 RCBC 103 9 BDO 120
10 EBC 102 10 CHIB 106
20 BDO 39
Industry Ranking in Total Assets 1997 U/KBs P bn 2002 U/KBs P bn 2006 U/KBs P bn
1 MBT 247 1 MBT 434 1 MBT 642
2 PNB 242 2 BPI 332 2 BPI 578
3 BPI 166 3 EPCI 261 3 LBP 361
4 LBP 156 4 LBP 248 4 EPCI 344
5 PCIB 152 5 Citi 217 5 BDO 306
6 FEBTC 144 6 PNB 186 6 PNB 245
7 Citi 119 7 RCBC 156 7 DBP 236
8 BA 109 8 DBP 151 8 RCBC 227
9 RCBC 103 9 BDO 120 9 Citi 211
10 EBC 102 10 CHIB 106 10 UBP 184
20 BDO 39
Milestones • Expansion through organic growth and M&As
1967
KB license
1994
P77 BN
Merged with Dao Heng
Bank Philippines
2001
P36 BN
U/KB license
1996
Acquired 1st e-Bank’s banking business
P121 BN
2002
Acquired UOB Philippines’ branch banking business
P234 BN
2005
Acquired by SM Group
1976
Assets
P13 BN
P617 BN
2007
Merged with Equitable PCI Bank.
Acquired Amex Savings Bank Philippines
Est. as
Acme
Savings
Bank
2003
Acquired Banco Santander Philippines
P149 BN
Full-Service Bank Strategy
Milestones • Expansion through organic growth and M&As
1967
KB license
1994
P77 BN
Merged with Dao Heng
Bank Philippines
2001
P36 BN
U/KB license
1996
Acquired 1st e-Bank’s banking business
P121 BN
2002
Acquired UOB Philippines’ branch banking business
P234 BN
2005
Acquired GE Money Bank
2008 2009
P862 BN
2012
Acquired Rural Bank of San Juan’s banking business
P1.2 TN
2014
Acquired Citibank
Savings, DB Trust
and Real Bank
P1.9 TN
Acquired One
Network Bank
2015
Acquired by SM Group
1976
Assets
P13 BN
P617 BN
2007
Merged with Equitable PCI Bank.
Acquired Amex Savings Bank Philippines
2016
Joint Ventures with Nomura Securities, and Mitsubishi Motors
Phils./Sojitz/JACCS; Acquired exclusive franchise of Diners Club Int’l and
full control of Generali Pilipinas Life (renamed as BDO Life Assurance)
P2 TN
Est. as
Acme
Savings
Bank
2003
Acquired Banco Santander Philippines
P149 BN
P2.3 TN
P802 BN
Full-Service Bank Strategy
Industry Ranking in Total Assets 1997 U/KBs P bn 2002 U/KBs P bn 2006 U/KBs P bn
1 MBT 247 1 MBT 434 1 MBT 642
2 PNB 242 2 BPI 332 2 BPI 578
3 BPI 166 3 EPCI 261 3 LBP 361
4 LBP 156 4 LBP 248 4 EPCI 344
5 PCIB 152 5 Citi 217 5 BDO 306
6 FEBTC 144 6 PNB 186 6 PNB 245
7 Citi 119 7 RCBC 156 7 DBP 236
8 BA 109 8 DBP 151 8 RCBC 227
9 RCBC 103 9 BDO 120 9 Citi 211
10 EBC 102 10 CHIB 106 10 UBP 184
20 BDO 39
2007 U/KBs P bn
1 MBT 707
2 BDO 621
3 BPI 617
4 LBP 383
5 DBP 241
6 PNB 240
7 RCBC 239
8 Citi 211
9 UBP 187
10 CHIB 175
Industry Ranking in Total Assets 1997 U/KBs P bn 2002 U/KBs P bn 2006 U/KBs P bn
1 MBT 247 1 MBT 434 1 MBT 642
2 PNB 242 2 BPI 332 2 BPI 578
3 BPI 166 3 EPCI 261 3 LBP 361
4 LBP 156 4 LBP 248 4 EPCI 344
5 PCIB 152 5 Citi 217 5 BDO 306
6 FEBTC 144 6 PNB 186 6 PNB 245
7 Citi 119 7 RCBC 156 7 DBP 236
8 BA 109 8 DBP 151 8 RCBC 227
9 RCBC 103 9 BDO 120 9 Citi 211
10 EBC 102 10 CHIB 106 10 UBP 184
20 BDO 39
2007 U/KBs P bn 2008 U/KBs P bn
1 MBT 707 1 BDO 808
2 BDO 621 2 MBT 758
3 BPI 617 3 BPI 658
4 LBP 383 4 LBP 434
5 DBP 241 5 DBP 291
6 PNB 240 6 PNB 277
7 RCBC 239 7 RCBC 270
8 Citi 211 8 UBP 208
9 UBP 187 9 CHIB 207
10 CHIB 175 10 Citi 188
Industry Ranking in Total Assets 1997 U/KBs P bn 2002 U/KBs P bn 2006 U/KBs P bn
1 MBT 247 1 MBT 434 1 MBT 642
2 PNB 242 2 BPI 332 2 BPI 578
3 BPI 166 3 EPCI 261 3 LBP 361
4 LBP 156 4 LBP 248 4 EPCI 344
5 PCIB 152 5 Citi 217 5 BDO 306
6 FEBTC 144 6 PNB 186 6 PNB 245
7 Citi 119 7 RCBC 156 7 DBP 236
8 BA 109 8 DBP 151 8 RCBC 227
9 RCBC 103 9 BDO 120 9 Citi 211
10 EBC 102 10 CHIB 106 10 UBP 184
20 BDO 39
2007 U/KBs P bn 2008 U/KBs P bn Jun-17 U/KBs P bn
1 MBT 707 1 BDO 808 1 BDO 2,472
2 BDO 621 2 MBT 758 2 MBT 1,972
3 BPI 617 3 BPI 658 3 BPI 1,709
4 LBP 383 4 LBP 434 4 LBP 1,485
5 DBP 241 5 DBP 291 5 PNB 818
6 PNB 240 6 PNB 277 6 SECB 774
7 RCBC 239 7 RCBC 270 7 CHIB 654
8 Citi 211 8 UBP 208 8 UBP 549
9 UBP 187 9 CHIB 207 9 RCBC 537
10 CHIB 175 10 Citi 188 10 DBP 536
Highlights: 1997 - 2017
10 capital raising activities totaling more than
P209 billion*
24 note and bond issues with an aggregate
amount of almost P202 billion
15 companies acquired by or merged with BDO
Note:
* Including IFC loan conversion into equity
18
19
Where are we now?
Source: Company data, consolidated statements of condition (SOC). Ranking as at 30 June 2017
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
1,592
1,113 1,074
503 436 401 336 324 260 205
MBT BPI LBP PNB CHIB SECB RCBC UBP EW
1,021
595
436
175 120 111 91 88 81 51
BPI MBT LBP SCB CHIB RCBC PNB UCPB SECB
1,980
1,462 1,434 1,319
625 554 435 383 380 345
MBT BPI LBP PNB CHIB UBP RCBC SECB DBP
Industry Ranking
Total Assets
(in PHP billions)
Gross Customer Loans
Customer Deposits Assets Under Management
• No. 1 among Philippine banks
(in PHP billions) (in PHP billions)
(in PHP billions)
BDO Market Share – 18% BDO Market Share – 36%
BDO Market Share – 22% BDO Market Share – 18%
2,472
1,972 1,709
1,485
818 774 654 549 537 536
MBT BPI LBP PNB SECB CHIB UBP RCBC DBP
20
Business Franchise
#1
Customer
Loans
#1
Deposits #1
Remittances
#1
Assets Under
Management
#1
Private
Banking
Leading Trade
Services Provider2
Major Player in
Cash Management3
#1
Rural
Banking
#2
Leasing &
Finance
#1
Investment
Banking4
#1 Insurance
Brokerage5
• Market-leading positions in almost all business lines
#1
Credit
Cards1
Notes: 1 In terms of cardholder base, merchant acquiring gross billings, and credit card receivables 2 According to The Asset, & Asian Banking and Finance 3 According to The Asian Banker, Asian Banking and Finance, Alpha South East Asia 4 In terms of corporate issuances 5 Among insurance brokers in terms of premiums produced and commissions earned
21
22
Market Reach • Wide and extensive coverage in key areas
27 International Offices
Europe - 12 11 Remittance Offices
1 Representative Office
Middle East - 1 Representative Office
SEA, China, HK, Taiwan,
Korea & Japan - 11 1 Full-service Branch
6 Remittance Offices
4 Representative Offices
North
America - 3 Remittance Offices
Philippines - 1,159
Branches
BDO ONB Total
Luzon 318 6 324
Metro
Manila 521 1 522
Visayas 115 16 131
Mindanao 80 102 182
Total
Branches 1,034 125 1,159
As of 2 Oct 2017
Total Shareholder Return* vs PSE Index
PSEi
(Php)
23 Note
* On an annualized basis , based on the closing price of P130.70 as of Sept. 29, 2017; adjusted for corporate actions
From To BDO PSEi
May 2002 (BDO IPO) Sep-17 16.3% 12.5%
Dec 2006 (EPCI merger Sep-17 13.6% 8.3%
announcement)
based on the closing price of P130.70
as of Sept. 29, 2017
24
―Genius is 1% inspiration, 99% perspiration‖
- Thomas Alva Edison
24
1967
25
Our number 1 supporter, primary financier and most vocal cheerleader
The Sy Family
1967
26
Our guiding light and moral compass
BDO Board of Directors
Corporate Support
Our Team
Anthony Chua
Head — Global Operations
With BDO since 2014
Over 30 years of banking experience
Evelyn C. Salagubang
Head — Human Resources
With BDO since 2007
Over 20 years experience in HR
Lucy Co Dy
Head — Comptrollership
With BDO since 1985
Over 30 years of banking experience
Ricardo V. Martin
Head — IT Group
With BDO since 2001
Over 30 years of banking experience
Edwin Romualdo G. Reyes
Head — Transaction Banking
With BDO since 2015
29-year banking experience
Evelyn L. Villanueva
Head — Risk Management
With BDO since 2002
Over 30 years of banking experience
Luis S. Reyes Jr.
Head — IR & Corplan
With BDO since 2003
Over 30 years of banking experience
Atty. Federico P. Tancongco
Head — Compliance
With BDO since 2005
Over 24 years banking experience
Alvin C. Go
Head — Legal
With BDO since 2013
In the practice of law for 30 years
Maria Theresa L. Tan
General Manager — BDO Insurance
With BDO since 2009
22-year banking and insurance experience
Albert Santiago Yeo
Head — Private Banking
With BDO since 2017
32 years banking experience
Eduardo V. Francisco
Head — Investment Banking
With BDO since 1999
27-year banking experience
Ador A. Abrogena
Head — Trust and Investments
With BDO since 1990
Over 30 years of banking experience
Walter C. Wassmer
Head — Business Lending
With BDO since 1997
Over 30 years of banking experience
Rolando C. Tanchanco
Head — Consumer Lending
With BDO since 2004
25-year banking experience
Jaime C. Yu
Head — Branch Banking
With BDO since 1997
Over 30 years of banking experience
Pedro M. Florescio III
Head — Treasury
With BDO since 2001
Over 30 years of banking experience
Products, Services and Subsidiaries Intermediation
Nestor V. Tan
President and CEO With BDO since 1997
Over 30 years of banking experience
Roberto E. Lapid
President — BDO Leasing and Finance
With BDOLF since 1993
Over 30-years of banking experience
Estrellita V. Ong
Head — Internal Audit
With BDO since 2011
Over 20 years experience in audit
Renato Vergel de Dios
CEO & Director – Generali Life
With Generali since 2009
40 years of experience in insurance
Ramon T. Militar
OIC, One Network Bank
With BDO since 2002
30 years of banking experience
Maria Cecilia G. Fonacier
Head — Marketing Communications
With BDO since 2017
Over 20 years of banking experience
Where do we go from here?
29
Philippine banking opportunities: what do we see?
1967
30
33 adults with savings in a
bank
Source: BSP 1Q17 Financial Inclusion DashBoard
%
1967
31
36 Philippine cities and municipalities
without a formal banking presence
Source: BSP 1Q17 Financial Inclusion DashBoard
%
1967
32
42 contribution of informal sector to
Philippine GDP
Source: World Bank
%
1967
33
1.8
insurance penetration
Source: BSP 1Q17 Financial Inclusion DashBoard
%
1967
34
3,000
approximate Philippine per capita income
$
• Philippines now in a higher growth trajectory
Real GDP Levels
2011-2016
CAGR of 6.6%
1966-2011
CAGR of 4.0%
Sources: National Statistics Authority
Bangko Sentral ng Pilipinas
GDP Growth
(USD bn)
35
Competition
13% 37
38
Fintechs
Cyber Threat
13% 39
Assets of ASEAN Banks, 2016
Top 3 Phil
banks =
between
Maybank
and CIMB
Globalization/Regionalization
ASEA
N
Bank Country Assets
US$ Bn
1 DBS Bank Singapore 332
2 OCBC Singapore 283
3 UOB Singapore 235
4 Maybank Malaysia 164
Top 3 Phil Banks combined 119
5 CIMB Group Malaysia 108
6 Public Bank Malaysia 85
7 Bangkok Bank Thailand 82
8 Slam Commercial Bank Thailand 81
9 Kasikorn Bank Thailand 79
10 Krung Thai Bank Thailand 75
11 Government Savings Bank Thailand 70
12 RHB Bank Malaysia 53
13 Bank of Ayudhya Thailand 53
14 Hong Leong Bank Malaysia 47
15 BDO Unibank Philippines 47
16 Bank for Inv and Dev of Vietnam Vietnam 45
17 Agribank Vietnam 45
18 Vietin Bank Vietnam 43
19 Metrobank Philippines 38
20 Vietcombank Vietnam 36
21 Bank of the Philippine Islands Philippines 35
22 AmBank Group Malaysia 34
23 Land Bank of the Philippines Philippines 28
24 Thanachart Bank Thailand 27
25 TMB Bank Thailand 23
41
Global standards – are they helpful?
42
Markets : overbanked vs underbanked
Developed World Philippines
Shareholders : dispersed vs family control
Focus : services vs intermediation
capital markets vs on balance sheet
transactional vs relationship
Objectives: interim profits vs growth
(market expectations) (franchise building)
43
Do global standards apply?
Principles
Prescription
Role of Banking
“fat cat bankers”
Expand our market downward
bankable
population
45
Facilitating Financial Inclusion
P 10K/month capacity to pay = P 1M affordable housing
P 10K/month remittance = P 10K/month consumption
Creating the Multiplier Effect
46
Enabling Efficient Payments and Settlement
47
48
• Depositors • Borrowers
Intermediation Funding Lending
Easing Intermediation
• Banks
Helping in Public Policy Implementation
Anti-Money Laundering and Anti-Terrorism Financing Laws
49
Collaboration Competition
Banking Frenemies
13% 51
危机 crisis opportunity
52
Every morning in the plains of the
Serengeti,
a Gazelle wakes up knowing that to
survive the day he must run faster than
the fastest Lion; and every morning a Lion wakes up knowing
that
to survive the day he must run faster than
the slowest Gazelle.
MORAL: It does not matter whether you are a Lion or a
Gazelle,
when the sun comes up you better be ready to run.
Thank you.