COMPANY OVERVIEW

Bank of the Philippine Islands (BPI) was incorporated on January 4, 1943 as a domestic
commercial bank and went public on October 12, 1971. The Company offers an array of financial
services that include corporate banking, consumer banking, investment banking, asset management,
corporate finance, securities distribution, and insurance services.

The Company's principal subsidiaries are BPI Family Savings Bank, Inc.; BPI Capital Corp.; BPI Direct
BanKo, Inc.; BPI International Finance Limited; BPI Remittance Centre Hong Kong Ltd.; BPI (Europe)
Plc.; BPI/MS Insurance Corp.; BPI Asset Management and Trust Corp. and BPI Investment Management
Inc.

As of December 31, 2021, BPI has 869 branches, including five express banking centers, across the
country. Overseas, BPI has one branch in Hong Kong and two branches in London. BPI also has 2,117
automated teller machines and 340 cash accept machines.

FINANCE
Over the past three years, despite the pandemic, BPI was able to grow total assets by 5.1%,
largely funded by deposits which grew 7.2% annually. Total loan book has exceeded pre-pandemic level
and registered a 2.9% three year CAGR as of 2021. The Bank continued to accrete capital from
operations at 5.6% three year CAGR.

The Bank’s income grew at a compounded annual rate of 5.6% in the past three years despite the
significantly higher impairment losses recorded in 2020. Net interest income and non-interest income
increased by 7.8% and 9.8%, respectively while operating expenses grew at a slower rate of 6.4% over
the same period.

MARKETING
BPI has launched a new campaign to inform new and existing clients about the promise of
turning their aspirations into reality with the Philippines’ most trusted bank. Following a competitive
pitch, BBDO Guerrero was chosen for the ad creation.
BPI has always been there for their customers, whether they are new or old, whether they have
recently joined the bank or will be in the next five years.
BPI helps them achieve their goals, and it all starts with one simple step: establishing an account
online in as little as 5 minutes to begin a relationship with BPI, one of the country’s most trusted banks
with over 170 years of experience.
BPI is a partner in helping new and existing customers achieve their objectives. They are ready to
help Filipinos’ everyday needs and objectives with their extensive network and innovative products and
services.

OPERATION/PRODUCTION
Bank of the Philippine Islands engages in the provision of commercial banking services.
It operates through the following segments: Consumer Banking, Corporate Banking and Investment
Banking. The Consumer Banking segment covers deposit taking and services, consumer lending such as
home mortgages, auto loans and credit card finance as well as the remittance business of individual
clients and retail markets. The Corporate Banking segment caters high-end corporations as well as middle
market clients on deposit taking and servicing, the entire lending, leasing, trade and cash management
services provided by the BPI Group to corporate and institutional customers. The Investment Banking
segment provides corporate finance, securities distribution, asset management, trust and fiduciary services
as well as proprietary trading and investment activities. The company was founded on August 1, 1851 and
is headquartered in Makati, Philippines.

HUMAN RESOURCE
BPI remains as the employer of choice among Philippine financial institutions. With strengths in
three main employee engagement drivers of career development and opportunities, goal clarity, and
leadership, we introduced more initiatives to boost competency development among our officers and
staff, worked to accelerate promotions, and identified the right metrics to better align human resource
measures with corporate strategy.

BPI LEAP has become a benchmark in training and development. Major focus areas include:

1. Leadership and Management Development – Programs that provide opportunities for BPI Leaders to
develop their ability to lead, inspire and motivate their team members and organization. This would also
cover Professional Effectiveness Programs that would develop Personal Leadership.

2. Functional – Programs that develop and strengthen specific functional and technical competencies
required from the individuals so they can perform their functional tasks effectively.

3. Core and Team Effectiveness – Programs that would provide foundational knowledge and
competencies for any member of the BPI team. This would also cover programs and interventions for
teams at BPI.

SWOT
STRENGTHS
1. First and the oldest bank in Philippines and Southeast Asia
2. Very strong network present within Philippines with one of the largest branch & ATM networks
3. Customer base has doubled since 2010
4. Very strong digital presence with 3.2 million active users and around 5 million total users
5. Strong lending practices with the Bank's Non-Performing Loan ratio much better than industry average
6. Second largest market capitalization out of all Philippines banks
7. Bank of the Philippine Islands is showing exceptional growth in all lines of businesses
8. adequate capital

WEAKNESSES
1. Presence in Europe and outside of Philippines is very limited
2. Number of Physical branches and employees are reducing
3. non-interest income

OPPORTUNITIES
1. Rapid digitalization across the Philippines is advantageous to Bank of the Philippine Islands
2. Very strong rebound by Philippine economy post pandemic
3. Expanding into more Southeast Asian Countries
4. Development programs to employees
5. Increase of credit card users
6. Increase in car loan financing.
7. New banking technology

THREATS
1. Increasing number of cybercrimes such as phishing and ransomware in Philippines
2. Increase in impaired-loan ratio may impact credit ratings
3. Risk of loss due to a borrower or counterparty’s nonpayment of a loan or other credit accommodations
(either the principal or interest, or both)
4. Projected Increase in Inflation due to Economic Recession
5. Global Financial Crisis
6. Supply and demand of foreign currency

FINANCIAL TRANSACTION
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REVIEW AND MONITORING

The strategy is founded on our analysis of economic outlook, competitive environment, regulatory
updates, stakeholder concerns, and other relevant factors to help us gain from opportunities as we manage
the risks. We position ourselves as a choice investment, attractive to both domestic and offshore investors

1. For the near-term, we need to position for recovery by:

• Reallocating resources for future growth,
• Realigning our various asset portfolios,
• Boosting productivity to improve cost efficiency,
• Transforming the organization

2. Our strategic imperatives will continue to focus on

five key areas:
• Growing our high margin businesses: We will be a driver of consumer choice through our digital
enhancements – more online features, services, and products for our customers, streamlined back-office
processing, and greater flexibility to respond to their needs gleaned from our customer insight analytics.
We will accomplish this while upholding our prudent credit underwriting policies and processes, ensuring
asset quality preservation and appropriate risk management of our exposures.

• Strengthening our funding franchise: Our efficient balance sheet management also ensures prudent
position taking, so that we are poised to grab trading opportunities in the market. Our digital platforms
have proven to be a vital tool in growing deposits in the corporate, SME, and retail banking segments
particularly during the period of enhanced community quarantine when a majority of our branches were
closed. Existing retail depositors could open another deposit account through our mobile app while the
enhancement of cash management digital services via Bizlink played a crucial role in generating funding
from our corporate and SME customers. As a result, we noted an increase in our low cost funding despite
the weak market conditions and achieved record-high liquidity ratios.

• Executing our five-point digital strategy:

1.Mobile first omni-channel experience to allow customers to open bank accounts in any branch and have
all other subsequent transactions take place digitally.
2. Shape the customer experience through tailor-fit service platforms to suit their needs based on data
analytics and insights. Such is the case for our clients using Bizlink, an all-in-one digital platform which
houses multiple products and services that extend beyond traditional cash management.
3. High tech, high touch by allowing customers to conduct self-service transactions, branch operations
can focus on specialized customer services.
4. Open banking to be a key focal point of financial intermediation by serving customers in as many ways
as possible by partnering with various fintechs who offer services like e-wallets and funds transfer.
5. Industry class infra that is secure, reliable, and private, underpinned by the upgrade of our core banking
systems. Our mission is to guarantee the security of our clients’ financial assets while championing the
education of clients on cybersecurity.

• Deepening our client relationships:

Traditionally our bastion of strength, we have solidified our foothold in the corporate space by helping
Philippine conglomerates, large corporates, and multinational companies grow their businesses, manage
their operations, and mitigate risks by:
• Becoming their main operating bank,
• Capturing their corporate ecosystem through our
digital and traditional platforms, and
• Offering dynamic pricing on products and
services while cross-selling other products such
as the investment banking services of BPI Capital
Corporation and investment products of BPI
Asset Management and Trust Corporation and BPI
Investment Management, Inc.

• Rationalizing our distribution channels to achieve further cost efficiency:

To further enhance customer service, streamline operations, and improve cost efficiency, we also
announced in January 2021 BPI’s merger with BPI Family Savings Bank, with BPI as the surviving
entity, subject to regulatory and stakeholder approvals. For our digital channels, we have embarked on
accelerating the growth of BPI as “the Everyday Bank”, through our open banking ecosystem and regular
launches of new platform functionalities. Our objective is to find opportunities as we transform our digital
operating model from “high volume-low value transactions” to “high-value transactions” typically
executed in the branch.

ACTION TAKEN
1. The national government has implemented stimulus measures to support the economy. Stimulus
measures aside from support on the healthcare system have included direct distribution of cash and goods
to the general public, short term tax and social security relief.
2. The BSP, on the other hand, has been implementing more forceful measures to cushion the economy’s
contraction. It has reduced its policy rate by 200 bps from 4.00% to 2.00% and its reserve requirement
ratio by 200 bps from 14% to 12%.
3. The BSP has also implemented unprecedented measures including purchase of
government securities and easing of regulatory requirements on banks
3. The Government Aid and BSP support on Restructuring Arrangements will enable banks to
obtain better credit enhancements that may be in the form of security or collateral.
4. Enables the Bank to quickly respond to business & investment opportunities, given the controlled
levels of liquidity and market risks.
5. Enactment of Corporate Recovery and Tax Incentives for Enterprises (CREATE) which will lower
corporate income tax