July 2018 1Q18 Investor Presentation
Presentation Outline I. Overview II. Financial Highlights III. Ownership, Board and Management IV. Environmental, Social and Governance V. Awards and Citations 2
About BDO • The Philippines’ largest bank with total assets of P2.8 Tn (USD53.6 Bn). • A full-service universal bank with one of the widest distribution networks consisting of 1,224 operating branches and over 4,000 ATMs nationwide. • Part of the SM Group, one of the country’s largest conglomerates. 3
Milestones • Expansion through organic growth and M&As Joint Ventures with Nomura Securities, and Mitsubishi Motors Phils./Sojitz/JACCS; Acquired exclusive franchise of Diners Club Int’l and full control of Generali Pilipinas Life (renamed as BDO Life Assurance) P2.7 TN Acquired Rural Bank of San Juan’s banking business P2 TN P2.3 TN P1.9 TN Merged with Equitable PCI Bank. Acquired Amex Savings Bank Philippines Acquired One Network Bank Acquired 1st e- Bank’s banking business P862 BN Acquired Citibank P802 BN P1.2 TN Merged with Dao Heng Savings, DB Trust Bank Philippines and Real Bank P234 BN P149 BN KB license P617 BN Acquired GE Money Bank Est. as Acme P36 BN Savings Acquired UOB Philippines’ branch banking business Bank P121 BN P77 BN Acquired Banco Santander Philippines U/KB license Assets P13 BN Acquired by SM Group 1967 1976 1994 1996 2001 2002 2003 2005 2007 2008 2009 2012 2014 2015 2016 2017 Niche Strategy Commercial Bank Expansion Full-Service Bank Strategy Ranking #19 #17 #13 #9 #9 #5 #2 #1
Market Reach • Wide and extensive coverage in key areas North Europe - 11 America - 3 11 Remittance Offices Asia - 11 Remittance Offices 1 Full-service Branch 6 Remittance Offices 4 Representative Offices Middle East - 1 Representative Office Philippines - 1,224 Branches BDO ONB Total 26 International Offices Luzon 339 7 346 Metro 559 1 560 Manila 119 17 136 Visayas 80 102 182 Mindanao Total 1,097 127 1,224 Branches As of 26 June 2018 5
Business Franchise • Market-leading positions in almost all business lines #1 #1 #1 #1 #1 Customer Credit Assets Under Deposits Remittances Loans Cards 1 Management Leading Trade Major Player in Services Provider 2 Cash Management 3 #1 #1 #1 #2 #1 Insurance Investment Private Rural Leasing & Brokerage 5 Banking 4 Banking Banking Finance Notes: 1 In terms of cardholder base, merchant acquiring gross billings, and credit card receivables 2 According to Asian Banking and Finance, Global Finance 3 According to The Asset, The Asian Banker, Alpha South East Asia 4 In terms of corporate issuances 6 5 Among insurance brokers in terms of premiums produced and commissions earned
Industry Ranking • No. 1 among Philippine banks Total Assets Gross Customer Loans (in PHP billions) (in PHP billions) 2,768 1,817 BDO Market Share – 18% BDO Market Share – 22% 2,069 1,909 1,253 1,225 1,634 844 621 719 701 488 620 608 442 588 371 365 283 223 MBT BPI LBP PNB CHIB RCBC SECB UBP DBP MBT BPI LBP PNB CHIB SECB DBP UBP RCBC Customer Deposits Assets Under Management (in PHP billions) (in PHP billions) 2,242 1,030 BDO Market Share – 34% BDO Market Share – 19% 1,589 1,554 1,443 577 460 658 614 257 440 429 420 395 128 112 90 89 84 52 BPI MBT LBP PNB CHIB UBP DBP SECBRCBC BPI MBT LBP CHIB SCB PNB RCBC UCPB SECB Source: Company data, consolidated statements of condition (SOC). Ranking as at 31 March 2018 Note: Financials prepared by banks under BSP’s SOC requirements differ slightly from reported financials under SEC 7 guidelines due to certain differences in accounting rules requested by the two authorities
Organizational Structure • With equity investments in allied and non-allied enterprises BDO Unibank, Inc. BANKING / FINANCE REMITTANCES INSURANCE OTHERS PROPERTY BDO Remit (USA), BDO Insurance SM Keppel Land, Inc. NLEX Corp. (formerly BDO Private Bank, MMPC Auto Manila North Inc. 100% Brokers, Inc. 100% 50% Inc. 100% Financial Tollways Corp.) Services Corp. 12.4% 40% Express Padala BDO Life Assurance Northpine Land, Inc. BDO Leasing and (HK) Ltd. 100% (c) Company (formerly 20% Finance, Inc. BDO - Venture Industry for Generali Pilipinas 87.43%, BDO BDO Rental, BDO Remit Business Enterprises Life Assurance Co.) Capital – 1.11% Equimark-NFC Inc. 100% (Canada) Ltd. BDO-97.0%, BDO 24% (a) Development Corp. 100% Capital-3.0% 60% One Network Bank, BDORO Europe Ltd. Inc. (A Rural Bank) BDO Remit Taal Land, Inc. 100% 99.85% BDO Remit (Japan) Ltd. 100% 33.33% (b) (UK) Ltd. (formerly CBN BDO Strategic BDO Remit(Italia) Holdings, Inc. 100% London Ltd.) S.p.A. 100% (a) Unicorn First 100% Properties, Inc. 35% BDO Nomura Armstrong BDO Remit (a) For dissolution (a) CBN Greece Securities, Inc. 51% Securities 80% Limited 100% (c) (b) For sale S.A. 99.92% (a) (b) (c) For merger Averon Holdings, Inc. BDO Remit 100% BDO Remit BDO Capital & BDO Securities (Macau)Limited (Ireland) Investment Corporation ** not yet operational. 100% Designated Corporation 99.88% 100% Activity BDO Remit Int’l Company. Stockholders of BDO Holdings B.V. Financial Allied Subsidiary 100% 96.32% Financial Allied Affiliate Non-Financial Allied Subsidiary Non-Allied Undertaking CBN Subsidiary/Affiliates of BDO Remittance Subsidiaries Center S.A. Non-Financial Allied Affiliate 99.99%
The Banker Top 1000 World Banks – Tier 1 Capital 2016 Rank Origin Bank USD Million 263 264 265 266 267 268 269 270 271 272 9
The Banker Top Philippine Banks – Tier 1 Capital 2016 Bank USD Million Rank 1 2 3 4 5 6 7 8 Acronyms: BDO BDO Unibank PNB Philippine National Bank MBT Metropolitan Bank& Trust LBP Land Bank of the Philippines BPI Bank of the Philippine Islands CHIB China Banking Corp. SECB Security Bank Corp. RCBC Rizal Commercial Banking Corp. 10
Credit Ratings Capital Moody’s Fitch Intelligence 27-Dec-2017 04-Apr-2018 24-Aug-2017 Foreign Currency Bank Deposits/Issuer/Debt Rating (IDR) Long Term Baa2 BBB- BBB Short Term P-2 F3 A3 Outlook Stable Stable Stable Senior Unsecured debt Long Term Baa2 BBB- Short Term P-2 Outlook Stable BCA/Viability/Financial Strength Rating Baseline Credit Assessment (BCA) baa2 Adjusted BCA Rating baa2 Viability Rating bbb- Financial Strength Rating BBB Outlook Stable Counterparty Risk (CR) Assessment Long Term Baa1(cr) Short Term P-2 (cr) Counterparty Risk Rating (CRR)* Foreign Currency Long Term Baa1 Short Term P-2 Local Currency Long term Baa1 Short Term P-2 Source: Moody’s, Fitch and Capital Intelligence; *Based on June 19, 2018 Moody’s Press Release 11
Trading Fact Sheet Stock Details Type Common Shares Stock Ticker BDO ISIN PHY077751022 Exchange Philippine Stock Exchange Par Value P10.00 Outstanding No. of Shares* 4,369,669,740,109 Foreign Ownership Up to 40% American Depositary Receipts (ADR) Program Details Type Sponsored Level 1 ADR ADR Ticker BDOUY ISIN US05537Y305 Ratio 1 ADR = 10 Ordinary Shares Depositary Bank Deutsche Bank Trust Company Americas Contact Details ADR Broker Helpline Tel (New York) + 1 212 250 9100 Tel (London) + 44 207 547 6500 Email adr@db.com ADR website www.adr.db.com Depositary Bank's Local Custodian Deutsche Bank AG, Manila *As of June 25, 2018 12
Presentation Outline I. Overview II. Financial Highlights III. Ownership, Board and Management IV. Environmental, Social and Governance V. Awards and Citations 13
1Q18 P&L BDO Conso (in PHP billion) 1Q18 1Q17 YoY% Interest Income 28.2 22.6 25% Interest Expense 6.1 4.2 46% Net Interest Income 22.2 18.4 20% Non-interest Income 10.9 11.4 -4% Fee Income 6.9 6.8 2% Insurance Premiums 2.6 2.2 20% Trading & FX 0.0 1.4 -98% Others 1.3 1.0 28% Gross Operating Income 33.1 29.8 11% Operating Expense 23.1 20.9 11% Ins. reserves, benefits and claims 1.5 2.0 -25% Pre-Provision Operating Profit 10.0 9.0 11% Provisions 1.8 1.4 26% Net Income before Tax 8.2 7.6 8% Taxes 2.3 1.7 33% Net Income 5.9 5.8 1% 14
1Q18 Balance Sheet BDO Conso (in PHP billion) 1Q18 1Q17 YoY% Resources 549.5 493.9 11% Reserve Assets Investment Securities 354.6 298.4 19% Gross Customer Loans 1,828.2 1,543.7 18% Investment Properties 18.2 15.3 19% Other Assets 47.0 44.5 6% Total Resources 2,797.6 2,395.9 17% Liabilities Deposits 2,242.2 1,928.1 16% CASA 1,586.1 1,404.2 13% Bills Payable/Sub-Debt 151.3 91.8 65% Insurance Contract Liab. 25.3 22.6 12% Other Liabilities 79.3 71.1 12% Total Liabilities 2,498.0 2,113.5 18% Total Capital 299.6 282.4 6% Total Liabilities & Capital 2,797.6 2,395.9 17% 15
BDO Loan Growth vs. Industry 25% 20% 19% 19% 20% 19% a Industry 17% 17% 16% 20% 18% 18% BDO 15% 16% 16% 15% 14% 10% 5% 0% 2012 2013 2014 2015 2016 2017 1Q18 a UKB, based on loans net of RRPs BDO Loan Growth vs. Interest Income Growth 30% 26% Growth in Interest 25% 22% income from 20% Loans Only 19% 18% 20% 17% 17% Loan Growth 16% 18% 15% 17% 16% 15% 15% 10% 8% 5% 0% 16 2012 2013 2014 2015 2016 2017 1Q18
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