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TRANSCRIPT
CONFIDENTIAL
BPI Investor UpdateStrength and Quality in Earnings
As of June 30, 2017
Founded in 1851, as Banco Español Filipino de Isabel II, by Catholic charities– Antonio de Ayala inaugural member of board
Named Bank of the Philippine Islands (Banco de las Islas Filipinas) after Treaty of Paris (1898)
Ayala y Compañia (present day Ayala Corp.) assumes strategic stake in 1969
Morgan Guaranty Trust Company (“MGT”)purchases stake in People’s Bank, a predecessor company, in 1974
DBS and GIC, Singapore’s sovereign wealth fund, eventually acquired MGT’s stake– GIC now has an effective 5.6% ownership
Summary History of BPI
Pesos Fuertes, 1883
BPI Iloilo, 1897
2BPI Investor Update: Strength and Quality in Earnings
GIC, 5.6%
RCAM*, 8.3%
Ayala Corp,48.3%
Public Float,37.8%
Shareholders & Equity Profile
Fundamentals Description
PCOMP Index 5.23% weight
Stock Price P106.00 per share
BV per share P44.04
P-B Ratio 2.41x
P-E Ratio 17.90x
Dividends P1.80 per share
Issued Shares 3.939 bn
Market Cap P417.574 bn
Shareholders
BPI Investor Update: Strength and Quality in Earnings
As of August 10, 2017
3
* Roman Catholic Archdiocese of Manila
BPI: 165 Years in the Philippines
Branches ATMs/CAMs
Expansive reach in both traditional and electronic channels
8.2 million customers
844 branches*
3,079 ATMs & CAMs
15,621 employees
BPI Investor Update: Strength and Quality in Earnings 4
* Local and International
Electronic ChannelsSignificant leadership in technology-based banking
BPI Investor Update: Strength and Quality in Earnings 5
+14.5%
+22.3%
+19.9%
-
Express Mobile
Express Phone -5.2%
No. of Clients 1H 2015 1H 2016 1H 2017
Express Online 2,078,324 2,422,846 2,774,969
Express Mobile 1,409,019 1,851,783 2,265,280
Express Phone 844,183 801,853 760,006
ExpressLink 24,060 27,306 32,747
* Philippine Statistics Office – Estimated OFW, 2015
ITSC MeetingBPI Investor Update: Strength and Quality in Earnings
A Leader Among Philippine Banks in OF Remittances
BSP Vol (USD bn) 25.77 26.90 11.35 5%
BPI
Vol (USD bn) 6.97 6.79 2.79 -4%
Share (%) 27% 28% 25%
Total OFWs* BPI Tie-Ups2.4 million 145
OFW Diaspora & Global BPI Tie-Ups
Canada
$ 313 mn 4Europe
$ 49 mn 5 Asia$ 2,076 mn 3
Middle East$ 3,210mn 2
U.S.A
$ 3,744 mn 1
Remittance 2014 2015 May ‘17 YoY Total OFWs* BPI Tie-Ups
6
Excellence in Debt Capital Markets
BPI Investor Update: Strength and Quality in Earnings 7
Underwriter Mkt Share (%) Issues
BDO Capital 1 20.1 8
BPI Capital Corp 2
China Banking Corp 3
Standard Chartered 4
5Security Bank
ING Group 6
7PNB
16.0
10.4
9.4
8.8
8.4
6.6
8
5
6
6
3
9
1H 2017 Rank
Sep 2016
Oct 2016
Dec 2016
Feb 2017
June 2017
Best SME Bank Alpha Southeast Asia
Best Domestic BankFinance Asia
Best in Retail ServicesThe Asian Banker
Highest Volume Growth, Top Consumer Prepaid IssuerMore Fun Prepaid & Ayala Malls Amore Cards: Visa
2016 Bond Deal of the Year, AboitizPower’s Tiwi Makban Geothermal Energy ProjectThompson Reuters: Project Finance International Magazine
Best Bank in the Philippines, 4th time in a rowCorporate Treasurer
Best Private BankEuromoney’s Private Banking and Wealth Management Survey
Best Service Provider for Trade Finance, 5 consecutive yearsTriple A Awards
8BPI Investor Update: Strength and Quality in Earnings
Recent Distinctions
BPI Management Team
Picture
Cezar P. ConsingPresident & CEO
RetailClients
EnterpriseServices
Financial Products &
Services
Corporate Clients
Global Markets
JosephGotuaco
NatividadAlejo
Daniel Montecillo
SimonPaterno
AntonioPaner
Ramon Jocson
Theresa Javier
Edgardo Madrilejo
EVP EVP EVP EVPEVP &
Treasurer EVP SVP & CFO SVP & CRO
Strategy &Dev’t
Risk Mgmt
BPI Investor Update: Strength and Quality in Earnings 9
Microfinance
1H 2017 Performance HighlightsSustained growth in assets
in P Bn 2016 2017 YoY (ppt)
Balance Sheet
Assets 1,584.6 1,716.0 8.3%
Net Loans 904.4 1,056.9 16.9%
Deposits 1,326.8 1,432.5 8.0%
CASA 975.4 1,050.5 7.7%
Capital 160.8 173.5 7.9%
Income Statement
Net Revenues 35.2 35.3 0.4%
Net Int Income 20.7 23.5 13.6%
Non-Int Income 14.5 11.8 -18.4%
Opex 17.3 18.3 5.4%
Provisions 3.1 2.5 -20.7%
Net Income 12.7 11.7 -7.7%
Comp Income 13.9 11.8 -15.6%
10BPI Investor Update: Strength and Quality in Earnings
1H 2017 Performance HighlightsAdequate capital, and strong asset quality
2016 2017 YoY (ppt)
Balance Sheet
LDR 68% 74% 5.6%
CASA Ratio 74% 73% -0.2%
Profitability
CIR 49% 52% 2.7%
ROE 16.4% 13.7% -2.7%
ROA 1.6% 1.4% -0.3%
Asset Quality
Gross 90-Day NPL 1.56% 1.48% -0.1%
NPL Cover 118% 126% 8.3%
Capital
CAR 13.9% 13.7% -0.2%
CET1 13.0% 12.8% -0.2%
11BPI Investor Update: Strength and Quality in Earnings
12.7 11.7
1H 2016 1H 2017
13.9
11.8
1H 2016 1H 2017
Strong Earnings QualityNet Income -7.7%, Comprehensive Income -15.6% YoY
12
Net IncomeP bn
Comprehensive IncomeP bn
-7.7%
YoY Growth
-15.6%
YoY Growth
BPI Investor Update: Strength and Quality in Earnings
59% 67%
41% 33%
1H 2016 1H 2017
20.7 23.5
14.5 11.8
35.2 35.3
1H 2016 1H 2017
Revenue Growth Remains PositiveCore intermediation business continued to be strong driver of revenues
13
RevenuesP bn
Revenue Mix
Net Interest Income Non-Interest Income
BPI Investor Update: Strength and Quality in Earnings
13.6%
-18.4%
YoY Growth
0.4%
Non-Interest Income
BPI Investor Update: Strength and Quality in Earnings 14
Securities & FX trading decrease +P4.35 bn (-67.9) vs last year
Fees & other income up by +P1.6 bn (17.5%) vs last yeardriven by:– Cards & Payments– Service Charges– Investment Banking– Asset Sales
1 Non-Interest Income at gross
8.910.5
6.4 2.1
15.3
12.5
1H 2016 1H 2017
Breakdown of Non-Interest IncomeP bn
-27.84%
12.1%
17.5%
-67.9%
YoY Growth
-18.2%
58% 84%
42% 16%
Fees & Others
Sec & FX
Slowdown in securities trading decreased non-interest income in 1H 2017
118%
126%
1.56%1.48%
1H 2016 1H 2017
904.4
1,056.9 1,040.7
2016 2017
Loan Book Has Both Growth and Quality
15
Net LoansP bn
Asset Quality
NPL Cover Gross 90-D NPL
BPI Investor Update: Strength and Quality in Earnings
1.6%
Growth
16.9%
Year-end 1H
Loan book driven by corporate loans which grew 19.5%
111.6 117.1
53.5 57.0
39.646.7
1H 2016 1H 2017
635.7773.8
77.7
78.4
1H 2016 1H 2017
YoY Growth
Sustained Growth in Loan Segments
Corporate Loan BalancesP bn
Retail Loan BalancesP bn
89% 91%Corp%
11% 9%SME%
55% 53%Housing%
26% 26%Auto%
19% 21%Cards%
19.5%
1%
21.7%
713.4
852.2
204.7220.8
1 Cards inclusive of Personal Loans.
4.9%
6.6%
18.0%
7.9%
YoY Growth
Going beyond marginal bookings
16BPI Investor Update: Strength and Quality in Earnings
74% 73%
68%
74%
1H 2016 1H 2017
1,326.8 1,432.5
975.4 1,050.5
1H 2016 1H 2017
Deposit and CASA Growth Remains StrongEfficiency continues to improve with LDR ratio
DepositsP bn
CASA Ratio, LDR
8.0%
7.7%
YoY Growth
Total Deposits CASA Deposits CASA Ratio LDR
17BPI Investor Update: Strength and Quality in Earnings
1,818.9 1,888.1
1H 2016 1H 2017
Growth in AUM
BPI Investor Update: Strength and Quality in Earnings 18
Asset Under Management1
P bn
21.6% -Share
Asset Management FeesP mnYoY Growth
1.5%
-15.8%
YoY Growth
3.8%
Total intermediated funds increased by 5.8%
1 BPI’s asset management business is managed thru three wholly-owned subsidiaries:BPI Asset Management & Trust Corp., BPI Investment Management Inc., BPI International Finance Limited
692.2 702.8
1H 2016 1H 2017
141 157 105 119
1,019 1,142
835 964
Conso 1H 2016 Conso 1H 2017 Parent 1H 2016 Parent 1H 2017
Capital Position
BPI Investor Update: Strength and Quality in Earnings 19
13.013.9 13.7
12.812.611.8
12.411.5
CAR % CET1 %Qualifying Capital Risk Weighted Assets
Growth in RWA, led by credit risks, outpaced the growth in qualifying capital
Credit RatingsMoody’s1 Fitch Ratings2 Capital
Intelligence3
Bank Financial Strength Rating
- - BBB
LT Local Currency Rating
- BBB- -
LT Foreign Currency Rating
Baa2/Prime-2 BBB- BBB
Outlook Stable Stable Stable
LT Foreign -Philippines
- BBB- -
/1 As of Mar 2017; /2 As of January 2017; /3 As of April 2017
20BPI Investor Update: Strength and Quality in Earnings
CONFIDENTIAL
Thank you.
As of June 30, 2017
BPI Investor UpdateStrength and Quality in Earnings