October 2018 2Q18 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 P2.9 Tn (USD53.8 Bn). • A full-service universal bank with one of the widest distribution networks consisting of 1,238 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 - 10 America - 3 10 Remittance Offices Asia - 11 Remittance Offices 1 Full-service Branch 6 Remittance Offices 4 Representative Offices Middle East - 1 Representative Office Philippines - 1,238 Branches BDO ONB Total 25 International Offices Luzon 345 11 356 Metro 562 1 563 Manila Visayas 119 18 137 Mindanao 81 101 182 Total 1,107 131 1,238 Branches As of 30 Sep 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) 2,846 1,903 BDO Market Share – 19% BDO Market Share – 22% 2,190 1,324 1,239 1,895 1,706 682 872 545 766 721 461 622 620 586 379 360 302 233 MBT BPI LBP PNB CHIB SECB UBP DBP RCBC MBT BPI LBP PNB CHIB SECB RCBC UBP DBP Customer Deposits Assets Under Management (in PHP billions) (in PHP billions) 2,323 BDO Market Share – 34% BDO Market Share – 20% 1,032 1,560 1,537 1,508 580 435 673 654 297 453 443 432 397 127 107 90 88 84 44 MBT BPI LBP PNB CHIB UBP SECB DBP RCBC BPI MBT LBP CHIB SCB RCBC PNB UCPB SECB Source: Company data, consolidated statements of condition (SOC). Ranking as at 30 June 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% 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% (b) For sale S.A. 99.92% (a) (b) 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 2017 Rank Origin Bank USD Million Bank Gospodarstwa Krajowego 5,421 231 232 Taipei Fubon Bank 5,419 233 Iyo Bank 5,403 234 Mashreqbank 5,391 235 BDO Unibank 5,344 E. Sun Commercial Bank 236 5,289 237 Yes Bank 5,203 238 Bank Nederlandse Gemeenten 5,140 239 Qatar Islamic Bank 5,114 240 Landwirtschaftliche Rentenbank 5,067 9
The Banker Top Philippine Banks – Tier 1 Capital 2017 Bank USD Million Rank 0 1000 2000 3000 4000 5000 6000 5,344 1 3,611 2 MBT 3,325 BPI 3 1,940 SECB 4 1,782 5 PNB 1,415 6 CHIB 1,088 7 RCBC 1,014 8 UBP Note: Only private banks are included in the 2017 individual country rankings list Acronyms: BDO BDO Unibank PNB Philippine National Bank BPI Bank of the Philippine Islands RCBC Rizal Commercial Banking Corp. CHIB China Banking Corporation SECB Security Bank Corp. 10 MBT Metropolitan Bank& Trust UBP UnionBank of the Philippines
Credit Ratings Capital Moody’s Fitch Intelligence 09-Jul-2018 04-Apr-2018 23-Aug-2018 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 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* 4,373,300,839 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 October 1, 2018 12
Presentation Outline I. Overview II. Financial Highlights III. Ownership, Board and Management IV. Environmental, Social and Governance V. Awards and Citations 13
1H18 P&L BDO Conso BDO ex-ONB & BDO Life (in PHP billion) 1H18 1H17 YoY% 1H18 1H17 YoY% Interest Income 59.1 47.0 26% 57.7 45.8 26% Loans & Other Receivables 52.6 41.3 27% 51.8 40.5 28% Interest Expense 13.1 8.4 56% 13.0 8.2 58% Net Interest Income 46.0 38.6 19% 44.8 37.6 19% Non-interest Income 22.8 23.2 -2% 18.7 16.8 11% Fee Income 14.6 13.9 5% 14.5 13.4 8% Insurance Premiums 5.6 4.6 23% - - - Trading & FX (0.1) 2.6 -102% 1.8 1.4 32% Others 2.6 2.2 19% 2.5 2.1 17% Gross Operating Income 68.8 61.8 11% 63.5 54.4 17% Operating Expense 46.8 41.9 12% 41.7 35.9 16% Ins. reserves, benefits and claims 2.9 3.9 -25% - - - Pre-Provision Operating Profit 22.0 19.9 10% 21.8 18.5 18% Provisions 3.5 2.9 22% 3.0 2.7 8% Net Income before Tax 18.4 17.0 8% 18.8 15.7 20% Taxes 5.3 3.7 42% 5.3 3.6 44% 14 Net Income 13.1 13.3 -1% 13.6 12.1 13%
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