COLLEGE OF BUSINESS AND ACCOUNTANCY

UNIVERSITY OF CALOOCAN CITY

CBA Bldg., Libis St., Camarin, Caloocan City

STRATEGIC MANAGEMENT PLAN

Of

BPI

(Bank of the Philippine Islands)

IN PARTIAL FULFILLMENT OF THE REQUIREMENRTS

FOR THE DEGREE OF BACHELOR OF SCIENCE

IN BUSINESS ADMINISTRATION MAJOR

IN FINANCIAL MANAGEMENT

BY:

CRISTINE JOY S.A. GITO

BSBA-FMGT 4E

PRESENTED TO:

ISAIAS L. BORRES

Executive Summary

•       It is the first commercial bank in the Philippines and the oldest of all Asian banks

since 1851.

•       Country’s third-largest bank according to its assets and deposits on March 2014 and

third in the rank according to its loans and capital based on March 2013.

•       BPI offers a full range of commercial and retail financial services, including

corporate finance services, asset management, and brokerage and other financial

consulting services.

•       As of December 2013, BPI has 814 branches across the country, including 66 kiosks

and nine overseas branches. While BPI's ATM network, known as the ExpressNet, has a

total of 2,507 terminals servicing customers nationwide. 

This study contains information about the banking industry analyzing the factors

that can affect to the Bank, revealing its strengths and weaknesses, as well as the impact

of opportunities and threats for the current position of the bank, and the tools used to

weigh it all and the recommended strategies which is the purpose of this study.

Chapter 1

INTRODUCTION

A. Company Background

The Bank of the Philippine Islands (BPI) is a commercial bank with an expanded

banking license. Together with its subsidiaries, BPI offers a wide range of financial

services that include corporate banking, consumer banking and lending, investment

banking, asset management, securities distribution, insurance services, leasing, and

foreign exchange. These services are offered to a wide range of customers, from

multinational corporations, government entities and large corporations to small- and

medium-sized enterprises and individuals.

Established on August 1, 1851 under Spanish colonial rule, BPI was originally

known as El Banco Español Filipino de Isabel II, named after then Queen of Spain, Isabel

II. The Bank was the first to be established in the Philippines, and was responsible for

starting the country's banking and finance industry. It performed many functions that in

effect made it the country's de facto central bank, including printing and issuing currency

in its own name.

For many years after its founding, BPI was the only domestic commercial bank in

the Philippines. It adopted its current name on January 1, 1912. 

Being one of the primers of the industry in the Philippines, BPI had become

genius of its environment. It adapts to new technologies, innovates rapidly and always

aims for the best as what its tagline says, “Make the Best Happen”. As it grows and being

one of the top banks not just only in the Philippines but also internationally, it still does

have problems that they don’t mind at times. One of the BPI’s problems is the lack of

employees to attend more of its clients at a time. The other problem is also a lack of seats

to give their clients convenience while waiting for their turns.

Today, BPI is not only known as the oldest bank in the Philippines and in

Southeast Asia; it is also an acknowledged leader in Philippine banking, with its high

market capitalization, strong Tier 1 capital adequacy ratio and healthy shareholder return,

all promoted and supported by prudent management. BPI is rated investment-grade by

two international ratings agencies, Moody's Investors Service and Fitch Ratings.

As of December 2013, BPI has 814 branches across the country, including 66

kiosks and nine overseas branches. While BPI's ATM network, known as the ExpressNet,

has a total of 2,507 terminals servicing customers nationwide. 

B. Research Design and Methodology

To have more insights on the Strategic Management Plan conducted, I, the

researcher gathered information and data through the internet in different websites, and

through description that helped in making the strategies of Bank of the Philippine Islands

(BPI).

1. Documentary Analysis – Through the use of internet I searched some information and

data about Bank of the Philippine Islands (BPI) as a banking institution that offers

financial services to be safety and secured. All information was conducted to have

specific foundation to hold and make this Strategic Management plan possible.

2. Descriptive method – a method that yields descriptions of behavior but not

necessarily causal explanations which would also help to have an insight of the

bank’s strategic plan.

Chapter 2

External Analysis

In this part, the shifting factors that directly affect the banking industry in the

Philippines were being discussed and will also serve as a guide for those transacting with

this kind of industry. It will also help one to have an idea on where to trust his future

plans.

A. Political – Legal Forces

Philippine Banking Laws

The Banko Sentral ng Pilipinas, as the Central Bank of the Philippines, has

regulated the Banking laws for the country to regulate the financial institution

establishments here. There are banking laws that banks, especially the commercial ones,

need to be followed. These are:

1. Presidential Decree No. 129 February 15, 1973 which concerns to the governing

the establishments, its operations and the regulation of the investment houses -

whereas, there were pending before Congress, prior to the promulgation of

Proclamation No. 1081, dated September 21, 1972, urgent measures proposing the

regulation of the so-called investment banks; whereas, an extensive survey and

study of the Philippine financial system had been undertaken in order to

determine its adequacy in Philippine economic development, and an integrated set

of recommendations were submitted; whereas, the recommendations, as endorsed

with modifications by the monetary authorities and made the basis of this Decree,

advocated the enactment of the statutory framework within which the

underwriting of securities may be governed and, to the extent that these entities

perform quasi-banking functions, to harmonize their operations with national

monetary goals.

2. Presidential Decree No. 1034 September 30, 1976 which is authorizing the

establishments of an offshore banking system in the Philippines - whereas,

conditions conducive to the establishment of an offshore banking system, such as

political stability, a growing economy and adequate communication facilities,

among others, exist in the Philippines; whereas, it is in the interest of developing

countries to have as wide access as possible to the sources of capital funds for

economic development; whereas, an offshore banking system based in the

Philippines will be advantageous and beneficial to the country by increasing our

links with foreign lenders, facilitating the flow of desired investments into the

Philippines, creating employment opportunities and expertise in international

finance, and contributing to the national development effort; whereas, the

geographical location, physical and human resources, and other positive factors

provide the Philippines with the clear potential to develop as another financial

center in Asia.

3. Republic Act No. 3591, as amended by PDIC Chapter is an act establishing the

Philippine deposit insurance corporations, defining its powers and duties and for

other purposes. It is composed of these sections:

Section  1. The Creation of the Philippine Deposit Insurance CorporationSection  2. Board of Directors: Composition and AuthoritySection  3. President of the Corporation, Compensation, Powers and DutiesSection  4. Definition of TermsSection  5. Deposit Insurance CoverageSection  6. Assessment of Member BanksSection  7. Sanctions Against Unsafe and Unsound Banking PracticesSection  8. Powers as a Corporate BodySection  9-12. Powers and Responsibilities and Prohibitions

Section 13. Permanent Insurance FundSection 14-16. Payment of Insured DepositsSection 17 a-c. Corporate FundsSection 17 d. Financial AssistanceSection 18. Authority to BorrowSection 19. Issuance of Bonds, Debentures, and Other ObligationsSection 20. ReportsSection 21. Sanctions and PenaltiesSection 26. Separability ClauseSection 27. Repealing ClauseSection 28. Effectivity Clause

4. Republic Act No. 8791, an act providing for the regulation of the organization and

operations of banks, quasi-banks, trust entities and for other purposes.

5. Republic Act (RA) 10641, the newly enacted law liberalizing the banking

industry “should” be a welcome respite to the abysmal economic and political

news - An Act Allowing the Full Entry of Foreign Banks in the Philippines,

Amending for the Purpose RA 7721”. The act was ratified on July 21, 2014. The

implications of this new law to our banking, economic and business industries is

depending on the reactions of the concerned players in the banking sector, the

entry of foreign banks to the country is an indication of stability, or at least a good

perception of our banking and finance environment. Or at least, the thrust of the

law is to promote equal opportunity for the banking sector that would hopefully

induce a more conducive business environment. The law allows up to 100-percent

ownership of domestic banks by foreigners and the liberalized entry of overseas

banks and financial institutions into the country. Likewise, it is a supportive law

meant to impose the same privileges granted to local banks. As such, it is intended

to strengthen or stabilize the operation of local banks and the financing industry

as a whole.

Taxes imposed on banks

Improperly accumulated earnings tax (IAET). This is imposed when the

accumulated earnings of a corporation are in excess of 100% of the paid up capital. The

IAET does not apply to listed corporations, banks and non-bank financial intermediaries,

insurance companies, companies registered with the Philippine Economic Zone Authority

(PEZA), or pursuant to the Bases Conversion Development Authority (BCDA), or other

special economic zones there is an applied 10% of the improperly accumulated taxable

income.

B. Technological Forces

Though the global economy is still shaking off the effects of the past and current

financial crises, banks in both emerging and developed economies have an opportunity to

manage enormous capital growth and wealth creation. To regain customer confidence and

earn their slice of the increasingly competitive market, banks must transform themselves.

Technology has been a big help to the great improvement of banking industry in our

country. Together with the budding gadgets there is this growing technology that had

invented to help our transactions made easy and more accessible and accurate. Through

the help of the new technology, the channels of banking transactions take only a few

seconds to get information and to transfer data to one another.

At the same time, the needs and nature of the financial services customer base

have shifted dramatically. Today, 2.5 billion people―or half the world’s adults ― don‘t

use formal financial services to save or borrow. Banks are struggling to regain the trust of

customers, counter-parties, regulators and governments after the tumult of the financial

system in 2008.

In a competitive landscape that favors the fastest and the smartest, banks and

financial services firms that invest in systems for sophisticated insights and predictive

analytics will be better positioned to emerge as market leaders. There are new ways to

understand their customer better, have more information for risk decision-making, and

develop products precisely for the needs of the customer.

By using this new set of technology, the company gets a chance to maintain their

good quality of products and services to capture the attention of the clients or customers.

This new technological forces brings a positive effect as of now by providing stabilized

and secure information.

C. Economic Forces

Each one of us wants to secure our future, particularly in education, health and

future necessities. In keenness of that security, the knowledge about investing and

handling financial aspects will help us to be secure by making of proficient and suitable

financial decisions that requires significant knowledge which provides them to assure

their needs and expectations. Putting trust to a certain company which we think can

handle our money well and manage it in a good way gives its customers the.

"In investing, what is comfortable is rarely profitable." - Robert Arnott. At times,

one has to step out of his comfort zone to realize significant gains. Know the boundaries

of it and practice stepping out of it in small doses. As much as we need to know the

market, we need to know ourselves too. Can one handle staying in when everyone else is

jumping ship? Or getting out during the biggest rally of the century? There's no room for

pride in this kind of self-analysis. The best investment strategy can turn into the worst if

one doesn’t have the stomach to see it through. Securing our future is not an immature

way of spending money to something; it is a knowledgeable way of thinking that we need

to secure our future that is why people are willing to invest or save their money to the

banks that are really trusted.

Inflation Rate

The inflation rate in Philippines was recorded at 4.90 percent in August of 2014.

Inflation Rate in Philippines averaged 8.89 Percent from 1958 until 2014, reaching an all

time high of 62.80 Percent in September of 1984 and a record low of -2.10 Percent in

January of 1959 (National Statistics Office of Philippines).

In Philippines, the most important categories in the Consumer Price Index are:

food and non-alcoholic beverages (39 percent of total weight); housing, water, electricity,

gas and other fuels (22 percent) and transport (8 percent). The index also includes health

(3 percent), education (3 percent), clothing and footwear (3 percent), communication (2

percent) and recreation and culture (2 percent). Alcoholic beverages, tobacco, furnishing,

household equipment, restaurants and other goods and services account for the remaining

15 percent. The link http://www.tradingeconomics.com/philippines/inflation-cpi provides

- Philippines Inflation Rate - actual values, historical data, forecast, chart, statistics,

economic calendar and news. Content for - Philippines Inflation Rate - was last refreshed

on October 4, 2014. 

Banks’ interest rate is much affected by the fluctuating rate of inflations. Also, the

inflation affects the pressure of the customer to choose saving in banks and on which

company to save their money or to trust their assets. And because of the population of the

rising banks in the industry the customers are still looking for the best one to hand over

their money. Decision takes critical analysis to pick the best decision for the security and

also the return of the ones’ investment.

Population Growth

The total population in Philippines was last recorded at 97.4 million people in

2013 from 26.3 million in 1960, changing 271 percent during the last 50 years.

Population in Philippines averaged 58.72 Million from 1960 until 2013, reaching an all

time high of 97.35 Million in 2013 and a record low of 26.27 Million in 1960. Population

in Philippines is reported by the Bangko Sentral ng Pilipinas.

The population of Philippines represents 1.37 percent of the world´s total

population which arguably means that one person in every 74 people on the planet is a

resident of Philippines. This page provides - Philippines Population - actual values,

historical data, forecast, chart, statistics, economic calendar and news. Content for -

Philippines Population - was last refreshed on Saturday, October 4, 2014. 

Growth in population may appear to have an impact on investment in the short

spell, in the distant future, it also strangles public finances. Therefore measures should be

adopted such that, rising unemployment rate resulting from population growth be

accommodated by private sector investments. Seemingly, structural adjustments policies

implemented by the country have had the desired investment effects. The mounting of the

population is an indicator that the company needs to develop and value their services for

the better understanding of the customer. Keeping the customer’s trust is the best thing

that the company could make. It needs to show that the trust of the customer is what the

truly values by giving a good response to them.

Employment Rate

The employment rate in the Philippines this July 2014 is estimated at 93.3

percent.  This estimate is based on the July 2014 round of the LFS (Labor Force Survey)

which did not cover the province of Leyte.  The employment rate for the same month of

2013, computed using data from the July 2013 LFS that includes the province of Leyte,

was 92.7 percent. Using data from the same LFS round, but excluding data from the

province of Leyte, the employment rate for July 2013 is also estimated at 92.7 percent.

In this report, for purposes of comparing with the July 2014 results, the July 2013 labor

and employment indicators were computed using the July 2013 LFS data that excludes

those for the province of Leyte.

Three regions, namely, National Capital Region (NCR) (89.7%), Central Luzon

(91.7%), and CALABARZON (92.0%) had employment rates lower than the national

figure.  The labor force participation rate (LFPR) in July 2014 is estimated at 64.4

percent, up from the LFPR in July 2013 which was estimated at 63.9 percent.  The labor

force consists of the employed and the unemployed.

Philippines jobless rate kept its downward trend to 6.7 percent in July of 2014

from 7 percent in April, as more people were employed in the services and industry

sectors. Figures for the province of Leyte which was hit by typhoon Haiyan are not

included. 

Among unemployed people, 63.3 percent were males. The age group 15 to 24

years old accounted for 49.3 percent of total unemployed, while the age group 25 to 34

accounted for 30.8 percent. By educational attainment, 23.2 percent were college

graduates, 13.2 percent were college undergraduates, and 32.1 percent were high school

graduates.

Among regions, the National Capital Region (10.3 percent), Central Luzon (8.3

percent), and Calabarzon (8.0 percent) showed unemployment rates higher than the

national figure (6.7 percent).

D. Socio – Cultural Forces

Probably Filipinos usually say, “Tsaka na ko mag- iinvest kapag may ipon na

ako.” Well actually one can save money whenever they can by careful planning and

knowledge they can be bound to financial freedom. Usual thing that Filipinos do is to

save money in piggy banks wherein every single coin is very much counted. But those

piggy bank days were over for it is now the generation on which Juan is wiser, more

knowledgeable and planning for his future better than before.

Living in the Philippines it is understood that one have to pay the bills, rent

or house mortgage, transportation and give money to the family but at the end of the day,

what is left to Juan? There is this knowledge that Filipinos were adopting today, first is to

save at least 20% and deposit it directly to savings account. This will not only one to

jump start investment, but will also have enough money to cover for any emergencies

that will happen in the future. Second is lessen the expenses, since having a raise happens

once a year, the best way to save money is to lessen the expenses by planning meals,

trying to stay at home more on the weekends, buying locally branded products, and

cutting down cable and landline. Third is get easy money by placing a jar at home and

whenever one have spare change he earns from public transport put it there and you will

be surprised on how much you will be saving. The common thing that Filipinos usually

lack is the knowledge on how to save money which is not actually the problem.

Acquiring knowledge on how to save money is only 10% of the battle and the rest goes to

the discipline we put in saving money itself.  

E. Environmental Forces

The most unpredictable and great threat to companies that will possibly affect its

operations is the environment as no one knows what will happen in future. Belongs to

which are the natural calamities and the health status of its market. When natural

calamities attacks and gives people damages whether property or lives, it directly affects

their financials as well as when there is an epidemic or contagious disease spreading.

With these people - especially the banks’ clients - are more likely will decrease their

transacting ability. This force elicits the company’s best ideas and can prove how well-

built and how good the company manages the different forces given by environment.

This also makes them analyze what strategies to start on.

Chapter 3

INDUSTRY ANALYSIS

This chapter shows the meaning why this kind of company still in exist into this

world. Together with the information on how this kind of industry works with the

different sectors.

A. Definition of the Industry

The banking industry is a dynamic and significant component to individuals,

corporate, small and medium businesses, national and global, economic, socio and

financial well-being. Despite the generally difficult regional conditions which prevailed

as a result of the onset of the Asian financial crisis in 1997, the Philippines has emerged

as among the most resilient economies in the region. The lesser impact on the Philippine

economy of the financial disorder which hit Asia owes much to the country is sound

macroeconomic fundamentals, as well as to the financial reform initiatives implemented

by the Central Bank of the Philippines (BSP) even before the Asian crisis struck.

Already in the 1980s, measures were being pursued to encourage greater

competition and strengthen supervisory and regulatory systems. In the 1990s, the reform

efforts were intensified. A new and more independent central bank was created in 1993.

Restrictions on the establishment of new banks, as well as of new branches, were eased.

Foreign bank entry was liberalized in 1994, which led to the establishment of 10 new

foreign bank branches in 1995. Meanwhile, tighter prudential measures continued to be

introduced such as a higher set of minimum capital requirements, liquidity cover on

foreign currency liabilities, and a cap on loans to real estate and regulations on

derivatives trading. Thus, the Philippine banks entered the crisis period in a relatively

well capitalized and robust condition.

The “Philippines Banking Outlook 2014: The Healthy Domestic Economy

Signals A Good Year For Banks,” international credit-watcher Standard & Poor’s (S&P)

projected a stable outlook for Philippine banks in 2014, citing the strong demand for bank

loans, with loan  portfolio estimated to grow  by a stable 10-15%, in a robust

consumption-led domestic economy resulting from steady remittance inflows, good

governance, and economic reforms. The strong Gross Domestic Product (GDP)

performance – 7.2% in 2013 – will support financial sector growth, said S&P. The

Philippine government forecasts a GDP growth of 6.5% to 7.5% in 2014. Any global

economy would have a manageable impact on Philippine banks, with the good

performance of the domestic economy and the country’s reliance on exports.

S&P said its view of the banking systems of the Philippines, Singapore,

Indonesia, and Thailand is one of stability. Healthy funding and liquidity profiles and

adequate capitalization of most rated banks in these countries have put them in a position

of strength going into 2014, it said. It particularly cited the Philippines as resilient to

global economy is driven by domestic demand and its emigrant work force. Philippine

growth is among the fastest among its peers in Asia,” S&P declared, saying that local

banks would continue their strong and resilient standing with good liquidity and funding

profile.

Although Philippine banks have gradually over the past decade, clearing the

remaining assets will take time,” S&P said in its report. Banks’ overall credit costs are

expected to be “manageable,” S&P said, projecting credit costs in 2014 at about 0.6%,

which banks can absorb, given their lending spreads of more than 4%. Philippine banks’

property-related exposure, including construction and mortgage loans, at 7% of total

loans as of the end of 2013, is smaller than that of other Asian banks,” S&P noted.

The gains in the banking sector notwithstanding, the BSP will continue to

implement market-oriented reforms that will further promote the soundness, stability and

global competitiveness of the Philippine banking system. To this end, the BSP will

continue to pursue legislative reforms and the alignment of supervisory and risk

management processes with internationally accepted standards.

At the top of the legislative agenda are the amendments to the 1993 New Central

Bank Act, as well as the enactment of anti-money laundering legislation. In addition,

prudential regulations will continue to be rationalized and aligned with international best

practices, while improvements will be made to regulatory oversight through the full

implementation of consolidated supervision and risk-based examination.

The combined effect of these moves should promote a stable and competitive

Philippine banking system, more suited to the growing demands of a globalised economy.

Domestic banks, with their flexibility in adapting to the changing financial environment,

will continue to be the lead players, while foreign banks, with their increased

participation, will continue to provide the additional impetus needed to sustain and

enhance the competitiveness of the Philippine banking industry

B. Market Analysis

Banks role

The bank is the channel between the individuals and the companies. This is also

the store house the country’s wealth and provides financial resources necessary for

economic development. Commercial banks accept deposits from individuals and

businesses, these deposits are then made available to the businesses which make use of

those for productive purposes of the country. Through the money deposited in the banks,

individuals as well as businesses trust their money to an institution for future use and that

will also be returned to them with interest. These moneys, to be able to earn money as

well, are being lent to the businesses and individuals to be used as their capital to start or

continue their operations and when businesses were put up many jobs opportunities were

popping up. By the time businesses were there, the individuals will also benefit to it

either by its products and services or by being part of the company creating products and

rendering services. Banks can be also considered as a market where consumers

(businesses) and the suppliers (individuals) meet to exchange assets and be used as

capital. Without banks, these two parties will have difficulty with their respective

situations.

Market volatilities in global and domestic markets led to increased demand for

risk protection. The inherent risks in many business transactions as well as the lingering

uncertainties brought by the recent economic crisis caused the demand for risk protection

instruments such as bank guarantees to rise. As of end-June 2013, the banking system’s

guarantees posted a double-digit growth of 18.3 percent to P145.0 billion from last year’s

P122.6 billion. Bank guarantees are either stand-by LCs or outstanding guarantees issued.

LCs made up 88.9 percent or P128.9 billion of total bank guarantees. The balance was

accounted for by outstanding guarantees issued at 11.1 percent or P16.1 billion. Most of

bank guarantees were accounted for by universal and commercial banks which continued

to hold the lion’s share of bank guarantees at 99.5 percent or P144.3 billion.

Credit card lines represent a large portion of total bank commitments wherein the

total commitments declined year-on-year by 36.9 percent to P608.0 billion from P962.9

billion a year ago and were mostly issued by universal and commercial banks. The

increased credit extended to households for family and other personal expenditures which

expanded by 3.5 percent to P421.0 billion from P406.8 billion last year failed to make up

for the huge drop in accounts under the item “others”. Credit card lines accounted for

69.2 percent of total commitments at P421.0 billion from 42.2 percent a year ago.

C. Competitive Analysis

BPI's main competitors are BDO and Metrobank. However, other competitors

include Land Bank of the Philippines (LBP), Philippine National Bank (PNB),

RCBC, Development Bank of the Philippines (DBP), and Citibank Philippines. BPI does

not compete with its two banking partners: BPI Family Savings Bank and BPI Direct

Savings Bank. Instead, they offer different levels of services based on the needs of the

potential BPI client(s). BPI, as the oldest and one of the largest Philippine banks, is

always trying to stave off competition to stay as one of the country's best banks.

The country’s three largest banks in asset terms retained their respective credit

ratings from Moody’s Investors Service on the back of strong capitalization, high

liquidity and prospects of continued profitability. BDO Unibank Inc., Metropolitan Bank

& Trust Co. and the Bank of the Philippine Islands (BPI) kept their Ba1 long-term local

and foreign currency deposit ratings, Moody’s said in a statement late Friday.

The short-term local and foreign currency deposit ratings of the three banks were

kept at “not prime” which means they do not fall within the “prime” ratings that measure

the capability to pay short-term obligations. The outlook for the ratings is stable.

At the same time, the bank financial strength rating of BPI and Metrobank were

revised upwards to D+ from D, which according to Moody’s metrics, means “modest

intrinsic financial strength” requiring “some” support at times. Their financial strength

grade is now higher than BDO’s D, which bagged a “positive” outlook due to better asset

quality, improving profitability and capitalization that benefitted from a $1 billion rights

issue last year.

The bank credit assessment (BCA) rating, which takes into account subsidies

from the government and bank affiliates, were raised to Ba1 from Ba2 for BPI and

Metrobank. BDO’s BCA rating was steady at Ba2. This is due to the bank’s improved

financial fundamentals, particularly asset quality and loss-absorption capacity. For

instance, both lenders’ bad loan ratio - 2.1 percent for BPI and 1.8 percent for Metrobank

- stood below the industry average.

BDO, for its part, has a “weaker” asset quality- or more bad loans- compared to

its peers, explaining the lower BCA rating as against BPI’s and Metrobank’s.

Nevertheless, BDO kept its Ba1 rating for long-term foreign currency senior unsecured

debt, while Metrobank’s local currency subordinated debt rating was retained at Ba2. The

banks’ ratings are “in line” with the Philippines’ sovereign rating of Baa1, one notch

below investment grade with a positive outlook, and the high exposure of the banks to the

local market.

“BDO, BPI, Metrobank keep” ratings By Prinz P. Magtulis (The Philippine Star) Updated 04/28/13

Based on an article on www.banksphilippines.com, the top banks in the country

today were ranked according to its assets, deposits, loans, and capitals. The top three’s

competition was very close for they compete at the first three spots as always.

Top 10 Best Bank in the Philippines as to Assets (March 2014)

1. BDO – P 1,601.922,000,000

2. Metrobank P1,151.506,000,000

3. BPI – P 994.527,000,000

4. Landbank – P 873.735,000,000

5. PNB – P 565.855,000,000

6. DBP – P 424.039,000,000

7. Chinabank – P387.860,000,000

8. Union Bank–P374.283,000,000

9. Security Bank P368.095,000,000

10. RCBC – P 354.779,000,000

Top 10 Best Bank in the Philippines as to Deposits (March 2014)1. BDO – P 1,301.732,000,000

2. Matrobank –P911.722,000,000

3. BPI – P 800.520,000,000

4. Landbank –P733.779,000,000

5. PNB – P 437.369,000,000

6. Chinabank –P334.680,000,000

7. Union Bank P306.696,000,000

8. DBP – P 245.079,000,000

9. RCBC – P 243.226,000,000

10. UCPB – P 216.993,000,000Top 10 Best Bank in the Philippines as to Loans (March 2013)

1. BDO – P 737.419,000,000

2. Matrobank–P 421.914,000,000

3. BPI – P 372.906,000,000

4. Landbank – P272.982,000,000

5. PNB – P 229.824,000,000

6. Chinabank – P 166.454,000,000

7. RCBC – P 153.695,000,000

8. Citibank – P 145.032,000,000

9. DBP – P 137.877,000,000

10.Security Bank –P121.933,000,000

 **This Loans Report excludes Interbank Loans Receivables and Net of General Loans Loss Provisions

Top 10 Best Bank in the Philippines as to Capital (March 2013)1. BDO – P 173.866,000,000

2. Metrobank –P122.189,000,000

3. BPI – P 100.231,000,000

4. Landbank – P 91.260,000,000

5. PNB – P 80.105,000,000

6. Union Bank –P48.229,000,000

7. RCBC – P 47.644,000,000

8. Chinabank - P43.002,000,000

9. DBP – P 42.929,000,000

10. Security Bank –P38.065,000,000

D. Operations Analysis

Retail banking is the banking that almost every reader will find most familiar.

Retail banking is the business of making consumer loans, mortgages and the like, taking

deposits and offering products such as checking accounts and CDs. Retail banking

generally requires significant investment in branch offices, as well as other customer

service points of contact, like ATMs and bank tellers. Retail banks frequently compete on

convenience, the accessibility of branches and ATMs for example, cost such as(interest

rates, and account service fees, or some combination of the two. Retail banks also attempt

to market multiple services to customers by encouraging customers who have a checking

account to also open a savings account, borrow through its mortgage loan office, transfer

retirement accounts, and so on.

Business banking is not altogether that different than consumer retail banking;

operations still revolve around collecting deposits, making loans and convincing

customers to use other fee-generating services. One of the primary differences is that

business customers tend to have somewhat more sophisticated demands from their banks,

often leaning on banks for assistance in managing their payables, receivables and other

treasury functions. Business banking also tends to be less demanding in terms of branch

networks and infrastructure, but more competitive in terms of rates and fees. 

There is a shrinking number of independent financial institution that focuses

exclusively on private banking, as it is increasingly conducted as a department of a larger

bank. Private banking is a euphemism for banking and financial services offered to

wealthy customers, typically those with more than $1 million of net worth. In addition to

standard bank service offerings, like checking and savings accounts and safe deposit

boxes, private banks often offer a host of trust, tax and estate planning services. Perhaps

not surprisingly, the bank secrecy laws of countries like Switzerland have made them

attractive locations for conducting private banking. 

BDO, BPI and Metrobank are the biggest commercial and universal banks in the

Philippines. Each one has its own strengths, so not one of the three, to mind, can

categorically claim that it's the most powerful bank in the country.

BPI, Metrobank and other banks, however, can't but agree that BDO has been the

fastest-growing bank since BDO was acquired from its original owners by the biggest

shopping mall operator in the country.

To ordinary people, however, the best banks are the ones that:

offer various banking services for free or at low costs

offer convenience to customers, such as a lot of branches, ATMs and longer banking

hours

offer safe investment opportunities

give back to the community

contribute to the stability of the country's banking system

Because not one bank offers all the services, some usually have accounts in more

than one bank. These banks offer a lot of services, including Internet banking, investment

options and private and corporate banking, but in this research only part of those that

interest most of the consumers will be mentioned, or that are unique to one bank.

Price

Banks perform the service of safekeeping, managing, and balancing our funds for

a fee, or actually, several fees: the trust or management fee, custodian fee, audit fee, and

early redemption fee, just to name a few. A “price conscious” buyer of anything, unit

investment trust funds or UITF fees matter significantly. To simplify things, the two most

significant fees are the annual management fee and the early redemption fee, which will

have to be paid up in case one decide to sell his units before the minimum holding period

expires.

Below are the Banco de Oro (BDO), Bank of the Philippine Islands (BPI), and

Metrobank’s comparison in terms of minimum investment, fees, and minimum holding

period for the three UITF types mentioned above.

Money Market Fund

BDO BPI MetrobankMinimum Investment 100,000 pesos 50,000 pesos 50,000 pesosMinimum Additional 100,000 pesos 10,000 pesos 25,000 pesosManagement/Trust Fee 0.50% per year 0.75% per year 1.00% per yearEarly Redemption Fee None 0.25% of original

investment50% of income

Minimum Holding Period None 7 days 7 days

Balanced FundBDO BPI Metrobank

Minimum Investment 10,000 pesos 50,000 pesos 25,000 pesosMinimum Additional 10,000 pesos 10,000 pesos 25,000 pesosManagement/Trust Fee 1.00% per year 1.50% per year 2.00% per yearEarly Redemption Fee 0.50% of original

investment0.50% of original

investment50% of income

Minimum Holding Period 30 days 90 days 90 days

Equity FundBDO BPI Metrobank

Minimum Investment 10,000 pesos 50,000 pesos 25,000 pesosMinimum Additional 10,000 pesos 10,000 pesos 25,000 pesosManagement/Trust Fee 1.00% per year 1.50% per year 2.00% per yearEarly Redemption Fee 1.00% of original

investment0.50% of original

investment50% of income

Minimum Holding Period 30 days 90 days 90 days

Service Proof

BPI

BPI when comes to services has a lot of ATMs and branches, with 1,600 ATMs

spread out all over the country. It's also the only one that directly accepts peso bills for

deposit at several of its ATMs in Metro Manila without using an envelope and with the

ATM deposit instantly credited.

BPI also pioneered rural banking in the Philippines, as its countryside banking

operations preceded that of many other banks' rural banking operations by many years.

Today, it maintains a large rural branch network, with some branches dating back to the

Spanish or American colonial periods. Its branch network of 831 branches is by far the

largest branch network of any bank in the Philippines.

It gives back to the community:

*It holds the annual Search for 10 Outstanding Expat Pinoy Children.

*Its BPI Foundation runs:

microfinance trainings in partnership with Ateneo de Manila University in major

cities

Show Me, Teach Me, SME Empowering Entrepreneurs

BPI-DOST Science Awards

BPI College Scholarship program

Climate Change Project

Awards:

Best Bank in the Philippines 2009 from Global Finance

Best Bank in the Philippines 2009 from Euromoney

Best Bank in the Philippines 2009 from FinanceAsia

BDO

BDO's very competent and driven management; BDO will raise P10 billion of

Tier 2 capital, and boosting its capital adequacy ratio by 2 percent to 3 percent; With the

completion of the merger, BDOU will have a network of 733 branches and 1,200

automated teller machines. In line with that it has a longer banking hours to give service

not only to its customers but also to those doing interbank transactions. It is also open on

Saturdays, Sundays and most holidays (for branches located in SM malls).

Banco de Oro is a full-service universal bank. It provides products and services to

the retail and corporate markets including lending (corporate,middle market, SME, and

consumer), deposit-taking, foreign exchange, brokering, trust and investments, credit

cards, corporate cash management and remittances. Through its subsidiaries, the Bank

offers Leasing and Financing, Investment Banking, Private Banking, Bancassurance,

Insurance Brokerage and Stock Brokerage services.

It gives back to the community:

BDO Foundation runs:

partnership with Gawad Kalinga

SME entrepreneurship program

*BDO's majority owner, the SM Group, runs the SM College Scholarship program.

Awards:

Best Emerging Market Bank in the Philipines 2010 from Global Finance

Best Bank in the Philippines 2010 from FinanceAsia

Best Foreign Exchange Provider in the Philippines 2010 from Global Finance

Metrobank

This bank offers a Zero-Fee credit card -- Its M Free Mastercard is Forever Free

of annual fee. This is significant as most credit cards typically charge 1,400 pesos or

more for annual membership. The Metrobank Group has a combined network of over 800

local and international branches/offices, remittance offices and subsidiaries worldwide. It

has 557 domestic branches and 32 offices in New York, Hong Kong, Tokyo, Osaka,

Seoul, Pusan, Guam, Taipei, Kaohsiung, Madrid, Barcelona, Vienna, Rome, Bologna,

Milan, Singapore, Chicago, Hawaii, and Shanghai.

It gives back to the community:

Metrobank Foundation runs the following:

Search for Outstanding Teachers

Metrobank Scholarship Program

Outstanding Policement in Service

Outstanding Philippines Soldiers

Awards:

Best Bank in the Philippines 2010 from Euromoney

Best Managed Company (Medium Cap) in the Philippines 2010 from AsiaMoney

Best Domestic Bank in the Philippines 2010 from AsiaMoney

E. Technological Analysis

Banks are intensive users of both IT and financial technologies, and have a

wealth of data available that may be helpful for the general understanding of the effects

of technological change. The research suggests improvements in costs and lending

capacity due to improvements in “back-office” technologies, as well as consumer benefits

from improved “front-office” technologies.

Innovations in information processing, telecommunications, and related

technologies – known collectively as “information technology” or “IT” – are often

credited with helping fuel strong growth in the U.S. economy, although questions remain

about the relative importance of IT versus other factors. The extensive research on the

banking industry may help in the general understanding about the effects of technological

change. The category of Depository and Non-depository Financial Institutions – of which

banking is an integral part – is the most IT-intensive industry in the U.S. as measured by

the ratio of computer equipment and software to value added

Banks have been responding well to market innovations for greater banking

convenience. In recent years, electronic banking (e-banking) platforms have widely

evolved from automated teller machine (ATM) networks, internet banking, mobile phone

banking to the more sophisticated use of electronic money (e-money) instruments such as

cash/remittance cards and electronic wallet which are accessible via mobile phones or

other portable/smart devices such as tablets and mobile data packets. To keep pace with

changing market dynamics, banks have capitalized on the use of e-banking technology to

provide fast, efficient and reliable services to a broader customer base.

As of end-June 2013, banks with ATM network reached 74 (from 67 banks a year

ago). These banks were composed of 69 domestic banks and five foreign bank branches

and subsidiaries. In terms of year-on-year growth, off-site ATMs or stand-alone ATM

units outpaced the growth of on-site ATMs. As of end-June 2013, off-site ATMs grew by

20.5 percent to 5,405 units compared to on-site ATM’s growth of 12.9 percent to 7,724

units. This broadly indicated the growing usage of mobile ATMs as additional financial

access points that cater to various clienteles.

By banking group, universal and commercial banks continued to hold the lion’s

share of the entire ATM network at 86.0 percent (slightly down from 86.2 percent). The

remaining shares went to thrift banks at 11.9 percent (unchanged from year ago) and rural

and cooperative banks at 2.1 percent (up from 2.0 percent), respectively. The share of

foreign banks stood at only 1.1 percent (down from 1.2 percent).

Aside from ATMs, banks have effectively utilized other e-banking platforms. As

of end-June 2013, there were 62 banks (down from 63 banks a year ago) offering

electronic wallet, 29 banks (down from 30 banks a year ago) with cash/remittance card

products, 43 banks (up from 39 banks) with internet banking, 16 banks (unchanged)

offering phone banking (computer-based, non-mobile), 30 banks (up from 24 banks)

engaged in mobile banking, 13 banks (up from 12 banks) with proprietary services and

35 bank6 (unchanged) with hybrid mobile/internet via BancNet-MegaLink switch

banking services. It is important to note that banks’ e-banking activities are constantly

monitored and regulated by the BSP to ensure compliance with appropriate risk

management and internal control measures and by doing so, safeguard the protection of

consumers.

It’s a world where convenience and customization are the norm, and customers

come first. It’s about preference and presence and knowing what customers want, and

knowing exactly when and where to offer it to them. And in today’s world, customers are

loyal to experiences and not companies. The key challenges that face the financial sector

are how to combine all their channels in the most effective, and efficient way, while

ensuring that they provide their customers with a personalized and interactive experience

that engages them in more relevant and convenient ways.

The competing banks’ offered technologies:

BPI BDO Metrobank

Automated Teller Machine or ATM Touch Screen computers Mobile banking Online transactions

Automated Teller Machine or ATM Touch Screen computers Mobile banking Online transactions

Automated Teller Machine or ATM with voice activated computer Mobile banking Online transactions

F. Financial Analysis

While there may be more than 700 banks in the Philippines, the six largest

accounts for more than 60% of total assets. Despite the fact that many lenders around the

world have taken a hit due to the global economic slowdown, most of the banks in the

Philippines are doing quite well, posting good numbers in 2011. Moreover, the country’s

banks are stable, with capital adequacy ratios (CARs) well above the required minimum

and plentiful liquidity. As ranked by assets, the following are currently the top three

largest banks in the country.

Bank of the Philippine Islands (BPI)

The oldest bank in the Philippines, celebrated its 160th anniversary in 2011, BPI

is owned by Ayala Corporation, the country’s largest conglomerate. The bank is the

third-biggest lender in terms of assets and reported year-to-date net income of around

P9.8bn ($222.5m) in September 2011. Major events for the bank in 2011 included the

completion of its acquisition of the trust and investment management business of ING

Bank Manila. As a result of this purchase, BPI has become the manager, advisor and

administrator of 32 investment funds. The lender has the largest branch network in the

country. As of December 2013, BPI has 814 branches across the country, including 66

kiosks and nine overseas branches. While BPI's ATM network, known as the ExpressNet,

has a total of 2,507 terminals servicing customers nationwide. About 1 million of its

depositors are overseas Filipino workers.

Banco de Oro Unibank (BDO)

 As of September 2011 BDO, a full-service universal bank and a member of the

San Miguel (SM) Group, one of the largest conglomerates in the Philippines, was the

country’s largest bank in terms of total resources, customer loans, total deposits and

assets under management. The bank has risen to the top in part due to its merger with

another lender, Equitable PCI Bank, in 2006. BDO reported net income of P7.6B

($172.5m) for the first nine months of 2011, up 19% from the P6.4B ($145.3m) it earned

for that period in 2010.

BDO’s lending operations posted above-industry growth rates, with gross

customer loans increasing by 24% to P620.8bn ($14.1bn) in the first three quarters,

compared to a 19% industry average.

The bank also reported that total deposits increased 15% to P820.6bn ($18.6bn)

on the back of low-cost deposits generated from an expanded branch network. According

to a company statement in November 2011, despite these positive results for the first nine

months of 2011, the bank will maintain a cautious stance in 2012 due in part to the

economic conditions in the EU and US.

In a bid to increase the bank’s CAR to cope with any rise in loan demand, in

October 2011 BDO sold P6.5bn ($147.6m) worth of debt notes qualifying as Tier 2,

meaning supplementary capital, completing its P15bn ($340.5bn) Tier 2 capital build-up

programme. In a press release, BDO said that this issuance would “supplement the bank’s

capital position and support its business expansion plans”.

As of December 2013, BDO has a total of more than 814 operating domestic

branches, 2,263 ATMs, and 12 Cash Accept Machines nationwide plus a branch in Hong

Kong.

Metropolitan Bank (Metrobank)

Metrobank, which was founded in 1962, is the country’s second-largest bank in

terms of assets. Metrobank ended the third quarter of 2011 with total assets of P916.1bn

($20.8bn), and retained the top spot in terms of equity at P104.2bn ($2.4bn), according to

a company statement. The bank reported consolidated net income of P8.9bn ($202m) for

the first nine months of 2011, representing a 47.6% increase over the P6bn ($136.2m)

earned for the same period in 2010. As a result, annualised return on average equity

improved from 10% to 12.3%.

For the third quarter alone, net income grew 52.8% to P2.8bn ($63.6m), from the

P1.8bn ($40.9m) earned in the same quarter in 2010. The bank reported that despite

competitive pressures, the net interest margin showed a slight improvement from 2010,

thanks to the 14.8% expansion seen in loans and receivables to P432.8bn ($9.8bn),

coupled with migration towards a more favourable mixture of deposits.

Metrobank has built up a large consolidated network of over 1400 ATMs, more

than 760 domestic branches and 38 foreign branches, subsidiaries and representative

offices. The lender has been expanding internationally and plans to continue to set up

operations overseas. In 2010 Metrobank inaugurated its wholly owned subsidiary,

Metropolitan Bank China, which is located in Nanjing.

Metrobank ended 2013 with 632 branches with selected branches in Metro Manila

and the countryside relocated to maximize visibility and greater reach to its clients. The

Company also deployed a total of 1,385 automated teller machines in strategic locations

nationwide. Remittance centers, Metrophone, Mobile Banking, Metrobankdirect, and Tax

direct facility were also continuously upgraded to help MB remain in a strong position as

well as to retain its leadership.

Chapter 4

Company Analysis

This chapter discusses the history and how the company was formed. This

research helps the reader to understand, to know and to appreciate the efforts of

individual in preparing their own company. This company analysis provides information

that keeps the company’s foundation as a growing company in that industry.

A. History

The bank of the Philippine Islands is a commercial bank with an expanded

banking license. Together with its subsidiaries BPI offers corporate banking, consumer

banking and lending, investment banking, asset management, securities distribution,

insurance services, leasing and foreign exchange. These services are offered to a wide

range of customers, from multinational corporations, government agencies, large

corporations, small-and-medium sized enterprises (SMEs) and individuals.

For many years after its founding, BPI was only the domestic commercial bank in

the Philippines. Its business was largely focused on taking deposits, extending credits to

exporters and traders of raw materials and commodities, and funding public

infrastructure. Its business grew as the country rose in prominence as an agricultural

exporter.

In the early 1980s, the Monetary Board of the Central Bank of the Philippines

(now Banko Sentral ng Pilipinas) allowed BPI to evolve into fully diversified universal

bank, to offer investment and consumer banking services in addition to tradition

commercial banking activities. This transformation into a universal bank was

accomplished through both organic growth and mergers and acquisitions.

Today, BPI is not only known as the oldest bank in the Philippines – and indeed

in the Southeast Asia – but it is also acknowledged leader in Philippine banking with total

assets of Php 1.2 trillion, market capitalization of Php 302.5 billion, and a 2013 full-year

net income of Php 18.8 billion.

In January 2014, the bank successfully raised Php 25 billion in a stock right

offering, in what is to-date the largest capital markets transaction in its 162-year history.

On October 12, 1971, Bank of the Philippine Islands has been enlisted in the

Philippine Stock Exchange issuing common stocks to the public and carrying the symbol

‘BPI’ in which it is very popular.

The Old BPI Logo used until 2008

The New BPI Logo 2008-present

The new BPI color

The new BPI logo stands out in the new color. The red from the old signage is

chosen for its vibrancy. Also, it is emphasized to further distinguish it from other major

competitors whose primary color is blue.

The new BPI font

BPI chose a new font to rejuvenate its identity. DAX is chosen for it’s more

modern and classic look, which updates BPI but retains its authoritative expertise.

B. Ownership

Shareholdings Structure

BPI’s Ownership Structure as of June 30, 2014:

PCD Nominee Corp. (Non-Filipino & Filipino) 35.0994%

Ayala Corp. 21.8512%

Ayala DBS Holdings Inc. 21.3176%

AC International Finance Limited 8.6999%

Roman Catholic Archbishop of Manila 7.6620%

Others 5.3699%

TOTAL 100%

C. Management Structure

BPI Senior ManagementAs of June 30, 2014

President CONSING, CEZAR P.

Executive Vice PresidentsALEJO, NATIVIDAD N.GOTUACO, JOSEPH ALBERT L.PANER, ANTONIO V.SALCEDO, ALFONSO L

Senior Vice PresidentsALONSO, JOSEPH ANTHONY M.ANG, OLGA S.BIACORA, ESTELITO C.CALLEJA, MICHAEL D.CASTRO, REYMUNDO S.CORCUERA, FIDELINA A.DEL MUNDO, ANICETA P.DIMAYUGA, RAUL D.GARCIA, PAUL JOSEPH M.GO, MA CRISTINA L.GUZMAN, MA CORAZON G.JAVIER, MARIA THERESA M.KING, ANGELIE O.LOPEZ, MARIE CHRISTINE O.MADRILEJO, EDGARDO O.MARANAN, FLORENDO G.MARQUEZ, PILAR BERNADETTE C.

MERCADO, EUGENIO P.MIRANDA, MARIO T.OCAMPO, MARIE JOSEPHINE M.OPULENCIA, RAMON G.REMO, MARIA CORAZON S.SANTIANO, ANGELA C.TAGAZA, MANUEL C.TECSON, JUDY K.VELOSO, ROLAND GERARD JR. R.VER, HEIDI P.YNGENTE, SYLVIA P.YU, ROY EMIL S.

Vice PresidentsALBERTO, ALBERT I.ALDEGUER, NESTOR S.ALVIAR, JOCELYN C.AMADO, FRANCES S.ANICETO, HOMER L.ARCEO, HENRY C.AYSON, REMARIE SUZETTE A.BABLES, DANIEL S.BANDERA, RUTH B.BASA, NIEVES J.BAUTISTA, ROBERTO O.BEDNAR, MARIA CONCEPCION A.BENEDICTO, ROSARIO J.BIASON, MA NANETTE A.BUENO, IRENE R.CASTILLO, MA. JUDITH L.

CEBRERO, JAENA A.CERVANTES, MIGUEL P.CHUA, SMITH L.CHUIDIAN, TOMAS S.CRISOSTOMO, MARIA ROSARIO F.CRUZ, MA LUISA L.CRUZ, NAPOLEON I.CRUZ, ROSEMARIE B.DAVID, DENNIS S.DAYRIT, ARLENE S.DE GUZMAN, IVY MARIA E.DE JESUS, MARIE JOAN SOCORRO J.DE PERALTA, YVETTE MARI V.DE VERA, JOSE M.DELA PAZ, CECILE CATHERINE A.DIAZ, ODETTE S.DIOMAMPO, IRENE A.DULAY, MELINDA V.DYTOC, BRENNO C.EALA, JO ANN B.ENRILE, ROBERTO MARTIN S.ERGUIZA, SUSAN L.ESCOLAR, RICHMOND EZER O.ESPIRITU, RUBEN ENRIQUE A.EVARISTO, MARIO GERARDO Z.FERNANDEZ, JOSEPHINE F.FERNANDEZ, RINALDO H.FLORENTINO, MARIA ANGELICA G.GALVEZ, ROBERTO E.GANGOSO, JESUSA CAMILA V.GARCIA, MARIA PAZ A.GARCIA, SANTIAGO L.GATUSLAO, CARLO CARMELO S.GAYARES, MARITA SOCORRO D.GAYOS, ROSA MARIA L.GO, NOEMI G.GOMEZ, JESUS ANGELO O.GONZALEZ, FLORENTINO T.GOZAR, CARMENCITA LILIA B.GUEVARA, JENNY C.GUZMAN, BEATRICE MARIE R.IBARRA JR, LUIS D.JALANDONI, CARLOS A.JAVIER, MA CRISTINA U.JEREZA, JOSE RAUL E.JIMENEZ, EDGARDO R.KATIGBAK, MARIAN T.

KAWPENG, MARIJOY Y.KHO, AILEN C.KIMSENG, DANILO L.LAMASUTA, AILEEN S.LAZA, CONRADO E.LEONG, MARIA ANTONIA O.LIM, MARIA TERESA ANNA K.LIM, ROSELLER B.LIMKETEE, AILEEN BERYL A.LUALHATI, GENARO N.LUDOVICE, IRMINGARDO O.LUKBAN, MARIA CONSUELO A.LUSTRE, FRANCISCA ANN M.MABIASEN, RODOLFO K.MAGPANTAY, GERARDO E.MANALO, SUSANA M.MARAMAG, ANGELA PILAR B.MARCOS, NOELITO C.MARQUEZ, MA. CARMINA T.MENDIOLA, NICANOR A.MINGLANA, JEROME B.MIRANDA, MELVIN M.MONTELIBANO, MA LOURDES B.MUNOZ, BARBARA S.NARBONETA, ELFRIDA S.NARCISO, MA CONCEPCION Q.NAVARRETE, ARMANDO T.OLIVA, ARNOLD E.PARUNGAO, JOSEPH PHILIPANTHONY S.PERALTA, RONALDO FRANCISCO B.PERTIERRA, RAFAEL J.PINEDA, DONARBER N.RAMIREZ, MARIA SOCORRO D.RARELA, GERARDO I.RICARDO, VICTORIA MARIE G.SALVAN, JOSE ESTEBAN J.SAN DIEGO, MA CRISTINA L.SANGCO, JOSE MARTIN S.SANTAMARIA, MARY CATHERINE ELIZABETH P.SANTOS, ANDRE ANGELO S.SANTOS, ENRICO A.SANTOS, STEPHEN O.SEVERINO, RUBY ROSARIO J.SEVILLA, CHRISTMAS G.SILVA, ELISA M.

SINGIAN, JENNIFER GAYLE P.SISON, ANA MARIA C.SORIANO, MA DINA F.STA ANA, ANA LIZA C.SUMAGPANG, SYLVIA P.TACO, ELIZA MAY T.

TADIQUE, ROMMEL D.TAN, ARTHUR NOEL S.TANCHOCO, CECILIA P.UNTALAN, BARBARA ANN C.YSMAEL, PAUL RODERICK A.

D. Organizational Structure

BPI Board of Directors for the Term 2014-2015

(As of April 10, 2014 BPI Annual Stockholders' meeting)

Members of the Board of Directors

1. Mr. Jaime Augusto Zobel de Ayala II

2. Mr. Fernando Zobel de Ayala

3. Mr. Cezar P. Consing

4. Ms. Vivian Que Azcona

5. Mr. Romeo L. Bernardo

6. Mr. Octavio V. Espiritu

7. Ms. Rebecca G. Fernando

8. Mr. Xavier P. Loinaz

9. Mr. Aurelio R. Montinola III

10. Ms. Mercedita S. Nolledo

11. Chief Justice Artemio V. Panganiban

12. Mr. Antonio Jose U. Periquet

13. Mr. Oscar S. Reyes

14. Dr. Astrid S. Tuminez

15. Ms. Ma. Dolores B. Yuvienco

INDEPENDENT DIRECTORS

1. Mr. Romeo L. Bernardo

2. Mr. Octavio V. Espiritu

3. Mr. Xavier P. Loinaz

4. CJ Artemio V. Panganiban

5. Mr. Antonio Jose U. Periquet

6. Dr. Astrid S. Tuminez

E. Human Resource

Individual talent and collective strength from the lifeblood of the Bank’s human

resource, BPI in 2013 enjoyed another landmark year with the introduction of many

product and services innovation, thanks in no small part to the skills, commitment and

drive of BPI’s 13,000-strong organization, fueled by the Bank’s many employee

engagement and talent management programs.

The Bank has, in fact, exceeded the Global Financial Institutions benchmark for

Employee Engagement of the Asian Banking and Finance Awards, garnering an overall

score of 82% and showing strength in three main engagement drivers; career

development and opportunities, goal clarity, and leadership. Coming from this milestone,

the Bank introduced more initiatives to boost competency development among its

officers and staffs; worked to accelerate promotions; and identified the right metrics to

better align human resource measures with corporate strategy.

Moreover, it is introduced a number of employee engagement efforts to sustain or

further boost employee commitment. On the year 2013, the Bank has updated their

headcount to 13,024 from 11,090 last 2012 wherein 70% of the population is compose of

females with a number of 9,150 and the rest 30% of the population is composed of males

with a number of 3,874. Of the 1,934 employees hired during the previous year, majority

were female with a count of 1,330 and below 30 years old with a number of 1,771 (mixed

male and female). Most of the hiring happened in Luzon.

Recruitment and training efforts were geared towards strengthening the sales and

service orientation of the organization. To augment the current sales force of the Bank, a

core group of marketing specialists were hired and underwent the Sales Management

Training Program. Financial advisory courses aimed at enhancing the investment

management and financial consultancy skills of frontline personnel were continuously

conducted. For the senior executives, a pioneering online Leadership Development

Program in partnership with the Harvard Business School was launched to further

develop core leadership competencies. The Program allowed the participants to access

the Harvard Business School cases and Harvard Business Review articles online. Weekly

case discussions were facilitated by Harvard alumni from BPI and other Ayala

companies. As part of the ‘WOW the Customers’ campaign, all branch personnel

underwent training on the service attributes to ensure consistent delivery of service across

branches. This was complemented by the ‘Expect More Smiles’ program earlier

discussed in Branch Banking. The feedback obtained from this program allowed frontline

personnel to further improve their manner of conduct during face to face situations with

clients.

In partnership with the World Wildlife Fund, the Bank implemented an

environmental program, the BPI I-GIVE Program (I Get Involved, I Volunteer for the

Environment), to involve the whole organization in the global efforts to save the

environment. Campaigns were launched to promote energy, paper, and water

consumption reduction. Carpooling was encouraged among the employees.

The Bank remained committed at nurturing the organization and sustaining

an effective workforce by providing more performance based rewards and incentives,

strengthening career development, and instilling a culture of employee volunteerism and

social responsibility especially during times of natural calamities and disasters.

F. Mission Statement

WE BELIEVE in the central role that private enterprise plays in economic

development.

WE BELIEVE that our corporate mission is to be the leading private financial

institution in the Philippines in terms of professional competence, service quality,

responsible corporate citizenry, and overall growth and stability; and to be an established

ASEAN financial institution with a creditable worldwide outreach.

G. Vision Statement

WE BELIEVE that we have a responsibility to manage the business for the

maximum benefit of our customers while adopting the highest standard of integrity; to

offer the widest possible range of financial services that is responsive to their needs; and

to adopt an objective attitude towards change and innovation, ever mindful of improving

service quality and operating efficiency.

WE BELIEVE that we have a responsibility to develop the potential of our

employees to the fullest by providing an environment conducive to their personal and

professional growth; and to foster a value system held in common throughout the

institution in order that we may all share a coherent sense of purpose and direction. 

WE BELIEVE that we have a responsibility to attain, over time and within

exacting standards of prudent management, the highest possible return on the investment

of our shareholders. 

H. Company Objectives

It is BPI’s objective is to help Filipinos achieve their financial objectives by

helping them make more intelligent and informed financial decisions. In a nutshell, we

want to help them change the way they think about money, so that they can get the best

out of life. Hence, in March 2014 they adopted a new slogan: “Make the Best Happen”.

As a good corporate citizen, we want to make the best happen for all our

constituencies. BPI Foundation, which focuses on entrepreneurship, education and the

environment, is a very important part of what they stand for. The Foundation works to

encourage entrepreneurships amongst families of Overseas Filipino Workers.

BPI Foundation is built:

   

» To contribute towards the uplift of the quality of Philippine education in identified

areas in need of development;

» To support programs that provide opportunities for expansion of microenterprises

and small and medium enterprises (SMEs), generation of employment and livelihood

opportunities;

» To catalyze programs for the delivery of basic social services in its communities; and

» To contribute towards the renewal and enhancement of societal values.

I. Strategies

The Bank’s are planning for the best of its operation and to continue building

good rapport with its clients by:

Infusing energy into an established brand, the Expect More Campaign effectively

revitalizes BPI as a brand. It threads the look, tone and intentions of BPI’s range of

products and services, achieving a more cohesive and strengthened impact.

New look of BPI Branches and improved ATMs to give more convenience to every

consumer.

In 2013, our ATM network grew by 21%, for a total of 2,181 ATMs and 326 cash

deposit machines.

In March 2013, BPI Family Savings Bank launched its first credit card, in response to

the strong consumer demand for a low-rate, no-frills alternative to cash.

An eDonations facility was introduced to make it easy for our customers to provide

assistance to victims of typhoons and other calamities via different foundations and

charitable organizations.

An important strategy we adopted towards client acquisition was our “My Branch,

My Store” program, tasking each and every retail/branch manager to treat his branch

as his own business, challenging him to understand his customers’ needs better.

In turn, BPI meets this challenge by now designing and packaging its products and

services with a more factor, an additional feature that gives the market more.

J. Market Analysis

The bank adopted the slogan “Let’s make it easy”, in May 2010. This slogan

spoke of the need in the country, in a country where 78.5% of the population is

unbanked, to make banking more accessible. In the four years since they have adopted

the slogan, they have made the every effort to be true to it. Since then, they have grown

their client base by 68%, or 2.7 million and now serving 6.7 million clients during the

year 2013. A small but growing number of clients bank with BPI Globe BanKo, the

micro lending joint venture between BPI, Globe Telecom and Ayala Corporation.

Expanding the ways by which clients can bank with us has been a key driver of

growth in our client base. Since it introduced automated teller machines to the Philippines

in 1983, BPI has been at the forefront of banking via electronic channels—online

banking, mobile banking, phone banking. Today, a significant proportion of their clients

are enrolled in at least one of their electronic channels, and those enrolled are active users

of these channels. When one adds transactions executed via their online, mobile and

phone banking applications to transactions executed via their automated teller and cash

acceptance machines, almost 70% of the Bank’s 270 million transactions are now

electronically. In contrast, transactions executed “traditionally” via a branch teller now

account for 30% of the Bank’s transactions. Growth in electronic channel usage has

allowed our front-line personnel to devote more time to identifying and meeting their

clients’ financial needs. Higher and more robust transaction volumes should follow.

In 2013, the Bank’s total deposits increased by 23% at Php 989 billion, from

previous year’s Php 802 billion. Total deposits include savings and current accounts. The

Bank’s financial performance in 2013 is built on the strength of its wide range of retail,

commercial and corporate banking products and services tailored to the needs of its

customers, offered through the Bank’s various business segments and channels.

1. Products & Services

2. Prices

a. Deposit Rates - Savings and Checking  

 Type of Deposit

AccountRequired Initial

DepositRequired Minimum

Monthly ADB1

Required Daily Balance2 to Earn

Interest

Interest Rate3

(Per Annum)

Peso Savings AccountJumpstart Savings Php 100 Php 1,000** Php 2,000 0.250%

Easy Saver Php 200 N.A. Php 1,000 0.250%Express Teller Savings Php 500 Php 3,000 Php 5,000 0.250%

Passbook Savings Php 10,000 Php 10,000 Php 25,000 0.250%BPI Advance Savings

Account with Passbook

Php 100,000 Php 100,000 Php 100,000 Less than Php 100,000 N.A.100,000 - 999,999 0.750%1M and above 1.500%

Maxi-Saver4Savings with ATM

Php 50,000 Php 50,000 Php 50,000 Less than Php 50,000 N.A.50,000 - 499,999 0.250%500,000 - 999,999 0.375%1M and above 1.000%With 0.5% BONUS p.a. if no withdrawal within a month

Maxi-Saver4Savings with Passbook

Php 75,000 Php 75,000 Php 75,000 Less than Php 75,000 N.A.75,000 - 499,999 0.250%500,000 - 999,999 0.375%1M and above 1.000%With 0.5% BONUS p.a. if no withdrawal within a month

Maxi-Saver4Savings with Passbook

(Corporate)

Php 250,000 Php 250,000 Php 250,000 Less than Php 250,000 N.A.250,000 - 499,999 0.250%500,000 - 999,999 0.375%1M and above 0.500%With 0.5% BONUS p.a. if no withdrawal within a month

Get Started Savings Account with Life Insuranceo ATM Php 25,000 Php 25,000 Php 25,000 0.250%

o Passbook Php 75,000 Php 75,000 Php 75,000 0.250%BPI Save-Up

Automatic Savings + Insurance

N.A. Php 1,000 Php 5,000 0.250%

BPI Save-Up High Automatic Savings

N.A. Php 1,000 Php 5,000 Php 5,000 - 49,999 0.250%50,000 - 499,999 0.500%500,000 and above 0.625%

Peso Checking AccountExpress Teller

CheckingPhp 10,000 Php 10,000 N.A. N.A.

Business Checking Php 10,000 Php 10,000 N.A. N.A.Ka-Negosyo CA with ATM and Statement

Php 10,000 Php 10,000 Php 50,000 0.250%

Ka-Negosyo CA with Statement

Php 10,000 Php 10,000 Php 50,000 0.250%

Ka-Negosyo CA with Passbook

Php 25,000 Php 25,000 Php 100,000 0.250%

Maxi-One with Statement

If daily balance is:

o Individual Php 25,000 Php 25,000 Php 25,000 Php 25,000 - 999,999 0.250%o Corporate Php 50,000 Php 50,000 Php 25,000 1,000,000 and above 0.350%

Maxi-One with PassbookIf daily balance is:

o Individual Php 250,000 Php 250,000 Php 25,000 Php 25,000 - 999,999 0.250%o Corporate Php 500,000 Php 500,000 Php 25,000 1,000,000 and above 0.350%

Dollar AccountExpress Dollar

Savings$ 500 $ 500 $ 500 0.250%

Dollar Savings with Passbook

$ 500 $ 500 $ 500 0.250%

Third Currency Savings Account*AUD -Australian Dollar Passbook

Savings

AUD 500 AUD 500 AUD 500 1.25%

CAD -Canadian Dollar Passbook

Savings

CAD 500 CAD 500 CAD 500 0.250%

CHF-Swiss Franc Passbook Savings

CHF 500 CHF 500 N.A. N.A.

CNY/RMB – Chinese Yuan

Passbook Savings

CNY/RMB 3,500 CNY/RMB 3,500 CNY/RMB 3,500 0.100%

EUR- Euro Passbook Savings

EUR 500 EUR 500 EUR 500 0.025%

GBP –British Pound Passbook

Savings

GBP 500 GBP 500 GBP 500 0.250%

HKD - Hong Kong Dollar Passbook

Savings

HKD 500 HKD 500 HKD 500 0.050%

JPY- Japanese Yen Passbook Savings

JPY 50,000 JPY 50,000 N.A. N.A.

  

BPI Family Savings Bank 

Type of Deposit Account

Required Initial Deposit

Required Minimum

Monthly ADB1

Required Daily Balance2 to Earn

Interest

Interest Rate3

(Per Annum)

Peso Savings AccountJumpstart Savings Php 100 Php 500** Php 1,000 0.500%

Easy Saver Php 200 N.A. Php 1,000 0.500%Express Teller Savings Php 500 Php 1,000 Php 3,000 0.500%

Passbook Savings Php 10,000 Php 10,000 Php 25,000 0.500%BPI Advance Savings

Account with Passbook

Php 100,000 Php 100,000 Php 100,000 Less than Php 100,000 N.A.100,000 -999,999 1.000%1M and above 1.750%

Maxi-Saver4Savings with ATM

Php 25,000 Php 25,000 Php 25,000 Less than Php 25,000 N.A.25,000 - 499,999 0.500%500,000 - 999,999 0.625%1M and above 1.250%With 0.5% BONUS p.a. if no withdrawal within a month

Maxi-Saver4Savings with Passbook

Php 50,000 Php 50,000 Php 50,000 Less than Php 50,000 N.A.50,000 - 499,999 0.500%500,000 - 999,999 0.625%1M and above 1.250%With 0.5% BONUS p.a. if no withdrawal within a month

Maxi-Saver4Savings with Passbook

(Corporate)

Php 150,000 Php 150,000 Php 150,000 Less than Php 150,000 N.A.150,000 - 499,999 0.500%500,000 - 999,999 0.625%1M and above 0.750%With 0.5% BONUS p.a. if no withdrawal within a month

Get Started Savings Account with Life Insuranceo ATM Php 5,000 Php 5,000 Php 10,000 0.500%

o Passbook Php 50,000 Php 50,000 Php 50,000 0.500%BFSB Save-Up

Automatic Savings + Insurance

N.A. Php 1,000 Php 3,000 0.500%

BFSB Save-Up Automatic High

Savings

N.A. Php 1,000 Php 3,000 Php 3,000 - 49,999 0.500%50,000 - 499,999 0.750%500,000 and above 0.875%

Peso Checking AccountExpress Teller

CheckingPhp 5,000 Php 5,000 N.A. N.A.

Regular Checking Php 10,000 Php 10,000 N.A. N.A.Ka-Negosyo CA with ATM and Statement

Php 10,000 Php 10,000 Php 50,000 0.500%

Ka-Negosyo CA with Statement

Php 10,000 Php 10,000 Php 50,000 0.500%

Ka-Negosyo CA with Passbook

Php 25,000 Php 25,000 Php 100,000 0.500%

Maxi-One with StatementIf daily balance is:

o Individual Php 25,000 Php 25,000 Php 25,000 Php 25,000 - 999,999 0.500%o Corporate Php 50,000 Php 50,000 Php 25,000 1,000,000 and above 0.700%

Maxi-One with PassbookIf daily balance is:

o Individual Php 150,000 Php 150,000 Php 25,000 Php 25,000 - 999,999 0.500%o Corporate Php 500,000 Php 500,000 Php 25,000 1,000,000 and above 0.700%

Dollar AccountGet Started Savings Account with Life

Insurance

$ 1,000 $ 1,000 $ 1,000 0.125%

Dollar Savings with Passbook

$ 500 $ 500 $ 500 0.250%

 BPI Direct Savings Bank 

Type of Deposit Account

Required Initial Deposit

Required Minimum Monthly ADB1

Required Daily Balance2 to Earn

Interest

Interest Rate3

(Per Annum)

Peso Savings Account

BPInoy Savings N.A. N.A.(For as long as there is a remittance transaction at

least once every three months)

Php 500 0.500%

BPI Direct Express Teller Savings

Php 500 Php 500 Php 500 0.500%

BPI Direct Stock Trade Account

Php 500 Php 500 Php 500 0.500%

BPI DirectSave-Up Automatic Savings + Insurance

N.A. Php 1,000 Php 1,000 0.500%

Maxi-Saver4Savings with ATM

Php 25,000 Php 25,000 Php 25,000 Less than Php 25,000 N.A.25,000 - 499,999 0.500%500,000 - 999,999 0.625%1M and above 1.250%With 0.5% p.a. BONUS if no withdrawal within a month

Peso Checking AccountBPI Direct Maxi-One

CheckingPhp 25,000 Php 25,000 Php 25,000 0.500%

 

b. Corporate Deposit Rates – Savings and Checking

Type of Deposit Account

Required Initial Deposit

Required Minimum

Monthly ADB1

Required Daily Balance2 to

Earn InterestInterest Rate3 (Per Annum)

Peso Savings AccountPassbook Savings Php 10,000 Php 10,000 Php 25,000 0.250%

Maxi-Saver4Savings with Passbook

Php 250,000 Php 250,000 Php 250,000If daily balance is:Less than Php 250,000 N.A.Php 250,000 -  Php 499,999 0.250%Php 500,000 -  Php 999,999 0.375%Php 1,000,000 and above 0.500%*With 0.5% BONUS p.a. if no withdrawal in a month

Foreign Currency Savings Account*

USD – US Dollar Passbook Savings

USD 500 USD 500 USD 500 0.250%

AUD - Australian

Dollar Passbook Savings

AUD 500 AUD 500 AUD 500 1.250%

CAD -Canadian Dollar Passbook

SavingsCAD 500 CAD 500 CAD 500 0.250%

CHF-Swiss Franc Passbook

SavingsCHF 500 CHF 500 N.A. N.A.

CNY/RMB – Chinese Yuan

Passbook

CNY/RMB 3,500

CNY/RMB 3,500

CNY/RMB 3,500

0.100%

Savings

EUR- Euro Passbook Savings

EUR 500 EUR 500 EUR 500 0.025%

GBP –British Pound Passbook

SavingsGBP 500 GBP 500 GBP 500 0.250%

HKD - Hong Kong Dollar

Passbook Savings

HKD 500 HKD 500 HKD 500 0.050%

JPY- Japanese Yen Passbook

SavingsJPY 50,000 JPY 50,000 N.A. N.A.

*For Third Currency deposit products, visit any of the 50 accredited BPI branches. View List of BPI branches offering Third Currencies.Peso Checking Account

Business Checking Php 10,000 Php 10,000 N.A. N.A.

Maxi-One with Statement Php 50,000 Php 50,000 Php 25,000

Php 25,000 - Php 999,999 0.250%Php 1,000,000 and above 0.350%

Maxi-One with Passbook Php 500,000 Php 500,000 Php 25,000

Php 25,000 - Php 999,999 0.250%Php 1,000,000 and above 0.350%

Ka-Negosyo CA with Statement Php 10,000 Php 10,000 Php 50,000 0.250%

Ka-Negosyo CA with Passbook Php 25,000 Php 25,000 Php 100,000 0.250%

BPI Family Savings Bank

Type of Deposit Account

Required Initial Deposit

Required Minimum

Monthly ADB1

Required Daily Balance2 to

Earn InterestInterest Rate3 (Per Annum)

Peso Savings AccountPassbook Savings Php 10,000 Php 10,000 Php 25,000 0.500%

Maxi-Saver4Savings with Passbook

Php 150,000 Php 150,000 Php 150,000If daily balance is:Less than Php 150,000 N.A.Php 150,000 - Php499,999 0.500%Php 500,000 - Php999,999 0.625%Php 1,000,000 and above 0.750%

*With 0.5% BONUS p.a. if no withdrawal in a month

Dollar Savings Account

USD – US Dollar Passbook Savings

USD 500 USD 500 USD 500 0.250%

Peso Checking AccountBusiness Checking Php 10,000 Php 10,000 N.A. N.A.

Maxi-One with Statement Php 50,000 Php 50,000 Php 25,000

Php 25,000 - Php 999,999 0.500%Php 1,000,000 and above 0.700%

Maxi-One with Passbook Php 500,000 Php 500,000 Php 25,000

Php 25,000 - Php 999,999 0.500%Php 1,000,000 and above 0.700%

Ka-Negosyo CA Php 10,000 Php 10,000 Php 50,000 0.500%

with StatementKa-Negosyo CA with Passbook Php 25,000 Php 25,000 Php 100,000 0.500%

c. Time Deposit Rates (per annum)  

Regular Time Deposit (Peso)For the Period: September 23 - September 29, 2014

Amount 35 Days

63 Days

91 Days

182 Days

364 Days

 1K to less than 10K 10K to less than 50K 50K to less than 100K 0.50000 0.50000 0.50000 0.75000 0.75000 100K to less than 500K 0.62500 0.62500 0.62500 0.87500 0.87500 500K to less than 1 MM 0.62500 0.62500 0.62500 0.87500 0.87500 1 MM to less than 5 MM 0.75000 0.75000 0.75000 1.00000 1.00000 5 MM and up 0.87500 0.87500 0.87500 1.12500 1.12500

BPI Family Savings BankFor the Period: September 23 - September 29, 2014

Amount 35 Days

63 Days

91 Days

182 Days

364 Days

 1K to less than 10K 10K to less than 50K 50K to less than 100K 0.75000 0.75000 0.75000 1.00000 1.00000 100K to less than 500K 0.87500 0.87500 0.87500 1.12500 1.12500 500K to less than 1 MM 0.87500 0.87500 0.87500 1.12500 1.12500 1 MM to less than 5 MM 1.00000 1.00000 1.00000 1.25000 1.25000 5 MM and up 1.12500 1.12500 1.12500 1.37500 1.37500

BFB Cash-A-MonthFor the Period: September 23 - September 29, 2014

Amount Rate50K - < 200K 0.000%200K - < 500K 0.125%500K - < 1.0M 0.250%1.0M - < 5.00M 0.375%

5.0M - up 0.500%

Plan AheadFor the Period: September 23 - September 29, 2014

Amount Interest Payment OptionMonthly End of Term

  % % 100K - up 3.000% %

 US Dollar Time Deposit Rates For the Period: September 23 - September 29, 2014

Amount 35  63  91  182  364 

Days Days Days Days Days 1K to less than 50K 0.3750 0.3750 0.5000 0.6250 0.7500 50K to less than 100K 0.5000 0.5000 0.6250 0.7500 0.8750 100K and above 0.6250 0.6250 0.7500 0.8750 1.0000

Auto Renew BPI Multi-Currency Time Deposit*For the period: September, 2014

Australian Dollar (AUD) Amount 35 

Days63 

Days91 

Days182 Days

 1K to less than 10K 2.0000 2.0000 2.0000 2.0000 10K to less than 50k 2.1250 2.1250 2.1250 2.1250 50K to less than 100K 2.2500 2.2500 2.2500 2.2500 100K and above 2.3750 2.3750 2.3750 2.3750

 British Pound (GBP) 

Amount 35 Days

63 Days

91 Days

182 Days

 1K to less than 10K 0.2500 0.2500 0.3750 0.5000 10K to less than 50k 0.3750 0.3750 0.5000 0.6250 50K to less than 100K 0.5000 0.5000 0.6250 0.7500 100K and above 0.6250 0.6250 0.7500 0.8750

 Canadian Dollar (CAD) 

Amount 35 Days

63 Days

91 Days

182 Days

 1K to less than 10K 0.5000 0.6000 0.6500 0.7000 10K to less than 50k 0.6250 0.7000 0.7500 0.8000 50K to less than 100K 0.7500 0.8000 0.8500 0.9000 100K and above 0.8750 0.9250 0.9500 1.0000

Euro (EUR) Amount 35 

Days63 

Days91 

Days182 Days

 1K to less than 10K 10K to less than 50k 50K to less than 100K 100K and above 0.0500 0.1000 0.1000 0.1500

 Hong Kong Dollar (HKD) 

Amount 35 Days

63 Days

91 Days

182 Days

 1K to less than 10K 0.0625 0.1000 0.2000 0.2500 10K to less than 50k 0.0625 0.1050 0.2500 0.3000 50K to less than 100K 0.1000 0.1550 0.3000 0.3500 100K and above 0.1500 0.2550 0.3500 0.4000

 

Japanese Yen (JPY) Amount 35 

Days63 

Days91 

Days182 Days

 1K to less than 10K 0.0000 0.0000 0.0000 0.0000 10K to less than 50k 0.0000 0.0000 0.0000 0.0000

 50K to less than 100K 0.0000 0.0000 0.0000 0.0000 100K and above

 Swiss Franc (CHF) 

Amount 35 Days

63 Days

91 Days

182 Days

 1K to less than 10K 0.0000 0.0000 0.0000 0.1250 10K to less than 50k 0.0000 0.0000 0.1250 0.1562 50K to less than 100K 0.0000 0.1250 0.1562 0.1875 100K and above 0.1250 0.1562 0.1875 0.2187

Bank Service Fees  

Particulars Service ChargeMonthly Service Charge for Falling Below the Required ADB1

    - Maxi-One with Passbook PHP 500.00    - Other Peso Deposit Accounts PHP 300.00    - Dollar Savings Accounts USD 5.00    - Third Currency Passbook Savings Accounts AUD 8.00

CAD 7.00CHF 7.00EUR 4.50GBP 3.50

JPY 600.00CNY 35.00

Monthly Dormancy Charge2

    - Peso Deposit Accounts PHP 200.00    - Dollar Deposit Accounts USD 5.00    - Third Currency Passbook Savings Accounts AUD 8.00

CAD 7.00CHF 7.00EUR 4.50GBP 3.50

JPY 600.00CNY 35.00

Fee for Closing within 1 Month from Date of Opening    - Peso Deposit Accounts PHP 500.00    - Dollar Deposit Accounts USD 15.00    - Third Currency Passbook Savings Accounts USD 15.00 equivalentService Charge per Excess Withdrawal    - Jumpstart Account (4 free withdrawals per month)3 PHP 10.00    - Platinum Savings (no longer offered) PHP 50.00    - Multi-earner (no longer offered) PHP 25.00ATM Transactions    - Balance inquiry at other Expressnet member banks, Megalink or Bancnet ATMs PHP 1.50    - Withdrawals at other Expressnet member banks, Megalink or Bancnet ATMs PHP 15.00Foreign Transactions via Cirrus ATMs    - Withdrawals of USD 175.00 and below USD 3.50    - Withdrawals above USD 175.00 2% of withdrawn amount    - Balance Inquiries USD 1.00

    - Denials USD 0.50Note: Some ATMs abroad charge an additional access fee. Fees are displayed on the ATM screen at the time of transaction.Over-the-Counter Withdrawal for ATM-based Accounts(except when ATM is off-line or if the transaction exceeds the daily ATM limit)

PHP 100.00

Over-the-Counter Funds Transfer via Debit/Credit Memo    - Peso Deposit Accounts PHP 50.00 per transfer    - Dollar Deposit Accounts USD 1.00Stop Payment Order (SPO) Application (per check)    - Peso Checks PHP 200.00    - Dollar Checks USD 20.00Overdraft (OD) Accrual Charge    - Fee 25.2% p.a. on OD amount    - Subject to a minimum of PHP 26.25Dollar Transactions    - Dollar Cash Deposits in Excess of USD 5,000 PHP 0.10 per USD 1.00 or

fraction thereof    - Dollar Cash Withdrawal in Excess of USD 5,000 PHP 0.05 per USD 1.00 or

fraction thereof    - Deposit Returned Dollar Check USD 20.00

BPI Family Savings BankParticulars Service Charge

Monthly Service Charge for Falling Below the Required ADB1

    - Maxi-One with Passbook PHP 500.00    - Other Peso Deposit Accounts PHP 250.00    - Dollar Savings Accounts USD 5.00Monthly Dormancy Charge2

    - Peso Deposit Accounts PHP 200.00    - Dollar Deposit Accounts USD 5.00Fee for Closing within 1 Month from Date of Opening    - Peso Deposit Accounts PHP 500.00    - Dollar Deposit Accounts USD 15.00Service Charge per Excess Withdrawal    - Jumpstart Account (4 free withdrawals per month)3 PHP 10.00    - Platinum Savings (no longer offered) PHP 50.00    - Multi-earner (no longer offered) PHP 25.00ATM Transactions    - Balance inquiry at other Expressnet member banks, Megalink or Bancnet ATMs PHP 1.50    - Withdrawals at other Expressnet member banks, Megalink or Bancnet ATMs PHP 15.00Foreign Transactions via Cirrus ATMs    - Withdrawals of USD 175.00 and below USD 3.50    - Withdrawals above USD 175.00 2% of withdrawn amount    - Balance Inquiries USD 1.00    - Denials USD 0.50Note: Some ATMs abroad charge an additional access fee. Fees are displayed on the ATM screen at the time of transaction.Over-the-Counter Withdrawals for ATM-based Accounts(except when ATM is off-line or if the transaction exceeds the daily ATM limit)

PHP 100.00

Over-the-Counter Funds Transfer via Debit/Credit Memo    - Peso Deposit Accounts PHP 50.00 per transfer    - Dollar Deposit Accounts USD 1.00Stop Payment Order (SPO) Application (per check)    - Peso Checks PHP 200.00

    - Dollar Checks USD 20.00Overdraft (OD) Accrual Charge    - Fee 25.2% p.a. on OD amount    - Subject to a minimum of PHP 26.25Dollar Transactions    - Dollar Cash Deposits in Excess of USD 5,000 PHP 0.10 per USD 1.00 or

fraction thereof    - Dollar Cash Withdrawal in Excess of USD 5,000 PHP 0.05 per USD 1.00 or

fraction thereof    - Deposit Returned Dollar Check USD 20.00

BPI Direct Savings Bank

Particulars Service Charge

Monthly Service Charge for Falling Below the Required ADB1

    - Peso Deposit Accounts PHP 250.00    - Dollar Deposit Accounts USD 5.00Monthly Dormancy Charge2

    - Peso Deposit Accounts PHP 200.00    - Dollar Deposit Accounts USD 5.00Fee for Closing within 1 Month from Date of Opening    - Peso Deposit Accounts PHP 500.00    - Dollar Deposit Accounts USD 15.00ATM Transactions    - Balance inquiry at other Expressnet member banks, Megalink or Bancnet ATMs PHP 1.50    - Withdrawals at other Expressnet member banks, Megalink or Bancnet ATMs PHP 15.00Foreign Transactions via Cirrus ATMs    - Withdrawals of USD 175.00 and below USD 3.50    - Withdrawals above USD 175.00 2% of withdrawn amount    - Balance Inquiries USD 1.00    - Denials USD 0.50Note: Some ATMs abroad charge an additional access fee. Fees are displayed on the ATM screen at the time of transaction.Stop Payment Order (SPO) Application (per Peso check) PHP 200.00Overdraft (OD) Accrual Charge    - Fee 25.2% p.a. on OD amount    - Subject to a minimum of PHP 26.25

Auxiliary Services 

ParticularsAmount of Fee / Charge

BPI BPI Family Savings Bank

BPI Direct Savings Bank

    ATM Card Replacement PHP 100.00    Replacement of Lost Passbook *    - Peso Deposit Accounts PHP 200.00    - Dollar Deposit Accounts USD 15.00    Bank Certification    - Peso Deposit Accounts PHP 100.00    - Dollar Deposit Accounts USD 2.00    Statement Request from Express Phone free of charge    Statement Request from Bank Statement Unit

    - First three pages PHP 100.00    - For every succeeding page PHP 10.00    Request for Microfilm Reproduction of Bank Documents *    - First three pages PHP 100.00    - For every succeeding page PHP 31.00    Manager’s Check PHP 50.00    Peso Checkbook    - Personal PHP 175.00    - Commercial PHP 350.00    Dollar Demand Draft    - Fee USD 5.00    - Plus, DST, if to be paid in Pesos Subject to applicable charges    Peso Telegraphic Transfer    - Fee ¼ of 1% of amount    - Plus DST PHP 0.30

for every PHP 200.00    - Subject to a minimum of PHP 100 plus PHP 1.50 DST    Sale of Traveler’s Checks    - Fee 0.5% of every USD 1.00 or fraction thereof    - Subject to a minimum of USD 1.00    - Plus DST, if to be paid in Pesos Subject to applicable charges    Purchase of Traveler’s Checks    - Fee per check PHP 15.00    - DST per check Subject to applicable charges    Foreign Bills Purchase (per check, if without line) PHP 100.00    Outward Bills for Collection *    - Fee ¼ of 1% for every PHP 1.00 or fraction

thereof    - Plus Postage Fee PHP 6.50    - Subject to a minimum of PHP 100.00

PCHC Charges 

ParticularsAmount of Fee / Charge

    Temporary Overdraft – Honored (Funded) 4

    - Fixed Fee PHP 1,000.00

    - Additional FeePHP 200.00

for every PHP 40,000.00 ora fraction thereof per day

    Temporary Overdraft – Returned (DAIF / DAUD) 5

    - Fixed Fee PHP 2,000.00

    - Additional FeePHP 200.00

for every PHP 40,000.00 ora fraction thereof per day

    Stop Payment – Funded    - Fixed Fee PHP 2,000.00    Stop Payment – Unfunded 5

    - Fixed Fee PHP 2,000.00

    - Additional FeePHP 200.00

for every PHP 40,000.00 ora fraction thereof per day

    Technicalities 6

    - Fixed Fee PHP 2,000.00 per item

      Inward Remittance ChargesFROM: Correspondent Bank/SWIFT Remittances *

Payment Mode Service Charge Commission

Postage DocumentaryStamps

Cable Charges

  Credit to Account    - Peso Account 

 PHP 150.00

 PHP 10.00 PHP 0.30

for every PHP 200and a fraction thereof

 n/a

  Credit to Account    - Dollar Account 

USD 6.50 n/a N.A. n/a

  Bank to Bank    - Peso (BPI as  intermediary bank) / Credit to Other Bank **

PHP 150.00 n/a PHP 0.30for every PHP 200

and a fraction thereof

n/a

  Bank to Bank    - Dollar (BPI as    intermediary bank) /     Credit to Other Bank **

USD 10.00 n/a n/a n/a

  Branch Pick-up - PesoPHP 150.00 n/a PHP 0.30

for every PHP 200and a fraction thereof

PHP 60

  Branch Pick-up - Dollar USD 6.50 n/a n/a n/a

      FROM: Direct Deposit / US Pension

Payment Mode Service Charge Commission Postage DocumentaryStamps

Cable Charges

  Credit to Account    - Peso Account 

USD 6.50* n/a n/a n/a

  Credit to Account    - USD Account 

USD 6.50* n/a n/a n/a

  FROM: Local Bank (PDDTS)

Payment Mode Service Charge Commission Postage DocumentaryStamps

Cable Charges

  Local Incoming (Peso) PHP 150.00regardless of amount

n/a n/a n/a

  Local Incoming (Dollar) USD 6.50regardless of amount

n/a n/a n/a

 FROM: BERC and Tie Ups

Payment Mode Service Charge/ Commission Postage DocumentaryStamps

Cable Charges

  Remittances from BERC click here n/a n/a n/a

  Remittances from Tie UpCharges vary depending on the

contract agreement with each tie up

n/a n/a n/a

  International Wire Transfer Charges

Payment Mode Service ChargeCommission

DocumentaryStamps

Correspondent/ Settlement

Bank Charges*

BeneficiaryBank

Charges**Debit from FCDU account of the Client

USD14.00 N/A Charges vary dependingon the following:- remittance amount- remittance currency- purpose of remittance i.e. non-trade or trade

Charges varydependingon the bank involved, they may or may not charge their own fees.

Debit from PESO account of the Client

PHP600.00 PHP0.30 for every

PHP200.00

Charges vary dependingon the following:- remittance amount- remittance currency- purpose of remittance i.e. non-trade or trade

Charges varydependingon the bank involved; they may or may not charge their own fees.

 

Promotion, Channel, People

The Six Institutional Pillars

BPI’s brand revitalization exercise through the Expect More Campaign was

communicated using six institutional pillars:

I. Expect more energy!

  A tradition of leadership -> A persistent pioneer

Energy is represented by the revitalized new look of BPI - the logo, the

branches and the threading discipline (Dax font, rhombus layout and ‘Expect

more’ messaging) through all materials.

II. Expect more innovation!

  Extensive portfolio -> Consistent innovations

Innovation is represented by the bank’s continuous search for new ideas to

address changing customer needs. This new campaign synchronized with the

launch of the new product – BPI Direct Save-Up. It is a product that enables you

to automatically save for what matters most in life. It comes free with a BPI

Express Teller account. Funds are automatically transferred from your BPI

Express Teller payroll account to your BPI Direct Save-Up account according to

your preferred amount, frequency and schedule of transfer. Throughout the years

new products and services were introduced to the public such as the “Ka

Negosyo” account for entrepreneurs and the Mobile Mall that allows purchase of

goods using a mobile phone.

III. Expect more freedom!

  Strong physical presence -> Presence in new mediums

Freedom is represented by the new technology employed by BPI in BPI

24/7 Banking. It allows customers to bank anytime, anywhere through BPI

Express Online, BPI Express Phone and BPI Express Mobile. No lines, no hassle.

It’s simple, secure and saves you time better spent for yourself or with the ones

you care about.

IV. Expect more smiles!

  Established reputation -> Familiar partner

‘Smiles’ is represented by the new brand of customer service which

features ground-breaking and meaningful services to its customers not offered by

most competitors. BPI shatters traditional rules on interbranch transactions

through its Expanded Interbranch Transactions capability. And it challenges the

usual check clearing period in all its branches through its real-time BPI check

clearing facility. A new immediate feedback mechanism was also introduced in

branches where customers will receive a “smiley” chip after every transaction to

be dropped in either the “yes” or “no” portion of a box with the heading “Are you

happy with my service?” This program is part of the bank’s internal campaign of

delivering a “WOW Customer Service” by soliciting immediate feedback from

customers for immediate improvement at the branch level.

V. Expect more passion!

  Determined brand ambition -> Constant Motivation

Passion is represented by the “Real Thrills Program” that studies

customer’s shopping habits and preferences to come up with appropriate gift

rewards based on segmented passions rather than the traditional demographic and

psychographic segmentations. This program was used by Credits Cards, Debit

Cards, Deposits, 24/7 Banking and BPInoy products to reward their loyal

customers.

VI. Expect more heart!

  Commitment to service -> Commitment to individuals

Heart is represented by the bank’s general interest in bringing financial

wellness to the public. BPI provides free financial wellness seminars and one-on-

one consultations in various companies through BPI OnCall and relationship

management services to high value customers.

The bank of the Philippine Islands (BPI) offers products and services that suit

every client’s need in banking. Through fliers, brochures, and their first Launched their

first commercial on Philippine Television this current year, 2014, they promote those to

attract more clients and to keep their current clients do their banking transactions with

them. BPI wants to keep in touch with their customers in every possible way that is why

they explore and research to make the best things happen, as what their current tagline

says. BPI’s banking transactions can be done through mobile, phone, online, machines,

and in their branches.

K. Operational Analysis

Banking and investment services firms' operations are ill-equipped to deliver or

support the radically new business models needed to adapt to ongoing industry

transformation. Bank CIOs, heads of operations and architects are seeking new

approaches to operational modernization and transformation. With market forces

dramatically disrupting the status quo, they must institute changes across people,

processes and technologies to create open, intelligent operational systems that support the

business. Operations must move beyond its current focus on incremental efficiency gains

to drive strategic innovation that enables new business models. Bank system assets and

functions must be accessible and usable in end users' contexts across internal and external

bank boundaries to enable the creation, access, analysis and application of information as

needed by end users. This is costly and high-risk, but can provide material benefits to

banks. Operations professionals must develop compelling business cases and recommend

appropriate front-to-back and internal-to-external structures and content, while balancing

the risks and potential costs against business benefits.

BPI strengthened its commitment to take customers farther in their quest for

financial progress and ensured that their funds are safe and secure in the face of a global

economic crisis. An institutional campaign, ‘Expect more in life with BPI’, offered BPI

products and services with better value to the customer.

L. Technological Analysis

As the Bank’s client base grows, an ever greater percentage of transactions will be

executed via electronic channels. Recognizing this trend, last year they outsourced a large

component of their IT operations to a world-class vendor. Furthermore, they continue to

invest in their primary IT platforms to achieve scale, availability, and reliability—at low

cost. They continue not only to invest heavily in software applications, particularly the

client-facing ones that truly differentiate the experience of BPI’s clients, but also retain

significant control of these development initiatives in-house, while diversifying their

relationships with vendors who are best-in-class.

BPI offers different variants of mobile banking, depending on client's mobile

device and available technology. In 2013, BPI introduced an enhanced version of the

mobile banking app which can run on iOS, Android, and Blackberry devices.

For many of Self-service transactions carried out by clients through its 24/7 and

more cost-effective service channels now account for 71% of the Bank’s total

transactions.

In the year 2013, the Bank’s ATM network grew by 21% for a total of 2,181

ATMs and 326 cash deposit machines. Through this expanded network, both withdrawal

transactions and deposit volumes posted marked increases. Deposit transactions via the

cash deposit machines increased by 90%. Additional ATM security features, such as PIN

shields, fraudulent device inhibitors and anti-skimming software, were installed.

BPI Express Online’s enrolled client base grew by 30% in 2013, resulting in a

client base of 1,550,850. The total financial transaction count passing through this site

was 18,060,756, a 15.3% growth over last year’s count. Total financial transactions grew

by 19.6% to Php 263 billion.

An eDonations facility was introduced to make it easy for our customers to

provide assistance to victims of typhoons and other calamities via different foundations

and other charitable organizations. The Bank has now 221 online banking kiosks located

inside BPI branches giving customers an access to BPI Express Online on bank premises.

In 2013, these kiosks generated 96,122 new enrollments, representing an increase of 60%

year-on-year. The number of financial transactions processed through the kiosks was

353,597, a growth of 35% from previous year.

BPI ExpressLink, the Internet banking platform for corporate accounts, recorded a

total financial transaction count of 28,565,559, a 20% increase year-on-year, for a total

transaction amount of Php 1.75 trillion. These transactions were carried out by 18,176

enrolled customers, an annual increase of 24%. ExpressLink mobile, an app intended for

corporate customers, now has a client base of 3,927, a 192% growth from last year’s

number.

BPI Express Mobile grew its unique user base by 56% in 2013 to 674,830 users,

making it the country’s leader in mobile banking. Total financial count increased by

205% to over 3.3 million, valued at Php 22.3 billion, an astounding 393% growth year-

on-year.

BPI Express Phone, the Bank’s phone-banking platform, recorded over 6 million

transactions for a total financial transaction value of Php 10.9 billion.

In summary, there are 1.71 million BPI clients who are banking online or via their

mobile devices; there are 5.6 million inquiries made via BPI Express Phone’s Self-

Service Facility; 216 million ATM transactions during 2013; 263,000 branch

appointment scheduled via Express Online; 5.4 million total transactions via cash deposit

machines; 344,000 clients paying their bills electronically; and 26,849 Number of point-

of-sale terminals, with total acquired consolidated billings of Php 9 billion.

M. Financial Analysis

The Bank of the Philippine Islands’ summary of performance during the year

2013 is stated based on the result of their operations and their financial standing.

Results of Operation

BPI earned a net income of Php 18.8 billion in 2013, representing a Php 2.5-

billion, or 15.0% increase relative to Php 16.4 billion earned last year. This increase in

net income was achieved through a Php 5.1-billion, or 10.8% increase in total revenues

but was partly induced by the Php 1.9 billion and Php 995 million increases in operating

expenses and taxes, respectively. Return on equity improved to 18.1% from last year’s

17.9%, while return on assets declined to 1.87% from previous year’s 1.91%.

Total revenue growth to Php 52.5 billion from last year’s Php 47.4 billion was

sustained by the increases in both net interest and non-interest income, up by Php 2.9

billion and Php 2.2 billion, respectively. Net interest income closed at Php 30.3 billion,

representing a 10.4% increase from last year. This increase in net interest income was the

result of a Php 151.4 billion, or 17.7%, expansion in average asset base partly tempered

by the 26 basis points drop in net interest spreads.

Non-interest income of Php 22.2 billion increased 11.3% from last year’s Php

19.9 billion. Other operating income increased Php 1.6 billion, or 20.8%, mainly due to

increases in trust fees, bank premises rental, profit from assets sold and miscellaneous

income.

Fees and commissions, income from the insurance business and income from

foreign exchange trading likewise increased by Php 774 million, or 15.1%, Php 755

million, or 108.8%, and Php 360 million, or 21.4%, respectively. Fees and commissions’

increase was attributed to increases in service charges, bank commissions, and

underwriting fees. Trading gain on securities ended Php 1.1 billion, or 18.1%, lower than

last year due to lower securities inventory level as tempered by market corrections.

Impairment losses at Php 2.6 billion, decreased Php 275 million, or 9.4%, from

2012 due to last year’s provisions for non-credit related items and foreclosed assets.

Other expenses at Php 26.7 billion, increased Php 1.9 billion, or 7.7%, from last

year’s Php 24.8 billion. Occupancy and equipment-related expenses increased Php 847

million, or 11.8%, due to increases in computer equipment and software costs,

contractual, rental, and depreciation cost.

Other operating expenses increased Php 883 million, or 12.4%, on higher

regulatory cost, fines and penalties, litigation expenses, management and other

professional fees, and other miscellaneous transaction related expenses.

Financial Condition

The Bank’s total resources reached Php 1.2 trillion, Php 210.1 billion or 21.3%

higher than last year’s Php 985.2 billion. This increase was attributed largely to the Php

186.3 billion, or 23.2% increase in total deposits, which reached Php 988.6 billion.

Current and savings deposits increased Php 194.2 billion or 39.5%.

Total capital funds increased Php 7.7 billion, or 7.8%, to Php 105.8 billion

from the previous year’s Php 98.1 billion. This growth in capital came from the

increase in profits from operation, net of cash dividends paid. Accumulated other

comprehensive income (loss) decreased Php 4.6 billion, or 322.7% on lower

market valuation of the Bank’s available-for-sale securities and the higher

actuarial losses on the Bank’s defined benefit plan. The Bank’s capital adequacy

ratio using Basel II framework at 13.7% declined from last year’s 14.2% as the

risk weighted assets increased at a faster rate than the qualifying capital. This

year’s CAR remained substantially higher than BSP’s 10% requirement.

BPI’s market capitalization remained the largest in the industry at Php

302.5 billion. The Bank’s share price traded at a premium of 2.9x its book value

per share of Php 29.37.

Loans, net of impairment losses stood at Php 635.2 billion representing a

Php 108.6 billion, or 20.6% increase from the prior year’s Php 526.6 billion. This

increase in loans was brought about by the higher loan demand from the

multinationals and conglomerates. Non-performing loans ration at 0.49%

improved from last year’s 1.5%and below the industry’s 2.4% (November 2013).

Liquid assets increased Php 93.3 billion, or 44.2%, to Php 304.2 billion

largely on higher balances with BSP. Investment securities at Php 183.7 billion

increased Php 1.1 billion from prior year’sPhp 182.6 billion. Held-to-maturities

securities increased Php 19.9 billion, or 26.1% due to additional investments,

while available-for-sale securities decreasedPhp 18.8 billion, or 17.7%, due to

reduction in local and foreign securities position.

Fiancial Indicators 2013 2012

Liquidity Ratio 73.39% 65.37%

Debt-to-Equity Ratio 25.04% 32.25%

Asset-to-Equity Ratio 1143.52% 1018.92%

Interest Rate Coverage Ratio 353.93% 281.80%

Return on Equity Ratio 18.05% 17.86%

Return on Assets Ratio 1.87% 1.91%

Cost to Income Ratio 50.86% 52.34%

Cost to Assets Ratio 2.66% 2.90%

Capital to Assets Ratio 8.74% 9.81%

Net Interest Margin 3.31% 3.57%

Chapter 5

Strategic Formulation

To have a deeper insight about what makes BPI staying strong in the industry for

the past 162 years, here are the qualitative analysis of the internal and external factors

that helps its continuous progress and challenges its survival.

A. Input Tools

1. Internal Forces Evaluation

Internal Factors Weight Rating WeightedScore

Strength      1.Innovative products and services

offered 0.15 4 0.60

2. Low cost deposits – no inter branch fees 0.12 4 0.48

3. Long banking history and tradition 0.10 4 0.40

4. Competent management 0.10 3 0.30

5. Tied with strong owners, Ayala Group of Companies 0.15 4 0.60

Weaknesses      

1. Absence of Strategic group 0.15 1 0.15

2. Long product cycle 0.10 2 0.20

3. Unimproved systems for new products and services 0.08 2 0.16

4. Great number of young population in human resource 0.05 2 0.10

TOTAL 1.00   2.99

Analysis

As shown on the Internal Forces Evaluation table above, BPI scored 2.99. It

shows that the Bank has a weighted average internal position. This reiterates the fact that

the company is strong in terms of innovating its products and services.

It did offers at a low cost deposit and with a ‘no inter branch fee’ policy. Its

longest history in the industry does add to the recognition and being well trusted of it plus

it is owned by one of the strongest and best company in the Philippines, Ayala Group of

Companies (AGC). From the illustration table, it concludes that BPI has a good internal

structure.

In contrast, the highest internal weakness of BPI falls on long product cycle and

in relation to its online banking system duration. Even though it does have its weaknesses

that directly affect the customers’ satisfaction about the offered products and services, it

still can be solved by having an extra effort to improve their virtual system.

2. External Forces Evaluation

External Factors Weight Rating Weighted Score

Opportunities      

1. Growing economy 0.15 3 0.45

2. Include young population 0.18 4 0.72

3. New alternative channels 0.15 3 0.45

4. Increasing count of remittances from the OFWs 0.15 4 0.60

Threats      1. Uncontrollable appearance of new entrants 0.12 2 0.24

2. Unending improvement and innovation of competitor’s products and services

0.10 1 0.10

3. Unpredictable disasters and diseases spreading 0.05 1 0.05

4. Continuous hike of inflation rate 0.10 2 0.20

TOTAL 1.00   2.81

Analysis

According to the External Forces Evaluation of BPI, it scored 2.81. By having this

score, BPI, based on the evaluation of general environment analysis of these external

factors, has a good potential to stay in the industry by grabbing the opportunities and

conquering each threats that may affect its operations.

The weighted score indicates that the company’s most intense factor is its great

number of young human resource; it was evaluated in a weighted average of 0.72. BPI’s

young human resource population does make it more competitive because of the early

management training for its young employees.

On the other hand, the unpredictable appearance of new entrants in the industry

gives threat to the company for it might give their customers more then what they are

giving and what more they could give. Gladly, BPI never stops improving and innovating

itself to make banking as easy as possible to make the best out of life.

3. Competitive Profile Matrix

Critical Success Factor

Bank of the Philippine Islands

Banco De Oro UnibankMetropolitan Bank and

Trust Company

Weight RatingWeighted

ScoreWeight Rating

WeightedScore

Weight RatingWeighted

Score

Technological advances 0.15 4 0.60 0.13 3 0.39 0.15 2 0.30

Product innovation 0.10 4 0.40 0.10 4 0.40 0.10 2 0.20

Best Rate 0.10 4 0.40 0.10 4 0.40 0.10 3 0.30

Service quality 0.10 3 0.30 0.10 4 0.40 0.10 4 0.40

Brand image (recognition) 0.15 4 0.60 0.15 4 0.60 0.15 4 0.60

Size of the company 0.15 4 0.60 0.15 4 0.60 0.15 3 0.45

Location and convenience 0.15 4 0.60 0.15 4 0.60 0.15 3 0.45

Promotion and advertisements 0.10 3 0.30 0.12 4 0.48 0.10 3 0.30

Total 1.00 3.80 1.00 3.87 1.00 3.00

4 – Major strength, 

3 – Minor strength,

2 – Minor weakness,

1 – Major weakness

Analysis

SCALE

Based on the CPM matrix, the Bank of the Philippine Islands obtained a weighted

score of 3.80, while Banco De Oro Unibank Inc. attained a weighted score of 3.87 while

Metropolitan Bank and Trust Company achieved a weighted score of 3.00. Although

Banco De Oro has the highest weighted score, some of its factors have a varied score in

rating and weight.

BPI is very much competitive with its close entrants. No wonder it is the second

largest and trusted bank in the country. In terms of technology it advances its competitors

by being the first in every product and service innovations. Talking about promotions, it

first ever television commercial had been shown this current year, 2014.

As to Metrobank, it should prioritize its competitive advantage and make

additional improvements with factors that have low on rating allocating additional

advertisements as well as investments in order to catch up in the future. This advantage

can improve its management, customer service, financial position, number of branches,

customer loyalty and security and safety and international relation.

B. Matching Stage

Threat – Opportunities – Weaknesses – Strengths (TOWS Matrix)

External

Threat

External

Opportunities

Internal

Weaknesses

Internal

Strength

1. Uncontrollable

appearance of new

entrants

1. Growing

economy

1. Absence of

Strategic group

1. Innovative

products and

services offered

2. Unending

improvement and

innovation of

competitor’s

products and services

2. Include young

population

2. Long product

cycle

2. Low cost deposits

– no inter branch

fees

3. Unpredictable

disasters and

diseases spreading

3. New alternative

channels

3. Unimproved

systems for new

products and

services

3. Long banking

history and tradition

4. Continuous hike

of inflation rate

4. Increasing count

of remittances from

the OFWs

4. Great number of

young population in

human resource

4. Competent

management

5. More companies

are eager to be part

of the team.

5. Tied with strong

owners, Ayala

Group of Companies

Strategic Position & Action Evaluation (SPAcE Matrix)

Internal Strategic Position External Strategic Position

X- Axis

Competitive Advantage (CA) Industry Strength (IS)(-6 worst , -1 best) (+1 worst , +6 best)

-2 Products and services quality 3 Barriers to entry-1 Market Share 6 Growth potential-2 Brand & image 5 Competitive pressure-3 Product life cycle 5 Consolidation

Average = -2 Average = 4.5Total X-axis score = 2.50

Y- Axis

Financial Strength (FS) Environmental Stability (ES)(+1 worst , +6 best) (-6 worst , -1 best)

4 Return on Asset -4 Inflation5 Profitability -1 Technology6 Liquidity -2 Demand Elasticity6 Cash Flow -3 Taxation

Average = 5.25 Average = -2.5Total Y-axis score = 2.75

Interpretation

The internal strategic dimension factors analyze BPI’s internal strategic position

while on the other hand external strategic factors analyze the Bank’s external strategic

position. These factors when combined make the SPACE matrix analysis. Competitive

advantage factors include the speed of innovation of the company, its financial strength,

the product quality, market share, brand and image, and product life cycle.

Every business is also affected by the environment in which it operates. SPACE

matrix factors related to business external strategic dimension are the overall economic

condition, inflation, price elasticity, technology, barriers to entry, competitive pressures,

industry growth potential, and others.

This represents that BPI has an aggressive strategy that continues product

development in the industry of banking and financial products and services which

penetrate the market and continuously working to compete with other international banks.

Internal-External Matrix

As what is shown above, the Bank’s location was nearly crossing on the top

division by being on the cells IV, V, and VI. Its position suggests the ‘hold and maintain’

strategy. In this case, the Bank’s tactical strategies should focus on market penetration

and product development more. This IE matrix tells that the company should hold and

maintain its position. The company should pursue strategies focused on increasing market

penetration and product and service development.

Grand Strategy

Bank of the Philippine Islands has a very strong strategic position being placed in

the first quadrant. The firm’s approach very good for BPI already build a name in

Banking since 1851. It is very competitive as it focuses on its established competitive

advantage (CA) and takes advantage of it as long as it’s allowing the company.

Concerning to that, the company is concentrating on the existing market by adopting the

set product development, market development, and market penetration strategy.

The firm can take risks being an aggressive one and can afford to obtain

advantage of opportunities in numerous ways.

C. Summary of Matrices

Quantitative Strategic Planning Matrix

Key Factors

Absorb Competitor Improve Internally

WeightAttractive-

ness Scores

Total

Attractive-

ness Score

WeightAttractive-

ness Scores

Total

Attractive-

ness Score

Strength            

1.Innovative products and

services offered0.15 4 0.60 0.15 4 0.60

2. Low cost deposits – no

inter branch fees0.12 4 0.48 0.10 2 0.20

3. Long banking history and

tradition0.10 4 0.40 0.10 3 0.30

4. Competent management 0.10 3 0.30 0.15 4 0.60

5. Tied with strong owners,

Ayala Group of Companies 0.15 4 0.60 0.15 3 0.45

Weaknesses            

1. Absence of Strategic

group0.15 1 0.15 0.10 4 0.40

2. Long product cycle 0.10 0 0.00 0.10 3 0.30

3. Unimproved systems for

new products and services0.08 2 0.16 0.10 3 0.30

4. Great number of young

population in human

resource

0.05 0 0.00 0.05 3 0.15

  1.00     1.00    

Opportunities            

1. Growing economy 0.15 3 0.45 0.15 2 0.30

2. Includes young

population0.18 3 0.54 0.18 3 0.54

3. New alternative channels 0.15 4 0.60 0.20 4 0.80

4. Increasing count of

remittances from the OFWs0.15 4 0.60 0.05 0 0.00

Threats            

1. Uncontrollable

appearance of new entrants0.12 3 0.36 0.12 3 0.36

2. Unending improvement

and innovation of

competitor’s products and

services

0.10 4 0.40 0.15 4 0.60

3. Unpredictable disasters

and diseases spreading0.05 1 0.05 0.05 0 0.00

4. Continuous hike of

inflation rate0.10 2 0.20 0.10 1 0.10

  1.00     1.00    

Total     5.89 < 6.00

Attractiveness Score: 0 = not relevant1 = not acceptable2 = possibly acceptable

3 = probably acceptable4 = most acceptable

Interpretation

Based on the analysis made from internal factors to external factors that were

matched and interpreted to know where the company is and headed to, came out these

two suggested strategies to be measured to get the best in order to apply for the

company’s continuous growth and excellence.

The first suggested strategy is to absorb competitors. Actually, it is not impossible

to do so as BPI has proved itself in the industry for almost two centuries now and today

as being part of one of the best and strongest groups in the country, Ayala Group of

Companies. Having a total attractiveness score of 5.89, absorbing competitors might be a

good strategy to expand and improve its service factor. Acquiring competitors might also

decrease the weaknesses of the company.

Improve internally is the second suggested strategy based on the study. This

strategy got a 6.00 total attractiveness weight, an 0.11 higher than the first one. As what

has been analyzed in this research, one of the major weaknesses of the subject is its

product and service delivery. By improving from within, the company will increase the

impact of it externally by escalating the customers’ satisfaction to its products and

services. This will create loyalty and good feedback from its customers which may attract

investors and will give competitors a better-quality game.

Chapter 6

Recommendation

As the researcher of this study, I am recommending the institution to:

Focus more on their product and service delivery;

Shorten technology-based service period to as fast as possible;

Continue to improve existing systems to connect to the target markets better in a

way that customers will be more than satisfied from what they are currently

receiving from the company now, and;

Educate each employee to the full content and application of each of its products

and services offered, especially when there are new of such on the menu by

conducting seminars or activities that will make its employees updated which will

also back to the image of the company.

A. Recommended Revised Mission Statement

Mission Statement:

WE SUPPOSE in the essential role that private venture plays in economic

development.

WE SUPPOSE that our corporate mission is to be the principal private financial

institution in the Philippines in terms of professional proficiency, service excellence,

responsible corporate citizenry, and overall growth and stability; and to be an established

ASEAN financial institution with a creditable worldwide outreach.

WE SUPPOSE that we have a responsibility to manage the business for the

maximum benefit of our customers while adopting the highest standard of integrity; to

offer the widest possible range of financial services that is responsive to their needs; and

to adopt an objective attitude towards change and innovation, ever mindful of improving

service quality and operating efficiency.

WE SUPPOSE that we have a responsibility to develop the potential of our

employees to the fullest by providing an environment conducive to their personal and

professional growth; and to foster a value system held in common throughout the

institution in order that we may all share a coherent sense of purpose and direction. 

WE SUPPOSE that we have a responsibility to attain, over time and within

exacting standards of prudent management, the highest possible return on the investment

of our shareholders. 

B. Recommended Revised Vision Statement

Vision Statement:

As the longest existing bank in the Philippines we aim to be the strongest bank

giving great convenience to all of our valued customers and to be the best bank for all our

stakeholders.

C. Recommended Revised Organizational Structure

Organizational Structure

D. Recommended Strategies

Strategy 1 – Absorb Competitors

The first suggested strategy is to absorb competitors. Actually, it is not

impossible to do so as BPI has proved itself in the industry for almost two centuries now

and today as being part of one of the best and strongest groups in the country, Ayala

Group of Companies. Having a total attractiveness score of 5.89, absorbing competitors

might be a good strategy to expand and improve its service factor. Acquiring competitors

might also decrease the weaknesses of the company.

Strategy 2 – Improve Internally

Improve internally is the second suggested strategy based on the study.

This strategy got a 6.00 total attractiveness weight on Quantitative Strategy Plan Matrix,

a 0.11 higher than the first one. As what has been analyzed in this research, one of the

major weaknesses of the subject is its product and service delivery. By improving from

within, the company will increase the impact of it externally by escalating the customers’

satisfaction to its products and services. This will create loyalty and good feedback from

its customers which may attract investors and will give competitors a better-quality game.

To services they offer, improve the communicating skills of every employee and

develop the knowledge of every employee. Always put seminars or activities to every

employee that makes the employee of the company updated that will also back to the

image of the company.

Appendix

Bank of the Philippine Islands 2013 Financial Statements.

Bibliography

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