Post on 29-Mar-2015
transcript
Leveraging strategic choices, reaping early Leveraging strategic choices, reaping early winswins
Media & Investor Briefing on Q1 2009 Results12 May 2009
PSE Ayala Boardroom
Mr. Justo OrtizChairman & CEO
Leveraging strategic choices, reaping early Leveraging strategic choices, reaping early winswins
Early winsEarly wins
861
657
Q1 2008 Q1 2009
Net income(in million pesos)
Non-interest income(in million pesos)
138
118
Q1 2008 Q1 2009
31%
Net trading & investment gains(in million pesos)
17%
Net income position in Q1 2009 signifies dissipating compression on improvement in non-interest revenue
component
565602
Q1 2008 Q1 2009
6%
Early winsEarly wins
986
1,7211,158
690
Q1 2008 Q1 2009
Loans Securities
Combined growth in interest & non-interest income contributed to strengthen overall revenue stream
Interest income(in million pesos)
+49%
+43%
2,306
1,912
Q1 2008 Q1 2009
Operating income(in million pesos)
+21%
Healthy marginsHealthy margins
Net interest margins remained favorable amid a low interest rate environment
3.7%
4.8%
4.2%4.4%
4.2%4.4% 4.4%
4.2%
3.3% 3.2%
3.6%
3.2%
4.1%
3.1%3.4%
J an '08 Feb Mar Apr May J un J ul Aug Sep Oct Nov Dec J an '09 Feb Mar
Focus on long-term growthFocus on long-term growth
1,113
1,431
Q1 2008 Q1 2009
Operating expenses increased as a result of growing transaction volumes & investments in long-term
productivity improvementOperating expenses
(in million pesos)
29%
Persistent deposit increasePersistent deposit increase
108.0
168.9
Q1 2008 Q1 2009
57%
Deposit surge persisted amid the global financial turmoil
Outstanding deposits(in billion pesos)
Consistent credit growthConsistent credit growth
3.8 4.64.2 5.4
5.3
32.5
4.9
43.9
Q1 2008 Q1 2009
Credit Card Mortgage Auto Loans Corporate &Commercial
59.2
Improvement in recurrent income supported by broad-based loan expansion
45.4
+35%
+10%
+28%
+21%
+30%
Amounts in Billion Pesos
Outstanding loan portfolio(gross, without BP)
Strong asset qualityStrong asset quality
Improving credit quality proves formidable risk management approach
*NPLs net of reserves; Loans net of IBCL
2.18
0.800.96
4.37%
1.49%1.29%
Q1 2008 end-2008 Q1 2009
Net NPL (in billion pesos) Net NPL ratio
Net non-performing loans*
Gearing up for balance sheet Gearing up for balance sheet expansionexpansion
CAR decline attributed to rise in risk-weighted assets
10.8%
12.9%
16.4%
2007 2008 Q1 2009
Looking to the upswingLooking to the upswing
RESILIENCE & SUSTAINABILITY PRINCIPLES
Solid profitability through steady credit volumes &
increasing recurrent income
Vigilance for opportunities for trading gains as volatility
subsides
Emphasis on continued deposit growth through customer
franchise development
Formidable risk management platform in support of loan
expansion thrust
EXPECTATIONS ON THE ECONOMY
Growth slowdown on global crisis spillover
Low inflation, low interest rate environment
Steady remittance flows
Infrastructure boost from fiscal stimulus package
Employment concerns albeit resilient household spending
Income pressures on the corporate sector
Anchoring on our strategic Anchoring on our strategic imperativesimperatives
Resilient strategy
framework
Re-energized brand
Risk-adjusted returns
Robust resource base
Resurgent loan & securities
•Solid profitability through improved recurrent income•Healthy interest margins•Asset quality preservation•Customer franchise expansion
•Commitment to exceptional customer satisfaction and loyalty
•Brand values of expertise, relevance, and challenging convention
•Adherence to governance principles of transparency and sound risk management
•Disciplined approach to pricing risk factors in support of a more aggressive lending posture
•Acceleration in deposit base through improved sales management and product development systems
•Excellence in service quality and leading edge in innovation
•Emphasis on more sustainable revenue sources through expansion in loans & securities
•Broadening market reach with strong bias for quality borrowers
Sustaining strong depositor Sustaining strong depositor confidenceconfidence
Mr. Edwin BautistaEVP, Retail Banking
Performance guidepostsPerformance guideposts
• Superior sales management system
• Robust product management process
• Excellence in service quality and efficiency
• Constant quest for innovation
How we sustained our growth path…How we sustained our growth path…
Built for successBuilt for success
Outstanding deposits(in billion pesos)
Customer expertise produced stronger foothold in deposit-gathering business
57%
y-o-y
108117
125132 137 135
153161 160 162
177 172 169
M'08
A M J J A S O N D '08 J '09 F M
24 28
42 4654
60
116107
162
179
2430
3847
59
73
92
115
143
179
224
2000 2002 2004 2006 2008 2010
Actual FOCUS 2010 target
Outstanding deposits(in billion pesos)
Built for successBuilt for success
P179.0 B as of April
Forging aheadForging ahead
• Focus on low-cost deposit generation
• Pursue investments in people, network, technology, partnerships & alliances
• Sustain branch network expansion in strategic growth areas
• Stay committed to brand positioning of Smart Banking through leadership in service & innovation
Capitalizing on strong corporate franchiseCapitalizing on strong corporate franchise
Ms. Guia LimEVP, Corporate Banking
Performance resultsPerformance results
• Strong loan growth
• Loans are to quality names
• Industries are diversified
• Pricing more competitive but asset quality,
good
• Loan portfolio largely in peso, hence not
vulnerable to foreign funding
• Accrual income steadily growing
• No loan deterioration
Built for successBuilt for success
Gross corporate loans(in billion pesos)
16.7
26.7
Q1 2008 Q1 2009
Asset growth
60%
Built for successBuilt for success
Interest income(in million pesos)
204.7
416.4
Q1 2008 Q1 2009
103%
Revenue growth
Built for successBuilt for success
Diversified borrowers
% Share of corporate portfolio, as of Mar 2009
25.7
25.116.2
15.5
7.9
5.93.7
Manufacturing
Real estate
Financial intermediation
Transport, Storage & Communication
OthersTelecommunications
Electricity, Gas & Water Supply
Moving forwardMoving forward
• Continue adherence to sound risk management principles
• Focus on borrowers of proven stability and resilience through market downturns
• Pursue growth in real estate portfolio via CTS
• Dual approach to customer business i.e., asset and liabilities growth through cash management
• Develop borrowers into lucrative sources of non-loan related products and services
Reinforcing middle market credit qualityReinforcing middle market credit quality
Ms. Betty RomuloEVP, Commercial Banking
Performance guidepostsPerformance guideposts
• Credit risk consciousness balanced with
profitable pricing
• Innovation in products and services
• Diversification in loan portfolio
How we sustained our growth path…How we sustained our growth path…
Built for successBuilt for success
Gross commercial loans(in billion pesos)
15.817.2
Q1 2008 Q1 2009
Steady climb in commercial credit portfolio guided by firm standards of credit quality
9%
Built for successBuilt for success
Interest income(in million pesos)
320.4
424.7
Q1 2008 Q1 2009
Principle of risk-adjusted returns enabled strong acceleration of interest income
33%
Built for successBuilt for success
Past due ratio
Decline in past due loans illustrate commitment to strong middle market credit quality
2.20%
1.50%
Q1 2008 Q1 2009
Built for successBuilt for success
26.9
21.720.7
12.9
7.2
10.6Manufacturing
Real estate
Financial intermediation
Trading
Others
% Share of commercial portfolio, as of Mar
Portfolio diversification remains a key risk management principle
SME
Forging aheadForging ahead
• Continue implementation of risk-based relationship pricing of accounts
• Design new products and services that would cater to specific client segments
• Collaborate with other business units to access prospective borrowers
• Further enhance risk management practices in line with account profitability approach
Solidifying consumer finance growthSolidifying consumer finance growth
Mr. Genju LapezEVP, Consumer Finance
Performance guidepostsPerformance guideposts
• Balance between aggressive marketing
strategies and cost efficiency
• Broad market reach via new geographies and
channels
• Prudence and discipline in market expansion
• Collaboration and alliances
How we sustained our growth path…How we sustained our growth path…
Built for successBuilt for success
Gross consumer loans(in billion pesos)
15.3
12.9
Q1 2008 Q1 2009
Innovative marketing strategies, in the face of challenging market conditions, sustained growth in consumer finance
19%
Built for successBuilt for success
Robust growth balanced with stable yields kept revenue trend on a consistent growth track
Interest income(Consolidated consumer finance, in million pesos)
399.0
453.1
Q1 2008 Q1 2009
14%
Built for successBuilt for success
Improvement in net past due ratio reflective of focus on both value and quality of credit portfolio
Net past due ratio
3.43%
1.39%
5.34%
4.51%
Q1 2008 Q1 2009
Mortgage Auto
Forging aheadForging ahead
• Strengthen the basics by expanding coverage in existing territories and enhancing customer relationships
• Design more aggressive promotional tools and offers
• Deliver superior value by building a ‘benefits package’ for customers and prospects
• Balance aggressiveness with appropriate safety nets
Leveraging strategic choices, reaping early Leveraging strategic choices, reaping early winswins
Media & Investor Briefing on Q1 2009 Results12 May 2009
PSE Ayala Boardroom