Group 1 BDO Strama Paper PDF

PAMANTASAN NG LUNGSOD NG MAYNILA
(University of the City of Manila)
Gen. Luna cor. Muralla St., Intramuros, Manila, Philippines
PLM Business School – Undergraduate Program
A Strategic Management Paper presented for
BDO Unibank, Inc.
Submitted by:
Afable, Lynel Arvey V.
Averia, Melquisidec S.
Asuncion, Bernadeth S.
Banta, Bastin
Bacho, Ria Niña A
Submitted to:
Prof. Benito Roger De Joya

ACKNOWLEDGEMENT
The researchers are delighted and thankful to Banco de Oro (BDO) Unibank, Inc.
for being a subject matter in this Strategic Management Study.
The researchers would like to take this opportunity to express gratitude to Prof.
Kristelle Marjori Pasco, a professor in Strategic Management, for his constant
encouragement, for believing in our capabilities, and for giving advice and insights
whenever the researcher encounters difficulty. We are thankful for exchanging
discussions about the topic and, without thinking twice, lending a hand during the
study's completion.
The researcher would also like to thank their family for the unceasing
encouragement, support, and attention they have given. A, to God for guiding and
giving strength and knowledge throughout creating this study. To God be the Glory!
Table of Contents
EXECUTIVE SUMMARY ................................................................................................ 6
CHAPTER I ..................................................................................................................... 8
INTRODUCTION ...................................................................................................... 8
History and Nature of Business ................................................................................ 8
Current Revenue Size and Profit ............................................................................ 13
Major Market Served .............................................................................................. 42
Market Size............................................................................................................. 43
Organizational Chart............................................................................................... 45
Products and Services............................................................................................ 51
CHAPTER II .................................................................................................................. 54
RESEARCH DESIGN AND METHODOLOGY........................................................... 54
Sources of Information............................................................................................ 54
Methodology ........................................................................................................... 54
Limitations .............................................................................................................. 56
CHAPTER III ................................................................................................................. 57
VISION AND MISSION .............................................................................................. 57
Current Vision ......................................................................................................... 57
Current Mission ...................................................................................................... 57
Vision Recommendation and Analysis ................................................................... 59
Mission Recommendation and Analysis ................................................................. 59
CHAPTER IV ................................................................................................................ 62
EXTERNAL ASSESSMENT....................................................................................... 62
Political and Legal .................................................................................................. 62
Economic................................................................................................................ 63
Socio-cultural, Demographic, and Lifestyle............................................................. 65
Technological ......................................................................................................... 65
Environmental......................................................................................................... 66
Opportunities and BDO's Responsiveness ............................................................. 66
Threats and BDO's Responsiveness ...................................................................... 69

External Factor Evaluation (EFE) Matrix................................................................. 71
CHAPTER V ................................................................................................................. 73
INDUSTRY AND COMPETITIVE ANALYSIS ............................................................ 73
Banking Industry ..................................................................................................... 73
Industry Structure ................................................................................................... 73
Banking Industry Sub-Sectors ................................................................................ 79
Porter’s Five Forces Model..................................................................................... 80
Major Competitors .................................................................................................. 83
DuPont Model of Universal Banking Industry ......................................................... 89
Competitive Profile Matrix (CPM) ........................................................................... 91
CHAPTER VI ................................................................................................................ 93
INTERNAL ASSESSMENT ........................................................................................ 93
Major Strengths ...................................................................................................... 93
Major Weaknesses ................................................................................................. 95
Internal Factor Evaluation (IFE) Matrix ................................................................... 96
CHAPTER VII ............................................................................................................... 98

STRATEGY FORMULATION..................................................................................... 98
Strengths, Weaknesses, Opportunities, and Threats (SWOT) Matrix..................... 98
SWOTS Recommended Strategies ........................................................................ 99
Internal-External (IE) Matrix .................................................................................. 103
Strategic Position and Action Evaluation (SPACE) Matrix .................................... 105
CHAPTER VIII ............................................................................................................ 107

SUMMARY OF MATRICES ..................................................................................... 107
Boston Consulting Group (BCG) Matrix................................................................ 107
Grand Strategy Matrix (GSM) ............................................................................... 109
Summary of Strategies ......................................................................................... 110
Quantitative Strategic Planning Matrix (QSPM) .................................................... 111

CHAPTER IX .............................................................................................................. 112
PROPOSED STRATEGIES ..................................................................................... 112
Generic Strategy................................................................................................... 112
Specific Strategy................................................................................................... 115
CHAPTER X ............................................................................................................... 123

ACTION PLANS AND PROGRAM........................................................................... 123
Strategy Implementation....................................................................................... 123
Departmental Action Plans .................................................................................. 127
CHAPTER XI .............................................................................................................. 130

STRATEGY EVALUATION AND CONTROL ........................................................... 130
Measuring and Monitoring of Organization Performance .................................... 130
Action Plan ........................................................................................................... 130
Balanced Scorecard ............................................................................................. 135
Strategy Map ........................................................................................................ 140
CHAPTER XII ............................................................................................................. 141

PROJECTED FINANCIAL STATEMENTS............................................................... 141
Projected Statements of Financial Position .......................................................... 141
Projected Income Statement ................................................................................ 142
Projected Financial Ratios .................................................................................... 143
CONCLUSION ............................................................................................................ 147

LIST OF FIGURES...................................................................................................... 148
LIST OF TABLES ....................................................................................................... 151
LIST OF ANNEXES .................................................................................................... 153
REFERENCES............................................................................................................ 211
EXECUTIVE SUMMARY
Banco de Oro Unibank, Inc. or BDO Unibank is a Philippine universal banking
company specializing in deposit-taking, lending (corporate, middle sector, SME, and
consumer), Foreign Exchange, brokering, trust and investments, including credit cards,
corporate cash management, and remittances. BDO is the largest bank in the country
owned by the SM Group of Companies, belonging to the country’s largest
conglomerates in terms of market capitalization.
Based on the external analysis of BDO and its competitor analysis, it is indicated
that BDO Unibank Inc. is capable of taking efficient advantage of opportunities and
mitigating threats. The study shows that there are opportunities present for BDO to take,
such that of the high demand of mobile banking applications, mergers and acquisitions,
increase in demands of loans during pandemic, push towards sustainable energy
products, and increase in profits from remittances which pose as challenges that BDO
should overcome. As for the internal analysis and financial analysis, it is shown that
BDO is in a position that is proactively upgrading and striving to cater to its clients and
providing quality services. It indicates the strengths of BDO as a business, which should
be utilized more in answer to opportunities. Meanwhile, such analysis showed BDO’s
weaknesses that should be mitigated. It was also found that BDO is able to take on the
challenges posed by the opportunities stated aggressively. In doing so, the
objectives for BDO formulated were to increase in net income while maintaining
expense, increase in market share, and invest more in technological advancements.
For BDO to achieve its goals, it was recommended that the financial institution
perform intensive strategies

6
to be more efficient, improve the data and security protection in online banking, and
expand its market to continue being in a good position in the financial industry.
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CHAPTER I
INTRODUCTION
History and Nature of Business
Banco de Oro Unibank, Inc. or commonly known as BDO, is a full-service
universal bank located in the Philippines with the largest total asset in the Philippines
and ranked fifteen in Southeast Asia and a member of the SM Group. It offers products
and services to retail and corporate markets, including borrowing (corporate, middle
sector, SME, and consumer), deposit-taking, foreign exchange, brokering, trust and
investment, credit cards, corporate cash management, and remittances. Via its
subsidiaries, BDO provides Leasing and Lending, Investment Finance, Private Banking,
Bancassurance, Insurance brokerage, and equity brokerage services. BDO has the
largest distribution network of more than 1,300 operational branches and more
than
4,000 ATMs across the nation.
Banco de Oro started on 2 January 1968, called Acme Savings Bank, known as
a Thrift bank with only two branches located in Metro Manila. Later, Sy Group obtains a
group of companies owned by Henry Sy and gives its new name: Banco de Oro
Savings and Mortgage Bank.
In December 1994, it was set to a commercial bank and renamed Banco de Oro
Commercial Bank. In the time of September 1996, it became a universal bank. These
8
led to a change of the bank's name to the new Banco de Oro Universal Bank (BDO
Unibank). It is one of several Chinese-Filipino-owned banks in the Philippines. In its
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search to explore and affirm by vision, creativity, and price, BDO engaged in an
insurance service in 1997 by creating a BDO Insurance Broker subsidiary, making it a
corporation of "bancassurance." It extended its insurance in 1999 by Partnership with
Assicurazioni Generali s.p.a, one of the world's major insurance agencies, and Jerneh
Asia Berhad, Kuok Community from Malaysia. In March 2000, BDO became a partner.
With its insurance affiliates, Generali Pilipinas Life Assurance Company and Generali
Life Assurance Company, Insurance Company of Pilipinas.
On 15 June 2001, BDO started merging with Dao Heng Bank's Philippine
subsidiary. The merger raised the number of BDO Unibank branches from 108 before
the merger, 129 to 120 after the merger. Its merging contributes to global
competitiveness by expanding its branches to become available to other people
increasing the number of depositors. It further extended when United Overseas Bank
sold 66 out of its Philippine subsidiary's 67 branches to BDO Unibank after UOB's
Philippine subsidiary is set to optimize its operations from retail to wholesale banking.
On 22 March 2006, after completing the United Overseas Bank integrated into the BDO
network, the number of BDO branches rose to 220. On 5 August 2005, 24.76% of the
shares of Equitable PCI bank hold the record of being the third-largest bank in the
Philippines and largest credit card issuers, founded by Go Family. The share was
bought by Banco de Oro and an SM subsidiary, SM investments, and 10% Equitable
Card Network.
On 6 January 2006, BDO along with the SM Group of Companies submitted a
proposal to Equitable PCI to swap a 1.6 of its share for every 1 Equitable PCI share
or
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to base swap ratio on the book values of same banks to evaluate by a firm
accountants
10
base on International Accounting Standards (IAS). For this proposal to take effect,
Banco de Oro needs the Equitable PCI shareholders' permission to portray 67% of
Equitable PCI. These comprise 29% Social Security System (SSS), 14% Government
Service Insurance System (GSIS), and 8% to the family of Equitable PCI chairman
Ferdinand Martin Romualdez.
On 27 December 2006, the said proposal was settled, putting together the Banco
de Oro-Equitable PCI bank, which became Banco de Oro Unibank Incorporation as of
February 2007. Before the two companies' union, BDO is the second biggest bank with
an asset of about P608 billion. Now BDO has 703 combined branches nationwide and
commercial centers in Metro Manila, Northern and South Luzon, Metro Cebu, Iloilo-
Bacolod, and Mindanao.
In 2009, BDO completed its acquisition of GE Money Bank with an agreement to
obtain a minority stake of 1.5 in BDO Unibank through a share-swap deal, increasing its
holdings to 10%. On 14 November 2013, Banco de Oro's objective is to acquire 99.99%
of Citibank Savings Inc., which has ten branches and famous for being an Insular
Savings Bank. In February 2014, obtain the trust business of Deutsche Bank's Manila
branch. In July 2014, BDO bought The Real Bank Inc., wherein it adds 24 branches to
its network. Before the end of December 2014, gain the name of One Network Bank as
it has 105 rural 105 branches, and on 6 August 2019, it was renamed BDO Network
Bank. Until now, Banco de Oro continues improving their services by providing Cash
Accepting Machine (CAM), which allows people to deposit money anytime to any BDO
Account with an ATM without transacting over the counter. Since BDO has Cash
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Deposit Machine, providing security to its customers is a competitive advantage to other
banks with an EMC chip in Debit/Credit Card implanted in it.
Figure 1 Milestones of BDO Unibank, Inc.
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Business Model Canvas
Figure 2 Business Model Canvass of Banking Companies
Key Partners Key Activities Value Relationship Customer

Propositions Segments
Branch
Operations
Personal
Deposits Assistance Retail and

Investment Call center Products Corporate
s Partners Operations (Lower Customers
Interest Automation (Depositors)
Rates) where
IT
possible
Operations
Technology
Vendors Key Channels

Resources
Loan Retail and

Physical and Products Corporate
Regulatory
IT (Higher Bank Customers
Agencies Interest Branches, (Borrowers)
Infrastructur
Rates) ATMs, Call
Centers,
Loan Internet,
Assets Mobile
Devices
Cost Structure Revenue Streams
Internet Channel Interest Fee

Expenses Costs Income Income
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Current Revenue Size and Profit
Interest
Income
Net Interest
515,548 Income
Interest 402,586
Expense
112,962
Impairment Net Profit
Loss Margin BDO
(22,920) 31%
Income (Other
Statement operating
income)
170,124 Net Profit
Other
operating 615,548 ROA BDO
expense
351,788 1.30%
Tax expense
41,671 Net Profit
615,548
Total Asset
Turn Over BDO
Current Asset 4.80%
ROE
11,858,943 Total Asset
BDO
Net Fixed 12,598,631 13%
Asset
739,788
Balance Current
Sheet
Liability
10,626,975 Total Liability
Long Term 10,963,674 Total Liability
Debt and Equity
Final
Shareholders’ 12,598,631
336,699 Leverage
Equity
(FLM)
Shareholders’ 7.70
1,634,957 Equity
1,634,957
Figure 3 Dupont Analysis of BDO Unibank, Inc.

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DuPont analysis:
The DuPont analysis yielded the return on assets or ROA of the company to be
at 1.30% and return on equity of 13% which are the average in 5 years.
With a net interest income of average of 31% in 5 years indicates that the
company has a high chance to improve aspects in the operations such as spreading
cost for the fixed assets like building-up more local and foreign branches.
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BDO UNIBANK, INC.
Statements of Financial Position
FOR THE YEARS ENDED DECEMBER 31, 2015, 2016, 2017, 2018 AND 2019
(Amounts in Millions of Philippine Pesos)
% change
2015 2016 2017 2018 2019 in 5 yrs.
RESOURCES
CASH AND OTHER CASH ITEMS P 41,767 P 39,813 P 43,882 P 52,492 P 62,726 50%
DUE FROM BANGKO SENTRAL NG
18%
PILIPINAS 260,841 304,285 340,596 349,017 306,938
DUE FROM OTHER BANKS 20,944 33,463 41,088 48,780 35,820 71%
TRADING AND INVESTMENT
76%
SECURITIES 196,500 207,886 258,214 304,281 345,278
LOANS AND OTHER RECEIVABLES -
64%
Net 1,323,311 1,511,981 1,730,732 2,019,153 2,175,655
PREMISES, FURNITURE, FIXTURES
101%
AND EQUIPMENT - Net 21,152 22,430 24,917 29,272 42,494
INVESTMENT PROPERTIES - Net 11,403 11,784 14,496 15,426 12,595 10%
OTHER RESOURCES - Net 54,085 57,449 70,700 73,391 81,594 51%
P P P P
TOTAL RESOURCES 1,930,003 2,189,091 2,524,625 P2891812 3,063,100
59%
LIABILITIES AND EQUITY
P P P P P
52%
DEPOSIT LIABILITIES 1,603,047 1,833,013 2,045,321 2,362,302 2,438,737
BILLS PAYABLE 76,867 75,800 105,623 117,693 147,321 92%
SUBORDINATED NOTES PAYABLE 10,030 10,030 10,030 10,030 10,030 0%
INSURANCE CONTRACT LIABILITIES
1 - - - - -
OTHER LIABILITIES 49,370 49,371 65,990 74,166 97,802 98%
Total Liabilities 1,739,314 1,739,315 2,226,964 2,564,191 2,693,890
55%
EQUITY
Attributable to:
Shareholders of the Parent Bank 369,210 199,263 297,661 327,621 369,210 94%
Non-controlling Interests - - - -
Total Equity 369,210 199,263 297,661 327,621 369,210 94%
P P P P 59%
TOTAL LIABILITIES AND EQUITY 3,063,1 00 1,938,57 2,524,625 2,891,812 3,063,100
Figure 4 BDO Unibank, Inc. Five (5) Year Financial Statement for years 2015-2019
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15
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BDO UNIBANK, INC,
Statements of Income
(Amounts in Millions of Philippine Peso Except Per Share Data)
% change in 5
2015 2016 2017 2018 2019 yrs.
P P P P P 125%
INTEREST INCOME 68,519 76,647 93,786 122,615 153,981
INTEREST EXPENSE 14,238 14,989 16,434 28,720 38,581 171%
NET INTEREST INCOME 54,281 61,658 77,352 93,895 114,500 111%

IMPAI RMENT LOINCOME
SSES - Net 2,709 3,003 5,809 5,700 5,699 110%
NET INTEREST
AFTER IMPAIRMENT
LOSSES 51,572 58,655 71,543 88,195 108,801 111%
OTHER OPERATING
INCOME 30,170 27,353 33,633 35,823 43,145 43%
OTHER OPERATING 87%
EXPENSES 50,394 56,379 68,929 81,794 94,337
PROFIT BEFORE
PRE-ACQUISITION INCOME 36,247 -
PROFIT BEFORE TAX 31,348 29,629 36,247 42,224 57,609 84%
TAX EXPENSE 4,829 5,713 8,241 9,512 13,376 177%
P P P P P 67%
NET PROFIT 26,519 23,916 28,006 37,712 44,233
Attributable to - - - - - -
Shareholders of the Parent
-
Bank - - - - -
Non-controlling Interests - - - - - -
Earnings Per Share:

Basic P 7.25 P 6.47 P 6.40 P 7.40 -
-
Diluted P 7.25 P 6.47 P 6.40 P 7.40 - -
Figure 5 BDO Unibank, Inc. Five (5) Year Income Statement for years 2015-2019
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BDO UNIBANK, INC.
Statements of Cash Flows
FOR THE YEAR ENDED DECEMBER 31, 2015, 2016, 2017, 2018 AND 2019
% change in 5
2015 2016 2017 2018 2019 yrs.
CASH FLOWS FROM OPERATING ACTIVITIES
Profit before tax P 31,348 P 29,629 P 36,247 P 42,224 P 57,690
Adjustments for:
Interest income -68,519 -76,647 -93,786 -122,615 -153,081 123%
Interest received 67,778 75,720 91,455 119,115 151,900 124%
Interest paid -14,344 -14,969 -16,085 -21,948 -43,136 201%
Interest expense 14,238 14,989 16,434 28,720 38,581 171%
Depreciation and amortization 3,085 3,668 3,958 4,555 7,564 145%
Impairment losses 2,709 3,003 5,809 5,700 5,699 110%
Share in net profit of subsidiaries and associates - -3,516 -4,312 -2,740 -6,046 -
Fair value losses (gains) -167 45 67 -476 1,093 -754%
Operating profit before changes in operating resources and liabilities 36,128 31,922 39,653 52,535 60,183 67%
Decrease (increase) in financial assets at fair value through profit or loss 66 1,076 32 487 -1,040 -1676%
Increase in loans and other receivables -231,297 -241,321 -255,626 -266,500 -194,417 -16%
Decrease (increase) in investment properties 1,374 -624 -3,389 -2,107 -1,014 -174%
Decrease (increase) in other resources -11,319 2,722 -16,848 -8,121 -13,265 17%
Increase in deposit liabilities 139,112 229,972 212,278 315,718 77,148 -45%
Increase (decrease) in other liabilities -13,863 10,423 17,244 13,935 22,703 -264%
Cash generated from (used in) operations -79,799 34,170 -6,720 105,947 -49,702 -38%
Cash paid for income tax -3,211 -5,342 -7,552 -9,087 -11,861 269%
Net Cash From (Used in) Operating Activities -83,010 28,828 -14,272 96,860 -61,563 -26%
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of available-for-sale securities -437,205 -40,953 -26,052 - - -
Proceeds from disposals of available-for-sale securities 493,842 P 63,539 17,816 - - -
Acquisitions of investment securities at amortized cost - - - 60,406 -78,983 -
Acquisitions of securities at fair value through other comprehensive income (FVOCI) - - - -17,629 -39,656 -
Maturities of investment securities at amortized cost - - - 26,514 48,746 -
Proceeds from disposals of securities at FVOCI - - - 8,387 25,820 -
Acquisitions of premises, furniture, fixtures and equipment -4,439 -3,811 -4,989 -6,920 -3,446 -22%
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Proceeds from disposals of premises, furniture, fixtures and equipment -211 30 17 125 165 -178%
Acquisitions of held-to-maturity (HTM) investments - -48,139 -74,111 - - -
Acquisition of a subsidiary - -2,298 - - - -
Acquisitions of available-for-sale (AFS) securities - - - - - -
Proceeds from disposals of AFS securities - - - - - -
Maturities of HTM investments - 11,938 33,013 - -
Net Cash Used in Investing Activities 51,987 -19,694 -54,306 -50,289 -47,354 -191%
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from bills payable - - 172,575 116,744 132,467 -
Payments of bills payable - - -143,971 -110,166 -99,044 -
Dividends paid -7,898 -4,716 -5,582 -5,585 -5,593 -29%
Payments of lease liabilities - - - - -3,076 -
Proceeds from issuance of common stock - 238 203 461 746 -
Net proceeds from (payments of) bills payable -8,250 -1,093 - - - -
Net proceeds from issuance of stock rights - - 59,826 - - -
Net Cash From Financing Activities -16,148 -5,571 83,951 1,454 25,500 -258%
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (Carried Forward) P -47,171 P 3,563 P 15,373 P 48,025 -83,417 77%
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR
Cash and other cash items 41,237 41,767 39,813 43,882 52,492 27%
Due from Bangko Sentral ng Pilipinas (BSP) 258,416 260,841 304,285 340,596 349,017 35%
Due from other banks 43,165 20,944 33,463 41,088 48,780 13%
Investment securities at amortized cost - - - 2,097 6,490 -
HTM securities - - 894 - - -
Securities purchased under reverse repurchase agreement (SPURRA) 86,173 58,431 7,891 14,872 22,009 -74%
Interbank loans receivables - - 72,749 31,576 42,214 -
Foreign currency notes and coins (FCNC) 3,406 3,243 3,337 3,694 4,828 42%
432,397 385,226 462,432 477,805 525,830
22%
CASH AND CASH EQUIVALENTS AT END OF YEAR
Cash and other cash items 41,767 39,813 43,882 52,492 62,726 50%
Due from BSP 260,841 304,285 340,596 340,017 306,938 18%
Due from other banks 20,944 33,463 41,088 48,780 35,820 71%
Investment securities at amortized cost - - 6,490 308 -
HTM securities - 2,097 - - -
SPURRA 58,431 7,891 14,872 22,099 - -
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Interbank loans receivables - 31,576 42,214 31,277 -
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FCNC 3,243 3,337 3,694 4,828 5,344 65%
P P P P P 15%
385,226 388,789 477,805 525,830 442,413
Figure 6 Statement of Cashflow of BDO Unibank, Inc. 2015 to 2019
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Analysis of Financial Statements:
Based on the percentage change in 5 years, the total assets of BDO
increased by 50%. It may indicate a good position for the company. The high
percentage changes of premises, furniture, fixtures and equipment (101%) and due
from the other banks (71%) give rise to the total assets. The bills payable (92%) and
other liabilities (98%) is the highest percentage change that resulted into 59% increase
in the total liabilities and equity.
In the income statement, the interest expense is much faster to increase the
interest income, but it doesn’t affect that much because the net interest income was
increased by 111%. Overall, BDO has a good performance in its operation due to an
increase of 67% in its net profit for 5 years.
A. LIQUIDITY RATIOS
1. Current Ratio
Ratio/Year 2015 2016 2017 2018 2019
Current Ratio 0.95 1.20 1.08 1.08 1.09
Industry Average 1.08 1.16 1.09 1.15 1.15
INTERPRETATION Unfavorable Favorable Unfavorable Unfavorable Unfavorable
Table 1 Current Five (5) Year Current Ratios of BDO Unibank, Inc.
Trend Analysis:
Current Ratio
1.5
0.5
0
2015 2016 2017 2018 2019
Figure 7 Trendline of Current Ratios of BDO Unibank, Inc.
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Analysis:
The current ratio measures the ability of the firm to meet its current liabilities with
the current assets. Based on the graph from 2015 to 2016, the trendline increased and
decline from 2017 to 2019. As you can see on the industry average, BDO is
unfavorable to meet its short-term obligation using its current assets except in 2016.
Cash Ratio
Ratio/Year 2015 2016 2017 2018 2019
Cash Ratio 0.02 0.02 0.02 0.02 0.02
INTERPRETATION Unfavorable Unfavorable Unfavorable Unfavorable Unfavorable
Table 2 Current Five (5) Year Cash Ratios of BDO Unibank, Inc.
Trend Analysis:
Cash Ratio
0.025
0.02
0.015
0.01
0.005
0
2015 2016 2017 2018 2019
Figure 8 Trendline of Cash Ratios of BDO Unibank, Inc.
Analysis:
The cash ratio measures the ability of the firm to finance its current liabilities
through the use of cash and cash equivalents. Based on the graph, the trendline for
BDO’s cash ratio is a straight horizontal line and there’s no further movement. In the
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industry average, from 2015 to 2019, it is unfavorable to meet its short-term
obligation using its cash and cash equivalents.
Summary
Ratio/Year 2019 2018 2017 2016 2015
Current Ratio 0.95 1.20 1.08 1.08 1.09
Cash Ratio 0.02 0.02 0.02 0.02 0.02
Table 3 Current Five (5) Year Liquidity Ratios of BDO Unibank, Inc.
Trend Analysis:
Liquidity Ratios
1.5
0.5
0
2015 2016 2017 2018 2019
Current Ratio Cash Ratio
Figure 9 Trendline of Liquidity Ratios of BDO Unibank, Inc.
Analysis:
The liquidity of the banks' measures different compares to the other types of
service businesses. The unfavorable result of its ratio can still be classified as good
since the banks have a higher liability due to deposits, premiums collected and other
financial services it offers to its customers.
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Liquidity Ratio Analysis:
The current Ratio was low compare to the Industry Average during the period of
2015 to 2019. The year 2016 is the lowest having a current ratio of 1.22 and an Industry
Average of 1.76.
The Quick Ratio for 2015 to 2019 is not good and not sufficient to pay off its
current liabilities because the Current Ratios are unfavorable. The company is having
financial difficulty. It begins to pay the short-term liabilities slowly and borrow more from
the other institution, which increases its current liabilities.
B. PROFITABILITY RATIOS
1. Net Interest Margin
Ratio/Year 2015 2016 2017 2018 2019
Net Profit Margin 4% 4% 4% 5% 6%
Industry Average 3.51% 3.54% 3.72% 3.99% 4.66%
INTERPRETATION Favorable Favorable Favorable Favorable Favorable
Table 4 Current Five (5) Year Net Interest Margin of BDO Unibank, Inc.
Trend Analysis:
Net Interest Margin

4.00%
3.00%
2.00%
1.00%
0.00%
2015 2016 2017 2018 2019
Figure 10 Trendline of Net Interest Margin of BDO Unibank, Inc.
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Analysis:
The net profit margin measures the company’s overall net income to revenues.
Based on the graph, BDO has an upward trendline, which indicates that the company
has an increasing interest percentage for the past 5 years. In the cutoffs and standard,
BDO’s net interest margin is favorable.
2. Gross Profit Margin
Ratio/Year 2015 2016 2017 2018 2019
Gross Profit Margin 2.04% 2.58% 2.76% 2.49% 2.59%
Industry Average 3% 3% 3% 3% 3%
Table 5 Current Five (5) Year Gross Profit Margin of BDO Unibank, Inc.
Trend Analysis:
Gross Profit Margin

3.00%
2.50%
2.00%
1.50%
1.00%
0.50%
0.00%
2015 2016 2017 2018 2019
Figure 11 Trendline of Gross Profit Margin of BDO Unibank, Inc.
Analysis:
The gross profit margin measures the profitability of the firm that indicates the
percentage of revenue that exceeds the cost of sales. Based on the graph, BDO’s gross
profit margin is in the uptrend movement, which means that the net interest income of
24
BDO is increasing. But in the industry average, from 2015 to 2019, BDO’s gross profit
margin is unfavorable and needs to increase a bit to meet the desired percentage.
3. Return on Assets
Ratio/Year 2015 2016 2017 2018 2019
Return on Assets (ROA) 1% 1% 1% 1% 1%
Table 6 Current Five (5) Year Return on Assets of BDO Unibank, Inc.
Trend Analysis:
Return on Assets
1%
1%
1%
1%
0%
0%
0%
2015 2016 2017 2018 2019
Figure 12 Trendline of ROA of BDO Unibank, Inc.
Analysis:
The return on assets measures how profitable a company is using its total
assets. The graph shows a straight horizontal line; it indicates that BDO’s ROA is not
changing or there is no trend. Based on the industry average, from 2015 to 2019, it is
unfavorable and shows that the company is not utilizing its assets to generate more
income. Since it is a bank, it relies more on the liabilities due to the deposits, premiums,
and other financial services it offers.
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4. Return on Equity
Ratio/Year 2015 2016 2017 2018 2019
Return on Equity 7% 12% 9% 12% 12%
INTERPRETATION Unfavorable Unfavorable Unfavorable Favorable Unfavorable
Table 7 Current Five (5) Year Return on Equity of BDO Unibank, Inc.
Trend Analysis:
Return on Equity
15%
10%
5%
0%
2015 2016 2017 2018 2019
Figure 13 Trendline of ROE of BDO Unibank, Inc.
Analysis:
The Return on Equity provides insight into how the company’s shareholders
contributed to generate profit. The graph shows a sideways movement. Based on the
industry average, it is unfavorable and shows that the company is not utilizing its
shareholder’s equity to generate more income. Since it is a bank, it relies more on the
liabilities due to the deposits, premiums, and other financial services it offers.
5. Times Interest Earned (TIE)
Ratio/ Year 2015 2016 2017 2018 2019
Times Interest 2.20 1.98 times 2.21 1.47 1.49
Earned times times times times
26
Table 8 Current Five (5) Year Time Interest Earned of BDO Unibank, Inc.
Trend Analysis:
Times Interest Earned

2.5
2
1.5
1
0.5
0
2015 2016 2017 2018 2019
Figure 14 Trendline of TIE of BDO Unibank, Inc.
Analysis:
Times interest earned ratio measures the capacity of the entity to meet its debt
obligation through its current income. The graph shows a downtrend movement and
below in the industry average, which means that if BDO cannot pay all of its debt
obligations through its current income. Due to financial services offered by banks, it has
high liabilities and can still be favorable that the company is in a good position.
5. Earnings Per Share
Ratio/ Year 2015 2016 2017 2018 2018

Earnings Per P7.25 P6.47 P6.47 P6.40 P7.40
Share
Industry It depends, no It depends, It depends, It depends, It depends,
Average general rule of no general no general no general no general
thumb rule of rule of thumb rule of thumb rule of thumb
thumb
Table 9 Current Five (5) Year Earnings Per Share of BDO Unibank, Inc.
27
Trend Analysis:
Earnings Per Share

7.5
6.5
6
5.5
2015 2016 2017 2018 2019
Figure 15 Trendline of EPS of BDO Unibank, Inc.
Analysis:
Earnings per share show how much the company generates for each stock
share. The graph shows a reversal movement, it declined from 2016 to 2018 and make
a bounce back in 2019. It means during 2016 to 2018, BDO deceased EPS by almost
P6.40, even though it generates more income in the given years. In 2019, it gives
P7.40 earnings per share, the highest in the past 5 years. It will give its investors a
higher return on each share of stock.
Summary
Ratio/Year 2015 2016 2017 2018 2019

Net Profit 2.58% 3.20% 3.25% 3.25% 3.48%
Margin
Gross Profit 2.04% 2.58% 2.76% 2.49% 2.59%
Margin
Return on 1% 1% 1% 1% 1%
Assets (ROA)
Return on
Equity (ROE) 7% 12% 9% 12% 12%
Time Interest 2.20 1.98 times 2.21 1.47 1.49
Earned times times times times
Earnings Per P7.25 P6.47 P6.47 6.40 7.40
Share
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Table 10 Current Five (5) Year Profitability Ratios of BDO Unibank, Inc.
Trend Analysis:
Profitability Ratios
14.00%
12.00%
10.00%
8.00%
6.00%
4.00%
2.00%
0.00%
2015 2016 2017 2018 2019
NPM GPM ROA ROE
Figure 16 Trendline of Profitability Ratios of BDO Unibank, Inc.
Analysis:
If the investor will rely on industry average of service type of business and not on
the nature of banks, the overall result will be unfavorable. But then, BDO must still need
to improve its profitability by generating more net interest income.
C. EFFICIENCY RATIOS
1. Receivable Turnover
Ratio/Year 2015 2016 2017 2018 2019
Receivable 0.05x 0.05x 0.05x 0.06x 0.07x
Turnover Ratio
Industry Average 6 to 12 times 6 to 12 times 6 to 12 times 6 to 12 times 6 to 12 times
Table 11 Current Five (5) Year Receivable Turnover Ratios of BDO Unibank, Inc.
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Trend Analysis:
Receivable Turnover
0.08
0.06
0.04
0.02
0
2015 2016 2017 2018 2019
Figure 17 Trendline of Receivable Turnover Ratios of BDO Unibank, Inc.
Analysis:
The accounts receivable turnover measures how the company’s receivables
have been turned into cash in the given year. The graph shows an uptrend, which
means that the conversion of loans and other receivables of BDO into cash is
increasing. But, based on the industry average, BDO’s accounts receivable turnover are
unfavorable, which may indicate that the loan and other receivables of BDO take time to
convert into cash. One of the reasons for this is the failure of payment of its debtor.
2. Asset Turnover Ratio
Ratio/Year 2015 2016 2017 2018 2019
Asset Turnover 0.04x 0.04x 0.04x 0.04x 0.05x
Ratio
Industry Average 3 3 3 3 3
Table 12 Current Five (5) Year Asset Turnover Ratios of BDO Unibank, Inc.
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Trend Analysis:
Asset Turnover
0.06
0.05
0.04
0.03
0.02
0.01
0
2015 2016 2017 2018 2019
Figure 18 Trendline of Asset Turnover Ratios of BDO Unibank, Inc.
Analysis:
The asset turnover ratio measures how efficient the management to use
assets to generate sales and earn profit for the company. The graph shows an
increased in
2019, it means that this year BDO increased its use on its assets to have more net
interest income but even it increased, the industry average are unfavorable to BDO, it
may indicate that it does not rely heavily on its assets to generate more new interest
income.
3. Fixed Asset Turnover Ratio
Ratio/Year 2015 2016 2017 2018 2019
Fixed Asset Turnover 2.10x 2.24x 2.38x 2.74x 2.80x
Ratio
Industry Average 0.65 to 1 0.65 to 1 0.65 to 1 0.65 to 1 0.65 to 1
Table 13 Current Five (5) Year Fixed Asset Turnover Ratios of BDO Unibank, Inc.
31
Trend Analysis:
Fixed Asset Turnover

3
2.5
2
1.5
1
0.5
0
2015 2016 2017 2018 2019
Figure 19 Trendline of Fixed Asset Turnover Ratios of BDO Unibank, Inc.
Analysis:
The fixed asset turnover measures how effectively a company generates sales
through its fixed assets. The graph shows an uptrend movement; it may indicate that
BDO is using more fixed assets in generating income. The high increase in the
branches of BDO across the rural areas affects the fixed assets to increase. `
4. Equity Turnover Ratio
Ratio/Year 2015 2016 2017 2018 2019
Equity Turnover 0.19x 0.38x 0.32x 0.37x 0.42x
Ratio
Industry Average 3 3 3 3 3
Table 14 Current Five (5) Year Equity Turnover Ratios of BDO Unibank, Inc.
Trend Analysis:
32
Equity Turnover
0.5
0.4
0.3
0.2
0.1
0
2015 2016 2017 2018 2019
Figure 20 Trendline of Equity Turnover Ratios of BDO Unibank, Inc.
Analysis:
The equity turnover measures the proportion of the sales to its stockholders’
equity. The graph shows an uptrend movement which may indicate an increase in the
efficiency of the management in using the equity to generate more revenue but
based on the industry average, it is unfavorable and needs to increase further to meet
the desired ratio.
Summary
Ratio/Year 2015 2016 2017 2018 2019

Receivable 0.05x 0.05x 0.05x 0.06x 0.07x
Turnover Ratio
Asset Turnover
Ratio 0.04x 0.04x 0.04x 0.04x 0.05x
Fixed Asset
Turnover Ratio 2.10x 2.24 2.38x 2.74x 2.80x
Equity Turnover
Ratio 0.19x 0.38x 0.32x 0.37x 0.42x
Table 15 Current Five (5) Year Efficiency Ratios of BDO Unibank, Inc.
33
Trend Analysis:
Efficiency Ratios
3
2.5
2
1.5
1
0.5
0
2015 2016 2017 2018 2019
Receivable Turnover Asset Turnover

Fixed Asset Turnover Equity Turnover
Figure 21 Trendline of Efficiency Ratios of BDO Unibank, Inc.
Analysis:
BDO’s efficiency ratios may still be favorable since it is a bank industry that relies
heavily on the liabilities due to its financial services. The significant increase in the fixed
asset turnover is due to the increased of the rural branches across the country which
may generate more financial services to customers.
D. STABILITY RATIOS
1. Debt Equity Ratio
Ratio/Year 2015 2016 2017 2018 2019
Debt Equity Ratio 0.31 0.59 1.94 0.51 0.56
Table 16 Current Five (5) Year Debt Equity Ratios of BDO Unibank, Inc.
34
Trend Analysis:
Debt Equity Ratio

2.5
1.5
0.5
0
2015 2016 2017 2018 2019
Figure 22 Trendline of Debt Equity Ratios of BDO Unibank, Inc.
Analysis:
The debt equity ratio compares the total liabilities to shareholder’s equity to
determine how much leverage a company is using. The graph shows a high increase in
2017 and a decline in 2018 and 2019. BDO has a high equity ratio which means that
the company relies more on liabilities than equity.
2. Debt Ratio
Ratio/Year 2015 2016 2017 2018 2019
Debt Ratio 0.60 0.50 0.60 0.60 0.60
Table 17 Current Five (5) Year Debt Ratios of BDO Unibank, Inc.
Trend Analysis
Debt Ratio
0.065
0.06
0.055
0.05
0.045
2015 2016 2017 2018 2019
35
Figure 23 Trendline of Debt Ratios of BDO Unibank, Inc.
Analysis:
The debt ratio measures how much leverage is used by a company in terms of
total debt to total assets. The graphs show a decline in 2016 because of the high
increase in debts over its total assets but it makes a bounce back in 2017 to 2019. But it
is unfavorable to industry average which may indicate that the company has more debt
than assets.
Summary
Ratio/Year 2015 2016 2017 2018 2019

Debt Equity 0.31 0.59 1.94 0.51 0.56
Ratio
Debt Ratio 0.06 0.05 0.06 0.06 0.06
Table 18 Current Five (5) Year Stability Ratios of BDO Unibank, Inc.
Trend Analysis:
Stability Ratios
2.5
2
1.5
1
0.5
0
2015 2016 2017 2018 2019
Debt Equity Debt Ratio
Figure 24 Trendline of Stability Ratios of BDO Unibank, Inc.
Analysis:
BDO’s stability ratios are in a good position wherein banks more rely on liabilities
and it also has higher total assets over debt which will be good for the eyes of the
customers and investors.
36
E. LEVERAGE RATIOS
1. Debt to Asset Ratio
Ratio/Year 2015 2016 2017 2018 2019
Debt to asset ratio 0.90 0.79 0.88 0.89 0.88
Industry Average 0.60- 1 0.60- 1 0.60- 1 0.60- 1 0.60- 1
Table 19 Current Five (5) Year Debt to Asset Ratios of BDO Unibank, Inc.
Trend Analysis:
Debt to Asset Ratio

0.95
0.9
0.85
0.8
0.75
0.7
2015 2016 2017 2018 2019
Figure 25 Trendline of Debt to Asset Ratios of BDO Unibank, Inc.
Analysis:
The debt to asset ratio indicates the percentage of assets that are being financed
through debt. The graph shows a sideways movement after the decline in 2016. It may
indicate that in 2016, BDO has a high portion of the debt in its assets. Based on
industry average, BDO relies more on debt to finance its assets.
2. Debt to Equity Ratio
Ratio/Year 2015 2016 2017 2018 2019
Debt to equity ratio 4.71 8.73 7.48 7.83 8.30
37
INTERPRETATION Unfavorable Favorable Favorable Favorable Favorable
Table 20 Current Five (5) Year Debt to Equity Ratios of BDO Unibank, Inc.
Trend Analysis:
Debt to Equity Ratio

10
8
6
4
2
0
2015 2016 2017 2018 2019
Figure 26 Trendline of Debt-to-Equity Ratios of BDO Unibank, Inc.
Analysis:
The debt-to-equity ratio shows the proportion of equity and debt to finance the
company’s assets. The graph shows an uptrend movement which may indicate an
increase in the liabilities of the company. It may still be favorable since it is a bank, the
higher the liabilities may indicate a higher amount came from the financial service it
offers.
3. Equity Ratio
Ratio/Year 2015 2016 2017 2018 2019
Equity Ratio 0.19 0.09 0.11 0.11 0.12
Industry Average 0.50 to 1 0.50 to 1 0.50 to 1 0.50 to 1 0.50 to 1
Table 21 Current Five (5) Year Equity Ratios of BDO Unibank, Inc.
38
Trend Analysis:
Equity Ratio
0.2
0.15
0.1
0.05
0
2015 2016 2017 2018 2019
Figure 27 Trendline of Equity Ratios of BDO Unibank, Inc.
Analysis:
The equity ratio measures how much leverage that the company uses to finance
its investment in assets. The graph shows a downtrend movement which may indicate
that BDO relies primarily on debt to acquire assets.
Summary
Ratio/Year 2015 2016 2017 2018 2019

Debt to asset 0.90 0.79 0.88 0.89 0.88
ratio
Debt to equity 4.71 8.73 7.48 7.83 8.30
ratio
Equity Ratio 0.19 0.09 0.11 0.11 0.12
Table 22 Current Five (5) Year Leverage Ratios of BDO Unibank, Inc.
39
Trend Analysis:
LEVERAGE RATIOS
10
0
1 2 3 4 5
Debt to Asset Debt to Equity Equity Ratio
Figure 28 Trendline of Leverage Ratios of BDO Unibank, Inc.
Analysis:
BDO’s Leverage ratios is in a good position wherein it relies heavily on its
liabilities than equity which is expected to a bank type of business.
Weighted Average Cost of Capital (WACC)
Bases on Investopedia, the weighted average cost of capital (WACC) is
a calculation of a firm's cost of capital in which each category of capital
is
proportionately weighted. All sources of capital, including common stock, preferred
stock, bonds, and any other long-term debt, are included in a WACC calculation.
Year 2015 2016 2017 2018 2019 Average
WACC 41% 40% 48% 48% 53% 46%
Table 23 Current Five (5) Year WACC of BDO Unibank, Inc.
40
Trend Analysis:
WACC
60%
50%
40%
30%
20%
10%
0%
2015 2016 2017 2018 2019 AVERAGE
WACC
Figure 29 Trendline of WACC of BDO Unibank, Inc.
Analysis:
BDO’s WACC average in 5 years is 46% and taking weighted average in
this way, it stated that 46% of BDO interest owes for each peso it finances.
41
Major Market Served
Before becoming one of the largest banks in the Philippines, BDO Unibank, Inc.
was known as the thrift bank Acme Savings Bank in the late 1960s, which was later
acquired by the Sy group in 1976 and since then has been providing their clients with
wide range of prominent goods and services as universal bank in the financial industry.
Having over than 1,300 branches nationwide and a growing number of
international offices, BDO aims to give quality service, customer-focused strategies, and
service-oriented company to maintain successful relationships with their customers that
make use of their financial services such as lending, deposit-taking, trusts and
investments, credit cards, etc.
BDO Unibank is a member of SM Group of Companies wherein consumers of
the corporation can easily manage their finances as SM Malls owns more than 8.5
million square meters of mall space that have a BDO physical branches or ATMs
available. Due to community quarantines that is implemented in the country, BDO
Online Banking is available for clients to make transactions as an alternative to branch
banking because of limited open branches and shortened banking hours.
42
Market Size
The banking industry in the Philippines consists of 43 universal banks, 57 thrift
banks (savings and mortgage banks, microfinance institutions, stock savings and loan
associations, and private development banks), and 495 cooperative and rural banks
(Outlook of the Philippine Banking Sector, 2019).
An archipelago with more than 109 million inhabitants, the Philippines being a
member of the tiger cub economies in Southeast Asia with the ability to take advantage
of the rising economy led to the increase of investments from neighboring countries and
other investors. Based on the data from Bangko Sentral ng Pilipinas (BSP), the total
assets of the country’s banks accumulated for 81.4% of the total assets of the financial
sector. With banks being the primary source of credit for the local economy and the
most essential asset in the financial market, the GDP in the first half of 2017 accounted
at 8.6%.
The performance and condition of the banking system in the Philippines is
negatively affected due to the COVID-19 pandemic and has forced banks to adjust daily
operations in accordance with the Enhanced Community Quarantine (ECQ) last
March
2020 which also affected their borrowers’ ability to pay their dues. Regardless, the
financial soundness indicators (FSIs) confirmed that the banking system were able to
adapt with the new normal during the first half of 2020. The demand for digital banking
spiked up in which more than 4.1 million digital accounts registered online in both banks
and non-bank electronic money issuers (EMIs) and the number of transactions using
Insta Pay and PesoNet also increased.
Market Segment
Bank’s Business Segments include the following:
• Retail Banking Segment
43
• Wholesale Banking Segment
44
• Wealth Management Segment
It is stated that in terms of income, retail banking is the number one contributor
and is also known as personal banking, in which most individuals are acquainted with
as it includes activities that happen in branch banking. Cash deposits, credit cards, and
mortgages are the services that retail banking offers that targets new business clients.
Retail banking income is divided into streams of interest and non-interest. Around 70
percent of retail sales are paid for by net interest income. In determining the interest
earned on both credit cards and mortgages, subtract the interest charged on deposits
and in total the percentage of non-interest income is at 30%. By taking the difference
between both non-interest profits and operating costs, it is determined. Account costs,
processing fees, credit card fees, and foreign exchange sales produce the revenues.
The payments are mostly small sums and the consumers are relatively ignored.
Compensation costs and maintenance costs are expenditures included in this section
with the gross revenue of a bank adding up to more than 50%.
Apart from retail banking, the second contributor in earnings is wholesale
banking, also known as capital markets. It deals with clients in the corporation and
institution that is associated with banking investment which includes trading, lending,
sales, mergers, and acquisitions. Usually, in the wholesale banking segment it is
normal to have 15% to 40% total revenue. Determining the revenue in wholesale
banking is difficult due to the complexity in estimating sales that stems from the lack of
trade disclosures.
For banks, wealth management is a fast growing market with its revenue
stemming from retail brokerage services and from funds of the management. Wealth
management is commonly priced for many reasons at a higher multiple than other
segments. Due to lower credit standards, it is more lucrative, there is lower uncertainty,
and there is greater growth. The sudden change in demographics of the population is
because of the older generation that chooses to save for retirement instead of getting
loans. This results to this segment to grow faster than the other two. As a majority of the
45
funds handled are held in equities in terms of revenue, trading commissions add to
revenue. In recent years, there has been more trade action, which raises commissions.
However, because of its focus on the stock markets, the short-term growth in trading
income is a significant source of volatility. Contrastingly, because management-related
payments do not rely on market success, there is no rise in volatility.
Organizational Chart
Figure 30 Table of Organization BDO Unibank, Inc.
Our Board of Directors
The variety in aptitudes, experience, sex, sexual direction or inclination, age,
training, race, business, and other related encounters is one of the vital supporters of
45
our effective Board oversight. We see this broad scope of encounters and
foundations
46
as a fundamental component in keeping up vital direction and perspective for
our developing business.
Board Structure
The Board is made of 11 individuals helped by three guides. The individuals from
the Board are generally experts with ability in banking, bookkeeping, and account, law,
stock showcasing, procedure plan, bank guidelines, data innovation, supportability, and
danger the executives. A Non-Executive Chairperson drives it with 6 Independent
Directors, 2 Non-Executive Directors, and 2 Executive Directors who are the Vice
Chairman and the President and CEO. Autonomous Directors involve the greater part
(54.50%) individuals from the Board, along these lines surpassing the prerequisite of
the Securities and Exchange Commission (SEC) and the Bangko Sentral ng Pilipinas
(BSP). Non-Executive Directors, including Independent Directors, presently contain
82% of the Board, more than the necessity of the BSP of at any rate greater part of the
Board. This gives autonomous and target judgment on huge corporate issues and
guarantees that central points of contention and techniques are equitably explored,
valuably tested, wholly talked about, and thoroughly analyzed.
Board Committees
The Board has set up nine (9) advisory groups to help release its obligations and
duties. These panels get their power from and report straightforwardly to the Board.
Their orders and extents of obligation are gone ahead in their separate Terms of
Reference, which are exposed to yearly audit and might be refreshed or changed to
address the Board's issues or for administrative consistence. The number and
participation organization of advisory groups might be expanded or diminished by the
Board as it considers proper, predictable with appropriate laws or guidelines explicitly
on the lion's share enrollment and chairmanship of autonomous chiefs in different
councils. As of December 31, 2019, eight of the nine board-level councils are led by
autonomous chiefs. These cover Risk Management, Board Audit, Corporate
47
Governance, T r u s t , R e l a t e d P a r t y T r a n s a c t i o n s , I n f o r m a t i o n T e c h n o l o g y
S t e e r i n g , Nominations, and Compensation.
The Board of Directors
• Responsibility for good administration lies with the Board.
• It is liable for giving viable initiative and generally heading to cultivate the
drawn- out accomplishment of the Bank.
• It administers the Bank's business undertakings, audits the key plans and
execution targets, monetary plans and financial plans, key operational activities,
capital uses, acquisitions, and divestments, yearly and break fiscal summaries,
and corporate administration rehearses.
• It administers the executive's execution, endeavors to hazard the executive's
structure, inner control frameworks, monetary revealing and consistence, related
gathering exchanges, proceeding with chief instruction, and progression plans for
the Board and CEO.
• It considers supportability issues identified with the climate and
social components as a feature of its maintainable financial practices.
Executive Committee
• Exercises intensity of the Board in the administration and heading of the issues
of the Bank.
• Acts as a principal favoring body for advances, credits, advances or
responsibilities, and property-related proposition.
• Reviews and suggests for Board endorsement significant credit arrangements.
Trust Committee
• Reviews and supports exchanges among trust and additionally guardian
accounts, acknowledges, and closes trust and other trustee accounts, and favors
the venture, reinvestment, and manner of assets or property.
• Evaluates trust and other trustee accounts at any rate once per year.
48
• Reviews Trust and Investment Group's general presentation, the profile of assets
and resources under its administration, industry position, and the board reports'
danger.
• Approves offering new items and administrations, foundation and recharging
of lines and cutoff points with monetary establishments, speculation sources, and
counterparties.
Risk Management Committee
• Responsible for improvement and oversight of danger the executive's program
of the Bank.
• Responsible for favoring hazard hunger levels, approaches, hazard resistance
limits. Characterizes fitting procedures for recognizing, evaluating, overseeing,
and controlling danger introductions, including forestalling or potentially limiting
the effect of misfortunes.
• Oversees usage and audit of the danger the executives plan on an undertaking
wide premise including the arrangement of cutoff points of optional authority
assigned by the Board of Directors to the Board and guarantees quick restorative
activities when cutoff points are penetrated.
• Responsible for assessing the proceeded with pertinence, exhaustiveness, and
viability of danger the executive's structure.
• Works with Audit Committee in ensuring in the Annual Report the sufficiency of
the Bank's inward control and danger the board frameworks.
Compensation Committee
• Provides oversight on chiefs' pay and compensation of senior administration and
other key staff, guaranteeing that remuneration conspire is reliable with the
Bank's way of life and methodology, successfully lined up with reasonable
danger taking and comparable with corporate and singular execution.
• Ensures consistency of remuneration approaches and practices over the Group.
Board Audit Committee
49
• Oversees monetary announcing the measure, the arrangement of inward
control and danger the board frameworks, interior and outside review
capacities, in addition to consistency with administration approaches, relevant
laws, and guidelines.
• Reviews the detailing cycle's uprightness to guarantee exactness and
unwavering quality of budget summaries and consistency with monetary
revealing norms.
• Monitors and assesses ampleness, adequacy, and viability of the Bank's set
up inside control and danger the board frameworks, approaches, and
methodology.
Nominations Committee
• Leads method of characteristic candidates for election and
appointment of administrators and everyone different position requiring the
Board of administrators' appointment, giving full thought to succession
coming up with and, therefore, the cluster's leadership wants. Above all, this
method includes the identification of the abilities and competencies of the
presently serving administrators, the gaps in skills and competencies known.
Therefore, they look for World Health Organization candidates aligned with the
Bank's directions to fill the gaps. It then makes applicable recommendations to
the Board.
• Makes recommendations to the Board on the composition and position of the
assorted committees.
• Reviews structure, size, and composition of the Board, together with the balance
of skills, information, and knowledge. Therefore, the non-executive
administrators' independence makes recommendations to the Board with
relevancy to any changes.
Corporate Governance Committee
50
• Assists the Board in process administration approaches and regulation the
usage of administration practices of the Bank even as its auxiliaries and
associates.
51
• ▪ Conducts yearly execution assessment of Board of administrators, its councils,
chief administration, peer assessment of chiefs, and behaviors a self-assessment
of its presentation.
• Oversees continuing instruction program for chiefs and key officers and proposes
applicable getting ready. Designations Committee
• Leads cycle of identifying risk for political race and arrangement of chiefs and
everyone completely different positions requiring the Board of administrators'
arrangement, giving full thought to progression composition and, therefore, the
cluster's authority wants. Specifically, this cycle incorporates the identification of
the presently serving chiefs' aptitudes and capabilities, the holes in skills and
skills distinguished, and therefore the pursue candidates World Health
Organization ar lined up with the Bank's bearings to fill the holes. IT at that time
makes correct proposals to the Board.
• Makes suggestions to the Board on the synthesis and position of the various
informatory teams.
• Reviews structure, size, and organization of the Board, together with the
equilibrium of skills, info, and knowledge and therefore the freedom of the non-
leader administrators and makes suggestions to Board with relevancy any
changes.
Information Technology committee
• Provides oversight and administration over the Bank's IT capacities, together with
endorsements of information innovation-related approaches and practices of the
Bank and material rules.
• Informs the Board of each inner and out of doors, IT-related turns of events
and exercises, expected difficulties and dangers, progress versus key
destinations.
• Approves and underwrites to the Board IT-related accepted procedures, key
plans, approaches, and methodology.
52
• Accountable for comprehension, overseeing, and assuaging
innovation probabilities that defy the Bank and its auxiliaries, guaranteeing that
the hazards are suitably overseen and mitigated, and checking IT execution
together with the standing of great IT tasks and problems.
Related Party Transactions Committee
• Assists the Board in its oversight of the lead of all connected Party Transactions
(RPTs) to secure the interests of the Bank and its partners
• Ensures legitimate exposure of all endorsed RPTs as per material lawful and
administrative prerequisites and affirmation by the lion's share vote at the Annual
Stockholders' gathering the Bank's critical exchanges with related gatherings.
Products and Services
BDO may be a full-service general/universal bank. A full-administration general
keeps cash with one among the amplest circulation organizations comprising of over
one, 300 operating branches and quite four, 400 ATMs across the country. It offers a
complete cluster of trade driving things and administrations to the retail and company
business sectors as well as loaning (corporate, focus market, SME, and purchaser),
Deposit-taking, interchange, Facilitating, Trust and Investments, Credit Cards, company
money Management, and Remittances.
BDO discovers approaches to satisfy BDO vendors' wants by giving the
accompanying:
• Straight Payment - Over the counter or face-to-face transactions
• Installment Payment arrange - Regular, zero % or obtain currently, Pay
Later Cardholders would currently be ready to have the ability to alter over a
traditional obtain, in staggered installment, while not interest! The customer
approach to life and searching propensities are quickly evolving. Banks and
53
stores have to be compelled to acknowledge this by cooperating to
grant
54
swollen disbursal power and filmable installment alternatives. The Installment
workplace typically used clearly for the acquisition of high-priced things, as an
example, machines, furniture, contraptions, and then on, has advanced.
Clothes and different essential wants are presently likewise offered in parts to
show resolute be a lot of moderate to the consumers. This workplace is
accessible to all or any BDO cardholders, the largest card base within the
nation. This program will not merely support your store's deals, but in like
manner profit by the market, we tend to each serve.
• Delivery/Events - Utilizations so much off/remote terminals ideal for
conveyance administrations, occasions, and shows. Alludes to BDO's
workplace of card acknowledgment utilizing the location Wireless Technology,
which can be introduced at your web site to be used for conveyances,
occasions, or roadshows while not the necessity for phone access.
• E-commerce - Internet/On-line transactions The BDO web Payment Entree
Facility offers a customary internet association together with your organization
to securely and reliably send and find installment approvals allowing your
shoppers to shop for merchandise and ventures from your internet web site.
• Mail Order / Telephone Order (MOTO) - Cardholder Not gift exchanges This
workplace permits your organization the advantage of tolerating exchanges
that are brought in, sent, or faxed by your shoppers. Consequently, your
organization can have the choice to oblige exchanges while not the presence
of the cardholders at your foundation.
• Recurring Payment System (RPS) - Shippers with perpetual charging
exchanges like protection expenses, membership installments, and club
enrollment contribution. The continual Payment System (RPS) Facility is
employed routinely by organizations for "auto-charge game plans" with
customers. This installment workplace permits the organization to trot out
exchanges that are continuance in nature, such as occasional
expenses/charges.
52
BDO likewise offers obtained shippers the attendant Services:
• Point of Sale (POS) terminal installation.
• Card acceptance and POS terminal usage orientation
• Supplies
• Terminal maintenance, servicing, and repair
• Merchant Services call center (with PLDT and Digital fee number)
• Merchant on-line access - dealings reports for payment reconciliation on
the market via the net
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CHAPTER II
RESEARCH DESIGN AND METHODOLOGY
Sources of Information
Collecting various information and data from other financial institutions were
gathered to use as a source to establish superior strategic management. A data
requirement includes financial statements, financial forecasts, financial highlights,
surveys, ownership, board, and management to accomplish this paper. It also needs
information on recent developments in the sector under review. Some of the industry's
significant competitors' history is required for comparative purposes in the financial and
organizational aspects. It is also essential to provide adequate internal knowledge of
Banco De Oro, the purpose of this study.
Methodology
The information required in this paper was gathered primarily through the recent
Financial Report of Banco De Oro and the website. Registered employees were
required to supply a copy of the financial highlights and all related material. Information
on rivals was collected using the internet. Certain internal information on the business
understudy was collected through the data gathered from investors' presentation
2019 on the internet. Extensive analysis has been carried out using the internet to scan
for specific data, statistics, and forecasts.
54
Table 24 Summary of Frameworks, Tools, Activities and Outputs For this Strategic Management Paper
Framework Tools Activities Output
Ten Essential Mission Statement Mission and Vision
Components of Evaluation/Formulation Statements
Mission Statement
External Factor General Environment
Evaluation (EFE Analysis
Matrix) Opportunities and
Poster’s Five Competitive Profile Industry Analysis Threats
Forces Model Matrix (CPM)
David’s Functional Internal Factor Company Analysis Strength and
Tools Evaluation (IFE) Weaknesses
David’s Matching SWOT Matrix Strategy Formulation Objectives and
Tools SPACE Matrix Strategies
IE Matrix Grand
Strategy Matrix
David’s Matching Quantitative Prioritization of Recommended
Tools Strategic Planning Strategies Strategies
Matrix
Implementing Market Penetration Action Plans
Strategies Product Development Proforma Financial
Statements
Norton’s and Strategy Evaluation Performance
Kaplan’s Balanced and Control Measures
Scorecard
55
Limitations
This paper is confined only to Banco de Oro, which exists exclusively in the
Philippines, compared to its competitors such as Metrobank, Bank of the Philippine
Islands (BPI), Philippine National Bank. Among the various fields of this business, this
paper focuses on banking institutions. This paper emphasizes the company's success
and role in the banking and finance industry vis-à-vis its competitors.
The most recent year (2019) annual report was available as an analysis to be
used, which is the most current financial statement available. The analyst made this
prediction, taking into account the global financial crisis, but conservative enough for
the undesirable events that influenced its financial status this year. This annual report
was used as a basis for comparison and forecast. Therefore, it is believed that no
dividend distributions will be made within the timeframe of the years' forecasts. The
forecasts also suggest that no tax holidays or preferential tax treatments and
improvements in tax rates will take effect in the future.
56
CHAPTER III
VISION AND MISSION
Current Vision
We shall be at the forefront of the leasing and financing industry in the Philippines and
in the Asia Pacific Region. We shall have the most extensive market reach and shall be
composed of highly trained, technically competent and upright professionals working as
a team and contributing to the growth of the nation and the communities we serve.
Recognizing that the customer is the focus of our activities, we shall lead the industry by
providing modern and relevant financial services which exceed their expectations.
Analysis:
Parameter Yes/No Evaluation
Does it clearly answer the YES It is indicated in the first

question “What do we want to sentence.
become?”
Is it concise enough yet NO Not concise enough and

inspirational? lacks in being inspirational
Is it aspirational? YES
Does it give a clear indication NO There is no clear indication

as to when it should be
attained?
Table 25 Current Vision Analysis
Current Mission
We are in business for our customers, shareholders, and employees. We shall deliver
creatively innovative products and cross-sell the BDO Unibank Group’s services
supported by procedures, systems and processes which will ensure utmost customer
satisfaction. We shall recognize and reward excellence in our employees and shall
57
provide an environment conducive to maximizing their potentials as we work cohesively
as a team. We shall generate consistently high returns for our shareholders.
Component Yes/No Evaluation
Customers YES It is stated that BDO are in

business for their customers,
shareholders, and employees.
Products and Services YES “deliver creatively innovative
products and cross-sell the
BDO Unibank Group’s
services” – It is very concise,
but the whole thought is seen.
Markets NO None stated
Technology NO Technology was not

mentioned
Concern for survival, growth YES “generate consistently high
and profitability
returns for our shareholders” –
They have clearly stated their
intentions to their
shareholders.
Philosophy NO
Self-Concept NO None stated
Concern for public image NO They have not stated their

response to social, community
and environmental concerns.
Concern for employees YES recognize and reward
excellence in our employees
Table 26 Current Mission Analysis
58
Vision Recommendation and Analysis
Proposed Revision for Current Vision:
➢ To be the leading bank and financial services firm in the Philippines,
empowering individuals to meet their goals and aspirations. We shall
have the most vital economic presence made up of highly trained and
competent professionals who work as a team and contribute to the
advancement of the country and communities the company represents.
With the customers as the focus of our activities, BDO Unibank shall
lead the industry in the next 5 years by providing and adapting to new
technological advancements relevant to financial services above their
standards.
Parameter Yes/No Evaluation
Does it clearly answer the YES It is indicated in the first

question “What do we want to sentence.
become?”
Is it concise enough yet YES

inspirational?
Is it aspirational? YES The vision statement is

optimistic
Does it give a clear indication YES 5 years
as to when it should be
attained?
Mission Recommendation and Analysis
Proposed Revision for Current Vision:
With our clients, shareholders, and staff at our core, we are committed to:
59
Deliver innovative goods dynamically and cross-sell the services of the BDO
Unibank Group, backed by policies, programs, and processes, ensuring
customer satisfaction;
Recognize and maximize our employees' full potential by providing a positive
and productive work environment while working as a team.;
Generate consistently high returns for our shareholders;
Live by adhering to the highest ethical principles based on
honesty; Advancing by technological innovation into the future of
banking; Reinventing ourselves pro-actively to fulfill market
demands.
Component Yes/No Evaluation
Customers YES It is stated that BDO are in

business for their customers,
shareholders, and employees.
Products and Services YES “Deliver innovative goods
dynamically and cross -sell
the services of the BDO
Unibank Group” – It is very
concise, but the whole thought
is seen.
Markets YES Able to address the demands
of the market and very clear
that they will re-invent to be
competitive for its global
success and growth.
Technology YES Technological innovation
60
Concern for survival, growth YES “generate consistently high
and profitability
returns for our shareholders” –
They have clearly stated their
61
intentions to their
shareholders
Philosophy YES It is stated that the company

Is living by adhering to the
highest ethical principles
based on honesty
Self-Concept NO None stated
Concern for public image NO They have not stated their

response to social, community
and environmental concerns.
Concern for employees YES It is clearly stated that they will
recognize and maximize the
full potential of their
employees
61
CHAPTER IV
EXTERNAL ASSESSMENT
Political and Legal
Company organizations and how they work is profoundly influenced by political
and legal powers. New financial reforms, regulations, tax laws, political
decisions/influence, etc., contain these powers. It affects the banking industry's
competitiveness and potential limits on how a firm can function.
Bangko Sentral ng Pilipinas (BSP) regulates the Philippines' financial services,
with laws expressed in the Manual of Regulations for Banks (MORB) and its Monetary
Board. The Republic Act 8791 or the General Banking Law of 2000 acknowledges
banks' contractual essence, quasi-banks, trust entities, etc., which demands the utmost
quality of performance and professionalism. It is the government’s responsibility to
foster and sustain a productive financial environment by developing and implementing
laws established to monitor banking transactions and protect clients of the financial
institutions. Aside from this, the Philippine Deposit Insurance secured additional
protection for the banking industry. It mostly engages with money and specifications for
capitalization, including functional criteria for commercial and universal banks.
In 2017, after repealing the 17-year moratorium on issuing licenses to new
domestic banks, they approved a new package of new rules for the granting of rights to
banks and other financial institutions. The 1999 moratorium on foreign license approvals
was in direct response to the Asian financial crisis. This only allowed banks to set up in
microfinance-focused unbanked areas. Competition in the banking sector will be
affected knowing that the ban is lifted.
Due to lockdowns caused by the coronavirus (COVID-19) pandemic, state-run
Credit Information Corp. (CIC) advises financial institutions to restrain from marking as
default or overdue missing or partial loan payments during enhanced community
quarantine. In the midst of this epidemic triggered by the 2019 coronavirus disease or
62
COVID-19 pandemic, CIC President and Chief Executive Officer Jaime Casto Jose
Garchitorena stated there is a need to ensure protection of consumer rights. Under
Republic Act No. 11469 or Bayanihan to Heal as One Act enacted in 2020, all
borrowers under the regulation of the BSP, Securities and Exchange Commission
(SEC), and Cooperative Development Authority, which include GSIS and Pag-IBIG, are
mandated, with principal on interest, fines, fees and other charges, to impose a 30-day
grace period on all loans with principal and/or interest falling due during the ECQ period.
Economic
According to the National Statistics Commission, the Philippines obtained
approximately P 11.5 trillion in 2013 as its Gross Domestic Product. Since 2000, the
country's GDP has been steadily rising. The Philippine economy increase by 7.2
percent in 2013. A variety of sectors, especially in the service sector, have been
boosted. However, slowdowns are also experienced in some markets, such as imports
and manufacturing. The effect of typhoons hitting the nation, which may have reduced
GDP growth, contributes to these slowdowns.
As investors responded to the tapering of the United States stimulus program,
stock and bond prices dropped dramatically, the Philippine financial markets witnessed
great uncertainty. However, development was accompanied by monetary and fiscal
policy. Along with tax improvements and effective expenditures, government finances
also continue to increase. In the other hand, the sluggish growth in emerging
economies has been more or less untouched by remittances and the export of services.
Cash remittances increased by 6.4% in the previous year, along with increasing
demand for Filipino workers.
In 2014, BDO Unibank acquired the leading rural bank in Panay and Mindanao
having over 10o branches and micro-banking offices, One Network Bank, Inc (ONB).
According to a statement released, the inclusion of ONB to the BDO Group is aimed to
extend its reach in the southern part of the Philippines’ fast-developing industries.
BDO
63
also noted that the movement also supports the initiative of the Bangko Sentral ng
Pilipinas (BSP) to expand inclusive banking by branching and lending in the
countryside. It indicated that it intends to extend its product portfolio to these
underserved segments of the economy of the Philippines.
A partnership with Rural Bank of Pandi Inc. (RBPI) to buy the banking company
in Bulacan has been signed in February 2019 by BDO's subsidiary, One Network Bank
Inc. (ONB). The acquisition is intended to provide ONB with a wider reach in the
province and to progressively monitor its growth in Central Luzon, one of the country's
most radical regions.
Bangko Sentral ng Pilipinas (BSP) raised the benchmark interest rates five times
to tame inflation in 2018. The facility for overnight reverse repurchase (RRP) of the
BSP was increased by 25 basis points. In the five times they increased their benchmark
interest rates, BSP produced a cumulative rise of 175 basis points. These inflation rate
changes trigger changes in interest rates. Rates which have an enormous impact on
the banking industry and its financial stability. It allows banks to offer cheap
loans to customers when the interest rates are lower, and it entices them to apply
for loans to buy the things they need and want. It boosts the economy and banks'
profits. But individuals will try not to use credit cards or apply for a loan when the
interest rates are higher. Shifts in inflation rates pose challenges for the Philippine
economy and the banking industry's stability.
Customer loans increased in July 2020 by 11 percent to P2.3 trillion as
individuals around the world remain solely trapped in the middle of the coronavirus
(COVID 19) pandemic. The BSP has reacted quickly to the looming crisis, specifically
when it comes to allowing affordable new loans. In weak markets, though, banks are
also left with large exposures. According to BSP and the Philippine Institute for
Development Studies (PIDS), that as of December 2019 banks have substantial loans
outstanding in the retail & wholesale (PHP1.3 trillion or 15% of total outstanding
loans)
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and manufacturing (PHP1.0 trillion or 12% of total outstanding loans) markets. Such
industries are among the ones most affected by the pandemic.
Socio-cultural, Demographic, and Lifestyle
The lifestyles, customs, patterns, behaviors, and beliefs of humans are socio-
cultural influences. For all firms, these powers are relevant because they control
customer purchasing behavior. Overtime influences the habits of customers. Socio-
cultural forces influence the way people use financial services concerning the banking
sector.
Approximately 51.2 million Filipino adults do not have bank accounts against the
roughly 72 million Filipino adult population, according to a 2019 survey by Bangko
Sentral ng Pilipinas (BSP). It provided that the lack of sufficient money, as reported by
about half (45 percent) of the unbanked, persists the top excuse for not having an
account. This is a huge number of new target customers for the banking sector. They
ought to know how to attract these Filipinos to banks to save, invest and make loans.
Technological
Technological advances have an immense effect on how organizations work
around the globe. Banking for people means getting out of the door, standing in line for
hours, and a lot of paperwork before technology changed the banking sector. With the
relentless advancement of technology, however, new prospects are opening up for the
banking sector. They now have services for clients that are more accessible and
convenient with the transition of banking activities from paper to digital and networked
systems. The banking sector has delivered benefits such as ATMs, telephone banking,
automatic fund transfer, mobile and online banking through technical developments.
However, behind this benefit, the problem of hidden defection arises. These
minor hidden faults lead to decreased customer loyalty, which can lead to the switching
of banks. Banks that do not react to these vulnerabilities are risking earnings. In
addition
65
to defection, which is an inherently internal problem, there is also a possibility of
data breaches and threats.
Environmental
The environmental element refers to any environmental aspect that influences
the survival of one or more species. Banking and financial services play a significant
role in trying to bring environmental sustainability. BDO's capacity to guarantee financial
access to the majority of the population is crucial to building a more equitable system.
The organization aims to be the ally of the country for social change by exploiting its
capital.
BDO released a sustainability study in 2018 outlining its intentions to help the
Sustainable Development Goals of the United Nations. BDO leverages its capital in
support of the government's "Build, Build, Build" strategy to fund strategic infrastructure
initiatives that stimulate economic production and encourage domestic and foreign
investment to foster the country's sustainable growth.
The devastating effect of climate change has taken center stage in the global
arena in recent years. International agencies have campaigned to prioritize the
mitigation of the environmental effects of industrialization. In the sense of sustainable
growth and initiatives to resolve environmental issues, BDO, in collaboration with the
International Finance Organization, serves as one of the leaders in developing
Sustainable Energy Finance as an important solution to harnessing renewable energy
sources.
Opportunities and BDO's Responsiveness
1. Harnessing mergers and acquisition to have talents needed.
Response Rate: 3
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In accordance with the Basel Accords and universal best practices, the Bangko Sentral
ng Pilipinas (BSP) has implemented an increase in financial requirements for industry
participants. In order to improve the financial sector, the BSP promotes mergers and
acquisitions. BDO's merging and acquisitions contribute to its global competitiveness by
extending its divisions through this and become open to other entities through growing
the number of depositors. It has enhanced partnerships with their respective customer
bases that have been developed and nurtured by the different market segments.
2. Increase in strength and profits from remittances from OFWs
Response Rate: 4
The Philippine economic situation has presented the banking sector with probable
prospects. As the service market continues to be strong, banks and their services are
still strong. In addition, the rise in demand for eligible Filipino overseas workers, in turn,
leads to an increase in remittances.
3. High demand for mobile banking applications
Response Rate: 2
The need for accessibility for clients has been resolved with the use of online and
mobile banking. On average, banking customers are now handling more of their
banking experiences through smartphones and tablets than via any other platform, and,
as stated by Bain and Company, Inc., the mobile channel has become a key element in
the bid to win customer loyalty.
4. Drive towards sustainable energy projects
Response Rate: 4
The move towards sustainable energy initiatives acknowledges the use of the
production of alternative and green energy options. Growing demand for renewable
energy projects would support the financial sector, resulting in large-scale investments.
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5. Increase in the demands of loans during pandemic
Response Rate: 3
Due to community quarantines, staff layoffs, and interrupted company processes, the
cash flow of companies and retailers could be affected by decreased customer
demands. The non-performing loans will easily escalate without adequate intervention
by the regulators and the banks as borrowers fail to pay their principal and interests.
68
Threats and BDO's Responsiveness
1. Continuous development of bank competitors
Response Rate: 2
Increased access to the internet and mobile banking has made it easier for
consumers to receive more information on specific items from various financial
institutions.
2. Decline in the usage of ATMs and physical branches due to demand in mobile
applications
Response Rate: 3
Due to dependency on mobile banking it decreases customer and bank managers'
contact and partnerships. As the rise in mobile banking persists, the use of ATMs will
also be at risk of declining.
3. Mobile scam and malware in mobile banking
Response Rate: 3
Mobile banking is often vulnerable to risks. Apart from hidden defections, which are an
entirely internal issue, data breaches and attacks are also likely.
4. Rise of inflation rate and interest rates
Response Rate: 2
In the following years, the country's inflation rate would slow down growth in the
financial services sector as BSP is committed to sustaining low and steady rates. The
rise in interest rates, which in turn decreases the banks' tendency to lend their funds to
the public, is one of the BSP's monetary instruments to combat inflation.
5. Failure of payments and decrease in the ability to pay of debtors during
pandemic.
69
Response Rate: 2
70
As the nation struggles with the effects of the COVID-19 pandemic, the Philippine
government has ordered all lenders to extend a 30-day extension for all loan payments,
including credit card dues and pawnshop loans. Considering the immediate steps taken
by BSP to ensure liquidity in the economy through lower lending rates and reserve
thresholds, banks are under pressure to operationalize these steps.
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External Factor Evaluation (EFE) Matrix
Figure 31 External Factors Evaluation Matrix BDO Unibank, Inc.
Weighted
Opportunities Weight Rating Score
1. Harnessing mergers and acquisition to have talents needed 0.11 3 0.33
2. Increase in strength and profits from remittances from OFWs 0.08 4 0.32
3. High demand of mobile banking applications 0.13 2 0.26
4. Drive towards sustainable energy projects 0.09 4 0.36
5. Increase in the demands of loans during pandemic 0.10 3 0.30
Weighted
Threats Weight Rating Score
1. Continuous development of bank competitors 0.09 2 0.18
2. Decline in the usage of ATMs and physical branches due to
demand in mobile applications 0.1 3 0.3
3. Mobile scam and malware in mobile banking 0.13 3 0.39
4. Rise of inflation rate and interest rates 0.09 2 0.18
5. Failure of payments and decrease in the ability to pay of
debtors during pandemic 0.08 2 0.16
TOTAL 1.00 2.78
Ratings: 4=Superior, 3 = Above Average, 2 = Average, 1 = Below Average
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EFE Analysis:
The External Factor Evaluation (EFE) Matrix above lists the eleven key external
factors. Six of these elements are considered as opportunities for BDO, while the
remaining are considered as threats. The rate suggests which external factors are
BDO’s opportunities or threats and how effective the strategy the company currently
has. The ratings in the EFE matrix are subjective depending on the effectiveness of
BDO’s strategy wherein a rating of ours is superior, three is above average, two as
average and one as below average. In evaluating the performance of BDO in the
industry, the weights are used to determine the importance of every external factor
identified. The greater the weight, the more significant a factor it is.
The company's leading opportunity is the rising demand of mobile banking
applications due to the continuous advancement of technology and the convenience it
gives to BDO’s clients, having the highest weight amongst five opportunities identified.
As for the threats to the company, the chances of potential clients to shift to other banks
increases as mobile banking is accessible to most BDO’s customers and opt for another
financial institution looking for additional services/products. The usage of ATMs and
physical branches of BDO are susceptible to dwindle as the demand for mobile banking
rises. Mobile scam and malware have the highest weight caused by the rise of demand
in mobile banking the vulnerability of the bank and customer’s information to security
breaches also increases. In addition, because of the COVID-19 pandemic and with the
government's aim to provide funding, banks will need to boost their activities quickly to
handle current borrowers' weakening credit positions and absorb potential rises in new
credit due to reduced interest rates.
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CHAPTER V
INDUSTRY AND COMPETITIVE ANALYSIS
Banking Industry
Bank is a licensed financial institution which provides financial services to receive
deposits and make loans. It also provides currency exchange, wealth management,
and safe deposit boxes. There are different types of banks such as retail banks,
commercial banks, and investment bank. Most of the countries, the national government
regulates the banks in the financial system.
Banks are significant part of a economy because its provides financial services
for both businesses and consumers. It is one of the safest that offers place to store your
cash which give corresponding interest as time goes by. In its banking system, there
are variety of account types such as savings accounts, checks, and certificate of
deposits. It can also make faster transaction in deposits, withdrawals, payment of
bills, check writing and etc.
Banks is one of the financial institutions that provide credit opportunities for
individuals, business and government. The money deposited at the bank is used to lend
to others in a form of cash, mortgages, credit cards, auto loan and etc. This process can
help to create liquidity in the market which can keeps the money circulate and supply
going.
Industry Structure
The Philippines’ banks are classified into three types: rural and cooperative
banking, thrift banks, commercial banks, and universal banks. Of these segments,
commercial and universal banks offered checking account series and domestic deposits
that had dominated the Philippines’ banking industry, with its total deposit of amount at
approximately 12 trillion Philippine pesos.
74
The commercial banks main services in the Philippines are to accept deposits
and offer a checking account services, while universal banks on the other hand provides
all kinds of services of the commercial banks and exercise the powers of an investment
house and in non-allied enterprises. In the Philippines, these types of banks are the
largest group of financial institution and the most popular among customers with
different financial needs.
In October 2020, the universal and commercial banks value of loans in the
Philippines amounted nearly 9.7 trillion pesos. Of these loans, there is an

approximately
364 billion pesos for vehicle loans granted for household use and approximately 1.6
trillion pesos’ worth of loans granted for the production of real estate business in the
country.
The granting of loans for business venture or for household consumption
provides a significant financial help for customers. It is rapidly increasing that a healthy
banking sector can be essential to sustain the growth. Bank loans can be resulted to
bad debts when there is a lack of payment and it affects the bank’s cash flow. A low
ratio of nonperforming loans to total gross loans indicates a healthy banking sector. As
of 2020, the ratio of nonperforming loans of banks to total gross loans in the Philippines
was almost 2 percent and it declined over the past years.
Minimum Capitalization Requirement regulated by the Banko Sentral ng Pilipinas
1. Banks should comply with the required minimum capital enumerated below or as
may be prescribed by the Monetary Board.
2. At least 25% of the total authorized capital stock should be subscribed by
the subscribers of the proposed bank.
3. The stockholdings of an individual, family, corporate or business group in any
bank should be subject to the following limits:
a. Foreign individuals and non-bank corporations can own or control up to 40% of
the voting
75
stock of a domestic bank
b. A Filipino individual and a domestic non-bank corporation can each own up to
40% of the voting stock of a domestic bank.
c. The citizenship of the corporation which is a stockholder of a bank should follow
the citizenship of the controlling stockholders of the corporation, irrespective of
the place of incorporation.
4. At least 60% of voting stock of any commercial bank should be owned by
Filipino citizens.
Revised Type of Bank Additional Major

Amounts Statutes aside from the
(P billion) General Banking Law
a. Universal Banks 4.95

b. Commercial Banks 2.40
With head office in 1.00
Metro Manila
Thrift Banks Act

With head office in .50 (R.A. 7906)
c. Thrift Banks
cities
of Cebu and
Davao
Other Areas 0.25
In Metro-Manila 0.10
d. Rural Banks Cities of Cebu and 0.05 Rural Banks Act

Davao (R.A. 7353)
In all other cities 0.025
e. Cooperative Banks 0.010 Cooperative Code

(R.A. 6938)
Figure 32 Type of Banks Amount in the Philippines
76
General Banking Law of 2000
RA 8791 – General Banking Law of 2000 is an act Providing for the Regulation of
and Organization and Operations of Banks, Quasi-banks, Trust Entities and for other
purposes.
The General Banking Law of 2000 (GBL) is the law that generally governs the
regulation, organization and operation of banks, quasi-banks, and other quasi-entities. It
primarily governs Universal Banks (UB) and Commercial Banks (KB), and has
suppletory application to Thrift Banks which is primarily governed by RA 7906, the Thrift
Banks Act, Rural Banks which is primarily governed by RA 7353, the Rural Banks Act,
and Cooperative Banks which is primarily governed by RA 6938, the Cooperative Code.
Section 2 of GBL provides that “the State recognizes the vital role of banks in
providing an environment conducive to the sustained development of the national
economy and the fiduciary nature of banking that requires high standards of integrity
and performance.” This consequently means that a bank shall be subject to heavy and
close supervision and/or regulation by the Bangko Sentral ng Pilipinas, and that it must
exercise utmost diligence in the handling of deposits.
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Market Share
Philippines’ Banking Institutions Statistics
Philippines Number of Commercial Banks
(ceic.com, 2018)
Figure 33 Number of Commercial Banks in the Philippines
Philippines’s No of Banks: Commercial Banks data was reported at 5, 946.000
Unit in July 2015 and increased in Jan 2018 by 6, 526.000. Philippines’s No of Banks:
Commercial Banks data is updated quarterly, averaging 4,199.000 Unit from Mar 1979
to Jan 2018, with 159 observations. The data reached an all-time high of 6,605.000 Unit
in Sep 2018 and a record low of 644.000 Unit in Mar 1979. Philippines’s No of Banks:
Commercial Banks data remains active status in CEIC and is reported by Bangko
Sentral ng Pilipinas. The data is categorized under Global Database’s Philippines.
78
Philippines Number of Thrift Banks
(ceic.com, 2018)
Figure 34 Number of Thrift Banks in the Philippines
Philippines’s No of Banks: Thrift Banks (TB) data was reported at 2,013.000 Unit
in Jul 2015 and increased in 2018 by 2, 452.000. This Philippines’s No of Banks: Thrift
Banks (TB) data is updated quarterly, averaging 1,268.000 Unit from Mar 1979 to
Sep
2018, with 159 observations. The data reached an all-time high of 2,550.000 Unit in
Sep
2018 and a record low of 138.000 Unit in Mar 1979. Philippines’s No of Banks: Thrift
Banks (TB) data remains active status in CEIC and is reported by Bangko Sentral ng
Pilipinas.
Philippines Number of Rural Banks
(ceic.com, 2018)
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Figure 35 Number of Rural Banks in the Philippines
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Philippines’s No of Banks: Rural Banks: Head Office data was reported at
565.000 Unit in Jan 2014 and decreased in July 2018 by 478. Philippines’s No of
Banks: Rural Banks: Head Office data is updated quarterly, averaging 785.000 Unit
from Mar 1979 to Sep 2018, with 159 observations. The data reached an all-time high
of
1,040.000 Unit in Dec 1981 and a record low of 476.000 Unit in Sep 2018. Philippines’s
No of Banks: Rural Banks: Head Office data remains active status in CEIC and is
reported by Bangko Sentral ng Pilipinas. The data is categorized under Global
Database’s Philippines
Banking Industry Sub-Sectors
Banking is made up of several segments—retail banking, commercial banking,
and investment banking. Also known as consumer or personal banking, retail banking
serves consumers rather than corporations. These banks offer financial services tailored
to individuals including checking and savings accounts, mortgages, loans, and credit
cards, as well as certain investment services.
Corporate, commercial, or business banking, on the other hand, deals with small
businesses and large corporations. Like retail banking, it provides account services and
credit products that are tailored to the specific needs of businesses.
An investment bank typically only works with deal makers and high-net-worth
individuals (HNWIs)—not the general public. These banks underwrite deals, secure
access to capital markets, offer wealth management and tax advice, advise companies
on mergers and acquisitions (M&A), and facilitate the buying and selling of stocks and
bonds. Financial advisors and discount brokerages also occupy this niche.
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Porter’s Five Forces Model
Figure 36 Porter’s Five Forces Model for BDO Unibank, Inc.
Competitive Rivalry within the Industry (HIGH)
The banking industry in the Philippines is difficult to penetrate as the national
government regulates the establishment of banks in the country. This implies that there
are few banks operating in the country. The banking competition is very tight.
BDO has been very competitive and aggressive in the banking industry as it
provides the best quality to its depositors, bringing in customers who patronize their
financial services, as it also expands to its quest to explore and give strength through
the vision, innovation and value. In every industry, it has always been a challenge to
every business, what their competitors has to offer. These factors such as extending
warranties, enhance quality, add features, provide services, and boosting
advertisements, are one of the primary reason why BDO has been very aggressive, a
threat to all banking companies especially its competitors such as Security bank,
Bank of the Philippine Island, and Union Bank of the Philippines.
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As for rivalry among competitors, the threat is intense because all banking institutions
offer the same financial services: leasing, loans, savings, certificate of deposits, checks
and etc. With respect to their strategies, every banks have their own perks and
advantages to have more customers. Whether BDO has long banking hours or BPI’s
Tele-Banking features. The low market growth rate of the banking institution affects the
BDO which can only truly grow with the loss or assimilation of other banks as was the
case for BDO which has been compromised of Banco and Equitable-PCI Bank.
Threat of Substitutes (MEDIUM)
In banking institution, the competitive pressure rises from substitute financial
services increase as the price of services declines and as consumers’ switch cost
decrease. Some of the BDO’s threats are not from its competitors but the failure of
payment of the borrowers, market crash, loss in trade and securities, mutual funds and
etc. which can also be offered by the non-banking sector. The difficulty of entering the
banking industry and the competitive rates and changes, there is still a possibility of
cater clients who are not able to transact with banks, like pawnshops and lending
houses, which can become a substitute. Pawnshop have now remittances service.
Threats of New Entrants (LOW)
New potential competitors are always become a threat in every field of business.
Possible threats may include; emergence of cheaper technologies, government
regulatory requirements, changes in demographics. As of now, there is now new
commercial bank entering in the Philippine banking industry.
Bargaining Power of Suppliers (LOW)
The financial services provided by the banks cannot be easily substituted. There
is also a limitation in the differentiation of services provided ad possibility
forward integration.
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The BDO’s continuous relationship building with another organization expanded
its networks through branches expansion. Other than that, the fast service availability of
next generation components are widely denomination of initiatives focusing on
the compensation and benefits of its employees, officers, and staffs. The issues
between unions resolution and program developments program supports the
changes in services, structure, an system.
The competitive pressure scales derived from the development of other financial
services from the competitors is generally an evidenced by rivals’ plan from its
expanding its capacity, as well as their sales and growth profit numbers.
Bargaining Power of Customers (HIGH)
One of the major force that affects the intensity of competition in the banking
industry is the bargaining power. With BDO’s strategies and mindset, they view the
banking process as a continuous creative cycle that challenge them to always find ways
to provide better service for its customers.
The use of online platforms through internets helps BDO to increased its power of
the consumer in the industry. The BDO’S mobile banking or so called digital banking
helps to have faster transactions of deposits, withdrawals, transfer of money and bills
payment has greatly increased the ease to its customers.
Despite the challenges appear on the horizon, particularly during
pandemic and the forecast of a US recession and the new SEC implemented rules on
over-the-counter market securities trading, BDO still remains upbeat on its prospects.
Increased in widened spread scan lead to have more opportunities.
The internet also has greatly increased the power of the consumer in the
banking industry. The internet has greatly increased the ease and reduced the cost for
consumers to compare the prices of opening/holding accounts as well as the rates
offered at various banks. Thus, Union Bank is pursuing a three-point strategy to
digitize
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its operations. The first plan is to digitize the whole Bank. The idea is that it must be
fully digital as fast as possible in terms of operations and processes.
Major Competitors
Selection for the major competitors were based on the market share of the
Banco de Oro in banking industry.
• Bank of the Philippine Islands (BPI)
Bank of the Philippine Islands is the Philippines’ oldest bank and one of the
oldest of all Asian banks. BPI offers a full range of commercial and retail financial
services, including corporate finance services, asset management, and brokerage and
other financial consulting services. BPI’s retail network includes more than 700
branches throughout the Philippines, as well as branches in New York, Hong Kong, and
Tokyo. The bank also operates a network of more than 1,200 automated teller
machines and more than 8,500 retailer-based point-of-sale machines. In 1999, BPI
pioneered online banking in the Philippines with the launch of online bank BPI Direct in
1999.
In addition to its banking products and services, BPI has also developed a strong
non-life insurance operation, chiefly under subsidiary BPI/MS Insurance Corporation.
Listed on the Philippines Stock Exchange, BPI has long been majority controlled by
Philippines conglomerate Ayala Corporation. (bpi.com)
• Union Bank of the Philippines (UBP)
Union Bank embraces the future of banking and is committed to be the
Philippines’ leading digital bank to best serve the growing needs of Filipinos
everywhere.
The Bank has always been among the first to embrace technological innovations
to empower its customers. With this, it has consistently been recognized as of one of
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Asia’s leading companies, ranking among the country’s top universal banks in terms of
profitability and efficiency.
UnionBank’s Digital Transformation Strategy reinforced its commitment to deliver
superior customer experiences and promote inclusive prosperity in the country. For
several years, the Bank was renowned “Best Digital Bank” by prestigious institutions,
and also recognized in areas of transformation, people, and culture. With its drive to
“Tech Up Pilipinas” and be an enabler of the Philippines’ push to be a G20 country by
2050, UnionBank stands firm in its promise to power the future of banking by co-
creating innovations for its customers and for a better world. (unionbankph.com)
• Security Bank Corporation (SECB)
Security Bank Corporation is one of the Philippines’ leading universal banks
serving retail, commercial, corporate, and institutional clients. Established on June

18,
1951, Security Bank was publicly listed with the Philippine Stock Exchange (PSE:
SECB) in 1995. Over the years, the Bank prudently managed to remain one of the most
stable in the banking industry and is steadfast in its commitment to serve its clients and
stakeholders. (secb.com)
Comparison of Competitors’ Financial Statements Vs Banco de Oro Unibank

Figure 37 Comparison of Competitors’ Financial Statements Vs Banco de Oro
Unibank
2015 2016 2017 2018 2019 Average

Current Assets (in Millions Php)
BDO 1,646 2,097 2,414 7,773 2,926 3,371.20
BPI 1,473 1,664 1,837 2,012 2,128 1,822.80
UBP 402.7 486 583 626.8 724.8 564.66
SECB 528.2 690.3 694.1 760.8 779.7 690.62
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2015 2016 2017 2018 2019 Average
Current Liabilities (in Millions Php)
BDO 1,689 1,689 2,160 2,490 2,596 2,124.80
BPI 1,270 1,434 1,566 1,589 1,698 1,511.40
UBP 382.2 456.8 548.1 582.8 672.8 528.54
SECB 472.2 592.6 645.3 648.4 657.5 603.20
2015 2016 2017 2018 2019 Average

Inventories (in Millions Php)
BDO - - - - - -
BPI - - - - - -
UBP 73.9 - - - - 14.70
SECB - - - - - -
2015 2016 2017 2018 2019 Average

Total Assets (in Millions of Php)
BDO 1,930 1,938 2,524 2,891 3,063 2,469.20
BPI 1,516 1,725 1,903 2,085 2,205 1,886.80
UBP 441.7 524.4 622.1 669.5 770.8 605.70
SECB 532.6 695.8 700 766.8 788 696.64
2015 2016 2017 2018 2019 Average

Total Liabilities (in Millions Php)
BDO 1,739 1,739 20,145 2,362 2,438 5,684.60
BPI 1,363 1,558 1,720 1,833 1,931 1,681.00
UBP 382.2 456.8 548.1 582.8 672.8 528.54
SECB 479.3 598.6 651.4 657.3 669.6 611.24
2015 2016 2017 2018 2019 Average

Total Equity (in Millions of Php)
BDO 190 199 297 327 369 276.40
BPI 152 167 183 251 273 205.20
UBP 59.5 67.6 74 86.7 98 77.16
SECB 53.3 97.2 105.1 109.6 118.4 96.72
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2015 2016 2017 2018 2019 Average
Net Loans Receivables (in Millions Php)
BDO 2,854 2,898 2,781 2,761 2,358 2,730.40
BPI 1, 456 1,828 1,982 2,231 2,345 2,096.50
UBP 179.6 234.5 280.2 326.2 393.4 282.78
SECB 10.5 13.4 17.4 23.6 32.7 19.52
2015 2016 2017 2018 2019 Average

Interest Income (in Millions Php)
BDO 68 76 93 122 153 102.40
BPI 38 42 48 55 65 49.60
UBP 20.2 25.5 25.1 25.5 36.7 26.60
SECB 12.1 15.8 19.3 20.3 25.8 18.66
2015 2016 2017 2018 2019 Average
Earnings Before Tax (in Millions Php)

BDO 31 29 36 42 57 39.00
BPI 23 26 28 29 38 28.80
UBP 8.1 12 10.7 8.5 14.5 10.76
SECB 8.3 9.3 11.9 11 12.5 10.60
Comparison of Competitors’ Financial Ratios Vs Banco de Oro Unibank
Figure 38 Comparison of Competitors’ Financial Ratios Vs Banco de Oro Unibank
LQUIDITY RATIOS
Measure Formulas Company 2015 2016 2017 2018 2019 Average
BDO 0.95 1.20 1.08 1.08 1.09 1.08
Current BPI 1.20 1.21 1.13 1.25 1.24 1.21
Current Ratio Asset/Current UBP 1.05 1.06 1.06 1.08 1.08 1.07
Liability SECB 1.12 1.16 1.08 1.17 1.19 1.14
Industry 1.08 1.16 1.09 1.15 1.15 1.12
BDO 0.02 0.02 0.02 0.02 0.02 0.02
Cash and cash BPI 0.22 0.22 0.21 0.2 0.18 0.21
Cash Ratio equivalents UBP 0.02 0.01 0.01 0.02 0.01 0.01
/Current Liability SECB 0.16
0.2 0.23 0.12 0.13 0.11
Industry 0.12 0.12 0.09 0.09 0.08 0.10
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LEVERAGE RATIOS
BDO 0.60 0.50 0.60 0.60 0.60 0.58
Total BPI 0.93 0.94 0.89 0.86 0.86 0.90
Debt Ratio Liability/Total UBP 0.87 0.87 0.88 0.87 0.87 0.87
Asset SECB 0.89 0.86 0.93 0.86 0.85 0.88
Industry 0.82 0.79 0.83 0.80 0.80 0.81
BDO 5.10 5.26 4.78 4.31 5.24 4.94
Total BPI 7.00 8.00 8.50 6.00 6.33 7.17
Debt-to-Equity
Liability/Total UBP 6.42 6.76 7.41 6.72 6.87 6.84
Ratio
Equity SECB 8.90 6.20 6.20 5.90 5.60 6.56
Industry 6.86 6.56 6.72 5.73 6.01 6.38
ACTIVITY
EFFICIENCY
RATIOS
Measure Formulas Company 2015 2016 2017 2018 2019
Average
BDO 2.1 2.24 2.38 2.74 2.8 2.45
BPI 4.75 5.11 5.02 5.02 4.72 4.92
Fixed Asset Revenue/Fixed
UBP 5.64 7.37 6.75 5.74 6.16 6.33
Turnover Assets
SECB 7.05 6.61 6.53 6.12 6.72 6.61
Industry 4.89 5.33 5.17 4.91 5.10 5.08
BDO 0.04 0.04 0.04 0.04 0.05 0.04
BPI 0.04 0.04 0.04 0.04 0.04 0.04
Asset Revenue/Total
UBP 0.04 0.05 0.04 0.04 0.05 0.04
Turnover Asset
SECB 0.04 0.03 0.03 0.03 0.04 0.03
Industry 0.04 0.04 0.04 0.04 0.05 0.04
BDO 4.00% 4.00% 4.00% 5.00% 6.00% 4.60%
(Interest Received- BPI 4.60% 4.72% 4.73% 5.15% 6.41% 5.12%
Net
Interest
Interest UBP 2.82% 2.86% 3.38% 3.02% 2.92% 3.00%
Paid)/Average
Margin SECB 2.80%
Assets 2.60% 2.57% 2.77% 2.77% 3.31%
Industry 3.51% 3.54% 3.72% 3.99% 4.66% 3.88%
BDO 1.00% 1.00% 1.00% 1.00% 1.00% 1.00%
Return BPI 1.21% 1.29% 1.29% 1.12% 1.32% 1.25%

Net Income/ Total
on UBP 1.35% 1.93% 1.27% 1.03% 1.82% 1.48%
Assets
Assets SECB 1.66% 1.39% 1.41% 1.13% 1.29% 1.38%
Industry 1.31% 1.40% 1.24% 1.07% 1.36% 1.28%
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BDO 7.00% 12.00% 9.00% 12.00% 12.00% 10.40%
Return BPI 12.03% 14.58% 14.89% 15.27% 19.04% 15.16%

Net Income/ Total
on UBP 10.08% 14.94% 10.68% 7.96% 14.29% 11.59%
Equity
Equity SBC 10.77%
15.40% 11.39% 10.16% 8.03% 8.87%
Industry 11.13% 13.23% 11.18% 10.82% 13.55% 11.98%
Financial
Ratios
BDO 0.41% 0.40% 0.48% 0.48% 0.53% 0.46%
BPI 0.47% 0.53% 0.64% 0.64% 0.66% 0.59%
WACC UBP 1.25% 1.53% 0.40% 0.22% 0.22% 0.72%
SECB 0.44% 0.49% 0.47% 0.62% 0.63% 0.53%
Industry 0.64% 0.74% 0.50% 0.49% 0.51% 0.58%
BDO 0.59% 0.60% 0.52% 0.52% 0.47% 0.54%
BPI 0.74% 0.76% 0.65% 0.48% 0.66% 0.66%
EVAROA ROA-WACC UBP 0.10% 0.40% 0.87% 0.81% 1.60% 0.76%
SECB 1.22% 0.90% 0.94% 0.51% 0.66% 0.85%
Industry 0.66% 0.67% 0.75% 0.58% 0.85% 0.70%
BDO 6.59% 11.60% 8.52% 11.52% 11.47% 9.94%
BPI 11.56% 14.05% 14.25% 14.63% 18.38% 14.57%
EVAROE ROE-WACC UBP 8.83% 13.41% 10.28% 7.74% 14.07% 10.87%
SECB 14.96% 10.90% 9.69% 7.41% 8.24% 10.24%
Industry 10.49% 12.49% 10.69% 10.33% 13.04% 11.41%
Industry Benchmarks
Industry analysis is a technique which makes it easier for a business to
understand its place compared to other companies providing similar products and
services. A significant component of successful strategic planning is recognizing the
forces at work in the industrial sector.
Using industry averages enables a company to measure and benchmark itself
against where it stands in comparison to businesses in the same industry. Industry
averages of financial accounting data helps assess the overall performance of the
company. Another method to equate a specific company with the average of all industry
participants is using ratio analysis and comparisons. A business can gain knowledge
88
about where to stand in relation to the industry average by contrasting a specific ratio
for one company with that of the overall industry.
DuPont Model of Universal Banking Industry
Figure 39 DuPont Model of Universal Banking Industry
Income Statement BPI BDO UBP SECB
Interest Income 71,647 515,548 26,843 29,179
Interest Expense 21,478 112,962 8,821 10,519
Net Interest Income 50,169 402,586 18,022 18,660
Impairment losses 4,663 22,920 1,568 11,519
Other operating income 10,454 170,124 8,534 13,681
Other operating expense 13,287 351,788 14,844 8,880
Tax expense 6,330 41,671 1,568 1,712
Net Income 23,160 160,386 8,987 9,073
Profitability Ratios BPI BDO UBP SECB
Net Profit Margin 25.48% 31% 27.18% 33%
ROA 1.25% 1.30% 1.48% 1.28%
ROE 15.16% 13% 11.59% 9.20%
Balance Sheet BPI BDO UBP SECB
Current Assets 1,823,388 11,858,943 564,661 690,624
Net Fixed Assets 63,855 739,788 41,005 6,022
Total Asset 1,887,243 12,598,631 605,666 696,646
Current Liability 1,511,955 10,626,975 478,709 603,213
Long-term debt 169,581 336,699 50,932 8,015
Total Liability 1,681,536 10,963,674 529,641 611,228
Shareholder's Equity 205,707 1,634,957 77,026 85,414
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BPI BDO UBP SECB
Final Leverage (FLM) 10.90% 7.70% 7.79% 7.00%
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Competitive Profile Matrix (CPM)
BDO BDO Union Bank Security Bank
Key Success Factors Weight

Weighted Weighted Weighted Weighted
Score Score Score Score
score score score score
Market Position 0.2 4 0.8 4 0.8 4 0.8 3 0.6
Infrastructure and
0.15 3 0.6 4 0.45 2 0.3 3 0.45
Quality of Service
Diversification 0.05 3 0.15 3 0.15 3 0.15 3 0.15
Management and
0.05 3 0.06 4 0.15 3 0.15 3 0.15
Human Resource
Capitalization 0.2 4 0.8 4 0.8 4 0.8 3 0.6
Assets Quality 0.1 4 0.4 4 0.4 4 0.4 3 0.3
Profitability 0.1 4 0.4 4 0.4 4 0.4 3 0.3
Liquidity and Financial

0.15 4 0.6 4 0.6 4 0.6 3 0.45
Flexibility
Total 1 4.35 3.75 3.6 3
Figure 40 Competitive Profile Matrix Between BDO and Competitors
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The Competitive Profile Matrix (CPM) allows comparing the company to its
competitors to reveal the relative strengths and weaknesses in the marketplace,
infrastructure and product efficiency, capitalization, asset quality, profitability and
liquidity, and financial stability. Based on the total weighted score, BDO is the best
player in the banking industry with 4.35 followed by BPI (3.75), UBP (3.6), and SECB
(3). BDO has already shown its capability in the banking industry by placing it on the top
of the competition. The table above shows that BDO has an almost perfect rating score
in all factors except in diversification. Even though it has the same score as its
competitors, it needs to improve and maintain being ahead on the top. The CPM
illustrates that BDO is not quite far ahead in the competition and should still be wary.
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CHAPTER VI
INTERNAL ASSESSMENT
Major Strengths
1. Successful business relationship with customers
Response Rate: 3
BDO’s institutional strengths and value-added goods and services hold the key to its
successful business relationships with customers. Its branches remain on top of setting
high standards as a sales and service-oriented, customer-focused force on the front line.
2. Largest bank in the country in terms of assets, loans and deposits
Response Rate: 4
After the Asian Banker called it 2019's Strongest Bank by Balance Sheet in the
Philippines for the second straight year, BDO Unibank, Inc. retains its #1 spot in the local
banking industry, and in terms of total assets, loans, deposits, and trust funds under
management, BDO Unibank, Inc. ranks as the largest bank in the country based on
published statements of condition.
3. One of the largest distribution networks nationwide
Response Rate: 4
BDO, with 740 operating branches and over 1,500 ATMs nationwide, has one of
the largest distribution networks. Also, BDO Network Bank is the country’s
largest rural bank with 105 branches.
4. Most number of remittances abroad
Response Rate: 4
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The Bangko Sentral ng Pilipinas (BSP) again acknowledged the role of BDO
Unibank as a trusted partner of overseas Filipinos in sending their hard-earned
money back home to their loved ones by presenting the "Commercial Bank that
Generated the Largest Overseas Filipino Remittances" award during the BSP
Stakeholders Awards recently held in 2019.
5. Increasing value of capitalization for the past 5 years
Response Rate: 4
As the capital investment partner of the top companies globally, BDO Capital continues
to build upon its strengths.
6. Good Fixed Asset Turnover
Response Rate: 4
The data in their financial ratios shows an increased in 2019, it means that this year
BDO increased its use on its assets to have more net interest income but even it
increased, the cutoffs and standard are unfavorable to BDO, it may indicate that it does
not rely heavily on its assets to generate more new interest income.
7. Member of the SM Group
Response Rate: 3
BDO is a member of SM Group, one of the largest and most successful
conglomerates in the world, with businesses ranging from retail, mall operations,
property development (residential, commercial, resorts/hotel), and financial
services. Although part of a family conglomerate, a team of competent managers
and bank officers handle the day-to-day operations of BDO.
8. Up-to-date electronic banking services
Response Rate: 3
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With an up-to-date electronic banking services of BDO, it can be used to access
your bank accounts and do transactions through BDO ATM, BDO Internet
Banking, BDO Phone Banking, BDO Mobile Banking, and BDO Call Center
provided you request to specifically enroll these accounts.
9. Longer banking hours
Response Rate: 3
Amid the General Community Quarantine (GCQ) or Enhanced Community
Quarantine (ECQ) guidelines, BDO Unibank, Inc. and BDO Network Bank
branches are both open to serve more customers. Although several businesses
continue to run on shortened business hours, branches of the BDO and BDO
Network Bank are open until 4:00 pm and ready to meet different banking needs,
including Forex and encashment requirements.
Major Weaknesses
1. Security in data assets
Response Rate: 1
A threat of security breaches and attacks could be several causes of which is the
crumbling personal relationships between managers and customers and a
reputation for security, also the increase of digital assets in the banking and
financial institutions.
2. Slow online banking system
Response Rate: 2
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Many customers are not satisfied with BDO’s online banking system. Sometimes
their application and website are always under maintenance.
3. Limited technical support team.
Response Rate: 1
Some customers say their upfront service is slow at any branch. Also, they
are not responding to emails sent to them by their customers.
Internal Factor Evaluation (IFE) Matrix.
Figure 41 Internal Factors Evaluation Matrix BDO Unibank, Inc.
Weighted
Strengths Weight Rating Score
1. Successful business relationship with customers 0.08 3 0.24
2. Largest bank in the country in terms of assets, loans, and deposits 0.11 4 0.44
3. One of the largest distribution networks nationwide 0.09 4 0.36
4. Most number of remittances abroad 0.09 4 0.36
5. Increasing value of capitalization for the past 5 years 0.10 4 0.40
6. Good Fixed Asset Turnover 0.09 4 0.36
7. Member of the SM Group 0.08 3 0.24
8. Up-to-date electronic banking services 0.08 3 0.24
9. Longer banking hours 0.07 3 0.21
Weighted
Weaknesses Weight Rating Score
1. Security in data assets 0.08 1 0.08
2. Slow online banking system 0.06 2 0.12
3. Limited technical support team 0.07 1 0.07
TOTAL 1.00 3.12
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IFE Analysis:
The Internal Factor Evaluation Matrix (IFE) above lists the twelve key internal
factors. Nine of these factors are considered as strengths of BDO, while there are only
three weaknesses. The rate suggests whether internal factors are major
strength/weakness and minor strength/weakness. For strength, the rate of four
indicates major strength, while three is a minor strength. For weaknesses, one indicates
a major weakness, while a rate of two indicates a minor weakness. In assessing
performance in the industry, the weights are used to determine the value of the
factor found. The greater the weight, the more critical it is.
The company’s top strength is being the largest bank in the country in terms of
assets, loans, and deposits, with the highest weight amongst nine major strengths. The
next major strength of BDO is their increasing value of capitalization for the past five
years and having a good fixed asset turnover. BDO is one of the largest distribution
networks nationwide and has the most number of remittances abroad. Also, they have
implemented longer banking hours and have up-to-date electronic banking services.
The weaknesses show that they lack security in data assets, which is their major
weakness. Although they have a successful business relationship with their customers,
they have slow online banking system and limited technical support teams that may
affect their relationship with their customers.
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CHAPTER VII STRATEGY
FORMULATION
Strengths, Weaknesses, Opportunities, and Threats (SWOT) Matrix
Strengths Weaknesses
1. Successful business relationship with customers 1. Security in data assets
2. Largest bank in the country in terms of assets,
loans and deposits 2. Slow online banking system
3. One of the largest distribution networks 3. Limited technical support team
nationwide
4. Most number of remittances abroad
5. Increasing value of capitalization for the past 5
years
6. Good Fixed Asset Turnover
7. Member of the SM Group
8. Up-to-date electronic banking services
9. Longer banking hours
Opportunities Threats
1. Harnessing mergers and acquisition to have Continuous development of bank competitors
talents needed. Decline in the usage of ATMs and physical
2. Increase in strength and profits from remittances branches due to demand in mobile applications.
from OFWs. Mobile scam and malware in mobile banking
3. High demand of mobile banking applications Rise of inflation rate and interest rates
4. Drive towards sustainable energy projects. of payments and decrease on the ability to pay
5. Increase in the demand of loans during of debtors during pandemic.
pandemic.
Figure 42 SWOT Matrix of BDO Unibank, Inc.
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SWOTS Recommended Strategies
Following the SWOTS analysis indicated above, we are using the TOWS analysis
for the creation of strategies based on the SWOTS indicated:
I. Strength – Opportunity (SO) Strategies
• SO#1
By improving the increased fixed assets of BDO, like the number of remittances
abroad, will lead to the increase in strengths and profit came from OFW. (S4, S6,
O2)
• SO#2
Providing strategies for the proper acquisition and utilization of assets, loans and
deposits, and capital to move towards the growing demand for renewable energy
projects that would support the financial sector, resulting in large scale
investment. (S5, S6, O4)
• SO#3
Improvement of the mobile banking applications to increase the demand
of customers. (S1, S7, S8, S9, O3)
• SO#4
Allocating more budget for the improvement of mobile banking applications.
(S5, O3)
• SO#5
The new and improved services will access more markets. (S3, S8, O2)
• SO#6
99
Provide a successful marketing strategies and fast customer service to assist
every loan transaction of the customer.
II. Strength-Threats (ST) Strategies
• ST#1
Improve and enhance the data protection and security measures. (S5, S8, T3)
• ST2#1
Provide an extension of payment terms for loans and other services to
increase the demand in order not to decrease its funds for the public. (S2, T2)
• ST#3
Improvement of services and proper utilization of assets and capital to
amplify marketing strategies. (S1, S2, S5, S7, S9, T1)
III. Weakness – Opportunity (WO) Strategies
• WO#1
Acquire professionals who will provide and improve security measures. (W3, O1)
• WO#2
Improve mobile banking application security and privacy to increase the
demand of customers (W1, O3)
• WO#3
Use of improved mobile banking application and marketing strategies. (W2, O3)
IV. Weakness – Threats (WT) Strategies
100
• WT#1
Improve the mobile banking application and its security. (W1, W3, T3)
• WT#2
Acquaint employees to be better and improve the efficiency of the system
of service. (W2, T1)
• WT#3
Acquire professionals that will provide security and protection of data and
information. (W3, T3)
TOWS Analysis:
Using the result of the TOWS, the company should be exploring further for the
WT strategies recommendation. The company should be wary of the use of mobile
banking applications for the different transactions made by its customers. It needs to
improve the data and security protection in the online banking system. To be more
efficient, it must provide different tips or warning signs to prevent mobile scams and
malware attacks. Besides, the company should also focus further on its SO strategies to
increase or expand its market and continue to be in a good position in the banking
industry.
101
Recommendation:
Using SO#1 and SO#4, the company must take advantage of the continuous
development of technology by being more efficient in providing secured use of online
banking. The larger capitalization and assets can acquire more remittances abroad to
expand its market and increase profits from OFW’s. Besides, this recommendation of
WO#2 and WO#3 strategies would further give a faster transaction in the banking
system and acquire more professionals to provide security and protection of online
banking.
102
Internal-External (IE) Matrix
Figure 43 Internal-External (IE) Matrix of BDO Unibank, Inc.
The IFE Total Weighted Scores
4.0 STRONG 3.0 AVERAGE 2.0 WEAK 1.0
3.12
HIGH
The EFE Total Weighted Scores
3.0
2.78
Grow
MEDIUM and
build
2.0
LOW
103
Analysis
BDO garnered a score of 3.12 in the IFE matrix and a score of 2.78 in the EFE
Matrix. In plotting the total weighted scores, it falls quadrant IV, or the grow and build
region. That suggests that BDO can use Intensive (market penetration, market
development, and product development) or integrative (backward integration, forward
integration, and horizontal integration) strategies.
104
Strategic Position and Action Evaluation (SPACE) Matrix
Figure 44 SPACE Matrix of BDO Unibank, Inc.
Conservative FP Aggressive
CP IP
Defensive SP Competitive
105
Internal Analysis External Analysis
Financial Position (FP) Stability Position (SP)
Return on Investment 5 Loan Range -3
Leverage 5 Inflation Rate -5
Liquidity 4 Technological Changes -2
Earnings per share 5 Competitive Pressure -3
Barriers to entry into
Working Capital 5 market -5
Average 4.8 Average -3.6
Internal Analysis: Competitive External Analysis
Position (CP) Market Share Industry Position (IP)
-3 Growth Potential 5
Product Quality -3 Profit Potential 5
Customer Loyalty -2 Financial Stability 5
Capacity Utilization -1 Resource Utilization 5
Technological know-
how -2 Extent Leveraged 4
Average -2.2 Average 4.8
Direct Vector Coordinates: x-axis: (-2.2) + 4.8 = 2.6 and y-axis: (-3.6) + 4.8 = 1.2
Following Fred David’s Strategic Management book, the bank should pursue
Aggressive Strategies.
106
CHAPTER VIII SUMMARY
OF MATRICES
BOSTON CONSULTING GROUP (BCG) MATRIX
Figure 45 BCG Matrix of BDO Unibank, Inc.
Star ?
Commercial Banking Investment Banking

Market Growth
Cash Cow Relative Market Share Dog
Analysis of BCG Matrix:
Boston Consulting Group Matrix is also called a business portfolio. It allows an
organization to manage its portfolio to businesses by assessing its relative market
share position and the industry growth rate. The BCG Matrix is done with the
consideration of
107
BDO is segmented by the revenue of their SBU, namely Commercial Banking and
Investment Banking.
Having the largest market share in the Banking industry based on Commercial Banking
ahead of BPI by at least 64% in market share and with a high market growth rate, BDO
can be considered in the Stars position in the Boston Consultancy Group (BCG) Matrix.
Commercial banking has the highest profit, which is 161.6 million, and has the highest
market share in relevance to their SBUs. Con
Being in a division with a high relative market share and a high growth rate, to
retain or improve their dominant positions, the organization should receive substantial
investment. The strategies appropriate are market penetration, market development,
and product development as intensive strategies or related diversification.
108
GRAND STRATEGY MATRIX (GSM)
Figure 46 GSM of BDO Unibank, Inc.
Q2 Rapid Market Growth Q1
1. Market Development
2. Market Penetration
3. Product Development
4. Forward Integration
5. Backward Integration
6. Horizontal Integration
Weak Competitive Position
Strong Competitive Position

7. Related Diversification
Slow Market Growth

Q3 Q4
Looking at the Grand Strategy Matrix (GSM), BDO is located in quadrant I. They
are in an excellent strategic position. Market penetration, market growth, and product
development are the ideal tactics. They can afford to take advantage of external
opportunities in many sectors, being in quadrant I. When necessary, they can
aggressively take risks.
109
SUMMARY OF STRATEGIES
The summary of strategies tallied the strategies that were recommended by the
strategy formulation tools used from the data obtained from the internal and external
analysis.
Table 29 Summary of Strategies David’s Framework
STRATEGY OPTIONS SWOT SPACE IE BCG GSM TOTAL
Forward Integration x x x x 4
Backward Integration x x x x 4
Horizontal Integration x x x x 4
Market Penetration x x x x x 5
Market Development x x x x x 5
Product Development x x x x x 5
Related Diversification x x 2
Unrelated Diversification x 1
Retrenchment
Divestiture
Liquidation
110
QUANTITATIVE STRATEGIC PLANNING MATRIX (QSPM)
Figure 47 QSPM of BDO Unibank, Inc.
Market Product
Penetration/Development Development
Opportunities Weight AS TAS AS TAS
1. Harnessing mergers and acquisition to have talents needed 0.11 4 0.44 4 0.44
2. Increase in strength and profits from remittances from OFWs 0.08 4 0.32 4 0.32
3. High demand of mobile banking applications 0.13 4 0.52 4 0.52
4. Drive towards sustainable energy projects 0.09 4 0.36 3 0.27
5. Increase in the demands of loans during pandemic 0.10 3 0.30 3 0.30
Threats Weight AS TAS AS TAS
1. Continuous development of bank competitors 0.09 3 0.27 3 0.27
2. Decline in the usage of ATMs and physical branches due to
demand in mobile applications 0.10 4 0.40 4 0.40
3. Mobile scam and malware in mobile banking 0.13 4 0.52 4 0.52
4. Rise of inflation rate and interest rates 0.09 3 0.27 2 0.18
5. Failure of payments and decrease in the ability to pay of
debtors during pandemic 0.08 2 0.16 2 0.16
Strengths Weight AS TAS AS TAS
1. Successful business relationship with customers 0.08 4 0.32 4 0.32
2. Largest bank in the country in terms of assets, loans, and
deposits 0.11 4 0.44 4 0.44
3. One of the largest distribution networks nationwide 0.09 4 0.36 4 0.36
4. Most number of remittances abroad 0.09 4 0.36 4 0.36
5. Increasing value of capitalization for the past 5 years 0.10 4 0.40 4 0.40
6. Good Fixed Asset Turnover 0.09 3 0.27 2 0.18
7. Member of the SM Group 0.08 4 0.32 4 0.32
8. Up-to-date electronic banking services 0.08 4 0.32 4 0.32
9. Longer banking hours 0.07 2 0.14 2 0.14
Weaknesses Weight AS TAS AS TAS
1. Security in data assets 0.08 3 0.24 3 0.24
2. Slow online banking system 0.06 4 0.24 4 0.24
3. Limited technical support team 0.07 3 0.21 3 0.21
TOTAL 7.18 6.91
111
CHAPTER IX
PROPOSED STRATEGIES
Generic Strategy
Cost Leadership Differentiation

Broad Target
Scope
Cost Focus Differentiation

Focus
Narrow Target
Cost Differentiation
Source of Competitive Advantage
Figure 48 Generic Strategies Banco De Oro Inc.
112
To achieve and continue as the largest distribution network nationwide, BDO
Unibank, Inc. should focus on having differentiation with its competitors, namely: BPI,
UPB, and SEBC. Their core should be on developing innovative products and services,
attracting the consumers to purchase their offers. To formulate their products and
services, it will take them to present strategies.
In developing these strategies, the following measurements should be
relatively to their common target which is gaining and satisfying consumers.
Table 30 Strategic Objectives for Banco De Oro Inc.
Improving operational performance, but also enhancing its ability
to satisfy consumer needs.
Profitability Retaining the industry-leading return on equity with an outstanding
financial record of drawing more buyers and to reduce the risk.
Further strengthen the digital network of the Bank to become a
successful distribution of sales and service channel.
The company will be able to market products/services to the

Productivity and
same consumers and attract new consumers.
Innovation
With its price advantage, the company will be able to expand its
branches in remote areas while retaining its high level of services.
A company that strengthens digital optimization programs: ATMs
and Online Banking that can be easily accessible.
113
A banking sector that adds complete functionality on
products/services and results in higher customer satisfaction.

Differentiation
Boost their strategic edge as a result of improved productivity and
specialization of services.
Customer Creation of a consumer feedback system to improve the services
Relationship delivered.
Providing a strong customer experience to the client to win their
loyalty.
114
Specific Strategy
According to the Mission-Vision declaration of BDO, the Matrix for External
Factor Assessment (EFE), and the Internal Factor Evaluation Matrix (EFE), the
following strategies can be addressed:
I. Investing more in mobile banking technology, financial transactions, and
applications
II. To achieve a continuously higher net income expenditure
III. To increase the sector's market share
IV. To have an even higher net income while maintaining costs
Strategy Implementation
Based on the internal and external analysis that form the basis of matching
strategies, three strategies are used to maximize the market share and improve it.
Horizontal integration, Market, and Product Development are the following methods.
The most suitable of the three is Product Development. In a sector with comparatively
high growth rates, BDO has a high market share. In the banking sector, various players
are part of BDO's competitors. UBP, SECB, and BPI are in the top three. Doing so will
raise the company's market share.
115
1. Horizontal Integration
To increase its reach, BDO will develop its goods and services by harnessing
mergers and acquisitions to have talents needed to meet new technology's innovation,
apart from producing more branches or ATMs. This, in essence, would lead to an
expansion of the BDO's relative market share. Provided the high capitalization of BDO,
development of digital network and programs of the Bank is possible to implement.
a.) To have an ever higher net income while maintaining costs
The benefit is one measure of success in any sector. As far as BDO is
concerned, it would convert plans into revenues to see how those goals are
accomplished. The technological creation for BDO would transform into innovative and
improved goods and services that will improve sales and raise interest earnings,
applications for loans, acquisitions, and receivables. BDO is expected to begin with a
10% increase followed by a steady 5% increase per year. Also, BDO has the task of
establishing shareholder value through higher returns. Besides, the reduction in
the BDO capital adequacy ratio is discussed, which is either an increase in equity or a
profit increase. BDO is expected to begin with an increase of 10% then slowly
increase by
10% annually. To further profit growth, BDO should sustain expenditures rather than
reducing or lowering them, except for operational expenditures, if necessary while
retaining other expenditures.
Figure 49 Value Proposition Canvas Banco De Oro Inc.
116
- Increase in the demand
of loans during pandemic.
- More customer
- Most number of
remittances abroad - Online presence without
- A company that strengthens
- Increasing demand of much hassle
the process of digital
optimization programs banking applications
-Good fixed asset turnover
- Business relationship Gain creators Gains -Innovative technology

services
Products &
services
Customer
Pains job(s)
- Improvement of the mobile banking
applications
- Attract new
- Use up-to-date programs to weed out Pain relievers relationship-based
malware and prevent viruses from customers/
spreading - Security in data assets acquisition job
- Tighten the security by providing EMV - Slow online banking system - Availability in all
chip and code/pin. areas, as with rural
- development of bank
competitors
- Acquire professionals who will provide
and improve security measures - Decline in the usage of
ATMs and physical branches
- Drive towards sustainable energy
due to demand in mobile
projects. The new and improved
applications.
services will access more markets
-Lacks technical teams
- Provide different tips or warning signs
to prevent mobile scams and malware
attacks.
The value proposition canvas shows that security and technological flawlessness
in online banking are core challenges for the BDO Unibank, Inc. or consumers in this
field. The pain killers that would have to be applied have to with the economies of scale
to address cost and strategic positioning of resources to address these pain points.
117
2. Market Development/Penetration
BDO should continue to pursue its market penetration as one of the leading players
in the banking sector and the biggest market share in the industry. The preferred
banking institution on the markets it represents as one of its duties. In its new status,
BDO cannot be complacent. Enhanced marketing strategy for its latest products would
help BDO in its existing markets explore deeper target. However, when its base is more
robust, BDO should not lose sight of its current markets.
a.) To increase the sector's market share
While BDO is at the top of the market, it would be too costly to be
complacent, especially if the banking industry players are very aggressive as
they will overpower BDO in the market share. It is also intended to discuss the
goal of BDO to become the leading bank in its markets. The rise in market share
would also further boost BDO's capitalization, strengthen its finances, deliver
new goods, and a proactive reinvention to fulfill market demands consistently.
The larger capitalization and assets can acquire more remittances abroad to
expand its market and increase profits from OFW's.
3. Product Development
One of the BDO's priorities is to invest more in mobile banking and other banking
innovations. It was expected to develop BDO's mobile banking program. The simple
transfers should be prepared and tap-free for such an application. Protection, including
updated codes, and coding systems and backup systems, should also be
strengthened.
118
BDO wants technologies to improve its services in bank branches, aside from
online services. This addresses its goal to provide services flawlessly. Use computers
to speed up transfers or to arrange delays. To achieve its goals, BDO must bear in
mind that quality service must become its priority. BDO must capitalize on its good
support units in Research and Development and Information Technology
Departments to promote this product growth. The high capitalization of BDO is also an
indicator that the firm can afford this growth.
a.) Investing further in mobile banking software technology and
transactions of banks.
This is BDO's response to the market's growth for mobile banking
applications in the banking sector. BDO capitalizes on its assets, suitable support
units for science and information, and technology by spending more on
technology and its high capitalization. The incorporation of better technologies in
BDO's goods and services also ensures that service delivery and innovation are
more flawless, both part of the BDO Project Vision declarations. Better security
also provides secure transactions that resolve the insecurity of digital properties
against infringements and assaults and the protection of BDO. This target
responds in 10-folds to BDO's targets.
b.) Hiring of new employees/Employees Training and Development for new
processes
119
An increasing demand of new technology demand for a further training
and development of skill or hiring of new employees to secure the handling
wave of
120
consumers using their mobile devices during the time of pandemic. It is a fair
opportunity to add additional workers to accommodate the growing numbers of
mobile users. Some employees will be differentiated by their expertise in modern
media, marketing, and industry technology. This is a fundamental matter for a
business; younger applicants who are technologically advanced could be superior to
elderly candidates for these skills.
With strategies 1 and 2 being set in place, Banco De Oro can now improve
its services and products, which is the new introduction of services and products.
Figure 50 Business Model Canvass BDO Unibank, Inc.
Key Partners Key Value Relationship Customer

Activities Propositions Segments
- Personal
-Investment -Branch -Deposits Assistance -Retail and
partners Operations Products - Automation Corporate
(Lower where Customers
-Technology -Call center Interest possible (Depositors)
Vendors Operations Rates)
-Regulatory IT Operations -Loan - Retail and

Agencies Products Corporate
(Higher Customers
Interest (Borrowers)
Rates)
Key Channels
Resources
- Bank
-Physical and Branches,
IT ATMs, Call
Infrastructure Centers,
Internet,
Mobile
- Loan Assets Devices
Revenue Streams
Cost Structure 120
-Internet Expenses -Interest Income
-Channel Costs -Fee Income
The table shows the estimated additional cost establishing maintenance for
Banco De Oro to achieve the strategies.
Figure 51 Additional Cost Establishing Maintenance for Banco De Oro
Action Plan Expected Output Timetable Responsible Cost
Department
Employees Motivated staff August- Human Php 500,000.00

Training and and developed October Resource
Development knowledge and Management
for new skills
processes
Opportunity Capital and November- Accounting Php 500,000.00

Analysis strategic December and Finance
regarding acquisition Department,
investment increase Treasury
and asset Department
acquisitions
Partnership, To suppress January- Human Php

merger, and rivals and maintain March Resource 100,000,000.00
acquisition bigger share Management
with large
scale
organizations
Updating Enhancing the April-May Technology Php

technologies industry Management 50,000,000.00
of the competitive edge, Group
company increasing
operating
efficiency,
enhancing service
121
quality
Total Php
151,000,000
122
CHAPTER X
ACTION PLANS AND PROGRAMS
Strategy Implementation
Matching Strategy with Strategy
1.) Management
In a nation that is loaded with banking stalwarts, BDO Unibank keeps on
standing tallest, driving the Philippines from the front into another period of
computerized or digital banking as well as, maybe more significantly,
comprehensive banking.
The biggest bank in the country, across a scope of measurements
including total assets, BDO has been for some time considered the Philippine
full-service financial institution of the decision. It offers a complete set-up of
financial products and administrations or services to a different customer base
and through a broad and developing cluster of channels. Also, BDO offers long-
banking hours before and during the pandemic to serve its customers longer.
2.) Project and Operations Management
To accomplish and proceed as the biggest dispersion networks cross
country, the BDO Unibank, Inc. should zero in on having separation from its
competitors, specifically: BPI, UPB, and SEBC. Their center ought to create
imaginative items and administrations, pulling in the customers to buy their
offers. To plan their items and administrations, it will take them to introduce
methodologies.
123
In building up these methodologies, the accompanying estimations should
be moderate to the standard objective, acquiring and fulfilling purchasers.
3.) Finance/Accounting
BDO Capital offers financial advisory assistance to organizations or
companies needing to investigate possible ways to add short-, medium or long-
term development possibilities. BDO Capital gives a menu of choices
contemplating its present business profile, market/industry where it should be,
and plans and prospects. Advisory services may cover corporate and obligation
rebuilding and consolidations and obtaining exchanges.
BDO is a leading financial institution that offers a scope of inventive items
or products and services to address various companies or organizations' issues.
With long stretches of involvement with the business, it created unique
methodologies that have permitted it to prevail in various economic situations. To
help different organizations or companies experience the same achievement to
keep on getting a charge out of, BDO gives proficient and dependable monetary
warning administrations.
BDO perceives that it tends to be trying to deal with a business,
particularly when market circumstances change consistently. This is the reason
for financial advisors try to offer your company or organization a lift by providing
master guidance. The experts will assess profile, market execution, and industry.
The structure sound techniques will help settle on the privileged monetary
choices and drive your business forward. With BDO, its customers will have the
certainty to investigate different freedoms and grow its compass.
124
4.) Banking Technology
Innovation has helped keep money with decreased expenses, creating
extra income, and overseeing hazard openness more capably. The consistent
reconciliation of innovation into the branch acquaints clients with computerized
presence, such as versatile banking or online exchanges yet. Also, it makes the
branches more effective and holding up occasions less critical. However, it has
additionally opened the entryway for enormous and little contenders.
5.) Corporate Structure
The bank has kept on conveying a stellar performance even into 2020,
posting 7-percent development in pre-arrangement working benefit during the
year's first quarter, contrasted with a year sooner. However, more than its
financial performance, it is the nature through which it has moved toward two key
objectives—boosting financial inclusion and banking digitization—that has
acquired the bank numerous approvals and extensively improved the financial
experience of the regular BDO client.
At the firm level, a surviving examination shows that the powerful
connection between system and design is an essential precondition to the fruitful
execution of new business methodologies. Likewise, a match between proper
authoritative components and procedure has been found to lessen uncertainty
inside the firm and increment system execution's adequacy. An improper
organizational structure will prompt helpless dynamic, which may adversely
influence the procedure used cycle.
125
6.) Organization Culture
Individuals first. Uncommon consistently, every way. Embrace change.
Strengthening through information. Pick responsibility.
These are BDO's guiding principles, the arrangement of norms for its
work, how to treat its customers, and how one another. It controls through the
difficulties of our calling and makes BDO a dynamic and steady workspace.
The bank utilizes the abbreviation CORE to show the qualities ingrained
across its branches and staff concerning client support:
- C for "Costumer focus": Everything BDO does should have the
client's evenhanded at the top of the priority list;
- O for "Out-of-the-box" thinking: Does not compelled by
conventional methods of getting things done;
- R for "Right attitude": The additional mile realizing that a work
isn't done until the customer is fulfilled;
- E for "Excellent execution": From start to finish, the entire
servicing measure should work without an issue.
126
Figure 52 Departmental Action Plans for BDO Unibank, Inc.
Bases if Measure Action Plan

Strategy based on Performance - (Continue or
IFE and Planned vs actual Take Corrective
Strategies EFE objective Action)
If With significant if with significant
difference difference
Operations
Strategies
Take Corrective
Providing a successful marketing strategies and fast customer YES YES Action
service to assist every loan transaction of the customer.
Improving employee’s workplace and Take Corrective

arranging plan YES YES Action
Improve and enhance the data protection and security measures of Take Corrective
significant data. YES YES Action
Maximizing banks quality Take Corrective

administration YES YES Action
Regulatory Compliance mandated by Continue Present

BSP NO NO Course
Improve handling funds, portfolios and

securities. Continue Present
NO NO Course
Marketing Strategies
Improvement of the mobile banking applications & Investing in digital Take Corrective
marketing YES YES Action
127
to expand the interest of
clients
Take Corrective
The new and improved services that will access more markets YES YES Action
Marketing & Sales

Team Take Corrective
YES YES Action
Introduce better items or products with remarkable highlights yet at the
same time pertinent in banking & financial industry
same time pertinent in banking & financial Take Corrective
industry YES YES Action
Increase more funds in marketing segment to gain popularity

in public, and boosting banks Continue Present
brand NO NO Course
Human Resource
Consistent improvement of labor force in organizational structure of the

banks YES YES Action
business Take Corrective

interest YES YES Action
Increase standards of employee classification for specific category.

Take Corrective
YES YES Action
agency. Continue Present

NO NO Course
128
Finance
Collection policy and Payment of loan Take Corrective

Take Corrective
Accomplish and proceed as the biggest dispersion networks cross country YES YES Action
Innovation in the mode of Take Corrective

payment YES YES Action
Improving the estimation of bank measures to prevent insignificant
accounts mistake in records Continue Present
NO NO Course
Gain efficiency in Financial
Statements. Take Corrective
YES NO Action
Offering financial advisory assistance to organizations or companies
needing Continue Present
NO NO Course
Improving calculation on product estimate and compliance management
Continue Present
129
CHAPTER XI
STRATEGY EVALUATION AND CONTROL
Measuring and Monitoring of Organization Performance
Strategy Evaluation is the last phase in strategic management in which it is as
necessary as the design of the strategy as it sheds light on the feasibility and
effectiveness of the systematic plans to accomplish the desired outcomes.
Organizations may also determine the efficacy of the new approach by socio-economic,
political, and technical developments in today's competitive business environment. The
importance of strategy evaluation depends on the ability, through organizational
performance, to manage the activities undertaken by supervisors, organizations, and
departments. Strategic evaluation can also help assess whether the decisions match
the intended strategy requirements which includes varying elements such as the
development of inputs for new strategic planning, the urge for feedback,
assessment and compensation, the development of the strategic management
process and the legitimacy of strategic choice.
Action Plan
Action plan is the method of turning goals and priorities into practice,
encouraging proposals to become concrete. It is defined by the creation of an action
plan for each portion and intermediate action phase both of which ultimately
contribute
to the ultimate objective. Below is the action plan for BDO Unibank, Inc.
130
Figure 53 Action Plans for BDO Unibank, Inc.
Department Responsible Action

Strategies Key Result Areas (KRA)
Plan
Operation Strategies
Providing a successful marketing strategies • Marketing
Credit Assessment
and fast customer service to assist every loan Department Continue
Management
transaction of the customer
Improving employees’ workplace and • Human Resource Manpower Scheduling To
arranging plan Department Software implement
Improve and enhance the data protection and • Information Management Information and To
security measures of significant data Technology Department Data System Implement
• Operations Project and Quality To
Maximizing banks quality administration
Department Management Reports Implement
• Executive Disclosure and Annual
Regulatory Compliance mandated by BSP Continue
Department Reports
• Accounting,
Improve handling funds, portfolios, and Investment Portfolio Reports To take
Finance, Treasury
securities and Schedule Action
Department
Marketing Strategies
Improvement of the mobile banking • I.T. Department To
Social Media Platforms
applications & investing in digital marketing to • Accounting, Implement
131
expand the interest of clients Finance, Treasury
Department
• R&D Department
The new and improved services that will To
• Marketing Updated Sales Reports
access more markets implement
Department
• Marketing
Department Scout potential employees
To
Marketing and Sales Team • Accounting, with qualities that parallel the
implement
Finance, Treasury company ideals
Department
• Research and
Introduce better items or products with Development (R&D)
To
remarkable highlights yet at the same time Department Banking Supervision
implement
pertinent in banking & financial industry • Marketing
Department
• Marketing
Increase more funds in marketing segment to Department
Commercial industry/ To take
gain popularity in public, and boosting banks • Accounting,
production studio action
brand Finance, Treasury
Department
Human Resource
Consistent improvement of labor force in • Human Resource Scout potential employees To
132
organizational structure of the banks Department with qualities that parallel the implement
company ideals
Labor force of banks specialized development • Human Resource
To
dependent on the business interest in terms of Department IT development programs
implement
technological advancements • IT Department
• Human Resource Scout potential employees
Build up a relationship with human resource To take
Department with qualities that parallel the
development agency action
company ideals
Finance
• Accounting,
Collection policy and Payment of loan To
Finance, Treasury Loan Portfolio
program implement
Department
• Accounting,
To take
Accomplish precise analysis on labor cost Finance, Treasury Project budget reports
action
Department
• Accounting,
Finance, Treasury Performance management To
Innovation in the mode of payment
Department reports implement
• R&D Department
Improving the estimation of bank measures to • Accounting,
Performance Management To
prevent insignificant accounts mistakes in Finance, Treasury
Reports/ Financial Statements implement
record Department
133
• R&D Department
• Accounting,
To take
Gain efficiency in Financial Statements Finance, Treasury Auditing, Financial Report
action
Department
• Accounting,
Offering financial advisory assistance to To
Finance, Treasury Economic condition analysis
organizations or companies needing implement
Department
• Accounting,
Improving calculation on product estimate and Performance management To take
Finance, Treasury
compliance management reports action
Department
134
Balanced Scorecard
The Balanced Scorecard makes it easier for organizations to properly match their
corporate framework with strategic priorities. Organizations need to make sure that all
company divisions and support functions are operating for the same priorities in order to
implement a strategy well. To accomplish that and relate strategy to tasks, cascading
the Balanced Scorecard into those units would help. Below is the balance scorecard
for
BDO Unibank, Inc.
135
Figure 54 Balanced Scorecard for BDO Unibank,
Reporting Primary
Strategies Tools Expected Output
Responsibility
Operations Strategies
Providing a successful
marketing strategies and fast
Credit Assessment
customer service to assist Quarterly Marketing Department
Management
every loan transaction of the
customer
Improving employees’ Manpower Scheduling • Lower interest Semi- Human Resource
workplace and arranging plan Software expense on deposit annual Department
Improve and enhance the data Management liabilities
protection and security Information and Data • Productivity efficiency Monthly IT Department
measures of significant data System of banks
Maximizing banks quality Project and Quality • Increase in leveraging Operations
Annually
administration Management Reports debt Department
Regulatory Compliance Disclosure and
Annually Executive Department
mandated by BSP Annual Reports
Accounting, Finance,
Improve handling funds, Investment Portfolio
Quarterly and Treasury
portfolios, and securities Reports and Schedule
Department
Sales and Marketing Strategies
Improvement of the mobile Social Media • Increase in assets Quarterly Marketing and IT
136
banking applications & Platforms to protect Department
investing in digital marketing to depositors and
expand the interest of clients creditors
The new and improved • Increase in clients Research and
Updated Sales
services that will access more • Increase in ale per Quarterly Development and
Reports
markets year Marketing Department
Scout potential
employees with Semi- Human Resource
Marketing and Sales Team
qualities that parallel annual Department
the company ideals
Introduce better items or
products with remarkable
Marketing and R&D
highlights yet at the same time Banking Supervision Quarterly
Department
pertinent in banking & financial
industry
Increase more funds in
marketing segment to gain Commercial industry/
Quarterly and Treasury and
popularity in public, and production studio
Marketing Department
boosting banks brand
Human Resource Operations
Consistent improvement of Scout potential Semi- Human Resource
• Maintain customer
labor force in organizational employees with annual Department
137
structure of the banks qualities that parallel attrition
the company ideals • Maintain employee
Labor force of banks retention
specialized development
IT development Semi- Human Resource and
dependent on the business
programs annual IT Department
interest in terms of
technological advancements
Scout potential
Build up a relationship with
employees with Semi- Human Resource
human resource development
qualities that parallel annual Department
agency
the company ideals
Finance and Accounting Operations
Collection policy and Payment • Lower rate for
Loan Portfolio Annually and Treasury
of loan program delinquent
Department
accounts
Accomplish precise analysis on • Increase in non-
Project budget reports Annually and Treasury
labor cost interest revenue
Department
accounts
Innovation in the mode of Performance • Lower than 30
Annually and Treasury
payment management reports days late for
Department
payment dues
Improving the estimation of Performance Annually Accounting, Finance,
138
bank measures to prevent Management Reports/ and Treasury
insignificant accounts mistakes Financial Statements Department
in record
Gain efficiency in Financial Auditing, Financial
Annually and Treasury
Statements Report
Department
Offering financial advisory Accounting, Finance,
Economic condition
assistance to organizations or Annually and Treasury
analysis
companies needing Department
Improving calculation on Accounting, Finance,
Performance
product estimate and Annually and Treasury
management reports
compliance management Department
139
Strategy Map
Figure 55 Strategy Map for BDO Unibank, Inc.
The strategy map above illustrates that through a faster processing time and
online servicing, improving employee retention will benefit the company. In comparison,
product awareness development leads to creative services and features, in which will
bring new potential high valued clients to the company. Customer loyalty would also
remain strong with the enhanced internal procedures, both online and physical
branches nationwide. This leads to a greater chance that current consumers will seek
new or additional services. To conclude, the rise in the amount of sales made by both
new and current customers would result in an increase in sales and an improvement in
market share. The strengthened financial condition would then contribute to sustaining
the high productivity of the operation.
140
CHAPTER XII PROJECTED
FINANCIAL STATEMENT
Projected Statements of Financial Position
Figure 56 Projected Statements of Financial Position for BDO Unibank, Inc.
Statements of Financial Position

2019 2020 2021 2022 2023 2024

RESOURCES -15% -10% -5% 3% 6%
CASH AND OTHER CASH
ITEMS 2.05% 62,726 53,317 45,320 38,522 32,743 27,832
DUE FROM BANGKO
SENTRAL NG PILIPINAS 10.02% 306,938 260,897 221,763 188,498 160,224 136,190
DUE FROM OTHER
BANKS 1.17% 35,820 30,447 25,880 21,998 18,698 15,894
TRADING AND
INVESTMENT
SECURITIES 11.27% 345,278 293,486 249,463 212,044 180,237 153,202
LOANS AND OTHER
RECEIVABLES - Net 71.03% 2,175,655 1,833,976 1,558,880 1,325,048 1,126,291 957,348
PREMISES, FURNITURE,
FIXTURES AND
EQUIPMENT - Net 1.39% 42,494 36,120 30,702 26,097 22,182 18,855
INVESTMENT
PROPERTIES - Net 1.00% 12,595 26,036 22,131 18,811 15,990 13,591
OTHER RESOURCES - Net 2.66% 81,594 69,355 58,952 50,109 42,593 36,204
TOTAL RESOURCES 100% 3,063,100 2,603,635 2,213,090 1,881,126 1,359,114
1,598,957
LIABILITIES AND EQUITY
DEPOSIT LIABILITIES 79.62% 2,438,737 2,072,926 1,761,987 1,497,689 1,273,036 1,082,081
BILLS PAYABLE 4.81% 147,321 125,223 106,439 90,474 76,902 65,367
SUBORDINATED NOTES
PAYABLE 0.33% 10,030 8,526 7,247 6,160 5,236 4,450
INSURANCE CONTRACT
LIABILITIES 1 - - -
OTHER LIABILITIES 3.19% 97,802 83,132 70,662 60,063 51,053 43,395
Total Liabilities 87.95% 2,693,890 2,289,807 1,946,336 1,654,385 1,406,227
1,195,293
EQUITY
Attributable to:
Shareholders of the Parent
Bank 12.05% 369,210 313,829 266,754 226,741 192,730 163,820
Non-controlling Interests - -
Total Equity 12.05% 369,210 313,829 266,754 226,741 192,730 163,820
TOTAL LIABILITIES AND
EQUITY 100% 3,063,100 2,603,635 2,213,090 1,881,126 1,359,114 1,598,957
141
Projected Income Statement
Figure 57 Projected Income Statement for BDO Unibank, Inc.
BDO UNIBANK, INC,

Statements of Income
(Amounts in Millions of Philippine Peso Except Per Share Data)
2019 2020 2021 2022 2023 2024
INTEREST
INCOME 100% 153,981.00 130,883.85 117,795.47 111,905.70 115,262.87 122,178.64
INTEREST
EXPENSE 30% 38,581.00 39,265.16 35,338.64 33,571.71 34,578.86 36,653.59
NET INTEREST
INCOME 74% 114,500.00 91,618.85 82,456.47 82,333.70 80,684.01 85,525.05
IMPAIRMENT
LOSSES - Net 7% 5,699.00 9,161.87 8,245.68 7,833.40 8,068.40 8,552.51
NET INTEREST
INCOME
AFTER
IMPAIRMENT
LOSSES 71% 108,801.00 82,456.98 74,210.79 74,500.30 72,615.61 76,972.54
OTHER
OPERATING
INCOME 28% 43,145.00 36,673.25 33,005.93 31,355.63 32,296.30 34,234.08
OTHER
OPERATING
EXPENSES 63% 94,337.00 82,456.83 74,211.14 70,500.59 72,615.61 76,972.55
PROFIT BEFORE
PRE-
ACQUISITION
INCOME
PROFIT BEFORE
TAX 37% 57,609.00 36,673.41 33,005.57 35,355.34 32,296.30 34,234.08
TAX EXPENSE 9% 13,376.00 11,369.60 10,232.64 9,721.01 10,012.64 10,613.40
NET PROFIT 29% 44,233.00 25,303.81 22,772.93 25,634.33 22,283.66 23,620.68
142
Statement of Financial Position Assumption
• Due to COVID-19 pandemic will less 5% in the total assets, liabilities and equity
until 2022 and will add 3% each in 2023 to 2024.
• The target total assets, liabilities and equity by 2024 is 1.5 billion as a sign for
recovery after pandemic.
Revenue Assumptions
• Due to COVID-19 pandemic will less 5% cumulative revenue until 2022 and will
add 3% each in 2023 to 2024 in which the interest income (revenue) of BDO
are
21% lesser than 2019.
• The target interest income (revenue) by 2024 is 122 million as a sign for
recovery after pandemic.
• The interest expense in 2019 increased by 5% each year.
• The impairment loss in 2019 increased by 3% each year.
• The other operating income expenses in 2019 increased by 2% each year.
Projected Financial Ratios
Figure 58 Projected Liquidity Ratios for BDO Unibank, Inc.
Liquidity Ratios
Measure Company 2020 2021 2022 2023 2024 Average Trend
Current Ratio BDO 1.08 1.08 1.08 1.08 1.08 1.08
143
Cash Ratio BDO 0.02 0.02 0.02 0.02 0.02 0.02
Liquidity Assumptions:
• The current and Quick ratio still has an average of 0.55, and this indicates that
BDO will manage to maintain its capacity to finance current expenses during the
pandemic.
• BDO can improve its liquidity ratios by using sweeping accounts, cutting
operating costs, and paying off liabilities in various ways.
Figure 59 Projected Leverage Ratios for BDO Unibank, Inc.
Leverage Ratios
Debt Ratio BDO 0.88 0.88 0.88 0.88 0.88 0.88
Debt to
Equity Ratio BDO 7.30 7.30 7.30 7.30 7.30 7.30
144
Leverage Assumptions:
• BDO's leverage ratios are stable or show no changes for the 5-year average.
This means that the company has managed to have enough cash flow to pay
its debt.
• BDO may take this as an opportunity to reduce its debt-to-capital ratio by
increasing sales revenues and, potentially, earnings.
Figure 60 Projected Activity Efficiency Ratios for BDO Unibank, Inc.
Activity Efficiency Ratios
Asset Turnover
Ratio BDO 0.05x 0.05x 0.06x 0.07x 0.09x 0.06x
Fixed Asset
Turnover Ratio BDO 1.00x 1.05x 1.18x 1.43x 1.78x 1.29x
Activity Efficiency Assumptions:
• BDO manages to increase its asset turnover ratio. However, it is still below the
industry average, and it may indicate that it still does not rely heavily on its assets
to generate more new interest income.
145
• The fixed asset turnover ratio decreases compared to the past 5-year
average, but it is still favorable compared to the industry average. This may
indicate that BDO is still using more fixed assets in generating income.
Figure 61 Projected Profitability Ratios for BDO Unibank, Inc.
Net Interest
Margin BDO 3.52% 3.73% 4.38% 5.05% 6.29% 4.59%
Return on
Assets BDO 5.03% 5.32% 5.95% 7.21% 8.99% 6.50%
Return on
Equity BDO 41.71% 44.16% 49.35% 59.81% 74.58% 53.92%
Profitability Assumptions:
• BDO's Net Interest Margin has an upward trend, which indicates that the
company has an increasing interest percentage for the next five years.
• The ROA and ROE increased for the next five years, which means better
leverage and asset management.
146
Conclusion
BDO Unibank Inc. is the Philippines’ leading local bank in terms of total assets
and loans. The financial institution should focus more on its strengths and improve its
services and maintain as the top local bank against its competitors. With the increasing
value of capitalization in the last five years and having a good, fixed asset turnover, it is
expected to be here in the long run. Its financial operations were doing well from 2015
to 2019, but due to the COVID-19 pandemic, the banking industry suffered a huge
setback. As for its operations, several threats hinder the bank for 2020 and the coming
years. However, with the right strategy, BDO can recover from the losses caused by the
pandemic.
With the rising demand for mobile banking applications caused by several
lockdowns nationwide and the convenience it offers to BDO clients, it is prone to threats
such as malware and mobile scams. Further research and developments must be done
on BDO’s products and services and studies on other banks to compare their different
characteristics and figure out the right strategy to face the impact of the worldwide
pandemic to recover by the next few years fully. BDO is currently taking progressive
steps to boost its economic recovery and sustainability but implementing these
strategies in time for future situations to come remains.
147
List of Figures
Figure 1 Milestones of BDO Unibank, Inc. ............................................................... 11

Figure 2 Business Model Canvass of Banking Companies..................................... 12
Figure 3 Dupont Analysis of BDO Unibank, Inc........................................................ 13
Figure 4 BDO Unibank, Inc. Five (5) Year Financial Statement for
years 2015-2019........................................................................................................... 15
Figure 5 BDO Unibank, Inc. Five (5) Year Income Statement for
years 2015-2019........................................................................................................... 16
Figure 6 Statement of Cashflow of BDO Unibank, Inc. 2015 to 2019 ..................... 17
Figure 7 Trendline of Current Ratios of BDO Unibank, Inc. .................................... 20
Figure 8 Trendline of Cash Ratios of BDO Unibank, Inc.......................................... 21
Figure 9 Trendline of Liquidity Ratios of BDO Unibank, Inc. .................................. 22
Figure 10 Trendline of Net Interest Margin of BDO Unibank, Inc. ........................... 23
Figure 11 Trendline of Gross Profit Margin of BDO Unibank, Inc. .......................... 24
Figure 12 Trendline of ROA of BDO Unibank, Inc. ................................................... 25
Figure 13 Trendline of ROE of BDO Unibank, Inc..................................................... 26
Figure 14 Trendline of TIE of BDO Unibank, Inc....................................................... 27
Figure 15 Trendline of EPS of BDO Unibank, Inc. .................................................... 28
Figure 16 Trendline of Profitability Ratios of BDO Unibank, Inc............................. 29
Figure 17 Trendline of Receivable Turnover Ratios of BDO Unibank, Inc. ............ 30
Figure 18 Trendline of Asset Turnover Ratios of BDO Unibank, Inc. ..................... 31
Figure 19 Trendline of Fixed Asset Turnover Ratios of BDO Unibank, Inc. ........... 32
Figure 20 Trendline of Equity Turnover Ratios of BDO Unibank, Inc. .................... 33
Figure 21 Trendline of Efficiency Ratios of BDO Unibank, Inc................................ 34
Figure 22 Trendline of Debt Equity Ratios of BDO Unibank, Inc............................. 35
148
Figure 23 Trendline of Debt Ratios of BDO Unibank, Inc. ....................................... 35
Figure 24 Trendline of Stability Ratios of BDO Unibank, Inc. ................................. 26
Figure 25 Trendline of Debt to Asset Ratios of BDO Unibank, Inc. ........................ 37
Figure 26 Trendline of Debt-to-Equity Ratios of BDO Unibank, Inc. ....................... 38
Figure 27 Trendline of Equity Ratios of BDO Unibank, Inc. .................................... 39
Figure 28 Trendline of Leverage Ratios of BDO Unibank, Inc................................. 40
Figure 29 Trendline of WACC of BDO Unibank, Inc. ................................................ 42
Figure 30 Table of Organization BDO Unibank, Inc.................................................. 45
Figure 31 External Factors Evaluation Matrix BDO Unibank, Inc. .......................... 71
Figure 32 Type of Banks Amount in the Philippines................................................ 75
Figure 33 Number of Commercial Banks in the Philippines.................................... 77
Figure 34 Number of Thrift Banks in the Philippines ............................................... 78
Figure 35 Number of Rural Banks in the Philippines ............................................... 78
Figure 36 Porter’s Five Forces Model for BDO Unibank, Inc................................... 80
Figure 37 Comparison of Competitors’ Financial Statements

Vs Banco de Oro Unibank .......................................................................................... 84
Figure 38 Comparison of Competitors’ Financial Ratios

Vs Banco de Oro Unibank .......................................................................................... 86
Figure 39 DuPont Model of Universal Banking Industry.......................................... 89
Figure 40 Competitive Profile Matrix Between BDO and Competitors .................. 91
Figure 41 Internal Factors Evaluation Matrix BDO Unibank, Inc............................. 96
Figure 42 SWOT Matrix of BDO Unibank, Inc............................................................ 98
Figure 43 Internal-External (IE) Matrix of BDO Unibank, Inc. ................................ 103
Figure 44 SPACE Matrix of BDO Unibank, Inc. ....................................................... 105
Figure 45 BCG Matrix of BDO Unibank, Inc. ........................................................... 107
Figure 46 GSM of BDO Unibank, Inc........................................................................ 109
149
Figure 47 QSPM of BDO Unibank, Inc. .................................................................... 111
Figure 48 Generic Strategies Banco De Oro Inc..................................................... 112
Figure 49 Value Proposition Canvas Banco De Oro Inc. ....................................... 117
Figure 50 Business Model Canvass BDO Unibank, Inc. ........................................ 120
Figure 51 Additional Cost Establishing Maintenance for Banco De Oro ............. 121
Figure 52 Departmental Action Plans for BDO Unibank, Inc. ................................ 127
Figure 53 Action Plans for BDO Unibank, Inc......................................................... 131
Figure 54 Balanced Scorecard for BDO Unibank, Inc. ........................................... 136
Figure 55 Strategy Map for BDO Unibank, Inc. ....................................................... 140
Figure 56 Projected Statements of Financial Position for BDO Unibank, Inc. ..... 141
Figure 57 Projected Income Statement for BDO Unibank, Inc. ............................. 142
Figure 58 Projected Liquidity Ratios for BDO Unibank, Inc. ................................. 143
Figure 59 Projected Leverage Ratios for BDO Unibank, Inc. ................................ 144
Figure 60 Projected Activity Efficiency Ratios for BDO Unibank, Inc. ................. 145
Figure 61 Projected Profitability Ratios for BDO Unibank, Inc. ............................ 145
150
List of Tables
Table 1 Current Five (5) Year Current Ratios of BDO Unibank, Inc. ....................... 20
Table 2 Current Five (5) Year Cash Ratios of BDO Unibank, Inc. ........................... 21
Table 3 Current Five (5) Year Liquidity Ratios of BDO Unibank, Inc. ..................... 22
Table 4 Current Five (5) Year Net Interest Margin of BDO Unibank, Inc. ................ 23
Table 5 Current Five (5) Year Gross Profit Margin of BDO Unibank, Inc. ............... 24
Table 6 Current Five (5) Year Return on Assets of BDO Unibank, Inc.................... 25
Table 7 Current Five (5) Year Return on Equity of BDO Unibank, Inc. ................... 26
Table 8 Current Five (5) Year Time Interest Earned of BDO Unibank, Inc. ............. 26
Table 9 Current Five (5) Year Earnings Per Share of BDO Unibank, Inc. ............... 27
Table 10 Current Five (5) Year Profitability Ratios of BDO Unibank, Inc................ 28
Table 11 Current Five (5) Year Receivable Turnover Ratios of BDO
Unibank, Inc. ................................................................................................................ 29
Table 12 Current Five (5) Year Asset Turnover Ratios of BDO Unibank, Inc. ........ 30
Table 13 Current Five (5) Year Fixed Asset Turnover Ratios of
BDO Unibank, Inc. ....................................................................................................... 31
Table 14 Current Five (5) Year Equity Turnover Ratios of BDO Unibank, Inc. ....... 32
Table 15 Current Five (5) Year Efficiency Ratios of BDO Unibank, Inc. ................. 33
Table 16 Current Five (5) Year Debt Equity Ratios of BDO Unibank, Inc. .............. 34
Table 17 Current Five (5) Year Debt Ratios of BDO Unibank, Inc. .......................... 35
Table 18 Current Five (5) Year Stability Ratios of BDO Unibank, Inc. .................... 36
Table 19 Current Five (5) Year Debt to Asset Ratios of BDO Unibank, Inc. ........... 37
Table 20 Current Five (5) Year Debt to Equity Ratios of BDO Unibank, Inc. .......... 37
Table 21 Current Five (5) Year Equity Ratios of BDO Unibank, Inc. ....................... 38
Table 22 Current Five (5) Year Leverage Ratios of BDO Unibank, Inc.................... 39
Table 23 Current Five (5) Year WACC of BDO Unibank, Inc. ................................... 33
Table 24 Summary of Frameworks, Tools, Activities and Outputs For this
Strategic Management Paper ..................................................................................... 40
Table 25 Current Vision Analysis............................................................................... 57
Table 26 Current Mission Analysis ............................................................................ 58
151
Table 29 Summary of Strategies David’s Framework ............................................ 110
Table 30 Strategic Objectives for Banco De Oro Inc. ............................................. 113
152
List of Annexes
Annex 1 Financial Statements of BDO Unibank, Inc 2015-16 ................................ 154

Annex 2 Financial Statements of BDO Unibank, Inc 2017-18 ................................ 159
Annex 3 Financial Statements of BDO Unibank, Inc 2019 ..................................... 163
Annex 4 Competitor 1 Financial Statements of BPI 2015-16 ................................. 167
Annex 5 Competitor 1 Financial Statements of BPI 2017-18 ................................. 172
Annex 6 Competitor 1 Financial Statements of BPI 2019 ...................................... 177
Annex 7 Competitor 2 Financial Statements of UBP 2015-16 ............................... 182
Annex 8 Competitor 2 Financial Statements of UBP 2017-18 ............................... 186
Annex 9 Competitor 2 Financial Statements of UBP 2019..................................... 190
Annex 10 Competitor 3 Financial Statements of SECB 2015-16 ........................... 194
Annex 11 Competitor 3 Financial Statements of SECB 2017-18 ........................... 201
Annex 12 Competitor 3 Financial Statements of SECB 2019 ................................ 206
153
Annex 1 Financial Statements of BDO Unibank, Inc 2015-16
154
STATEMENTS OF
INCOME
BDO UNIBANK, INC. AND SUBSIDIARIES
FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND 2014
(AMOUNTS IN MILLIONS OF PHILIPPINE PESOS EXCEPT PER SHARE DATA)
BOO Unibank Group Parent Bank
2015 2014
(As Restated - (As Restated -
Notes 2016 2015 2014 2016 see Note 2) see Note 2)
INTEREST INCOME 21 82,037 72,127 63,583 76,647 68,519 60,871

INTEREST EXPENSE 22 16.413 15,166 12,358 14,989 14,238 11,728
NET INTEREST INCOME 65,624 56,961 51,225 61,658 54,281 49,143

IMPAIRMENT LOSSES - Net 9, 13, 14 3,815 3,000 5,114 3,003 2,709 5,014
NET INTEREST INCOME

AFTER IMPAIRMENT LOSSES 61,809 53,961 46,111 S8,65S 51,572 44,129
OTHER OPERATING INCOME 23 41,620 31,939 29.487 27,353 28,645 27,033
OTHER OPERATING EXPENSES 23 70,139 55,144 48,530 56,379 50,394 44,836
PROFIT BEFORE PRE-

ACQUISITION INCOME 33,290 30,756 27,068 29,629 29,823 26,326
PRE-ACQUISITION INCOME 28 391)
PROFIT BEFORE TAX 32,899 30.756 27,068 29,629 29,823 26,326
TAX EXPENSE 29 6,797 5.701 4,240 5,713 4,829 3,522
NET PROFIT 26,102 p 25,055 p 22,828 p 23,916 p 24,994 p 22,804
Attributable to:
Shareholders of the 26,090 p 25,016 p 22,805

Parent Bank
Non-controllingInterests 12 39 23
26,102 p 25,055 p 22,828
Earnings Per Share: 30

Basic 7.06 p 6.84 p 6.27 p 6.47 p 6.83 p 6.27
Diluted 7.06 p 6.84 p 6.27 p 6.47 p 6.83 p 6.27
See Notes to Financial Statements.
30
155
STATEMENTS OF
CASH FLOWS
BDO UNIBANK, INC. AND SUBSIDIARIES
FOR THE YEARS ENDED DECEMBER 31, 2016, 2015 AND

2014 (AMOUNTS IN MILLIONS OF PHILIPPINE PESOS)
201S 2014
Notes 2016 2015 2014 2016 see Note 2) see Note 2)
CASH FLOWS FROM OPERATING

ACTIVITIES
Profit before tax P 32,899 P 30, 7S6 P 27,068 P 29,629 29,823 26,326
Adjustments for
Interest income
21 82,037) 72,127) 63.583) 76,64n 68,SJ9) 60,871)
Interest received
80,887 71,124 62,S29 7S,720 67,778 60,122
Interest expense
22 16,413 15,166 12,358 14,989 14,238 11,728
Interest paid
16,344) 15,188) 12,496) 14,969) 14,344) ll,8S5)
Depreciation and amortization 11, 12, 13

4,782 3,961 3,262 3,668 3,085 2,640
Impairment losses 9, 13, 14
3,81S 3,000 5,114 3,003 2,709 5,014
Income from acquisition of
a subsidiary 28 2,214) - ( 18)
Share in net profit of

subsidiaries and associates 13
481) 837) 652) 3,Sl6) 2,276) 2,368)
Fair value loss (gain)
96) 121) 37) 45 167) 65)
Operating profit before changes in
operating resources and liabilities
37,624 35,734 33,545 31,922 32,327 30,671
Decrease (increase) in financial

assets at fair value through
profit or loss
Increase in loans and other
1,988 4,714) 1,076 1,076 66 u2n
receivables 248,384) 188,091) 216,173) 241,321) 231.297) 200,655)
Decrease (increase) in
investment properties 794) 1,072 1,377) 624) 981) 1,389)
Decrease (increase) in
other resources 3,612) 9,496) 11,000) 2,722 S.447) S,SS3)
Increase in deposit liabilities 241,312 171,671 147,105 229,972 139,112 147,110
Increase in insurance
contract liabilities 2,638
Increase (decrease) in
other liabilities 13,00S ( 18,308) 18,543 10,423 13.863) 9,907
Cash generated from (used in)

operations 43,777 12,132) 28,281) 34,170 80,083) 21,236)
Cash paid for income tax 6,S28) 4,090) 4,160) S,342) 3,211) 3,S89)
Net Cash From (Used in) Operating

Acnvrtles 37,249 16,222) 32.441) 28,828 83.294) ( 24,825)
38
156
FINANCIAL STATEMENTS
STATEMENTS OF
CASH FLOWS
BDO UNI BANK, INC. AND SUBSIDIARIES

BOO Unlbank Group Parent Bank
2015 2014
Notes see Note 2) see Note 2)
2 016 2015 2014 2016
--- -
CASH FLOWS FROM
INVESTING ACTIVITIES
Proceedsfrom disposals
of
available-for-sale securities (AFS) 92,532 P 449,636 P 383,247 63,539 493,842 373,079
Acquisitions of AFS 77,520) 453,010) 377,961) 40,953) 437,205) 360,013)

Acquisitions of held-to-maturity
(HTM) investments 49,939) - ( 48,139)
Maturities of HTM Investments 12,300 11,938
Acquisitionsof premises, furniture,

fixtures and equipment 11 5,537) 6,963) 5,970) ( 3,811) 4,439) 4,712)
Acquisitionof a subsidiary 28 2,298) - ( 2,298)
Proceeds from disposalsof

premises, furniture,
fixtures and equipment 144 126 194 30 73 87
Net Cash From(Used in)

Investing Activities 30,318) 10,211) 490) 19,694) 52,271 8,441
CASH FLOWS FROM

FINANCING ACTIVITIES
Dividends paid 19 4,766) 7,941) 7,903) 4,716) 7,898) 7,859)
Net proceeds from

(paymentsof) bills payable 2,983 2,896) 6,100 l,093) 8,250) 2,216
Proceeds from issuance of

common stock 238 238
Proceeds from issuance of

subordinated notes payable 17 7,023 7,023
Net Cash From (Used in)

Financing Activtiies 1,545) 10,837) 5,220 5,571) 16,148) 1,380
NET INCREASE (DECREASE) IN CASH

AND CASH EQUIVALENTS
(Carried Forward) 5,386 (P 37,270) (P 27,711) p 3,563 (P 47,171) (P 15,004)
39
157
STATEMENTS OF
CASH FLOWS
BDO UNI BANK, INC. AND SUBSIDIARIES

Notes
~~ ~ ~
20 16
~~ ~ - 201 5 2016 2015 2014
-~ ~ ~
20 14
NET INCREASE (DECREASE) IN

CASH AND CASH EQUIVALENTS
(Brought Forward) 5,386 (P 37,270) (P 27,711) p 3,563 (P 47,171) (P 15,004)

ACQUIRED FROM NEW SUBSIDIARY 28 851 3,294
CASH AND CASH EQUIVALENTS AT

BEGINNING OF YEAR
Cash and other cash items 42,729 41,342 27,824 41,767 41,237 27,736
Due from Bangko

Sentral ng Pilipinas 271,808 269,542 408,383 260,841 258,416 384,361
Due from other banks 24,837 45,621 26,939 20,944 43,165 24,655
Securities purchased under reverse

repurchase agreement 10 69,490 86,173 8,407 58,431 86,173 8,407
Foreign currencynotes and coins 13 3,244 3,406 2,242 3,243 3,406 2,242
412,108 446,084 473,795 385,226 432,397 447,401

AT END OF YEAR
Cash and other cash items 40,909 42,729 41,342 39,813 41,767 41,237
Due from Bangko

Sentral ng Pilipinas 318,002 271,808 269,542 304,285 260,841 258,416
Due from other banks 41,794 24,837 45,621 33,463 20,944 43,165
Securities purchased under

reverse repurchase agreement 10 14,302 69,490 86,173 7,891 58,431 86,173
Foreign currency notes and coins 13 3,338 3.244 3,406 3,337 3,243 3,406
P 418,345 P412,108 P446,084 P 388,789 385,226 432,397
40
158
Annex 2 Financial Statements of BDO Unibank, Inc 2017-18
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Annex 4 Competitor 1 Financial Statements of BPI 2015-16
167
168
169
170
BA..'IK OF THE PHILIPPINE ISi.ANDS
STATEMENTS OF CASH FLOWS

FOR EACH OF THE THREE YEA.RS INTHE PERIOD ENDED DECEMBER 31, 2016
On f.1ilUons of Pesos)
Consolidated Parent
Notes 2016 2015 2014 2016 2015 2014
CASH FLOWS FROM INVESTING
ACTIVITIES
(Increase) decrease In:
Available-for-sale securities, net 8 18,435 8.027 35,013 17,519 4,623 38,452
Held-t~aturity secunties 9 (23,874) (34,995) (111,906) (21,078) (31,722) (105,811)
Bank premises, furniture, fixtures and
equipment, net 11 (4,109) (1,503) (3,434) (2,543) (406) (2,061)
Investment properties, net (35) 709 709
Investment in subsi<:t,aries and associates,
net 28 (1,983) (95) (880) (1,342)
(248) Assets attributable to insurance operations (136) 589 (851)
Dividends receilled 20 56 48 22 6,084 389 sn
Proceeds from sale of interest in a slbsldia!}'. 31 1,744
Net cash used in investi!19 activties (9,635! !29,817) !80,542) !898) ~8,458! !
66,643! CASH FLOWS FROM FINANCING
ACTIVmES
Cash dividends paid (7,082) (7,078) (6,739) {7,082) (7,078) (6,739)
Increase (decrease) In:
Collection on stock subsctiptions 175 112 24,733 175 112 24,733
Bills payable 41,032 (12,052) 6,812 39,431 (13,462) 7,300
Proceeds from sale of interest in a subsidia!}'. 31 1,744
Net cash from (used in) financing activities 34,125 !19,018) 26,550 32,624 (20,428! 25,294
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 28,995 8,193 (26,214) 38,076 4,771 (10,189)
Janua!i'. 1 281,751 273,558 299,772 228,381 223,610 233,799
December31 310,746 281.751 273,558 266,456 228,381 223,610
(The notes on pages 1 to 111 are an integral part of these financial statements.)
Date [ APR l l 29;-

J()~~Aftf l
171
Annex 5 Competitor 1 Financial Statements of BPI 2017-18
172
173
174
175
176
Annex 6 Competitor 1 Financial Statements of BPI 2019
177
178
179
180
181
Annex 7 Competitor 2 Financial Statements of UBP 2015-16
182
183
184
185
Annex 8 Competitor 2 Financial Statements of UBP 2017-18
186
187
188
189
Annex 9 Competitor 2 Financial Statements of UBP 2019
190
191
192
193
Annex 10 Competitor 3 Financial Statements of SECB 2015-16
194
-2 -
Consolidated Parent Companv

December 31, January I,
December J l, December 31, December J l, 2015 2015
2016 2015 2016 (As Restated· Notes 2 and 13)
(Amounts in Thousands]
F.QIJITY A"ITKllll!TAllU: TO t:QIJITY

HOLDERS OF THE PARE!H
COMPANY
Capital stock (Note 26) 1'7,635,389 P6,088,594 1'7,635,389 P6,088,594 P6,088.594
Additional paid-in capital (Note 26) 38,524,323 3,210,200 38,551,028 3,236,905 3,236,905
Surplus reserves (Note 26) 717,874 492,727 686,300 462,983 442,783
Surplus (Notes 26 and 29) 49,909,010 43,223,291 49,953,230 43,322,233 36,999,539
Net unrealized gain on financial assets at fair value
throughother comprehensive income (Nole I 0) 72,018 56,058 66,838 50,878 41,930
Net unrealized gain on subsidiaries' financial assets
at fair value through other comprehensive income
(Notes 10 and 13) 18,428 20.439 18,428 20.439 24,851
Cumulative foreign currency lranslation 244,631 118,360 244,631 118,36(, 76,253
97,121,673 53,209,669 97.155,844 53,300,398 46,910,855
J\"ON-CONTKOLUNG [J\"TEREST (Note 13) 5,245 5,128
TOTAL F.QIJITY 97.126,918 53,214.797 97,ISS,844 53,300,398 46,910,855

TOTAL LIABILITIES AND EQUITY 1'694,981,705 P532,200,793 1'695, 768,056 P532,570,754 P387,223,820
See accompanyingNotesto FinancialStatements.
1111111 ~1111111111 ~m Ii 1111111111111111111~ 1111 Ill
195
SECURITY BANK CORPORATION AND SUBSIDIARIES
STATEMENTS OF INCOME
Consolidated Parent Coml?:.my

Years Ended December 31
2015 2014 2015 2014
2016 (As Restated - Note 13) 2016 (As Restated - Notes 2 and 13)
(Amounts in Thousands, Except Earnings per Share)
CONTINUINGOPERATIONS
INTEREST I.NCOME ON
I .oans and receivables (Notes 12 and 32) 1'13,313,371 PI 0,869,481 P9,179,487 1'13,206,185 PI 0,526, I 07 P8,180,510
Financial investments (Note 7) 9,095,371 7.403,292 5,975.313 9,095,371 7,398.911 5,955,163
Interbank loans receivable and securities
purchased under resale agreementswith
the Bangko Seutral ug Pilipinas (Note 32) 180,816 9.546 126.954 169,461 6,277 115,263
Oc~sits with banks and others 235,613 66,316 92,617 22.l,367 52,981 81.184
22,825,171 18,348,635 15.374.371 22,694,384 17.984.276 14,332,120
INTEREST EXPENSE ON
Deposit liabilities (Notes 17 and 32) 3,500,375 3,196,563 2.540, 115 3,484.031 3,143,654 2,389,528
Subordinated note, bills payable, securities
sold under repurchase agreements.
notes payable, and other borrowings
(Note 20) 2,618,456 1,817,604 855,872 2,616,060 1,813.059 851,940
Derivative instruments (Note 18) 796,513 910,549 789.275 796,513 910.549 789,275
l)crivativcs dcsil;inau.x. l as hcd~cs (Note 19) 16,381 25,245 47,863 16,381 25,245 47.863
6,931,725 5,949.961 4.233.125 6,912,985 5.892.507 4,078,606
1'ET INTEREST Th"COM.E 15,893,446 12,398,674 11,141,246 15,781,399 12.091.769 10,253,514

Service charges, fees and commissions
(Note 30) 2,172,862 2,109,627 1,514,891 1,587,083 1,477,445 719,012
Gain on disposal of investment securities al
amortized cost (Notes 8 and 11) 1,609,502 2,067,016 3,079,540 1,609,502 2.067.016 3,079,540
Rent (Notes 15. 32 and 33) 178,074 78,215 37,365 48,155 38,269 35.374
Trading and securities gain - net (Note 8) 142,694 174,679 515.907 142,870 180.968 513,988
Foreignexchange gain (loss) - net (Note 6) 153,995 298,309 (173,926) 141,675 281.628 (188.385)
Profit from assets solcVcxchangcd
(Notes 14, 15 and 16) 108,132 78.053 93,005 104,916 53,838 54.867
Share in net income of subsidiaries and
a joint venture (Note 13) 21,192 22,859 25,523 231,363 181,735 233,752
Gain 011 reclassification of investment
securities at amortized cost to financial
assets at fair value through profit or loss
(Notes 8 and 11) 625,926 625,926
Miscellaneous {Note 31) 551,904 455,639 354,086 355,245 419,595 329,790
TOTAL OPERATING INCOME 20,831,801 18.308,997 16.587.637 20,002,208 17,418.189 15.031,452

OPERATING EXPENSES
Compensation and fringe benefits
(Notes 29 and 32) 3,738,064 3,124,727 2,645,110 3,601,714 2,890,554 2,315,872
Taxes and licenses (Note 28) 1,226,806 1,272,871 1.005,650 1,183,167 1,206,790 894,980
Provision for credit losses (Note 12) 937,544 628,208 790,065 877,028 616,013 626,146
Occupancy costs (Notes 15 and 33) 764,261 693,033 643,296 735,700 658,439 504,101
Depreciation and amortization (Note 14) 640,067 549,497 479,515 533,756 490,020 398,975
Amortization of softwarecosts (Note 16) 69,767 56,171 56,622 65,725 48,351 37,005
Provision for (recovery ol) impairmenl losses
(Note 15) 6,829 (9,233) (35,943) 9,617 (28,151) (13,309)
Miscellaneous (Notes 28 and 31) 4,017,588 3.691,633 3,035,294 3,602,377 3,213,745 2,366,290
TOTAL OPERATING F.XPE1'SES 11,400,926 10,006,907 8,619,609 10,609,084 9,095,761 7,130,060
(Forward)
1111111 ~1111111111 ~m Ii 1111111111111111111~ 1111 Ill
196
-2 -
Consolidated Parent
Compauv
Veal's Ended December
31
2015 2014 2015 2014
2016 (As Restated -Note 13) 2016 (As Restated -Notes 2 and 13)
(Amounts in Thousands, Except Earnings per
Share)
INCO)'lE BEFORE ll'iCOME TAX 1'9,430,875 1'8,302,090 1'7,968,028 1'9,393,124 1'8,322,428 1'7,901,392
PROVISION FOR lNCOME TAX (Note 28) 877,216 914.628 820.689 896,131 864,425 737.654
!'.t:T INCOMt: FROM CONTINUING

OPERATIONS 8,553,659 7,387,462 7,147,339 8,496,993 7,458,003 7,163,738
/JISCONHNUE/JOPERATIONS
Oiscontinucd oeerntions, net of tax {No te 13} 367,929 72,903 307,668
J\'ETI.NCOME 1'8.553,659 1'7,755,391 1'7,220,242 1'8,496.993 1'7,765,671 1'7,163,738
ATTRnllJTAlll.E TO:
Equity holders of the Parent Company
(Note 36) 1'8r5S3,S4S P7.699.327 P7,163,738
Non-controllins interest 114 56.064 56.504
!\'ET INCOME P8,SS3,659 P7,755.391 P7,220.242
B11sic/Oiluted Eurnings Per Share {No te 36} Pll.95 1'12.77 1'11.88
Bask/Diluted Earulngs Per Share -

Continuing Oeerations (Note 36) Pll.95 P12.25 Pl 1.85
lla.sic/llilutedEarnings Per Share

- Discontinued Opcratlens
(Note 13l P- P0.52 P0.03
See accompanyingNotes 10 FinancialStatements.
1111111 ~1111111111 ~m Ii 1111111111111111111~ 1111 Ill
197
Consolidated Parent Corne~rnv

2015 2014
2016 2015 2014 2016 (As Restated - Notes 2 and 13)
(Amounts in Thousands)
C:ASII FLOWS FROM
OPERATINGACTIVITIES
Income from continuing operations
before income tax 1'9,430,875 P8,302,090 P7,968.028 1'9,393,124 P8.322,428 P7.901,392
Income from
discontinued operations
before income lax {N ote 13~ 468,958 121.154 495,339
Income beforeincome lax 1'9,430,875 P8,771,048 P8,089,182 1'9,393,124 P8,817,767 P7,901,392
Adjustments for:
Gain on disposal of
investment securitiesat
amortit.edcost
(Notes 8 and 11) (1,609,502) (2,067,016) (3,079,540) (1,609,502) (2,067,016) (3,079,540)
Gain on rcclassificarion of
investment securities at
amortized cost to
financial assets at fair
value through
profit or loss (Note 11) (625,926) (625,926)
Unrealized marketvaluation loss
(gain) on linancial
instruments at fairvalue
through profit or
loss (Notes 9, 18 and 19) (450.640) (454,843) 247,345 (450,640) (454,843) 247,345
Dcprcciution and amortization
(Note 14) 640,067 565,886 496,618 533,756 490,020 398.975
Profit from assets sol<Vexchanged
(Notes 13, 14, 15 and 16) (108,132) (147,662) (149,020) (104,916) (53,838) (54.867)
Provision for credit losses (Note 12) 937,544 628,208 790,065 877,028 616,013 626,146
Provision for(recovery of)
impairment losses (Note 15) 6,829 (9,233) (35,943) 9,617 (28,151) (13,309)
Amortizationofsofiwarc costs
(Note 16) 69,767 56.190 56.647 65,725 48.351 37,005
Amortization of transaction costs
on J ,TNCD. notes payable and
subordinated note (Notes 17, 21
and 22) 27,437 24,822 11.800 27,437 24,822 11,800
Gain on sale ofa subsidiary
(Notes 13 and31) (413,969) (495,339)
Share in net income of
subsidiaries
and a joint venture (Note I 3) (21,192) (22,859) (25,523) (231,363) (181,735) (233,752)
Changes in operating assets
and
liabilities:
Decrease (increase) in the
amounts
of:
Financial assets at FVJ"PI.
(Note 9) (105,860) 8,563,417 (7,777.822) (106,021) 8,561,689 (7,846,134)
Loans and receivables (Note 12) (52,930,794) (47,260,743) (29,584,803) (53,625,189) (47,814,5!0)
(29,024,618) Otherassets (777,006) (658,944) 188,833 (753,750) (747,764)
(3,398)
Increase (decrease) in the amounts
of
Deposit liabilities (Note 17) 57,061,009 42,703,811 40,853,192 57,828,024 42,270,534 39,299,663
Acceptances payable 407,507 47,785 (284,842) 407,507 47,785 (284,842)
Margin deposits and cash letters
of credit 59,522 292,003 27,071 59,522 292,003 27,071
Manager's and certified checks
outstanding 282,447 616,619 224,724 282,447 613,944
314,522
Increase (decrease) in the amounts
of:
Accrued interest, taxes and other
expenses (Note 23) 202,682 802,960 6 I0,931 249,581 837,768 558,438
Other liabilities (Note 24) (737,053) 533,205 2,842,049 (999,696) 86,372 2,698,758
Net cash generated from operations 12,385,507 11,944,759 13,500,964 11,852,691 10,237,946 11,580,655
Income taxes eaid (1,011,589) (1,021.436) (1,119.569) (929,071) (883,189) (1,019,978)
Net cash provided by operating
activities 11,373,918 I0,923,323 12,381,395 10,923,620 9,354,757 10,560,677
(Forward)
198
11mi 11111 IIH ml 111111111111111111111111!1111111
199
-2-
Consolidated Parent Company

2015 2014
CASH FLOWS FROM lNVESTTh"G
ACTIVITIES
Acquisitions of:
lnvestmenl securities at amortized
cost
(1'108,854,298) (1'134,940,378) (1'124,463,389) (1'108,854,298) (1'134,940,378) (1'124,466,774)
Property and equipment(Note 14) (1,683,819) (869,443) (980,065) (1,313,477) (562,654) (851,322)
Software costs (Note 16) (317,763) (123.791) (114.378) (312,585) (118.505) (94,011)
Branch licenses (Note 16) (80,000) (220,000) (80,000) (220,000)
Proceeds from:
Sale of a subsidiary (Note 13) 959,430 1.600,000
Assumption of net liabilities ofa
subsidiary (Note 13)
Disposal or maturities of 1,522,124
investment
securities at 51,292,237 54,670.548 104.572.527 51,292,237 54.321,408 104.572,527
amortizedcost 95,016 195,163 147,902 95,016 109,530 123,222
Disposal of investment 217,473 118,639 94.963 208,481 79,997 68,746
properties
Disposal of property and
equipment
Dividend received from
subsidiaries
(Note 13) 150.000 25.264 55,000
Ne1 cash used in in investing activities (59,331, I 54) (79,989.832) (20,962.440) (58.814,626) (77,963.214) (20,812.612)
CASH FLOWS FROM FINANCING
ACTIVITIES
Proceeds from bills payable and
securities sold under
repurchase agreements 5,864,190,350 6.089,608.306 4.904,119.261 5,864,100,350 6,159.749,966 4,903.041,268
Settlements of bills payable and
securities sold under repurchase
agreements (5,803,414,872) (6,019,107.646) (4.914,630.673) (5,803,414,872) (6.089,131.306) (4.913.670.633)
Proceedsfrom issuance of notespayable
(Note 21) 13,166,023 13.166,023
Proceeds from issuance of subordinated
note (Note 22) 9,931,008 9,931,008
Proceeds from issuance of preferred
stock (Note 26) 39,717 60.283 39,717 60,283
Proceeds from issuance of common
stock (Notc 26) 36,821,201 36,821,201
Cash dividends ~id (Note 26) (1,505,242) ( 1,228,434) (1,204,698) (1,505,242) ( 1,204,934) ( 1,204,698)
Net cash provided by (used in)
financing activities 96,IJl,IS4 82,438,249 (1,724.819) 96,041,154 82.579,749 (1,842,772)
Effect of exchan8e rate differences 921,780 929,261 26.571 921,808 929,250 26,606
!\'ET INCREASE (DECREASE)

IN CASH AND CASH
EQUIVALENTS 49,095,698 14,301,001 (10,279,293) 49,071,956 14,900,542 (12,D68,IOI)
CASH Al'iD CASH

EQUIVALENTS AT
BEGINNING OF YEAR
Cash and other cash items 1'6,646,264 1'5,619,751 1'4,428,863 P6,646,157 1'5,307,008 1'4.196,521
Due from Dangko Sentral ng
Pilipinas 56,882,313 35,843,596 45,583,991 55,989,081 34,671,149 45,129,263
Due from other banks 31,365,366 39,129,595 28,739,381 31,290,503 39,047,042 28,677,516
Interbank loans receivable and
securities purchased
under resale agreements
with the Scntral "S: Pilipinas
RanS:ko 12,120,000 13,090,000
94,893,943 80,592,942 90,872,235 93,925,741 79,025,199 91,093,300
(Forward)
11mi 11111 IIH ml 111111111111111111111111!1111111
200
-3-
Consolidated Parent Company

2015 2014
CASll MD CASII
EQUIVALENTS AT
F.ND OF VF.AR (Note 37)
Cash and other cash items 1'7,692,810 P6.646.264 P5,619,751 1'7,692,718 P6,646,I57 1'5,307,008
Due from Bangko Scntml ng
Pilipinas 71,662,840 56,882,313 35,843,596 71,423,852 55,989,081 34,671,149
Due from other banks 63,943,682 31,365.366 39,129,595 63,881,127 31,290,503 39,047 ,042
Interbank Joans receivable and
securities purchased under
resale agreements with the
Ban~o Sentral n~ 690,309
Pili~inas 1'143.989,641 P94,893,943 PS0.592,942 1'142.997,697 P93.925.741 P79.025,199
OPERATIONAL CASll FLOWS

FROM INTEREST A m
01\IJDEJ'(OS
Intcrcsr received 1'21,824, 796 P 16,993,896 P14,399,926 1'21,620,959 P 16.546,546 Pl3,338,188
Lnterest paid 6,550,756 5,510,256 3,858,993 6,SJl,691 5.432,857 3,709,417
Dividends received 11,877 17,062 14.504 10,608 15.541 14,924
See accompanying Notes 10 Financial Statements.
11mi 11111 IIH ml 111111111111111111111111!1111111
201
Annex 11 Competitor 3 Financial Statements of SECB 2017-18
201
Consolidated Parent Com[!any

2018 2017 2016 2018 2017 2016
(Amounts in Thousands. Except Earnings per Share)
INTEREST INCOME ON
Loans and receivables (Notes 14 and 33) 1'23,943,130 P 17 ,356.906 Pl3.313,371 P23,476,439 Pl7,289.877 P 13.206, 185
Financial assets at fair value through other
comprehensive income and
investment
securities at amortized cost (Note 8) K,916,289 10.399,086 8.264.024 8,916,289 10.399,086 8,264,024
Financial assets at fair value through profit or loss
(Note 8) 867,768 602.621 831.347 867,768 600.400 831.347
Interbank loans receivable and securities purchased
under resale agreements with the Bangko
Scntral ng Pilipinas 134,196 119.731 180,816 134,187 119,731 169.461
Dee2sits with banks and others (Note 7) 100.196 316.471 235.613 97,799 312.486 223.367
33.961,579 28.794.815 22.825.171 33.492,482 28.721.580 22.694.384
INTEREST EXPENSE O~
Deposit liabilities (Notes 19 and 33) 8,227,763 5.229.464 3.500.375 8,248,3(,S 5,226.066 3,484.031
Subordinated note. bills payable, securities
sold under repurchase agreements.
notes payable, and other borrowings (Note 21) 4,124,5911 3,587.076 2.618,456 4,1 lS,682 3,581,285 2,616.060
Derivative instruments (Note 20) 789,219 588.243 796.513 789,219 588,243 796,513
Derivatives dcsisnatcd as hedges ~otc 11 ~ 4.156 16,381 4,156 16.381
13.141.572 9.408.939 6.931.725 13.153.269 9.399.750 6.912.985
NET INTEREST INCOME 20,820,007 19,385,876 15,893,446 20,339,213 19,321,830 15,781.399
Service charges, fees and conunissions (Note 31) 2,926,883 2.320.430 2.172.862 2,591,215 1.841.249 1.587.083
Rent (Notes 17. 33 and 34) 419,232 289.555 178.074 29,690 38.504 48,155
Foreign exchange gain • net (Note 6) 375,910 125,880 153,995 375,475 125,657 141,675
Trading and securities gain· net (Note 9) 366,061 26.965 142.694 366.058 28.032 142.870
Profit from assets sold/exchanged
(Notes 17 and 18) 150,999 144,926 108,132 146,918 142,587 104.916
a joint venture (Nate 15) 26,461 25.452 21.192 317,IJO 210,559 231.363
Gain on disposal of investment securities at
amortized cost {Notes 9 and 13) 2.349,270 1,609,502 2,349,270 1.609,502
Miscellaneous ~otc 32) 513,291 416.746 551,904 441,742 352,894 355,245
TOTAL OPERATING ll\COME 25,598,844 25,085.100 20,831.801 24,607,441 24.410,582 20.002.208
OPERATING EXPENSES
Compensationand fringe benefit's
(Notes 30 and 33) 4,938,700 4,258,952 3.738,064 4,852,446 4,166,079 3,601.714
Taxes and licenses 1,778,383 1.561.636 1.226.806 1,717,472 1,523.300 1,183.167
Depreciationand amortiz.ation {Note 16) 1,138,538 943.964 640.067 808,389 742,159 533,756
Occupancy costs (Notes 17, 33 and 34) 1,086,230 904.610 764,261 1,077,151 897,075 735.700
Provision for credit losses {Note 14) 714,483 656,469 937.544 617,968 629,322 877,028
Amortization of software costs {Note 18) 191,258 126,127 69,767 190,264 122,890 65,725
Provision for (recovery of) impairment losses
(Note 17) 7,316 (5.328) 6,829 8,836 (2.180) 9,617
Miscellaneous ~otes 29 and 32} 4,658,054 4.687.425 4.017,588 4,338,389 4,395,326 3,602,377
TOTAL OPERATING EXPENSES 14,512,962 13,133,855 11.400,926 13,610,915 12,473,971 10,609,084
INCOME llt:FORE INCOME TAX 1'11,085,882 Pl 1,951,245 P9.430,875 1'10,996,526 Pl 1,936,611 1'9,393, l 24
PROVISION FOR INCOME TA.X ~ote 29) 2,476,112 1.686,152 877.216 2,346,392 1,627,344 896.131
NET INCOME 1'8,609,770 P 10,265,093 PS.553,659 1'8,650,134 Pl0,309,267 P8,496.993
ATTRlllUTA!lLE TO:
Equity holdcrs of the Parent Company
(Notes 27 and 37) 1'8,608,694 P 10.264.797 P8.553.545
Non·controllin1z interest 1,076 296 114
NET INCOME 1'8,609,770 I' 10.265.093 1'8.553.659
Basic/Diluted Earnings Per Share {Note 37) 1'11.42 1'13.62 Pl 1.95
See accompanyingNotes to Financial Statements.
1111111 ~1111111111 UI Ii IUI illllllll11111111111111111
202
SECURITY BANK CORPORA TTON AND SUBSlDIARIES
Consolidated Parent Come:iny

2017 2016 2017 2016
(As restated - (As restated - (As restated - (As restated -
2018 Notc2) Note2) 2018 Notc2) Notc2)
(Amounts in Thousancls)
CASH FLOWS FROM OPERATING

ACTIVITIES
Income before income tax 1'11,085,1182 1'11.951.245 1'9,430.875 Pt0,996,526 1'11,936,611 1'9,393.124
Adjustments for:
Depreciation and amortization (Note 16) 1,138,538 943.964 640.067 808,389 742.159 533,756
Provision for credit losses (Note 14) 714,483 656,469 937.544 617,968 629,322 877.028
Amortization of softwarecosts(Note 18) 191,258 126,127 69,767 190,264 122,890 65,725
Amortization of transaction costs on
LTNCD, notes payable and
subordinated note
(Notes 19. 22 and 23) 55,204 34.920 27,437 55,204 34,920 27,437
Provision for (recovery of) impairment
losses (Note 17) 7,316 (5,328) 6.829 8,836 (2,180) 9,617
Gain on disposal of investment securities
at amortized cost (Notes 9 and 13) (2.349.270) (1.609.502) (2.349.270) (1.609.502)
Share in net income of subsidiaries
and a joint venture(Note 15) (26,461) (25.452) (21.192) (317,130) (210.559) (231.363)
!ledge ineffectiveness (Note 11) (90,784) (90,784)
(Notes 17 and 18) (150,999) (144.926) (108.132) (146.918) (142.587) (104.916)
Gain on disposal of financial assets at
FVTOCI (Note 9) (508,634) (508,634)
Unrealized market valuation loss (gain)
on financial instruments at fair
value through profit or loss
(Notes IO and 20) (659,813) 563.089 (450,640) (659,813) 561,924 (450.640)
Changes in operating assets and liabilities:
Decrease (increase) in the amounts of:
Due from other banks (3,937) (5,742)
Interbank loans receivableand
SPURA (319) (110.430) (319) (110,430)
Financial assets al FVTPL (Note JO) (356,280) (413,809) (IOS.860) (33,157) (315.851) (106.021)
Loans and receivables (Note 14) (48,520,704) (81.441.581) (52.930.794) (48,707,822) (79,833.252) (53,625.189)
Other assets (l.'\69,001) 922.598 (777,006) (1,542,178) 949,363 (753.750)
lncrease (decrease) in the amountsof:
Deposit liabilities (Note 19) 70,031,646 57.952,217 57.061.009 69,836,990 57.617.121 57,828.024
Acceptances payable (65,859) (64,975) 407,507 (65,859) (64,975) 407,507
of credit 288,382 265.780 59.522 288,382 265.780 59,522
outstanding (331,385) 551.235 282,447 (331,385) SS 1,235 282,447
expenses (Note 24) 1,378,638 984.668 202,682 1,353,207 984,888 249.581
Other liabilities (Note 25) 1,952,102 723.876 (737,053) 2,542,945 29,733 (999,696)
Net cash generated from (used in) opemtions 34,559,273 (8.879.583) 12.385.507 34,288,970 (8,603, I 58) 11,852.691
Income taxes eaid (2,714,956) (1.702.306) (1.011.589) (2,661,795) (1,655.471) (929.071)
Net cash provided by (used in) operating
activities 31,844,317 (10.581.889) 11,373.918 31,627,175 (I 0,258.629) 10,923.620
(Forward)
IUIHlllllllllllll l!IOll l ll llllllllll ll l illl
203
-2-
Consolidated Parent
Compau,· Years Ended December 31
2017 2016 2017 2016
(As restated- (As restated· (As restated - (As restated •
2018 Note2) Note2) 2018 Note2) Note2)
CASH f'I.OWS FROM INVf.SH G
ACTIVITIES
Acquisitions of:
Investmentsecurities at
amortizedcost (1'1,986,718) (1'61.207.446) (1'108.854,298) (1'1,986,718) (1'61,207 ,446) (I' I
Financial assets at FVTOCI 08,854.298) (62,157,123) (62,157,125)
Property and equipment (Note 16) (1,241,242) (I.559.574) (1.683.819) (618,J65) (941.582) (1.313.477)
Sortware costs (Note 18) (545,501) (248.123) (317.763) (542,708) (247,724) (312.585)
Branch licenses (Note 18) (20.000) (80,000) (20.000) (80,000)
Proceedsfrom:
Disposals or maturities of
investment securities at amortized 1.000,000 79.917.049 51.292.237 1,000,000 79,917.049 51.292.237
cost
Disposals or maturities of financial 57.159,594 57,159,594
assets
427,893 285.535 95.016 427,893 285.534 95,016
atFVTOC! 35,109 37,448 217.473 17,670 62,233 208.481
Disposals of investment properties
Disposals of property and equipment
Dividends received from subsidiaries
(Note 15) 162,500 150.000
Net cash provided by (used in) investing
activities (7,307,988) 17,204,889 (59.331, 154) (6.537,259) 17.848,064 (58,814,626)
CASH ri.ows FROM Fli'iMCl'.'IG

ACTIVITTES
Scnlcmcnrs of bills payable and
securities sold under
repurchase
agreements (2,565,298,292) (2,013,737.221) (2,848,402,890) (2,564,933,292) (2,013,424,221) (2,848,402,890)
Proceeds from:
Bills payable and securities sold
under repurchase agreements 2,530,024, I 52 1,984,831,943 2,881,818,833 2,~29,484,152 1,984,458,943 2,881,728,833
Issuance of LTNCD (Note I 9) 5,727,494 8.541,289 5,727,494 8,541,289
lssuance of notes payable (Note 22) 16,136,646 16,136,646
Issuance ofprefem.e.d stock(Note 39,717 39,717
27)
Issuance of common stock (Note 27) 36,821.201 36,821.201
Cash dividends paid (Note 27) (2,271.232) ( 1,505.242) (2,268,039) (2.271,232) (l.505,242)
(2,268,039)
Net cash provided by (used in)
financing activities (22.635.22 l) 68.771,619 (15.853,039) (22.695.221) 68.681.619
(15,678,039)
Effect of exchange rate differences 1,967.658 921.780 (1,588,881) l.967,658 921.808
(1,159,536)
NET INCREASE (DECREASE)
ll'i CASH MO CASH
EQUIVALENTS 7,698,754 (14,044,563) 21.736, 163 7,647,996 (13,138,128) 21,712,421
CASH ANO CASH f.QIJIVAl.f.i'iTS

ATBEGIJ\'NINGOFYEAR
Cashand othercash items 7,956,367 7.692,810 6.646.264 7,956,342 7,692,718 6,646.157
Due from Bangko Scntral ng Pilipinas 56,592,042 71.662.840 56.882,313 56,592,042 71,423,852 55,989,081
Due from other banks 6,822,992 11,058.652 5.839,871 6,737,508 10,996,097 5,765,008
Interbankloansreceivable and
securitiespurchasedunder
Bangko Sentral ng Pilipinas 5,688,647 690.309 5,688,647
77,060,048 9!,104,611 69,368,448 76,974,539 90.112,667 68.400,246
(Forward)
11miHIIHmlll lillilllllllllllllll ll l l lll

204
-3 -
Consolidated Parent
Compam' Years Ended December 31
2017 2016 2017 2016
(As restated- (As (As restated - (As restated •
restated·
2018 Note2) Note2) 2018 Note 2) Note2)
CASH ANO CASH F.QIJIVAU:NTS

AT f.NI) OF VF.AR
Cash and other cash Pll,926,373 P7.956.367 P7.692.810 Pll,926,348 P7,956.342 P7.692.718
Due from items
Bangko Scnlral ng
Pilipinas 63,605,386 56.592.042 71,662.840 63,605,386 56,592,042 71,423.852
Due from other banks 9,017,042 6.822.992 11.058.652 8,880,800 6.737.508 10,996.097
Lnterbank loans receivable and
Ban~o Sentral Pilieil1as na 210.001 5.688.647 690.309 210.001 5.688.647
P84,758,802 P77.060.048 P91.104.611 P84,622,535 P76.974,539 P90.l 12.667
OPERATIOJ'(AL CASII FLOWS FROM

lNTJ::RJ::ST ANU UlVIDJ::NDS
Interest received 1'33,107,550 1'29.023.716 1'21.824.796 1'32.676,814 1'28,963.576 1'21,620.959
Interest paid 11,740,682 8,956.391 6.550,756 11,752,379 8.947,977 6,531.691
Dividends received 6.810 6.679 11.877 5,085 5.431 10.608
See accompanying Noles to Financial Statements.
11miHIIHmlll lillillll llllllllll ll l l lll
205
Annex 12 Competitor 3 Financial Statements of SECB 2019
206
Consolidated Parent
Comeany
YearsEnded December
31
INTEREST INCOME ON 2019 2018 2017 2019 2018 2017
(Amounts in Thousands. Except Earnings per
Share)
Loans and receivables (Notes 14 and 33) 1'33,633,356 P23,943.130 Pl 7.356.906 1132,439,281 1'23,476.439 1'17,289,877
Financial assets at fair value through
other comprehensive income and
investment
securities at amortized cost (Note 8) 9,243,972 8.916.289 10.399,086 9,243,972 8,916,289 I 0.399.086
Financial assets at fair value through profit or loss
(Note 8) 978,IOl 867.768 602.621 978,101 867.768 600.400
Interbank loans receivable and securities purchased
under resale agreements with the Bangko
Scntral ng Pilipinas 280,295 134,196 119,731 280,295 134,187 119,731
Dee2si1s with banks and others iliote 7) 67.824 100.196 316.471 60.790 97.799 312.486
44,203,548 33.961,579 28,794.815 43,002,439 33.492.482 28,721,580
INTEREST EXPENSE ON
Deposit liabilities (Noles 19 and 33) 10,528,259 8.227.763 5.229.464 10,570,376 8,248,368 5.226.066
Subordinated note. bills payable. securities
sold under repurchaseagreements,
notes payable, and other borrowings (Note 5,881,455 4.124.590 3.587.076 5,719.585 4.115.682 3.581.285
21)
Derivative instruments (Note 20) 799.447 789.219 588.243 799,447 789,219 588.243
Lease liabi Iitics (Note 16) 128,899 128,362
Derivatives desisnated as hedses (Note 11) 21,837 4.156 21.837 4,156
17,359,897 13,141,572 9.408.939 17,239,607 13,153.269 9,399,750
NET INTEREST INCO~IE 26,843,651 20.820.007 19,385.876 25,762.832 20,339.213 19,321.830
Service charges, fees and commissions (Note 31) 4,084,055 2,926,883 2.320.430 3,577,871 2,591,215 1.841.249
Rent (Noles 17. 33 and 34) 529.292 419.232 289,555 34,223 29.690 38,504
Foreign exchange gain · net (Note 6) 423,912 375,910 125.880 424,110 375,475 125.657
Trading and securities gain - net (Note 9) 1,538,150 366.061 26.965 t,SJ6,95S 366,058 28,032
Profit from assets soldlexchangcd
(Noles 17 and 18) 20,822 150.999 144.926 21,644 146,918 142.587
a joint venture (Note 15) 23,799 26,461 25,452 174,946 317,130 210,559
Gain on disposal of investment securities at
amortized cost (Notes 9 and 13) 2.349.270 2.349.270
Miscellaneous (Note 32} 485,009 513.291 416.746 416,040 441,742 352,894
TOTAL OPF:RATING INCOMF: 33,948,690 25.598.844 25.085,100 31,948,621 24,607,441 24,410,582
Ol'ERATLNG EXPENSES
Compensation and fringe benefits
(Notes 30 and 33) 5,581,128 4.938.700 4.258,952 5,455,817 4,852,446 4,166.079
Provision for credit losses (Note 14) 4,174,274 714.483 656,469 3,368,528 617,968 629.322
Taxes and licenses 3,183,996 1,778.383 1,561,636 3,042,567 1,717,472 1.523,300
Depreciation and amortization (Note 16) 1,867,239 1.138.538 943.964 1,425,232 808,389 742.159
Occupancy costs (Notes 17, 33 and 34) 364,578 1.086.230 904,610 349,469 1,077,151 897.075
Amortization ofsofiware costs (Note 18) 259,974 191,258 126,127 258,891 190,264 122.890
Provision for (recovery of) impairment losses
(Note 17) 8,813 7.316 (5,328) 8,813 8,836 (2,180)
Miscellaneous ~otes 29 and 32} 6,093,197 4.658.054 4.687,425 5,582,780 4,338,389 4.395.326
TOTAL OPERATING EXPENSES 21,533,199 14.512.962 13.133.855 19,492,097 13.610.915 12.473.971
INCOME BEFORE INCOME TAX 12,415,491 11.085,882 11,951,245 12,456,524 10,996,526 11,936.611
PROVISION FOR INCOMF: TAX (Nole 29) 2,313,384 2,476.112 1.686,152 2,310,578 2,346,392 1,627,344
NET INCOME PI0,102,107 1'8.609.770 P 10.265.093 1'10,145,946 P8.650,!34 P!0,309,267
ATTRfBUTAllLE TO:
Equity holders of the Parent Company
(Noles 27 and 37) 1'10,101,732 1'8,608,694 l'I0.264.797
Non-controllinc. interest 375 1.076 296
NET INCOME 1'10,102,107 1'8,609.770 PI 0.265,093
llasicffiiluted Earnings Per Share (Note 37} 1113.40 Pl 1.42 Pl3.62
See accompanyingNotes lo FimmcialStatements,
IIIHllllllllllllllllmHIIIIIIII IIII HIII
207
Commlidated Parent
Corne:1nv
Years Ended December
31
2019 2018 2017 2019 2018 2017
CASH FLOWS FROM 01'£RATING (Amounts in Thousands)
ACTIVITIES
lncome before income tax 1'12,415,491 Pl 1.085.882 Pl 1.951.245 1'12,456,524 PI 0.996.526 P
11,936.611
Adjustments
for:
Provision for credit losses (Note 14) 4,174,274 714.483 656.469 3,368,528 617,968
629.322
Depreciation and amortization (Note 16) 1,867,239 1.138.538 943,964 1,425,232 808,389 742,J
59
Amortization of premium on financial
assets at fair value through other
comprehensive income and
investment
securities at amortized cost 841,988 798,872 275.846 841,988 798,872 275,846
Amortization of software costs (Note 18) 259,974 191.258 126.127 258,891 190.264 122.890
Amortization of transaction costs
on LTNCD, notes payable and
subordinated note
(Notes 19. 22 and 23) 148,1131 55,204 34,920 148,031 55.204 34,920
Provision for (recovery of) impairment
losses (Note 17) 8,813 7.316 (5.328) 8,813 8.836 (2.180)
Hedge ineffectiveness (Note 11) 2,692 (90.784) 2,692 (90.784)
Gain on disposal of investment securities
at amortized cost (Notes 9 and 13) (2,349,270) (2.349,270)
(Notes 17 and 18) (20,822) (150,999) (144,926) (21,644) (146,918) (142,587)
Share in net income of subsidiaries
and a joint venture (Note IS) (23,799) (26.461) (25.452) (174,945) (317,130)
(210,559) Unrealized marketvaluation loss (gaia)
on financial instruments at
fuir value through profit or
loss
(Notes IO and 20) (67,HOS) 51,006 (36,863) (67,HOS) 51,006 (38.028)
Gain on disposal of financial assets at
FVTOCI (Note 9) (1,138,116) (508,634) (1,138,116) (508,634)
Changes in operating assets and
liabilities: Decrease (increase) in the
amounts of:
Due from other banks (1,174) (3.937) 3,018 (5.742)
SPUR A (1,0Sl,581) (319) (110.430) (1,051,581) (319) (110,430)
Financial assets at FVTPL(Note JO) (518,475) (1.067.099) 186.143 1,074,159 (743,976) 284.JOJ
Loans and receivables (Note 14) (43,864,593) (48,520.704) (81,441.581) (39,802,860) (48.707,822)
(79,833,252) Other assets (5,799,143) (1,569,001) 922,598 (S,760,328) ( 1,542, 178)
949,363
lncrease (decrease) in the amounts of:
Deposit liabilities (Note l 9) 12,391,581 70.031.646 57,952,217 11,627,219 69.836,990 57,617.121
Acceptances payable (126,914) (65.859) (64.975) (126,914) (65.859) (64.975)
of credit (17,926) 288.382 265,780 (17,926) 288,382 265,780
outstanding 845,010 (331,385) 551.235 845,010 (331.385)
551,235
expenses (Note 24) (655,042) J.378,638 984.668 (737,632) J,353.207 984.888
Other liabilities (Note 25) 650,595 1,952.102 723,876 984,561 2,542,945 29.733
Net cash generated from (used in) operations (19,681,507) 35.358.145 (8.603. 737) (15,855,085) 35,087.842
(8,327,312) Income taxes !!::!id (2,537,758) (2.714.956) ( 1.702.306) (2,433,657) (2,661, 795)
(1,655,471) Net cash provided by (used in) operating
activities (22,219,26~ 32.643.189 (10.306.043) (18,288,742) 32,426,047 (9,982,783)
(Forward)

208
-2-
Consolidated Parent
Comeanv
Years Ended December
31
2019 2018 2017 2019 2018 2017
CASH rr.ows FROM I VF.STING (Amounts in
ACTIVITIES Thousands)
Acquisitions of:
Investment securities at arnortiz.cd cost (1'691,384) (1'1,986,718) (1'61.207,446) (1'691,384) (Pl,986,718) (1'61,207,446)
Financial assets at FVTOCI (176,088,368) (62.157,123) (176,088,367) (62,157.125)
Property and equipment (Note 16) (1,148,671) (1.241,242) (1,559.574) (632,929) (618,365) (941,582)
Software costs (Note 18) (558,666) (545.501) (248.123) (558,264) (542,708) (247,724)
Branch licenses (Note 18) (20,000) (20.000)
Proceedsfrom:
Disposals or marurities of investment
securities at amortized cost 623,680 1,000.000 79.917.049 623,680 1.000,000 79,917,049
Disposals or maturities of financial assets
at FVTOC! 188,795,389 57.159.594 188,795,389 57.159,594
Disposals of investment properties 536,229 427.893 285.535 537,051 427,893 285.534
Disposals of property and equipment 52,645 35.109 37.448 14,281 17,670 62.233
Dividends received from subsidiaries
(Note 15) 19,204 162.500
Net cash provided by (used in) investing
activities 11,520,854 (7.307.988) 17.204.889 12,018,661 (6.537,259) 17.848.064
CASll 1'1.0WS l'ROM FlKAKCING
ACTIVITIES
Senlements of bills payable and
securities sold under repurchase
agreements (4,366,722,703) (2.565.298.292) (2.013.737,221) (4,360,641,703) (2,564,933,292) (2,013.424,221)
Proceeds from:
Bills payable and securities sold
under repurchase agreements 4,363,848,087 2,530.024, 152 1.984,831.943 4,353,308,127 2,529,484, 152 1,984.458.943
Issuance of LTNCO (Note 19) 8,296,409 5,727,494 8,541,289 8,296,409 5,727,494 8,541.289
Issuance of notes and bonds payable
(Note 22) 17,839,206 16,136,646 17,839,206 16,136.646
Maturity of LTNCO (I0,000,000) (I0,000,000)
Payment of subordinated note (10,000,000) (I 0,000,000)
Cash dividends paid (Note 27) (2,266,561) (2.268,039) (2.271,232) (2,266,581) (2,268,039) (2,271,232)
Pal'.ments oflease liabilities (613,570! (610,909)
Ne1 cash provided by (used in) financing
activities 380,868 ! 15.678,039) (22.635.221) (4,075,451) !15.853.039) (22.695.221)
EfTect of exchange ratedifferences 844,201 (1.958.408) 1.691.812 844,201 (2.387,753) 1.691.812
NET lt'ICREASE (DECREASE)

IK CASH AKD CASH
EQUIVALENTS (9,473,342) 7.698.754 ( 14.044,563) (9,501,331) 7.647.996 (13, 138.128)
CASll AND CASH EQUlVALEKTS

AT BEGINNINGOF YEAR
Cash and other cash items 11,926,373 7,956.367 7,692,810 11,926,348 7,956,342 7,692,718
Due from Bangko Scntral ng Pilipinas 63,605,386 56,592.042 71,662,840 63,605,386 56.592,042 71,423,852
Due from other banks 9,017,042 6.822.992 11.058.652 8,880,800 6,737.508 10.996,097
resale agreemenst with the
Ban~o Sentral ssPiliEinas 210,001 5.688.647 690.309 210,001 5,688.647
84,758,802 77.060.048 91.104.611 84 622,535 76.974.539 90,112 667
(Forward)
209
-3-
Consolidated Parent
Company
2019 2018 2017 2019 2018 2017
(Amountsin
Thousands)
CASH ANIJ CASH F:QUlVALF:l'-TS
AT END OF YEAR
Cash und other cash items l"J,883,536 1'11,926.373 1'7,956.367 1'9,883,511 I' 11.926,348 1'7,956,342
Due from Bangko Scntral ng
Pilipinas 56,118,831 63.605.386 56.592,042 56,118,831 63.605,386 56,592,042
Due from other banks 9,275,093 9.017.042 6.822.992 9,110,862 8.880.800 6,737.508
Lnterbank loans receivable and
ss
Ban~o Sentral Pilieinas 8.000 210.001 5.688.647 8.000 210.001 5.688.647
1'75.285.460 1'84.758.802 1'77.060.048 1175.121,204 1'84.622.535 1'76.974,539
01'1':RATIONAL <.:ASH t"LOWSFROM

LNTERJ::ST AND IJIVIIJJ::NIJS
Interest received 1144,601,672 P33. I 07.550 1'29.023, 716 1143,345,764 1'32,676,814 1'28,963,576
lnterest paid I 7.875,342 11.740.682 8.956.391 17.767,296 11.752.379 8.947.977
Dividends received 3.335 6.810 6.679 3,335 5.085 5,431
See accompanying Notes to Ftnanctat Sratemems.
IIIHllllllllllllllllmHIIIIII I IIII HIII
210
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PAMANTASAN NG LUNGSOD NG MAYNILA

(University of the City of Manila)

Gen. Luna cor. Muralla St., Intramuros, Manila, Philippines

PLM Business School – Undergraduate Program

A Strategic Management Paper presented for

BDO Unibank, Inc.

Afable, Lynel Arvey V.

Bacho, Ria Niña A

Prof. Benito Roger De Joya

for being a subject matter in this Strategic Management Study.

Kristelle Marjori Pasco, a professor in Strategic Management, for his constant

whenever the researcher encounters difficulty. We are thankful for exchanging

Mission Recommendation and Analysis ................................................................. 59

Opportunities and BDO's Responsiveness ............................................................. 66

Threats and BDO's Responsiveness ...................................................................... 69

Porter’s Five Forces Model..................................................................................... 80

Major Competitors .................................................................................................. 83

DuPont Model of Universal Banking Industry ......................................................... 89

Competitive Profile Matrix (CPM) ........................................................................... 91

Major Weaknesses ................................................................................................. 95

Internal Factor Evaluation (IFE) Matrix ................................................................... 96

CHAPTER VII ............................................................................................................... 98

SWOTS Recommended Strategies ........................................................................ 99

Internal-External (IE) Matrix .................................................................................. 103

Strategic Position and Action Evaluation (SPACE) Matrix .................................... 105

CHAPTER VIII ............................................................................................................ 107

Grand Strategy Matrix (GSM) ............................................................................... 109

Summary of Strategies ......................................................................................... 110

Quantitative Strategic Planning Matrix (QSPM) .................................................... 111

Specific Strategy................................................................................................... 115

CHAPTER X ............................................................................................................... 123

Departmental Action Plans .................................................................................. 127

CHAPTER XI .............................................................................................................. 130

Action Plan ........................................................................................................... 130

Balanced Scorecard ............................................................................................. 135

Strategy Map ........................................................................................................ 140

CHAPTER XII ............................................................................................................. 141

Projected Income Statement ................................................................................ 142

Projected Financial Ratios .................................................................................... 143

CONCLUSION ............................................................................................................ 147

Banco de Oro Unibank, Inc. or BDO Unibank is a Philippine universal banking

company specializing in deposit-taking, lending (corporate, middle sector, SME, and

owned by the SM Group of Companies, belonging to the country’s largest

conglomerates in terms of market capitalization.

increase in demands of loans during pandemic, push towards sustainable energy

be utilized more in answer to opportunities. Meanwhile, such analysis showed BDO’s

challenges posed by the opportunities stated aggressively. In doing so, the

expense, increase in market share, and invest more in technological advancements.

perform intensive strategies

History and Nature of Business

Banco de Oro Unibank, Inc. or commonly known as BDO, is a full-service

4,000 ATMs across the nation.

Savings and Mortgage Bank.

Unibank). It is one of several Chinese-Filipino-owned banks in the Philippines. In its

insurance service in 1997 by creating a BDO Insurance Broker subsidiary, making it a

corporation of "bancassurance." It extended its insurance in 1999 by Partnership with

Life Assurance Company, Insurance Company of Pilipinas.

competitiveness by expanding its branches to become available to other people

bought by Banco de Oro and an SM subsidiary, SM investments, and 10% Equitable

On 6 January 2006, BDO along with the SM Group of Companies submitted a

Ferdinand Martin Romualdez.

de Oro-Equitable PCI bank, which became Banco de Oro Unibank Incorporation as of

Bacolod, and Mindanao.