February 2018 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 P2.62 Tn (USD51.30 Bn). • A full-service universal bank with one of the widest distribution networks consisting of 1,184 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 TN Acquired Rural Bank of San Juan’s banking business P2.3 TN P1.9 TN Merged with Equitable PCI Bank. Acquired Amex Savings Bank Philippines Acquired One Network Bank P862 BN Acquired 1st e- Bank’s banking business P802 BN P1.2 TN Acquired Citibank Merged with Dao Heng Savings, DB Trust Bank Philippines and Real Bank P234 BN P149 BN Acquired GE Money Bank P617 BN KB license 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 Niche Strategy Commercial Bank Expansion Full-Service Bank Strategy #19 #17 #13 #9 #9 #5 #2 #1 Ranking
Market Reach • Wide and extensive coverage in key areas North Europe - 12 America - 3 11 Remittance Offices Asia - 11 1 Representative Office Remittance Offices 1 Full-service Branch 6 Remittance Offices 4 Representative Offices Middle East - 1 Representative Office Philippines - 1,184 Branches BDO ONB Total 27 International Offices Luzon 328 7 335 Metro 534 1 535 Manila Visayas 115 17 132 Mindanao 80 102 182 Total 1,057 127 1,184 Branches As of 29 Jan 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 The Asset, & Asian Banking and Finance 3 According to The Asian Banker, Asian Banking and Finance, 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) 2,593 BDO Market Share – 18% BDO Market Share – 22% 1,661 1,988 1,794 1,151 1,139 1,481 807 795 531 688 460 434 560 547 368 526 337 257 212 MBT BPI LBP PNB CHIB SECB RCBC UBP EW MBT BPI LBP PNB SECB CHIB DBP UBP RCBC Customer Deposits Assets Under Management (in PHP billions) (in PHP billions) 2,090 1,034 BDO Market Share – 34% BDO Market Share – 19% 1,506 1,475 1,306 596 454 612 578 438 431 206 375 368 114 90 90 89 83 49 BPI MBT LBP CHIB RCBC PNB SCB UCPB SECB BPI MBT LBP PNB CHIB UBP SECB RCBC DBP Source: Company data, consolidated statements of condition (SOC). Ranking as at 30 September 2017 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 PCI Insurance Northpine Land, Inc. BDO Leasing and (HK) Ltd. 100% (c) Brokers, Inc. 100% 20% Finance, Inc. BDO - (a) Venture Industry for 87.43%, BDO BDO Rental, BDO Remit Business Enterprises Capital – 1.11% Equimark-NFC Inc. 100% (Canada) Ltd. 24% (a) BDO Life Assurance Development Corp. 100% 60% Company (formerly One Network Bank, Generali Pilipinas BDORO Europe Ltd. Inc. (A Rural Bank) BDO Remit Taal Land, Inc. Life Assurance Co.) 100% 99.79% BDO Remit (Japan) Ltd. 100% BDO-97.0%, BDO 33.33% (b) (UK) Ltd. Capital-3.0% (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. 100% Financial Allied Subsidiary 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 26-Jan-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) 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* 4,369,105,359 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 January 28, 2018 12
Presentation Outline I. Overview II. Financial Highlights III. Ownership, Board and Management IV. Environmental, Social and Governance V. Awards and Citations 13
3Q17 vs. 2Q17 P&L BDO Conso (in PHP billion) 3Q17 2Q17 QoQ% Interest Income 25.8 24.4 6% Loans & Other Receivables 22.8 21.5 6% Interest Expense 4.7 4.2 10% Net Interest Income 21.2 20.2 5% Non-interest Income 11.6 11.8 -2% Fee Income 6.9 7.1 -3% Insurance Premiums 2.6 2.4 11% Trading & FX 0.8 1.2 -33% Others 1.3 1.2 7% Gross Operating Income 32.7 32.0 2% Operating Expense 21.7 21.0 3% Insurance benefits and claims 1.9 1.9 -2% Pre-Provision Operating Profit 11.0 11.0 1% Provisions 1.5 1.5 0% Net Income before Tax 9.5 9.5 1% Taxes 2.4 2.0 21% Net Income 7.1 7.4 -5% 14
3Q17 Balance Sheet BDO Conso (in PHP billion) 3Q17 3Q16 YoY% Resources 561.3 460.1 22% Reserve Assets Investment Securities 330.8 278.3 19% Gross Customer Loans 1,669.8 1,412.1 18% Investment Properties 15.5 15.2 2% Other Assets 42.5 42.2 1% Total Resources 2,619.9 2,207.9 19% Liabilities Deposits 2,090.4 1,816.5 15% CASA 1,523.7 1,272.4 20% Bills Payable/Sub-Debt 133.7 88.2 52% Insurance Contract Liab. 25.7 19.2 33% Other Liabilities 75.4 68.6 10% Total Liabilities 2,325.2 1,992.4 17% Total Capital 294.7 215.4 37% Total Liabilities & Capital 2,619.9 2,207.9 19% 15
BDO Loan Growth vs. Industry 24% 25% 21% Industry 20% 19% 19% 20% 17% 17% BDO 16% 20% 18% 15% 16% 16% 15% 14% 10% 5% 0% 2011 2012 2013 2014 2015 2016 3Q17 BDO Loan Growth vs. Interest Income 24% 25% 20% 21% 19% 20% Interest 17% Income from 17% 16% Loans Only 18% 17% 15% 16% 15% 15% Loan Growth 10% 8% 5% 6% 0% 16 2011 2012 2013 2014 2015 2016 9M17
Capital Adequacy Ratio CAR Min. w/ BSP DSIB BDO 3Q17 Net Income & ROE ROCE 17 * Ratio for interim annualized
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