The Bank of the Philippine Islands (BPI) held its annual stockholders’ meeting last April 14 with its chairman, Jaime Augusto Zobel de Ayala II, and president and CEO Aurelio R. Montinola III reporting on the bank’s major accomplishments for the year 2010.
In his message, Mr. Zobel reported that the global economic crisis that stalled many economies in 2009 made 2010 another challenging year for all. On BPI, he talked about the Bank’s adequate capital, prudent risk management and sustainable banking.
BPI’s share price was P59.00 at end-2010, a 23% improvement over the P48.00 price at end-2009. The stock continued to trade at a premium at a price-to-book ratio of 2.6x, resulting to a market capitalization of P210 billion, the highest in the banking industry.
Mr. Zobel then moved on with the rationale behind the Bank’s Stock Rights Issue, which was to further strengthen BPI’s core Tier 1 capital and support its strategic growth initiatives. The merits of this capital raising exercise was evident in the above industry growth rates of the Bank’s loans and deposits, and the acquisition of the trust and investment management business of ING Bank, N,V, Manila.
In parallel to the Bank’s growth strategies, he said emphasis was placed on ensuring that internal processes were constantly upgraded and relevant to the environment. BPI’s net 30 day non-performing loans ratio thus further improved to 2.1%. Specific reserve cover likewise improved to 82%. Moreover, BPI maintained its BSP CAMELS rating of 4, the highest among local commercial banks, and earned the 2009 Gold Award from the Institute of Corporate Directors Corporate Governance Scorecard for Publicly Listed Companies.
Mr. Zobel also said that BPI’s net income of P11.3 billion for the year and ROE and ROA of 15.6%, and 1.5%, respectively, was the result of its sustainable banking principles. BPI remained to be the only Philippine bank with a sustainability framework that is compliant with the Global Reporting Initiative (GRI) sustainability reporting guidelines.
The Bank’s second sustainability report entitled “Banking on Sustainability” covered total customer experience, open financial access, market coverage, employees and stakeholders issues, and the reduction of environmental footprint.
In addition, the Bank entered into partnership with World Wide Fund for Nature Philippines in a Climate Risk Adaptation Project to generate socio-economic baseline data in 4 cities outside the NCR with apparent adverse effects of climate change.
In his management report, Mr. Montinola said that 2010 was a quality plus growth year for BPI. Deposits grew 21%, while loans improved by 16% with all market segments delivering double-digit growth rates. Tier 1 capital adequacy ratio was at 14%. He continued on with the performance of the various businesses of the bank.
In 2010 and 2011, Mr. Montinola said that the Bank remains committed ‘To Make Banking with BPI More Accessible, More Convenient, and More Cost Effective to More Filipinos’. For sustainable quality growth, it will stick to basic banking, focus on financial inclusion and expansion into new customer segments, ensure its strategy along country centric values and provide attractive shareholder value.
In closing, the President said, “We have always aligned our strategy with country Centric Values. We will continue to be a responsible banker, as shown by our Governance awards and our BSP Camels 4 rating. We will support government initiatives for SME, housing, microfinance lending, and private public partnership projects. Sustainability and Environmental Protection will be big themes for BPI’s 160th year and beyond.”
