2013 Definitive Information Statement

Transcription

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PART I.
INFORMATION REQUIRED IN INFORMATION STATEMENT
A. GENERAL INFORMATION
Item 1. Date, time and place of meeting of security holders.
(a)
(b)
Date :
Time :
Place:
April 10, 2014
9:00 a.m.
Ballroom 2, Fairmont Makati, 1 Raffles Drive
Makati Avenue, Makati City 1224
Registrants’ Mailing Address:
BPI Building, Ayala Avenue corner Paseo
de Roxas, Makati City
Approximate date on which the information statement is first to be sent or given to
security holders. March 18, 2014
WE ARE NOT ASKING FOR A PROXY AND
YOU ARE REQUESTED NOT TO SEND US A PROXY
Item 2. Dissenters' Right of Appraisal
There are no matters or proposed corporate actions included in the Agenda of the
Meeting which may give rise to a possible exercise by security holders of their appraisal
rights. Generally, however, in the specific instances mentioned by the Corporation Code
of the Philippines, the stockholders of the corporation have the right of appraisal provided
that the procedures and the requirements of Title X of the Corporation Code governing
the exercise of the right are complied with and/or followed.
Item 3. Interest of Certain Persons in or Opposition to Matters to be Acted Upon
(a)
No current director or officer of the Bank, or nominee for election as directors has
any substantial interest, direct or indirect, by security holdings or otherwise, in
any matter to be acted upon other than election to office.
(b)
No director has informed the Bank that he intends to oppose any action to be
taken up at the meeting.
B. CONTROL AND COMPENSATION INFORMATION
Item 4. Voting Securities and Principal Holders Thereof
(a) Class of Voting Securities:
Common Shares
Number of Shares Outstanding as of February 19, 2014:
Number of Votes Entitled:
3,929,297,850
One (1) vote per share
Per company By-Laws, one share entitles the holder thereof to one vote, except in
election of the members of the Board where any stockholder may accumulate his
vote as provided for in the Corporation Code.
(b) Record Date:
Stockholders of record as of March 11, 2014 are entitled to
notice and to vote in the Annual Stockholders’ Meeting
(c) Manner of Voting
Article IV of the Amended By-Laws of the Bank provides that the stockholders may
delegate in writing their right to vote and must be attested by two (2) witnesses and
1
filed with the Bank at least ten (10) days before the meeting. Voting shall be by
shares and not per capita.
In addition, paragraph 6 of Article IV of said By-Laws states that the voting for the
election of members of the Board of Directors and upon all questions before the
Stockholders’ Meeting, shall be by shares of stock, that is, one share entitles the
holder thereof to one vote, two shares to two votes, etc.; but in the election of
members of the Board of Directors, any stockholder may accumulate his vote as
provided for in the Corporation Code.
In the election of Directors, cumulative voting is allowed provided that the total votes
cast by a stockholder shall not exceed the number of shares registered in his name in
the books of the corporation as of the record date multiplied by the whole number of
directors to be elected. If the number of nominees does not exceed the number of
Directors to be elected, the Secretary of the meeting upon motion made will be
instructed to cast the votes represented at the meeting in favor of the nominees.
However, if the number of nominees exceeds the number of Directors to be elected,
voting shall be done by secret ballot.
(d) Security Ownership of Certain Record and Beneficial Owners and Management
i.
Title of
Class
Common
Security Ownership of Certain Record and Beneficial Owners of more than
5% as of February 19, 2014:
Name/Address of Record
Owner & Relationship w/
Issuer
PCD Nominee Corp.
(Non-Filipino)
Name of Beneficial
Owner & Relationship
w/ Record Owner
Various
Stockholders
Client
PCD Nominee Corp.
(Filipino)
G/F MKSE Building
6767 Ayala Ave., Makati City
Stockholder
Citizenship
No. of Shares
Percent of
Holdings
Various
1,014,890,763
25.8288%
Various
Stockholders
Client
Filipino
436,263,247
1,451,154,010
11,1028%
36.9316%
Various/Stockholders/
Clients holds 7.5576%
or 296,769,417 shares
Various
776,802,113
19.7695%
PCD Participants that own
more than 5% of the voting
securities
Deutsche Bank ManilaClients A/C
26/F Ayala Tower One &
Exchange Plaza, Ayala
Triangle, Ayala Avenue
Makati City, Phils. -1226.
The Hongkong and Shanghai
Banking Corporation Limited
HSBC Securities Services
7th Floor, HSBC Centre
3058 Fifth Avenue West
Bonifacio Global City
Taguig City-1634 Philippines
Common
Common
Various
Various/Stockholders/
Clients holds 13.1497%
or 516,352,590 shares
Ayala Corporation
Tower I, Ayala Triangle
Ayala Avenue, Makati City
Stockholder
Ayala Corporation
Ayala DBS Holdings, Inc.
33rd Floor Ayala Tower One
and Exchange Plaza, Ayala
Triangle, Ayala Avenue
Makati City
Stockholder
Ayala DBS Holdings,
Inc.
Filipino
(plus 81,797,087
stock rights lodged
under PCD)
Filipino
837,630,845
21.3176%
2
Title of
Class
Common
Common
Name/Address of Record
Owner & Relationship w/
Issuer
AC International Finance
Limited
c/o Ayala Corporation
34th Floor, Tower I,
Ayala Triangle Ayala Avenue,
Makati City
Stockholder
Roman Catholic
Archbishop of Manila
121 Arzobispo street
Intramuros, Manila
Stockholder
Name of Beneficial
Owner & Relationship
w/ Record Owner
AC International Finance
Limited
Roman Catholic
Archbishop of Manila
Citizenship
Cayman Isl.
Filipino
Percent of
Holdings
No. of Shares
341,845,066
8.6999%
301,063,608
7.6620%
(plus 26,840,643
stock rights lodged
under PCD)
PCD Nominee Corporation (PCD) now known as Philippine Depository and Trust
Corporation (PDTC) - Non-Filipino & Filipino, holds 36.9316% interest. PDTC is the
registered owner of the shares beneficially owned by participants in the PDTC. The
Board of Directors of each participant has the power to decide on how the shares are to
be voted.
Ayala Corporation holds 19.7695% interest (excluding stock rights lodged under
PCD).
Mermac, Inc. and the Mitsubishi Group own 50.6547% and 10.5212%,
respectively (or a total of 61.1759%) of the outstanding shares of Ayala Corporation. The
Board of Directors of Ayala Corporation has the power to decide on how Ayala
Corporation shares in BPI are to be voted.
The Ayala DBS Holdings, Inc. (Ayala DBS) holds 21.3176% interest. Ayala
Corporation owns 80.80% of the outstanding shares of Ayala DBS. The Board of
Directors of Ayala DBS has the power to decide on how Ayala DBS shares in BPI are to
be voted.
The AC International Finance Limited (AC International) holds 8.6999% interest.
The Board of Directors of Ayala Corporation has the power to decide on how AC
International shares in BPI are to be voted pursuant to a Voting Trust Agreement dated
October 12, 2012.
The Roman Catholic Archbishop of Manila Group (RCAM) holds 7.6620%
(excluding stock rights lodged under PCD) interest. The Archbishop of Manila has the
power to decide on how RCAM shares in BPI are to be voted.
ii.
Security Ownership of Directors and Management as of February 19, 2014
Title of
Class
Name of Beneficial Owner
Common
Common
Jaime Augusto Zobel de Ayala
Fernando Zobel de Ayala
Common
Cezar P. Consing
Common
Common
Common
Common
Romeo L. Bernardo
Octavio V. Espiritu
Rebecca G. Fernando
Solomon M. Hermosura
Common
Aurelio R. Montinola III
Common
Common
Common
Common
Common
Common
Common
Common
Common
Xavier P. Loinaz
Mercedita S. Nolledo
Artemio V. Panganiban
Antonio Jose U. Periquet
Oscar S. Reyes
Astrid S. Tuminez
Antonio V. Paner
Natividad N. Alejo
Alfonso L. Salcedo, Jr.
Joseph Albert L. Gotuaco
Maria Theresa Marcial -Javier
Common
Position
Chairman
Vice-Chairman
Director &
President
Director
Director
Director
Director
No. of
Shares
312*
120
Nature of
Ownership
(R/B)
R/B
R/B
Citizenship
% of
Holdings
Filipino
Filipino
0.0000%
0.0000%
500,391*
R/B
Filipino
0.0127%
12
1,173,102*
18
120*
R/B
R/B
R/B
R.B
Filipino
Filipino
Filipino
Filipino
0.0000%
0.0298%
0.0000%
0.0000%
Director
1,552,159*
R/B
Filipino
0.0395%
Director
Director
Director
Director
Director
Director
EVP & Treasurer
Executive VP
Executive VP
Senior VP
Senior VP
3,449,557*
51,487*
4,428*
22,093*
1,188*
10
109,297*
12,496
38,615*
0
12,612
R/B
R/B
R/B
R/B
R/B
R/B
R/B
R/B
R/B
R/B
Filipino
Filipino
Filipino
Filipino
Filipino
American
Filipino
Filipino
Filipino
Filipino
Filipino
0.0878%
0.0013%
0.0000%
0.0005%
0.0000%
0.0000%
0.0027%
0.0003%
0.0009%
0
0.0003%
3
Title of
Class
Name of Beneficial Owner
Position
Common
Edgardo O. Madrilejo
Senior VP
Common
Maria Corazon S. Remo
Senior VP
Aggregate Shareholdings of Directors & Officers as a Group
No. of
Shares
54,952*
176,228*
7,159,197
Nature of
Ownership
(R/B)
R/B
R/B
Citizenship
% of
Holdings
Filipino
Filipino
0.0013%
0.0044%
0.1815%
*Inclusive of his/her shares lodged under PCD Nominee Corporation.
None of the members of the Bank’s board of directors and management owns 2.0% or
more of the outstanding capital stock of the Bank.
iii.
Voting Trust Holders of 5% or More
Ayala Corporation has a Voting Trust Agreement with AC International Finance
Limited.
iv.
Changes in Control
No change of control in the Bank has occurred since the beginning of its last
fiscal year.
(e) Certain Relationships and Related Party Transactions
In the normal course of the business, the Bank transacts with related parties consisting of
its subsidiaries and associates and with its directors, officers, stockholders and related
interest (DOSRI). The BPI Group has transactions with Ayala Corporation (AC) and its
subsidiaries (Ayala Group). All transactions involving DOSRI are reported to Bangko
Sentral ng Pilipinas (BSP) and the BPI Group is in full compliance with the General
Banking Act and BSP regulations concerning DOSRI loans.
These transactions such as loans and advances, deposit arrangements, trading of
government securities and commercial papers, sale of assets, lease of Bank premises,
investment advisory/management, service arrangements and advances for operating
expenses are made in normal banking activities and have terms and conditions that are
comparable to those offered to non-related parties or to similar transactions in the market.
Significant related party transactions and outstanding balances as at and for the year
ended December 31, 2013 are summarized below:
Consolidated
2013
Outstanding
Balances
(In Millions of Pesos)
Transactions
Loans and Advances from:
Subsidiaries
Associates
AC
Subsidiaries of AC
Key management
personnel
Deposits from:
Subsidiaries
Associates
Ayala Group
Key management
personnel
Terms and Conditions
(202)
11,403
194
6,250
16,065
-
-
11,201
22,509
2,885
613
(17,910)
6,936
672
21,159
704
1,014
(13,708)
29,781
These are loans and advances
granted to related parties that are
generally secured with interest
rates ranging from 0.65% to
8.04% and with maturity periods
ranging from 8 days to 12 years.
Additional information on DOSRI
loans are discussed below.
There are demand, savings and
time deposits bearing the
following average interest rates:
Demand - 0.28% to 0.36%
Savings - 0.70% to 0.98%
Time
- 2.20% to 3.25%
A more detailed discussion on related party transactions can be found on Note 31 of the
2013 Audited Financial Statements.
4
Item 5. Directors and Executive Officers
(a) The Board of Directors/Nominees for election at the Annual Stockholders’ Meeting
Per Article V of the Amended By-Laws of the Bank, all nominations for election of
Directors by the stockholders shall be submitted in writing to the Board of Directors
through the Corporate Secretary, together with the written acceptance of the
nominee, not later than the date prescribed by law, rules and regulations or at such
earlier or later date as the Board of Directors may fix. No nominee shall qualify to be
elected as Director unless this requirement is complied with. In accordance with the
resolution of the Board of Directors of the Bank dated December 18, 2013, which
resolution was disclosed and reported to PSE and SEC, all nominations for election
of Directors for the term 2014-2015 were required to be submitted to the Corporate
Secretary not later than 22 January 2014. As of said date, there were only 15
nominees to the Board received by the Corporate Secretary and all the nominees
confirmed their acceptance of said nomination. The nominations were subsequently
processed and evaluated by the Nomination Committee of the Bank in a meeting
called for that purpose. It was determined by the Committee that all the nominees
(both regular directors and independent directors) possess all the qualifications
required by law, rules, regulations and BPI’s By-Laws and Manual on Corporate
Governance and no provision on disqualification would apply to any of them.
The following is the list of current directors and the final list of candidates eligible for
election/re-election as members of the Board of Directors of BPI for the term 20142015 as approved by the BPI Nomination Committee.
i.
Current Board of Directors (as of February 19, 2014)
Name
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
Jaime Augusto Zobel de Ayala
Fernando Zobel de Ayala
Cezar P. Consing
Romeo L. Bernardo (Independent Director)
Octavio V. Espiritu (Independent Director)
Rebecca G. Fernando
Solomon M. Hermosura
Xavier P. Loinaz (Independent Director)
Mercedita S. Nolledo
Artemio V. Panganiban (Independent Director)
Antonio Jose U. Periquet (Independent Director)
Oscar S. Reyes
14. Astrid S. Tuminez (Independent Director)
ii.
Age
(as of last
birthday)
54
53
54
59
70
65
51
70
62
72
77
52
67
Citizenship
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino/
American
49
Final list of candidates eligible for election as Members of the Board
Name
1. Jaime Augusto Zobel de Ayala
2. Fernando Zobel de Ayala
3. Cezar P. Consing
4. Vivian Que Azcona (Independent Director)
5. Romeo L. Bernardo (Independent Director)
6. Octavio V. Espiritu (Independent Director)
7. Rebecca G. Fernando
8. Xavier P. Loinaz (Independent Director)
9. Aurelio R. Montinola III
10. Mercedita S. Nolledo
Age
(as of last
birthday)
54
53
54
58
59
70
65
70
62
72
Citizenship
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
5
Name
11. Artemio V. Panganiban (Independent Director)
12. Antonio Jose U. Periquet (Independent Director)
13. Oscar S. Reyes
Age
(as of last
birthday)
77
52
67
14. Astrid S. Tuminez (Independent Director)
49
15. Dolores B. Yuvienco
65
Citizenship
Filipino
Filipino
Filipino
Filipino/
American
Filipino
None of the above-named nominees works with the government. Of the abovenamed nominees, seven (7) were nominated and are eligible as Independent
Directors. They are: Messrs. Romeo L. Bernardo, Octavio V. Espiritu, Xavier P.
Loinaz, Artemio V. Panganiban, Antonio Jose U. Periquet, Dr. Astrid S. Tuminez and
Ms. Vivian Que Azcona. Messrs. Romeo L. Bernardo, Octavio V. Espiritu, Xavier P.
Loinaz, Artemio V. Panganiban, and Antonio Jose U. Periquet were nominated by
Ms. Maria Ysabel P. Sylianteng, long-time stockholder of BPI, while for Dr. Astrid S.
Tuminez was nominated by Mr. Romeo L. Bernardo, a long time Independent
Director of BPI. Ms. Vivian Que Azcona was nominated by Ms. Elvira V. Mayo, a
long time stockholder of BPI. None of the aforementioned nominees has any
business or personal relationship with Ms. Sylianteng, Mr. Bernardo or Ms. Mayo.
Six of the nominee namely Messrs. Xavier P. Loinaz, Octavio V. Espiritu, Artemio V.
Panganiban, Antonio Jose U. Periquet, Romeo L. Bernardo and Dr. Astrid are being
nominated for re-election as independent director while Ms. Azcona is being
nominated for election for the first time. The Bank has adopted the SRC Rule 38
(Requirements on Nomination and Election of Independent Directors) and compliance
therewith has been made. All nominations were submitted, evaluated and approved
by the Bank’s Nomination Committee in compliance with Section 38 (a) of SRC on
Independent Directors and SEC Memorandum Circular No. 9 dated December 05,
2011 [Term Limits for Independent Directors].
All the seven (7) nominees for Independent Directors (ID) meet all the conditions set
forth in SEC Memorandum Circular No. 9, December 05, 2011, e.g. Independent
Directors can serve for five (5) consecutive years from January 2, 2012, the effectivity
date of the said circular, provided that service for a period for at least six (6) months
shall be equivalent to one (1) year, regardless of the manner by which the ID position
was relinquished or terminated.
The Certificate of Qualification of the Independent Directors pursuant to the Notice of
the Securities and Exchange Commission dated October 20, 2006 is submitted by the
Bank within 30 days from the date of election or appointment of independent directors
to the board of directors.
The Nomination Committee is composed of Mr. Romeo L. Bernardo as Chairman,
and Messrs. Jaime Augusto Zobel de Ayala, Xavier P. Loinaz, and Solomon M.
Hermosura, as members. All information about the said nominees can be found in the
attached Annex “A”.
No one among the above-named nominees has declined to stand for election or reelection to the Board of Directors in the forthcoming stockholder’s meeting and all of
them have confirmed their acceptance of the said nomination.
1.
2.
3.
4.
5.
6.
7.
8.
THE KEY EXECUTIVE OFFICERS (As of February 19, 2014)
Name
Rank/Title
Age Citizenship
Cezar P. Consing
President & CEO
54
Filipino
Antonio V. Paner
EVP and Treasurer
55
Filipino
Natividad N. Alejo
Executive Vice-President
57
Filipino
Executive Vice-President
58
Filipino
Joseph Albert L. Gotuaco
Senior Vice-President
48
Filipino
Maria Theresa Marcial-Javier
43
Filipino
Edgardo O. Madrilejo
57
Filipino
55
Filipino
6
Please refer to attached Annex “A” for the brief background of the Directors/Nominees
and Key Executive Officers of BPI. Per Article V of the By-Laws of the Bank, the term
of office of a director is one (1) year or until his successor is duly elected and qualified.
(b) Significant Employees
The Bank values its human resources and considers its entire workforce as significant
employees. It expects each employee to do his share in achieving the company’s set
goals and objectives.
(c) Family Relationships
The Chairman of the Board of Directors, Mr. Jaime Augusto Zobel de Ayala and Mr.
Fernando Zobel de Ayala, the Vice-Chairman of the board, are brothers.
(d) Legal Proceedings
To the knowledge and/or information of the Bank, the nominees for election as
Directors of the Bank and its Key Executive Officers are not presently or in the last five
(5) years included in any material legal proceeding involving themselves and/or their
property before any court of law or administrative body in the Philippines or elsewhere
nor said persons have been convicted by final judgment of any offense punishable by
laws of the Philippines or laws of any other nation.
(e) Resignation of Directors
Ms. Chng Sok Hui and Mr. Khoo Teng Cheong, members of the Board of Directors of
the Bank, voluntarily resigned effective 28 November 2013, not due to any
disagreement with the Bank relative to its operations, policies or practices but due to
the sale of the stockholdings of its principal, DBS Bank, Ltd. in BPI.
Item 6. Compensation of Directors and Executive Officers
a. Executive compensation
Names arranged
By Rank/ By Surname
Gil A. Buenaventura*
Antonio V. Paner
Natividad N. Alejo
All above-named Officers as a
group
All other unnamed Officers as
a group
All Directors
Directors’ Per Diem
Position
President & CEO
SEVP & COO
EVP & Treasurer
Executive VP
Executive VP
Salary
2012
Bonuses
129,828,834.84
81,457,210.00
3,544,044,929.39
438,477,715.00
28,000,000.00
15,390,000.00
Other Salary
N.A.
*Retired effective October 01, 2012
Names arranged
By Rank/ By Surname
Aurelio R. Montinola III**
Cezar P. Consing***
Antonio V. Paner
Natividad N. Alejo
group
a group
All Directors
Position
President & CEO
President & CEO
EVP & Treasurer
Executive VP
Executive VP
Salary
2013
Bonuses
101,089,082.91
92,872,690.00
3,816,317,513.58
577,104,435.00
28,000,000.00
15,140,000.00
Other Salary
N.A.
** President & CEO up to 18 April 2013
***President & CEO from 18 April 2013 to present
7
Names arranged
By Rank/ By Surname
Cezar P. Consing
Antonio V. Paner
Natividad N. Alejo
group
a group
All Directors
Position
President & CEO
EVP & Treasurer
Executive VP
Executive VP
Sr. Vice-President
Salary
2014 Estimate
Bonuses
114,476,523.20
98,445,051.40
4,169,542,708.42
611,730,701.10
28,000,000.00
15,140,000.00
Other Salary
N.A.
b. Compensation of Directors
In 2013 each member of the Board of Directors received ₧ 2.5M as Directors’ Bonus for
the services rendered by them to the Bank during the year 2012. The total bonus for all
directors in 2013 was equivalent to less than ¼ of 1% of the Net Income of the Bank after
tax. Said bonus was pro-rated with respect to Directors who served for less than one (1)
year.
For the compensation of the member of the Board of Directors for the services rendered
for year 2013, Article V (Board of Directors) of the Bank’s By-Laws provides:
“Each director shall be entitled to receive from the Bank,
pursuant to a resolution of the Board of Directors, fees and other
compensation for his services as director. The Board of Directors shall
have the sole authority to determine the amount, form and structure of
the fees and other compensation of the directors. In no case shall the
total yearly compensation of directors exceed one percent (1%) of the
net income before income tax of the Bank during the preceding year.
The Personnel and Compensation Committee of the Bank shall
have the responsibility for recommending to the Board of Directors the
fees and other compensation for directors. In discharging this duty, the
Committee shall be guided by the objective of ensuring that
compensation should fairly pay directors for work required in a company
of the Bank’s size and scope.”
Standard Arrangement
Other than the usual per diem arrangement for Board and Board Committee meetings
and the abovementioned Compensation of Directors, there is no Standard Arrangement
with regards to compensation of directors, directly or indirectly for any other services
provided by the said directors, for the last completed fiscal year.
Item 7. Independent Public Accountants
(a) The principal accountant of the Bank for the fiscal year 2013 is the Accounting Firm of
Isla Lipana & Co. (formerly known as Joaquin Cunanan & Co.). The same Accounting
Firm is being recommended for re-election at the scheduled Annual Stockholders’
Meeting of the Bank.
(b) Representatives of Isla Lipana & Co. are expected to be present at the Annual
Stockholders’ Meeting. They will have the opportunity to make a statement if they
desire to do so and they are expected to be available to respond to appropriate
questions and to count and/or validate the votes, if needed, during the Annual
Stockholders’ Meeting.
Pursuant to the General Requirements of SRC Rule 68, Par. 3 (Qualifications and
Reports of Independent Auditors), the Bank has engaged Isla Lipana & Co., as the
external auditor with Ms. Blesilda A. Pestaño as the Partner-in-Charge starting year
2009.
8
(c) Changes in and Disagreements with Accountants on Accounting and Financial
Disclosure
The Bank has engaged the services of Isla Lipana & Co. and Ms. Blesilda A. Pestaño
has been the Partner-in-Charge for the two most recent fiscal years. There are no
disagreements with accountants on accounting and financial disclosure.
(d) Audit and Audit-Related Fees
BPI has paid the following fees to its external auditors in the past two (2) years:
Fiscal Year
Audit Fees and
Other-related Fees
₧13,175,561.28
₧12,061,501.46
2011 paid in 2012
2012 paid in 2013
Tax Fees
-
The above audit fees are inclusive of the following: (a) other assurance and related
services by the external auditor that are reasonably related to the performance of the
audit or review of the Bank’s financial statements and (b) all other fees.
The appointment or re-appointment of the Bank’s External Auditor is subject to the
approval and endorsement by the Audit Committee for subsequent confirmation and
approval by the Board of Directors and finally the Stockholders. The Audit Committee
is chaired by Mr. Xavier P. Loinaz with Mr. Khoo Teng Cheong (resigned effective
November 28, 2013), Mr. Octavio V. Espiritu, Mr. Aurelio R. Montinola III and Mr.
Oscar S. Reyes as members.
Item 8. Compensation Plans
As provided for in Article VII of the Amended Articles of Incorporation of BPI, not more
than one and one half percent (1 ½%) of the Authorized Capital Stock of BPI is set aside
for an Executive Stock Option Plan (ESOP) and another one and one half percent (1 ½
%) for Stock Purchase Plan (SPP) for employees and officers of BPI and its subsidiaries,
over which shares the stockholders shall have no pre-emptive rights. Said provision was
approved by the Bangko Sentral ng Pilipinas, Securities and Exchange Commission and
the Stockholders. The last Stock Options were granted in 2013 aggregated to 5,821,307
shares, 3,250,000 shares for the Executive Stock Option Plan and 2,571,307 shares for
Stock Purchase Plan.
C.
ISSUANCE AND EXCHANGE OF SECURITIES
Item 9. Authorization or Issuance of Securities Other than for Exchange
There are no matters or actions to be taken up in the meeting with respect to the
authorization or issuance of securities other than for exchange.
Item 10. Modification or Exchange of Securities
There are no matters or actions to be taken up in the meeting with respect to the
modification of any class of the Company’s securities or the issuance of authorization for
issuance of one class of the Company’s securities in exchange for outstanding securities
of another class.
Item 11. Financial and Other Information
The management’s discussion and analysis, market price of shares and dividends and
other data related to the Company’s financial information and the Statement of
Management’s Responsibility for Financial Statements including the audited financial
9
statements as of 31 December 2013, are attached hereto as Annexes “A-1” and “B”.
Item 12. Mergers, Consolidations, Acquisitions and Similar Matters
There are no matters or actions to be taken up in the meeting with respect to mergers,
consolidations, acquisitions and similar matters.
Item 13. Acquisition or Disposition of Property
There are no matters or actions to be taken up in the meeting with respect to material
acquisition or disposition of any property by the Company.
Item 14. Restatement of Accounts
There are no matters or actions to be taken up in the meeting with respect to restatement
of accounts.
D. OTHER MATTERS
Item 15. Action with Respect to Reports
(a) Approval of the Minutes of the Annual Meeting of the Stockholders on April 18, 2013
containing:
i)
ii)
iii)
iv)
Annual Report of Officers and approval of the Bank’s Statement of
Condition as of December 31, 2012 incorporated in the Annual
Report.
Approval and confirmation of all acts of the Board of Directors,
Executive Committee, and all other Board and Management
Committees and Officers of BPI for the year 2012 up to April 18, 2013
(the date of the Annual Meeting of Stockholders).
Election of 15 Members of the Board of Directors.
Election of External Auditors and fixing their Remuneration.
(b) Approval of the Annual Report and the Bank’s Statements of Condition as of 31
December 2013 containing the performance of the Bank and its financial condition.
Item 16. Matters Not Required to be Submitted
All matters or actions that will require the vote of the security holders will be submitted
in the meeting.
Item 17. Amendment of Charter, By-Laws or Other Documents
The Bank to propose Amendment of the Third Article of the Articles of Incorporation
of BPI and Article I of its By-Laws to state complete and specific address of its
principal office instead of referring only to city, town, municipality or “Metro Manila” in
compliance with SEC Circular No. 6 Series of 2014.
Item 18. Other Proposed Action
(a)
Confirmation/ratification of all acts of Management, the Board of Directors, all Board
and Management Committees and the Officers of the Bank done in the regular
course of business for the period covering January 01, 2013 through December 31,
2013, and from January 01, 2014 up to the date of the annual stockholders’ meeting
such as but not limited to approval of all transactions and contracts entered into by
10
ANNEX “A”
THE NOMINEES TO THE BPI BOARD OF DIRECTORS FOR THE TERM 2014-2015
1.
JAIME AUGUSTO ZOBEL DE AYALA, 54 years old, Filipino, has been a member of
the Board of Directors of Bank of the Philippine Islands (BPI) since 1994 and Chairman
of the Board since 2004. He was also the Vice-Chairman of the Board from 1995 to
March 2004. Mr. Zobel is currently the Chairman of the Executive Committee and
member of the Nomination Committee of BPI. He is also the Chairman of the Board of
Directors of BPI Family Savings Bank, Inc., and BPI Capital Corporation.
Mr. Zobel is the Chairman and CEO of Ayala Corporation. He also holds the following
positions: Chairman of Globe Telecom, Inc.; Integrated Micro-Electronics, Inc.; CoChairman of Ayala Foundation, Inc.; Vice Chairman of Ayala Land, Inc. ; Manila Water
Company, Inc.; and AC Energy Holdings, Inc.; Chairman of Harvard Business School
Asia-Pacific Advisory Board and Asia Business Council; Vice Chairman of the Makati
Business Club, and member of the Harvard Global Advisory Council, Mitsubishi
Corporation International Advisory Committee, JP Morgan International Council,
International Business Council of the World Economic Forum; Philippine Representative
for APEC Business Advisory Council.
He graduated with B.A. in Economics (with honors) degree from Harvard College in 1981
and obtained an MBA from the Harvard Graduate School of Business in 1987.
2.
FERNANDO ZOBEL DE AYALA, 53 years old, Filipino, has been a member of the
Board of Directors of Bank of the Philippine Islands (BPI) since 1994 and was elected as
Vice-Chairman of the Board on April 18, 2013. He also holds the following positions in
BPI: Chairman of the Personnel and Compensation Committee, Vice-Chairman of the
Executive Committee and member of the Trust Committee.
Mr. Zobel has been a member of the Board of Directors of Ayala Corporation since May
1994. He has also been the President and Chief Operating Officer of Ayala Corporation
since April 2006. Mr. Zobel’s other positions are: Chairman of Ayala Land, Inc., Manila
Water Company, Inc., AC International Finance Ltd., AC Energy Holdings, Inc., and Hero
Foundation, Inc.; Co-Chairman of Ayala Foundation, Inc.; Director of Globe Telecom, Inc.,
Integrated Micro-Electronics, Inc., LiveIt Investments, Ltd., Ayala International Holdings
Limited, Honda Cars Philippines, Inc., Isuzu Philippines Corporation, Pilipinas Shell
Petroleum Corp., Manila Peninsula and Habitat for Humanity International; Member of
The Asia Society, INSEAD East Asia Council, Chairman of Habitat for Humanity’s AsiaPacific Capital Campaign Steering Committee; and Member of the Board of Trustees of
Caritas Manila, Pilipinas Shell Foundation, Kapit Bisig para sa Ilog Pasig Advisory Board
and National Museum. Mr. Zobel graduated with B.A. Liberal Arts degree at the Harvard
College in 1982. In 1993, he received a Certificate in International Management (CIM)
Programme from INSEAD.
3.
CEZAR P. CONSING - President & Chief Executive Officer, 54 years old, Filipino, has
been President & CEO of Bank of the Philippine Islands (BPI) since April 18, 2013. Mr.
Consing has been a member of BPI's Board of Directors since April 2010. He also
served as a member of BPI's Board of Directors from February 1995 to January 2000,
and from August 2004 to January 2007. Mr. Consing is Chairman of BPI's Credit
Committee and a member of the BPI Board's Executive, Trust, Retirement & Pension,
and Risk Management Committees. Mr. Consing also serves as Chairman of BPI Direct
Savings Bank, Inc. and as Vice Chairman of BPI Capital Corporation. He also serves
as a board director of other BPI subsidiaries and affiliates.
Mr. Consing is a Senior Managing Director of Ayala Corporation and a member of the
Board of Partners of The Rohatyn Group ("TRG"), an international asset management
firm. He has served as an Independent Board Director of Jollibee Foods
Corporation since June 2010.
1
Mr. Consing first joined BPI in 1980, initially in corporate planning and then in corporate
banking. In 1985, he joined J.P. Morgan & Co. ("J.P. Morgan"), then the second largest
shareholder of BPI. Over a nineteen year career with J.P. Morgan in Hong Kong and
Singapore, Mr. Consing focused on loan trading and syndication, capital markets and
mergers & acquisitions. He was responsible for all of J.P. Morgan's banking business in
the Philippines, then in Southeast Asia and ultimately, the Asia Pacific region. From 1994
to 2004, he was President of J.P. Morgan Securities (Asia Pacific) Ltd. Prior to re-joining
BPI.
Mr. Consing was a Partner at TRG, headed its Hong Kong Office, and was responsible
for TRG's private equity businesses in Asia, which include Arch Capital Management Co.,
a real estate investment firm, and Capital Advisors Partners Asia, an infrastructure
investment firm. Between 2007 and 2012, TRG owned a 40% stake in Premiere
Development Bank, where Mr. Consing served as Chairman of the Executive Committee.
Between 2004 and 2013, Mr. Consing also served as an independent board director of
CIMB Group Holdings Berhad and CIMB Group Sdn Bhd, which together comprise one of
the largest universal banking institutions in Southeast Asia. Between 2005 and 2013, Mr.
Consing also served as an Independent Board Director of First Gen Corporation.
Mr. Consing is a member of the Boards of Advisors of De La Salle University and
International Care Ministries, which focuses on fighting poverty in the Visayas and
Mindanao. Between 2003 and 2009, he was a member of the Board of Directors of the
Asian Youth Orchestra. He is currently a member of the Trilateral Commission, a global
think tank.
Mr. Consing received an A.B. Economics degree (Accelerated Program), magna cum
laude, from De La Salle University in 1979. He obtained an M.A. in Applied Economics
from the University of Michigan, Ann Arbor, in 1980.
4.
VIVIAN QUE AZCONA – 58 years old, Filipino, was nominated for election as
Independent Director of Bank of the Philippine Islands (BPI) for the term 2014-2015. She
is the President of the Mercury Group of Companies, Inc. (“MGCI”) and President and
General Manager of Mercury Drug Corp. (“MDC”), a subsidiary of MGCI. MDC operates
one of the Philippines’ largest chain of full-service drug stores, and is the country’s
leading provider of health, wellness, and consumer products, as well as related valueadded services. Ms. Azcona joined MDC in 1977, starting in entry-level store operations,
and eventually progressed through key functions such as merchandising, distribution,
administration, and finance. Ms. Azcona was appointed Vice President and General
Manager of MDC in 1983 and assumed her current position in 1998.
Ms. Azcona is currently a Vice President of the Philippine Retailers Association. She is
also a member of the Philippine Pharmacists Association for which she has also served
as an officer and director. Ms. Azcona is also President of Mercury Drug Foundation,
Inc., a non-stock, non-profit organization active in the promotion and building of a healthy,
educated and productive nation.
Ms. Azcona is a registered pharmacist. She received her B.S. Pharmacy degree, cum
laude, from the University of Santo Tomas, in 1977. She also graduated from the Basic
Management Program of the Asian Institute of Management, in 1978.
5.
ROMEO L. BERNARDO* (Independent Director), 59 years old, Filipino, has served as a
member of the Board of Directors of Bank of the Philippine Islands (BPI) from February
1998 to April 2001. He was again elected as an Independent Director in August 2002 up
to present. He is the Chairman of the Nomination Committee and a member of the
Corporate Governance Committee, Personnel & Compensation Committee, Risk
Management Committee and Trust Committee of BPI. He also sits as Independent
Director of BPI Family Savings Bank, Inc., BPI Capital Corporation, BPI Direct Savings
2
Bank, Inc., BPI/MS Insurance Corporation, BPI Globe BanKO, Inc., A Savings Bank,
BPI-Philam Life Assurance Corporation, and Philippine Investment Management, Inc.
Mr. Bernardo is also an Independent Director of the following listed companies: Aboitiz
Power Corporation, National Reinsurance Corporation of the Philippines, Globe Telecom,
Inc. and RFM Corporation. Mr. Bernardo is the Chairman of the Board of Directors
(Independent) of Ayala Life Fixed-Income Fund Peso, Dollar, Growth, Money Market and
Euro Bond Funds and Philippine Stock Index Fund, Inc.; Vice-Chairman and Founding
Fellow of Foundation for Economic Freedom; President and Managing Director of Lazaro
Bernardo Tiu & Associates, Inc.; Member of the Board of Governors of the Management
Association of the Philippines,; and Advisor of Global Source/N.Y.
He graduated with B.S. Business Economics degree, magna cum laude, from the
University of the Philippines in 1974. He obtained his M.A. Development Economics (Top
of the Class) at the Williams College, Williamstown, Massachusetts, USA in 1977.
6.
OCTAVIO V. ESPIRITU*, (Independent Director), 70 years old, Filipino, has been a
member of Board of Directors of Bank of the Philippine Islands (BPI) since April 2000. A
three term former President of the Bankers Association of the Philippines and former
President and Chief Executive Officer of Far East Bank & Trust Company and Chairman
of the Board of Trustees of Ateneo Manila University for 14 years. He is the Chairman
of the Risk Management Committee and a Member of the Audit Committee of BPI.
Mr. Espiritu is currently Chairman of GANESP Ventures, Inc., Member of the Board of
Directors of International Container Terminal Services, Inc., SM Development
Corporation, Philippine Dealing System Holdings Corporation and Subsidiaries; Philippine
Stratbase Consultancy, Inc., and Netvoice, Inc.
He graduated with an AB Economics degree from the Ateneo de Manila University in
1963 and obtained his M.A. Economics degree from the Georgetown University, USA in
1966.
7.
REBECCA G. FERNANDO, 65 years old, Filipino, served as Director of Bank of the
Philippine Islands (BPI) from 1995 to 2007. She was again re-elected Director of BPI in
2009 up to present. Ms. Fernando is a member of the following Committees in BPI:
Executive Committee, Trust Committee and Retirement/Pension Committee. She is also a
member of the Board of Directors BPI Capital Corporation and BPI Family Savings Bank,
Inc.; and Chairman of LAIKA Intertrade Corporation. She is the Financial Consultant and
Member of the Finance Board of The Roman Catholic Archbishop of Manila and Finance
Board of The Roman Catholic Archbishop of Antipolo.
She graduated with BSBA degree major in accounting from the University of the Philippines
in 1970. She took further studies for an MBA at the University of the Philippines and
attended an Executive Program on Transnational Business at the Pacific Asian
Management Institute at the University of Hawaii. She is a Certified Public Accountant.
8.
XAVIER P. LOINAZ* (Independent Director), 70 years old, Filipino, has been a member of
the Board of Directors of Bank of the Philippine Islands (BPI) since 1982. He served as the
President of BPI from 1982 to 2004 (22 years). Likewise, he was the President of the
Bankers Association of the Philippines from 1989 to 1991. Mr. Loinaz also holds the
following corporate positions: Chairman of the Audit Committee and Member of the
Nomination Committee of BPI; Independent Director of BPI Family Savings Bank, Inc.,
BPI/MS Insurance Corporation, Ayala Corporation and Globe Telecom, Inc. He is the
Chairman of the Board of Directors of Alay Kapwa Kilusan Pangkalusugan and Member of
the Board of Trustees of E. Zobel Foundation and PETA.
He graduated with an A.B. Economics degree from the Ateneo de Manila University in 1963
and obtained his MBA Finance at the Wharton School of Pennsylvania in 1965.
3
9.
AURELIO R. MONTINOLA III, 62 years old, Filipino, has served as President and CEO
of Bank of the Philippine Islands (BPI) for 8 years (2005-2013), the Bankers Association
of the Philippines for 4 years and the Chamber of Thrift Banks for 1 year. He is a
member of the BPI’s Executive Committee, Audit Committee,
Risk Management
Committee and Personnel and Compensation Committee. Mr. Montinola is presently the
Chairman of Far Eastern University and the Vice-Chairman of Philippine Business for
Education. His present affiliations, among others, include being Director of BPI, BPI
Family Savings Bank, Inc. and BPI Capital Corporation; Chairman of BPI/MS Insurance
Corporation, BPI-Philam Life Assurance Corporation, BPI Globe BanKO, Inc., A Savings
Bank, BPI Europe, FEU East Asia Education Foundation and Amon Trading Corporation;
Vice Chairman of Lafarge Republic, Director of Ayala Land, Inc., Member of the
Management Association of the Philippines and Trustee of the Makati Business Club and
WWF Philippines.
Significant awards include Management Man of the Year 2012 (Management Association
of the Philippines), Asian Banker Leadership Award (twice), and Legion d’Honneur
(Chevalier) from the French Government. He graduated MBA in 1977 from the Harvard
Business School and BS Management Engineering degree at the Ateneo de Manila
University in 1973.
10.
MERCEDITA S. NOLLEDO, 72 years old, Filipino, has served as a Director of Bank of
the Philippine Islands (BPI) since 1991 up to the present. She is the Chairman of the BPI
Trust Committee and Retirement/Pension Committee, Member of Corporate Governance
Committee and Alternate Member of Executive Committee. Ms. Nolledo is the Chairman
of the Board of Directors of BPI Investment Management, Inc.; Director of BPI Family
Savings Bank, Inc. and BPI Capital Corporation.
The other positions Ms. Nolledo currently holds are the following: Director of Ayala Land,
Inc., Anvaya Cove Beach and Nature Club, Inc., Honda Cars Cebu, Inc., Honda Cars
Makati, Inc., Isuzu Automotive Dealership, Inc., Isuzu Cebu, Inc., Ayala Automotive
Holdings Corporation; member of the Board of Trustees of Ayala Foundation, Inc. and
BPI Foundation, Inc.; and President of Sonoma Properties, Inc. She also served as a
Director of Ayala Corporation from 2004 to September 2010.
Ms. Nolledo graduated with the degree of Bachelor of Science in Business Administration
major in Accounting from the University of the Philippines in 1960 and topped the CPA
exams (second place) given in the same year. In 1965, she finished Bachelor of Laws
degree also from the University of the Philippines where she also topped the Bar exams
(second place) given in the same year.
11.
ARTEMIO V. PANGANIBAN*, (Independent Director), 77 years old, Filipino, was elected
as Independent Director of Bank of the Philippine Islands (BPI) on April 15, 2010 and has
held that position up to present. He is the Chairman of the Corporate Governance
Committee of BPI. At present, he is also an Independent Director of the following listed
corporations: Manila Electric Company, Petron Corporation, First Philippine Holdings
Corporation, Metro Pacific Investment Corporation, Robinsons Land Corporation, GMA
Network, Inc., GMA Holdings, Inc., Asian Terminals, Inc. and Philippine Long Distance
Telephone Company. Likewise, he holds the following positions in various companies, to
wit: Chairman, Board of Advisers, College of Law and University of Asia and the Pacific;
Non-Executive Director of Jollibee Foods Corporation; Advisor of Double Dragon
Properties Corporation; Senior Adviser, V. Mapa Blue Falcon Honor Society and
Metropolitan Bank and Trust Company; Chairman, Board of Advisers, Metrobank
Foundation, Inc. and Asian Institute of Management Ramon V. Del Rosario, Sr.- C.V.
Starr Center for Good Corporate Governance; Chairman Emeritus, Philippine Dispute
Resolution Center, Inc.; President, Manila Metropolitan Cathedral – Basilica Foundation,
4
Inc.; Member, Board of Advisers of Dela Salle University College of Law and Johann
Strauss Society; Member, Advisory Board of The World Bank (Philippines), and
Chairman of the Board of Trustees of Foundation for Liberty and Prosperity. He is also a
Columnist in the Philippine Daily Inquirer and Member of Philippine National Committee of
Asean Law Association.
He has held various positions in government offices from 2003 to 2006, such as Chief
Justice and Associate Justice of the Supreme Court, Chairman of the Presidential
Electoral Tribunal, Judicial and Bar Council, Philippine Judicial Academy and House of
Representatives Electoral Tribunal and Member of the Senate Electoral Tribunal. He
graduated with the degree of Bachelor of Laws ,cum laude, from Far Eastern University in
1960 and obtained his Doctor of Laws, (Honoris Causa) degree at the various
universities, to wit: University of Iloilo (1997), Far Eastern University (2002), University of
Cebu (2006), Angeles University (2006), and Bulacan State University (2006).
12.
ANTONIO JOSE U. PERIQUET* (Independent Director), 52 years old, Filipino, has been
an Independent Director of Bank of the Philippine Islands (BPI) since April 19, 2012 to
present. He is a member of BPI’s Executive Committee and Risk Management
Committee. He is also the Vice-Chairman of BPI’s Trust Committee. Mr. Periquet is also
an Independent Director of BPI Capital Corporation and BPI Family Savings Bank, Inc.
Currently, Mr. Periquet is an Independent Director of ABS-CBN Holdings Corporation,
ABS-CBN Corporation, Philippine Seven Corporation, Ayala Corporation and DMCI
Holdings, Inc.. He is also the Chairman of the Board of Directors of Pacific Main Holdings,
Inc., Campden Hill Group, Inc. and Regis Financial Advisers, Inc.. Mr. Periquet is a
member of the Board of Directors of The Straits Wine Co. Inc., and member of the Board
of Trustees of Lyceum University of the Philippines.
He graduated with A.B. Economics degree at the Ateneo de Manila University in 1982
and finished his MBA at the University of Virginia in 1990. He also earned a Master of
Science in Economics at the Oxford University in 1988.
13.
OSCAR S. REYES, 67 years old, Filipino, was elected
Member of the Board of
Directors of Bank of the Philippine Islands BPI in April 2003 and has been a Director since
then. He is a member of the Audit Committee, Corporate Governance Committee and
Personnel & Compensation Committee of BPI.
Among his other positions are: Chairman of Pepsi Cola Products Philippines, Inc., Pacific
Light Power Pte. Ltd.; Redondo Peninsula Energy, Inc., Meralco Energy, Inc., Meralco
Industrial Engineering Services, Inc., and CIS Bayad Center, Inc. He is an Independent
Director of the following Companies: Ayala Land, Inc., Manila Water Company, Inc., Basic
Energy Corporation, Cosco Capital, Inc., Sun Life Financial Plans, Inc., Sunlife Prosperity
Dollar Abundance and Dollar Advantage Funds, Money Market, GS and Dollar Funds, Inc.,
Grepalife Funds and Petrolift Corporation.
Mr. Reyes is also a Director/Officer of the following companies: Director/President/Chief
Executive Officer of Manila Electric Company; President and Director of Meralco Powergen
Corporation; PLDT Communications & Energy Ventures, Inc.; Clark Electronic Distribution
Co.; Republic Surety & Insurance Co., Inc., and Advisory Board Member of Philippine
Long Distance Telephone Company.
He finished Bachelor of Arts Major in Economics, cum laude, from the Ateneo de Manila
University in 1965. He also took up the following courses: Business Management
Consultants and Trainers Program from the Japan Productivity Center/Asian Productivity
Organization, Tokyo in 1968; International Management Development Program leading to
(1) Diploma in Business Administration and (2) Certificate in Export Promotion from the
Waterloo University, Ontario, Canada in 1969-1970; European Business Program from UK,
Netherlands, France, Germany, Switzerland in 1970; Master of Business Administration
5
(Academic units completed) from the Ateneo Graduate School of Business Administration
in 1971; Program for Management Development from the Harvard Business School,
Boston, in 1976; and Commercial Management Study Program from the Lensbury Centre,
Shell International Petroleum Co., United Kingdom.
14.
ASTRID S. TUMINEZ*, (Independent Director) 49 years old, Filipino with U.S. citizenship,
joined Bank of the Philippine Islands (BPI) as an Independent Director on December 18,
2013. Dr. Tuminez joined Microsoft in October 2012 as the Regional Director of Legal and
Corporate Affairs (LCA) in Southeast Asia (SEA), responsible for driving government
relations, corporate citizenship, and business and regulatory initiatives in the ASEAN
countries as well as Sri Lanka, Bangladesh, Nepal and Bhutan.
Dr. Tuminez is also an Adjunct Professor, the former Vice-Dean (Research) and
Assistant Dean (Executive Education) of the Lee Kuan Yew School of Public Policy
(National University of Singapore), 2008-present. In 2003-2007, at the U.S. Institute of
Peace, she assisted in advancing peace negotiations between the Philippine
government and the Moro Islamic Liberation Front. She was also a Senior Advisor to
the Salzburg Global Seminar (2006), Executive Associate and then Director of Research
for alternative investments at AIG Global Investment (1999-2003), a consultant to The
World Bank and an institutional sales/research professional at Brunswick Warburg
(1998).
In 1989-1992, she worked with the Harvard Project on Strengthening Democratic
Institutions, eventually running operations in Moscow, Russia, where she worked with
leading reformers like Eduard Shevardnadze and Mikhail Gorbachev. In 1992-1998, she
was a Research Associate and, later, program officer at the Carnegie Corporation of
New York, focusing on grant-making in democratization, conflict prevention, and nonproliferation of weapons of mass destruction. She is a member and former Adjunct
Fellow of the Council on Foreign Relations in New York City, and is the author of the
book, Russian Nationalism Since 1856. Ideology and the Making of Foreign Policy
(2000) and other scholarly publications, reports and opinion pieces.
In 2012, Dr. Tuminez authored “Rising to the Top - A Report on Women’s Leadership in
Asia,” a project supported by the Asia Society and The Rockefeller Foundation. She has
been a U.S. Institute of Peace Scholar, a Freeman Fellow of the Salzburg Global
Seminar, a fellow at the Harvard Kennedy School, a Distinguished Alumna of Brigham
Young University, a fellowship recipient of the Social Science Research Council and the
MacArthur Foundation, and a member of the International Advisory Board of the Asian
Women Leadership University project and the ASEAN Institute on Disability and Public
Policy (IDPP). She also serves on the board of ASKI Global, an NGO focused on
training and financing entrepreneurship among Asian women migrant laborers.
In 2013, the Filipina Women’s Network of the U.S. selected Dr. Tuminez as a recipient of
their “Global Influencer Award.” Her educational background includes a B.A. with a
double major in Russian Literature and International Relations from Brigham Young
University; a Master’s in Soviet Studies from Harvard University (1988); and a Ph.D. in
Political Science from the Massachusetts Institute of Technology.
15.
DOLORES B. YUVIENCO, 65 years old, Filipino, was nominated for election as Director
of Bank of the Philippine Islands (BPI) for the term 2014-2015. Ms. Yuvienco joined
Bangko Sentral ng Pilipinas in April 1972 as Senior Executive Assistant - Office of the
Governor. She transferred to the Supervision and Examination Sector in 1975 and
worked in various capacities until compulsory retirement in March 2013. Her stint of more
than 25 years at the Supervision and Examination Sector gave her exposure to the
crafting of polices on banking supervision, as well as on-site and off-site supervision of
BSP supervised entities. She also represented the BSP in international fora like the
EMEAP (Executives Meetings for East Asia and the Pacific Central Banks) Working
Group on Banking supervision and the SEACEN Group on Banking Supervision. She is
6
part of the speakers’ pool of the Rural Bankers Association of the Philippines Foundation
delivering the basic governance course for bank directors. She is as well an adviser to the
Baiphil Institute Committee on Training. She graduated with Bachelor’s degree in
Commerce, major in Accounting in St. Theresa’s College, Manila and Quezon City in
1967 and took up her post graduate MBA studies at the University of the Philippines in
1972. She passed the CPA Board Examination in December 1967.
*Independent Director as defined in Sec. 38 of the Securities Regulation Code and BSP
Circular Nos. 296. and 749.
THE KEY EXECUTIVE OFFICERS OF BPI AS OF FEBRUARY 19, 2014
1.
CEZAR P. CONSING
2.
ANTONIO V. PANER
- President & Chief Executive Officer
- Executive Vice-President, Treasurer
and Head of Global Banking
55 years old, Filipino, is currently Treasurer and Head of the Global Markets Group
(“GMG”) of Bank of the Philippine Islands (BPI). GMG is responsible for Treasury, sales
and trading, portfolio management, private banking and BPI’s offshore businesses
including the remittance operations. He is Chairman of the Bank’s Asset and Liability
Committee and a member of BPI's Asset Management Investment Council. Mr. Paner
joined BPI in 1989, and has been responsible for various GMG-related businesses of the
Bank, including Risk Taking, Local Currency Portfolio Management, and Money
Management.
Mr. Paner is Chairman of the Boards of Directors of BPI International Finance, Ltd., BPI
Forex Corporation and Santiago Land Development Corporation. He is also a member
of the Boards of Directors of AF Money Brokers, Inc., Citytrust Securities Corporation,
BPI Direct Savings Bank, Inc. and BPI Europe Plc. He is also Treasurer and member
of the Board of Directors of Citytrust Realty Corporation, (and Treasurer of) BPI
Computer Systems Corporation, BPI Operations Management Corporation and the BPI
Foundation, Inc.
Mr. Paner served as President for the Money Market Association of the Philippines
(MART) in 1998 and remains an active member of the Bankers Association of the
Philippines’ (BAP) Open Market Committee. He is also a member of the Money Markets
Association of the Philippines, Makati Business Club, British Chamber of Commerce, and
the Philippine British Business Council.
Mr. Paner obtained an A.B. Economics degree from Ateneo de Manila University in 1979
and completed the Advanced Management Program at Harvard Business School in
2009.
3.
NATIVIDAD N. ALEJO
- Executive Vice-President
57 years old, Filipino, is head of Retail Segments and Channels Group (“RSCG”) at Bank
of the Philippine Islands (BPI), which she has headed since 2007. RSCG is responsible
for managing the Bank’s consumer deposit franchise, as well as all physical, electronic,
internet, and mobile channels servicing that franchise. RSCG also hosts the bank’s
distribution capabilities for its diverse array of financial products and services. She is a
member of the Management Committee of BPI. Between 2001 and 2006, Ms. Alejo
served as President and Director of BPI Capital Corporation and BPI Securities
Corporation, the Bank’s investment banking and equities brokerage arms. Ms. Alejo
joined BPI in 1979 as a Senior Manager.
Concurrent to the above, Ms. Alejo serves as member of the Boards of Directors of BPI
Family Savings Bank, Inc., BPI Direct Savings Bank, Inc., BPI-Philam Life Assurance
Corporation and National Reinsurance Corporation of the Philippines, BPI Operations
Management Corporation, Beacon Property Ventures, Santiago Land Development
7
Corporation and BPI International Finance Ltd. In addition to her BPI-affiliated
directorships, Ms. Alejo is also a member of the Boards of Directors of Shemberg
Biotech, and An Waray Party List, a community service organization consisting of
Filipinos from Eastern Visayas.
Ms. Alejo graduated with AB Economics degree, summa cum laude and Gansewinkle
Scholastic Trophy Awardee, from Divine Word University, Tacloban City, in 1976. She
obtained an M.A. Economics degree from the University of the Philippines in 1978, and
completed the Advanced Management Program at Harvard Business School in 2005.
4.
ALFONSO L. SALCEDO, JR.
- Executive Vice-President
58 years old, Filipino, is responsible for Corporate and Investment Banking Group at Bank
of the Philippine Islands (BPI). As such, Mr. Salcedo oversees the bank’s domestic and
multinational relationships in the wholesale banking space, as well as the delivery of
important products and services to such relationships, including loans, trade financing,
capital markets, project finance, advisory, cash management, and payments. Mr.
Salcedo is also responsible for BPI’s Centralized Operations Group (“COG”) which is the
primary support group for the Bank’s branch and electronic networks, as well as the
servicing of the Bank’s retail and corporate loans. Mr. Salcedo has served at BPI since
2000, when he became responsible for the firm’s insurance businesses.
Between 2004 and 2010, Mr. Salcedo served as President of BPI Family Savings Bank,
Inc. At present, he is also the Chairman of the Board of Directors of BPI Leasing
Corporation and BPI Rental Corporation. He is currently a member of the Boards of
Directors of the following: BPI Capital Corporation, BPI Direct Savings Bank, Inc., BPI
International Finance Ltd., BPI-Philam Life Assurance Corporation, Ayala Automotive
Holdings Corporation and National Reinsurance Corporation of the Philippines. Prior to
joining BPI, Mr Salcedo served for ten years in the retail banking operations of Citibank
Philippines. Furthermore, for five years, between1983 and 1988, Mr. Salcedo was
posted in Osaka, Japan as Marketing Manager of Nippon Vicks KK (Japan).
Mr. Salcedo received his A.B. Economics Honors degree, with honors, from Ateneo de
Manila University, in 1977. He also completed the Advanced Management Program at
Harvard Business School in 2006.
5.
JOSEPH ALBERT L. GOTUACO
- Senior Vice President
48 years old, Filipino, is Chief Financial Officer of Bank of the Philippine Islands (BPI) and
serves as head of its Enterprise Corporate Services Group. He is responsible for
managing the primary infrastructure of the Bank--in particular, human resources,
premises, and technology--and also serves as Chairman of BPI’s Capital Expenditure
and Capital Management Committees. He is also a member of the Management
Committee of BPI.
Mr. Gotuaco began his Asian banking career in 1994, joining Morgan Guaranty Trust
Company in Hong Kong, with responsibilities for sovereign and corporate clients in the
Philippines and in ASEAN. In 2002, Mr. Gotuaco joined Credit Suisse, where he was
responsible for Philippine and North Asian clients; in 2005, he joined Merrill Lynch, where
he served as Managing Director in its Fixed Income, Currencies and Commodities
(“FICC”) Division, with responsibilities for the division’s sovereign and corporate clients
across non-Japan Asia. From 2009, Mr. Gotuaco was based in Singapore, where he
worked for an asset management vehicle of the Brunei government, and served in
various capacities in the aviation and aviation finance industry.
Mr. Gotuaco obtained his B.S. Economics in Finance and Marketing, summa cum laude,
from the Wharton School, University of Pennsylvania, in 1986. He obtained his MBA from
Harvard Business School in 1994. Mr. Gotuaco is a U.S. FAA-certified private pilot
(ASEL).
8
6.
MARIA THERESA MARCIAL- JAVIER
43 years old, Filipino, is head of Bank of Philippine Islands’ (BPI) Asset Management and
Trust Group (“AMTG”), a position she assumed in 2009. She is the Trust Officer of BPI,
a member of the Management Committee and Trust Committee of BPI. Ms. Javier
joined BPI in 1995. Ms. Javier is a member of the Board of Senior Advisers of the Fund
Managers Association of the Philippines and the Trust Officers Association of the
Philippines, and has served as President of both associations.
She serves as a Director in the following mutual fund companies: ALFM Peso Bond
Fund, ALFM Dollar Bond Fund, ALFM Euro Bond Fund, ALFM Money Market Fund,
ALFM Growth Fund, and the Philippine Stock Index Fund. She also serves as a member
of the Board of Directors of BPI Investment Management, Inc., McCann World Group
Philippines, Inc., Fintec Holdings, Inc., Cebu Holdings, Inc., Cebu Property Ventures &
Development Corporation, and Roxas Land Corporation.
Ms. Javier obtained a B.S. Economics degree, cum laude, from the University of the
Philippines Los Baños, in 1990, and Masters Degree in Economics, from University of
the Philippines Diliman, in 1994. At Harvard Business School, she completed the CFA
Institute Investment Management Workshop and Advanced Management Program in
2006 and 2010, respectively.
7.
EDGARDO O. MADRILEJO
Senior Vice President
57 years old, Filipino, is Bank of the Philippine Islands’ (BPI) Chief Risk Officer and heads
its Risk Management Office (“RMO”). Mr. Madrilejo reports directly to the bank’s Risk
Management Committee (“RMC”) of the Board of Directors, and to its President & CEO.
The RMO, comprising Credit, Operational and Market Risk departments, supports the
RMC in nurturing an appropriate risk culture for BPI. He is also a member of the
Management Committee of BPI.
Mr. Madrilejo began his banking career with BPI’s Corporate Planning unit in 1982. In
1986, he established BPI Agribank, now BPI Direct, with the International Finance
Corporation (“IFC”) as equity investor, and served as its Treasurer. He was appointed
Business Center Head for Western Visayas and then moved on to head BPI’s training
division. Following this, Mr. Madrilejo joined the bank’s Global Banking Group, where he
obtained local currency fixed income, market risk and asset-liability management
experience. In 1998, Mr. Madrilejo started the bank’s data mining project. In 2005,
based in London, he successfully established BPI Europe, obtaining permission from the
U.K. Financial Services Authority (“FSA”) to establish a wholly owned subsidiary, serving
as its Managing Director until 2013.
Mr. Madrilejo obtained his A.B. Honors degree in Economics at De La Salle University, in
1973, and his M.Sc. in Economics from the College of Arts and Sciences of the University
of Pennsylvania, in 1980, where he also worked as a University Research Fellow,
between 1978 and 1980.
8.
MARIA CORAZON S. REMO
Senior Vice- President
55 years old, Filipino, is head of Bank of Philippine Islands’ (BPI) Centralized Operations
Group (“COG”), which is responsible for supporting the Bank’s branch and ATM network,
as well as servicing the Bank’s retail and corporate loan portfolio, payments infrastructure
and global markets operations. She is also a member of the Management Committee of
BPI.
9
Ms. Remo started her banking career in Citytrust Banking Corporation in 1978, where she
held various positions in corporate, then retail lending. She joined BPI in 1996, moved to
operations in 1999 and has served in her current capacity since February 2011.
Ms. Remo is a member of the Board of the Philippine Clearing House Corporation and an
active member of the Bankers Association of the Philippines’ (BAP) Operations
Committee. She is currently Chairman of BPI Operations Management Corporation,
Ayala Life-FGU Condominium Corporation Makati, Ayala Life-FGU Condominium
Corporation Alabang, BPI Paseo de Roxas Condominium Corporation and Greentop
Condominium Corporation. She is also President and Director of CityTrust Realty
Corporation and member of the Boards of Directors of BPI Computer Systems
Corporation and FGU Insurance Corporation.
Ms. Remo obtained her B.S. Business Economics degree from the University of the
Philippines (UP), magna cum laude, in 1978 attended Masters in Business Administration
from Ateneo de Manila, 1986-1988. She completed the Advanced Management Program
at Harvard Business School in 2011. She is presently a Director of the UP School of
Economics Alumni Association.
10
ANNEX “A-1”
MANAGEMENT REPORT
Description of business
BPI is the third largest commercial bank in the country in terms of total assets but has the largest
market capitalization among listed banks. It has a significant market share in deposits, lending,
and asset management and trust business. It is recognized as one of the top commercial banks
in overseas Filipino (OF) remittances and enjoys a significant presence in the finance and
operating lease business, government securities dealership, securities distribution and foreign
exchange business. BPI is a market leader in electronic banking, where it has been a first mover
and innovator in the use of automated teller machines (ATMs), cash deposit machines (CDMs),
point-of-sale debit systems, kiosk banking, phone banking, internet banking and mobile banking.
Principal Subsidiaries. The bank’s principal subsidiaries are:
(1)
BPI Family Savings Bank, Inc. (BFSB) serves as BPI’s primary vehicle for retail deposits,
housing loans and auto finance. It has been in the business since 1985.
(2)
BPI Capital Corporation is an investment house focused on corporate finance and the
securities distribution business. It began operations as an investment house in December
1994. It merged with FEB Investments Inc. on December 27, 2002. It wholly owns BPI
Securities Corporation, a stock brokerage company.
(3)
BPI Leasing Corporation is a non-bank financial institution (NBFI) registered with SEC to
generally carry on the business of a financing company under the Financing Company
Act. It was originally established as Makati Leasing and Finance Corporation in 1970. It
merged with FEB Leasing & Finance Corporation on February 20, 2001. It wholly owns
BPI Rental Corporation which offers operating leases.
(4)
BPI Direct Savings Bank is a savings bank that provides internet and mobile banking
services to its customers. It started operating as such on February 17, 2000 upon
approval by the Bangko Sentral ng Pilipinas.
(5)
BPI International Finance Limited, Hong Kong is a deposit taking company in Hong Kong.
It was originally established in August 1974.
(6)
BPI Express Remittance Corp. (U.S.A) is a remittance center for overseas Filipino and
was incorporated on September 24, 1990.
(7)
Bank of the Philippine Islands (Europe) Plc was granted a UK banking license by the
Financial Services Authority (FSA) on April 26, 2007. It was officially opened to the public
on October 1, 2007. In July 2008, BPI Europe was permitted by the FSA to carry out
cross-border services in other EEA Member States.
(8)
Ayala Plans, Inc. is a 98% owned pre-need insurance company acquired through the
merger with Ayala Insurance Holdings Corp (AIHC) in April 2000.
(9)
BPI/MS Insurance Corporation is a non-life insurance company formed through the
merger of FGU Insurance Corporation and FEB Mitsui Marine Insurance Company on
January 7, 2002. FGU and FEB Mitsui were acquired by the Bank through its merger with
AIHC and FEBTC in April 2000.
11
Legal Proceedings
The Bank does not have any material pending legal proceedings to which the registrant or any of
its subsidiaries or affiliates is a party or of which any of their property is the subject.
Market Information
The common shares of BPI have been listed on the Philippine Stock Exchange (PSE) since 1966.
The table below shows the high and low prices of BPI shares transacted at the PSE for each
quarter within the last three (3) fiscal years.
High
Low
Year Ended December 31, 2011
1st Quarter...............
2nd Quarter..............
3rd Quarter...............
4th Quarter...............
P 59.50
60.65
61.00
58.50
51.40
53.95
51.00
52.30
1st Quarter...............
2nd Quarter..............
3rd Quarter...............
4th Quarter...............
P 75.50
76.15
79.80
96.60
55.55
65.20
71.71
77.60
1st Quarter...............
2nd Quarter..............
3rd Quarter...............
4th Quarter...............
P 114.00
109.00
101.00
105.00
95.00
85.10
89.00
82.50
The high and low prices of BPI at the Philippine Stock Exchange on February 25, 2014 were
P91.60 and P91.00, respectively, with a closing price of P91.00.
Dividends
Cash dividends declared and paid during the years ending December 31, 2011, 2012 & 2013 are
as follows:
BPI
Amount Declared
Amount Paid
Year Ending December 31, 2011
6,401 Million
8,180 Million
6,401 Million
3,201 Million
11,380 Million
3,201 Million
The difference between the amount declared and paid per year is due to the time lag in obtaining
BSP approval to pay out the dividends.
There are no known restrictions or impediments to the company’s ability to pay dividends on
common equity, whether current or future.
There were no unregistered securities sold during the year.
Management Discussion and Analysis of Financial Condition and Results of Operations
(Last Three Years: 2011, 2012 and 2013)
The highlights of the balance sheet and income statement of BPI for each year and the
compounded growth rate over the three year period (2010 - 2012) are shown below:
12
In Million Pesos
Assets
Deposits
Loans (Net)
Capital
2010
878,755
719,766
378,728
80,851
2011
843,565
681,101
454,499
88,316
2012
985,241
802,274
526,640
98,122
2013
1,195,364
988,586
635,194
105,807
CAGR
10.80%
11.16%
18.81%
9.38%
The compounded annual growth rate (CAGR) of the Bank’s asset levels from 2011 to 2013 was
10.8%, and this growth was driven by the 11.2% increase in deposits. Loans increased at a faster
rate over the same period by 18.8%. Capital increased by 9.4% due to profits generated annually,
net of cash dividends paid.
Assets and Capital for the years 2011 and 2012 were restated following the adoption of PAS 19.
Details can be found under Note 33 of the Audited Financial Statement.
2011
Total Resources ended at P843.6 billion, P35.2 billion or 4.0% lower than last year’s level of
P878.8 billion. The Bank focused on the safety of its assets and the maintenance of yields at the
expense of assets growth. Total Deposits contracted by P38.7 billion or 5.4% due to the P95.1
billion or 26.9% drop in Time deposits net of P45.7 billion and P10.7 billion increase in Savings
and Demand Deposits, respectively. Demand and savings deposits grew by 8.9% and 18.6%,
respectively following the Bank’s thrust to grow low cost deposits to fund its loans growth. Bills
Payable likewise contracted P5.7 billion or 23.0% due to settlement of borrowings under the BSP
rediscounting facility. Accrued Taxes, Interest and Other Expenses also went down by P1.1
billion on lower accruals of interests on time deposits due to lower volume and interest rate and
lower year-end accruals of operating expenses. Derivative Financial Liability likewise
contracted by P516 million or 9.7% due to lower mark-to-market valuation of foreign exchange
swaps and reduced non-deliverable forward position. Due to Bangko Sentral ng Pilipinas
(BSP) and Other Banks also declined by P283 million or 14.1% mainly on lower deposits
maintained by foreign banks. On the other hand, Deferred Credits and Other Liabilities grew
by P3.0 billion basically on account of the recognition of the P3.2 billion dividend payable net of
the decline in the Bill Purchased - Contra account level. Liabilities Attributable to Insurance
Operations grew by P724 million or 7.9% on increased claims due to typhoon-related losses,
reinsurance liabilities and reserves corresponding to new policies issued at BPI/MS.
Capital Funds this year amounted to P86.9 billion, P7.3 billion or 9.2% higher than last year’s
P79.6 billion. Surplus was up by P6.4 billion or 18.1% from this year’s profits net of cash
dividends paid. Accumulated other comprehensive income (loss) also went up by P838
million or 83.5% on account of the favorable mark-to-market valuation of the bank’s available-forsale securities as well as the insurance companies’ investment securities. These increases were,
however, partly tempered by the increase in actuarial losses on defined benefit plan. Reserves
was also up by P94 million or 6.9% due to additional reserves set up for the trust business this
year, a requirement whenever the Bank declares dividend. Non-controlling interest increased
by P134 million or 10.7%, representing the interest of the other shareholders of BPI Globe BanKO
(BanKO) and of Mitsui Sumitomo in BPI/MS.
On the asset side, Loans and Advances, net were ahead of last year by P75.8 billion or 20.0%
on higher corporate and retail loan portfolio. Cash and Other Cash Items increased by P4.2
billion or 23.4% on higher level of cash requirement at year end. Other resources was also
ahead of last year by P3.8 billion or 45.3% due to the unamortized purchase price of ING
investment management business, increase in miscellaneous assets and business related
account receivable. Due from Other Banks grew by P2.7 billion or 42.0% due to higher working
balances maintained with correspondent banks. Bank Premises, Furniture, Fixtures and
Equipment, net also increased by P716 million or 6.2% with the upgrade of the Bank’s
mainframes, purchase of new computers and the higher equipments for lease. Investments in
Subsidiaries and Associates, net likewise went up by P561 million or 22.4% on account of the
Bank’s share in the net income and market valuation of investment securities of BPI-Philam.
Trading Securities also went up by P826 million or 7.2% due to the purchase of long term
government securities.
13
On the other hand, Due from BSP went down by P44.7 billion or 34.8% on lower term
placements with the BSP. Available for Sale Securities, net decreased by P38.4 billion or
34.2% due to sale of peso and foreign currency securities. Interbank Loans Receivable and
Securities Purchased under Agreements to Resell dropped by P31.6 billion or 47.2% as
interbank placements were shifted in favor of higher yielding loans. Held-to-Maturity Securities,
net also declined by P5.7 billion or 6.0% on maturities. Assets Held for Sale, net likewise
decreased by P2.6 billion or 22.3% following the continuous disposal of the bank’s foreclosed
properties. Deferred Income Tax Assets, net also went down by P349 million or 6.2% due to
the utilization of the minimum corporate income tax (MCIT). Derivative Financial Assets also
dropped by P670 million or 11.1% on lower mark-to-market valuation of foreign currency swaps
and structures.
2012
Total Resources stood at P985.2 billion, P141.7 billion or 16.8% higher than last year’s P843.6
billion. Total Deposits grew by P121.2 billion or 17.8% due to the increases in Time, Savings
and Demand deposits by P52.9 billion or 20.5%, P50.5 billion or 17.3%, and P17.8 billion or
13.6%, respectively. Bills Payable likewise increased by P7.1 billion or 37.3% due to additional
funding requirements. Manager’s Checks and Demand Draft Outstanding grew by P1.7 billion
or 40.3% due to the higher balance of non-negotiated manager’s checks issued. Derivative
Financial Liabilities was likewise up by P1.0 billion or 21.0% due to higher mark-to-market
valuation of interest rate and cross currency swaps payable. Liabilities Attributable to
Insurance Operations went up by P857 million or 8.6% due to the increase in reserves of
BPI/MS and Ayala Plans. Accrued Taxes, Interest and Other Expenses went up by P794
million or 19.7% due to higher accrual of year end expenses, and interests on time deposits and
interest rates swaps relative to increased volume. Due to BSP and Other Banks also increased
by P318 million or 18.5% mainly on higher tax collections for the Bureau of Internal Revenue and
higher deposit balances maintained by foreign banks.
Capital Funds amounted to P96.7 billion, P9.8 billion or 11.2% higher than last year’s P86.9
billion. Surplus was up by P8.0 billion or 19.2% from this year’s profits net of cash dividends paid.
Accumulated other comprehensive income (loss), also went up by P1.6 billion or 957.6% on
account of the higher market valuation of the bank’s available-for-sale securities as well as lower
actuarial losses on defined benefit plan. Reserves also went up by P141 million or 9.6% due to
additional reserves set up for the trust business this year.
On the asset side, Loans and Advances, net were up from last year by P72.1 billion or 15.9% on
higher corporate and retail loan portfolio. Due from BSP also went up by P35.3 billion or 42.2%
on account of reserves relative to the higher deposit volume. Available for Sale Securities, net
increased by P32.3 billion or 43.6% due to higher inventory of local and foreign currency
denominated bonds. Trading Securities likewise improved by P9.8 billion or 80.0% due to the
purchase of government bonds. Interbank Loans Receivable and Securities Purchased
under Agreements to Resell was higher by P3.7 million or 10.4% due to increase of placements
with the BSP. Other resources were also ahead of last year by P2.8 billion or 23.0% due higher
accounts receivable and miscellaneous assets. Assets Attributable to Insurance Operations
also rose by P1.2 billion or 9.9% on higher investments by the Bank’s insurance subsidiaries.
Investments in Subsidiaries and Associates, net also went up by P612 million or 19.9% on
account of the increase in the Bank’s share in the net income as well as the market valuation of
investment securities of BPI-Philam. Derivative Financial Assets also went up by P531 million
or 9.8% on higher mark-to-market valuation of interest rate swaps receivable and foreign currency
swaps.
On the other hand, Held-to-Maturity Securities, net dropped by P13.5 billion or 15.0% on
maturities. Assets Held for Sale, net likewise declined by P2.3 billion or 24.7% following the
continuous disposal of the Bank’s foreclosed properties. Due from Other Banks went down by
P1.7 billion or 18.4% on lower working balances with local and correspondent banks.
14
2013
Total Resources stood at P1,195.4 billion, P210.1 billion, or 21.3% higher than last year’s
P985.2 billion. Total Deposits increased P186.3 billion, or 23.2% to P988.6 billion due to
increases in Savings and Demand deposits by P163.6 billion, or 47.8%, and P30.6 billion, or
20.5%, respectively. Derivative Financial Liabilities likewise increased P10.5 billion, or 180.8%
due to higher negative fair value through profit and loss on non deliverable swaps. Deferred
Credits and Other Liabilities increased P6.9 billion, or 28.5% due to higher dividends payable
and miscellaneous liabilities. Liabilities Attributable to Insurance Operations increased P2.3
billion, or 21.0% on account of BPI MS’ higher claims due to the recent typhoons and earthquake.
Manager’s Checks and Demand Draft Outstanding increased P1.4 billion, or 24.0% due to
higher non-negotiated manager’s checks issued. Unsecured Subordinated Debt, however,
declined P5.0 billion, or 100.0%, as BPI exercised its exclusive option to redeem the Notes last
December 13, 2013.
Capital Funds amounted to P104.5 billion, P7.8 billion, or 8.1% higher than last year’s P96.7
billion. Surplus increased P12.3 billion, or 24.8% from this year’s profits net of cash dividends
paid. Reserves also increased P77 million, or 4.8% due to additional reserves set up for the trust
business this year a requirement whenever the Bank declares dividend. Accumulated other
comprehensive income (loss), however, decreased P4.6 billion, or 322.6% on account of the
lower market valuation of the Bank’s available-for-sale securities and the higher actuarial losses
on the Bank’s defined benefit plan.
On the asset side, Due from Bangko Sentral ng Pilipinas increased P125.4 billion, or 105.3%
on higher special deposit account with BSP. Loans and Advances, net increased P108.6 billion,
or 20.6% due to higher loan demand from multinationals and conglomerates. Held-to-Maturity
Securities, net increased P19.9 billion or 26.1% due to additional investments. Derivative
Financial Assets increased P10.6 billion, or 179.6% due to higher positive fair value through
profit and loss on non deliverable swaps.
Higher working balances maintained with
correspondent banks and placements resulted in a P9.5 billion, or 125.1% increase in Due from
Other Banks. Cash and Other Cash Items increased P2.4 billion, or 10.3% on higher level of
cash requirement. Assets Attributable to Insurance Operations increased P1.1 billion, or 8.4%
on BPI MS’ higher premiums written. Deferred Income Tax Assets, net likewise increased P1.1
billion, or 21.4% largely due to the DIT on the Bank’s unrealized marked to market AFS losses on
available for sale securities this year as against DIT on gains last year. Investments in
Subsidiaries and Associates, net likewise increased P496 million, or 13.5% on account of the
increase in the Bank’s share in the net income from BPI-Philam and City Trust Realty.
On the other hand, Interbank Loans Receivable and Securities Purchased under
Agreements to Resell declined P26.5 billion, or 68.1% due to limited volume of Reverse
Repurchase Agreements (RRP) accepted by the BSP. Available for Sale Securities, net and
Trading Securities declined P18.8 billion, or 17.7% and P17.5 billion or 79.2%, respectively, due
to reduction in position for local and foreign securities. Other resources, net decreased P3.9
billion, or 26.1% due lower accounts receivable and miscellaneous assets. Assets Held for
Sale, net likewise declined P1.0 billion, or 15.0% following the continuous disposal of the Bank’s
foreclosed properties. Investment properties, net declined P985 million, or 38.2% on sale of a
bank property.
Non-Controlling interest declined P155 million, or 10.8%, due to higher net losses incurred by
BanKO and the lower market valuation of BPI MS’ securities.
Asset Quality. The bank maintained its broad mix of loan portfolio broken down into top
corporations at 40%, middle market commercial at 25%, SMEs at 13%, and consumer at 22%.
Allowance for Impairment of P12.7B was up by P1.6 billion from last year’s P11.1 billion and also
higher than 2011’s P10.7 billion.
Gross 90 days non-performing loans (NPL) ratio as of December 2013 improved to 1.8%, from
last year’s 2.1%, and 2011’s 2.5%. December 2013’s 30 day net NPL ratio (net of fully reserved
15
accounts) per BSP definition ended at 0.5%, an improvement from December 2012’s 1.5% and
2011’s 1.9%. The bank’s NPL ratio was better than industry’s average of 2.4% as of November
2013.
BPI shall prudently manage its lending activity and always be mindful of the credit risks, potential
or otherwise, that may be posed by the shifting environment. It will regularly assess its portfolio
quality and ensure adequate collateral and reserve coverage. It will continue to resolve
outstanding delinquent loans through collection or restructuring, where appropriate.
Liquidity. BPI is one of the industry’s most liquid banks as it derives 97% of its funding from
deposits. Its loan to deposit ratio was 65% in 2013, a little lower than 2012’s 67% and 2011’s
68%, but still with adequate room to actively finance any surge in loan demand. Currently, excess
funds are invested in cash and highly liquid assets as well as in non-risk government securities.
Results of Operations
In Million Pesos
Net Interest Income
Non-Interest Income
Impairment Losses
Operating Expenses
Net Income
2010
23,628
15,369
3,454
20,852
11,383
2011
25,867
15,891
2,150
23,356
12,899
2012
27,454
19,930
2,923
24,802
16,351
2013
30,324
22,174
2,648
26,703
18,811
CAGR
8.67%
13.00%
-8.48%
8.59%
18.23%
The Bank’s net income from 2011 to 2013 increased by a CAGR of 18.2% as net interest income
and non-interest income increased by 8.7% and 13.0%, respectively and impairment losses
declined by 8.5%. However, the bottom line impact of above mentioned improvements was partly
reduced by the 8.6% CAGR increase in operating expenses.
Operating Expenses and Net Income for the years 2011 and 2012 were restated following the
adoption of PAS 19. Details can be found under Note 33 of the Audited Financial Statement.
2011 vs. 2010. Net Income for 2011 amounted to P12.9 billion, P1.5 billion, or 13.3% higher
than last year’s P11.4 billion. This increase was driven by the P2.8 billion growth in revenues and
the P1.3 billion drop in impairment losses but partly tempered by the P2.5 billion rise in operating
expenses.
Revenue increase came from the improvements in both net interest income (up by P2.2 billion)
and non-interest income (up by P522 million).
Net Interest Income at P25.9 billion was up by 9.5% from last year’s P23.6 billion. This growth
was fuelled by the P48.7 billion average asset base expansion and the 12 basis points increase in
net interest margin.
•
Interest Income increased by P1.7 billion, or 4.6%, to P38.7 billion from previous year’s
P37.0 billion as the interest income of almost all interest bearing assets grew. The bulk of
the increase came from interest income on loans and advances which grew by P1.9
billion despite the 65 basis points drop in loan yield as the loan average volume rose by
P57.2 billion. Interest on available-for-sale securities and trading securities went up
by P259 and P230 million, respectively, on higher yields. Interest income on held-tomaturity securities also went up by P236 million due to the growth of P6 billion in
average volume partly tempered by a 18 basis points drop in yield.
Above increases
were partly toned down by lower interest income on deposits with BSP and other
banks which went down by P922 million, or 27.0%, on lower yield on deposits with BSP.
•
Interest Expense was lower by P535 million to P12.8 billion from last year’s P13.4 billion
as interest expense in both deposits and bills payable and other borrowings fell by
P348 million and P187 million, respectively, due to lower interest cost.
16
Other Income increased by P522 million, or 3.4%, to P15.9 billion. Other operating income
improved by P863 million or 14.8% mainly due to higher trust fees, credit card income and bank
premises and equipment rental. Fees and commissions rose by P447 million, or 10.8%, on
increased service charges due to higher ATM and remittance fees. Income attributable to
insurance operations was also higher by P147 million, or 18.3%, on higher premiums earned by
BPI/MS and BPI Philam. These increases were partly reduced by the decline in Trading gain on
securities by P588 million, or 16.6%, mainly on account of the change in the accounting
treatment of trading gain from gross to net of tax. Income from foreign exchange trading
likewise declined by P433 million, or 19.7%, on lower trading gain from forwards and swaps.
GRT was down by P87 million, or 7.5%, on lower realized foreign exchange income.
Other Expenses at P23.4 billion was up by P2.5 billion or 12.0% against last year’s P20.9 billion.
Compensation and fringe benefits increased by P1.2 billion or 13.7% due to salary adjustments
and CBA related expenses. Other operating expenses was P819 million or 14.3% up on exING investment management business acquisition related expenses and higher advertising,
regulatory and miscellaneous expenses. Occupancy and equipment-related expenses likewise
grew by P451 million or 7.4% on increased equipment depreciation, software costs, rent and
contractual costs.
This year’s impairment losses of P2.2 billion was P1.3 billion or 37.7% less than the previous
year in view of the Bank’s relatively stable asset quality and the sufficient reserve cover on nonperforming loans (NPLs).
Provision for Income Tax was up by P22 million or 0.7% to P3.2 billion. Current taxes
increased by P115 million or 3.3% on higher taxable income but was partly offset by the P93
million or 29.5% decline in deferred taxes as last year included the corresponding tax relative to
the utilized remaining NOLCO.
Income attributable to Non-Controlling Interest was higher by P23 million or 13.9% on
BPI/MS’ improved operating performance tempered by BanKO’s lower income this year
compared to last year.
Comprehensive Income
Total Comprehensive Income for 2011 stood at P13.7 billion, P286 million or 2.0% higher than
last year’s P14.0 billion. The P1.5 billion or 13.3% increase in net income before minority
interest was negated by the P1.8 billion decline in other comprehensive income, from P2.7
billion last year to this year’s P840 million.
Contributing to the decline in other comprehensive income was the P479 million or 57.7% drop
in share in other comprehensive income of associates on lower incremental investment
valuation at BPI Philam relative to last year. Fair value reserve on investments of insurance
subsidiaries also went down by P385 million or 1.2x following the downward valuation of their
investments. As part of the Comprehensive income restatement following the adoption of PAS 19
in January 2013, Actuarial losses on defined benefit plan of P864 million was recorded in
2011. However, 2010 reflected an actuarial gain of P538 million, hence the downward impact of
P1.4 billion to other comprehensive income. On the other hand, net change in fair value reserve
on available-for-sale securities went up by P214 million or 17.7% on upward market valuation
of the bank’s securities. Currency translation differences also went up by P211 million due to
the strengthening of the British pounds and the Hong Kong dollar against the US dollar.
Comprehensive Income of Non-Controlling Interest went down by P17 million or 8.1%
corresponding to the drop in the fair value reserve of insurance subsidiaries.
2012 vs. 2011. This year’s net income reached P16.4 billion, P3.5 billion or 26.8% higher than
last year’s P12.9 billion on the back of the P5.6 billion or 13.5% growth in revenues. This strong
performance was, however, partly reduced by the rise in operating expenses and impairment
losses by P1.4 billion or 6.2% and P773 million or 36.0%, respectively.
17
Revenue growth came from increases in both net interest income (up by P1.6 billion) and noninterest income (up by P4.0 billion).
Net Interest Income at P27.5 billion was up by 6.1% from last year’s P25.9 billion as the average
asset base expanded by P64.2 billion.
•
Interest Income increased by P1.4 billion or 3.7% to P40.1 billion from previous year’s
P38.7 billion. The increase came from interest income on loans and advances which
grew by P3.6 billion or 13.4% as the loan average volume rose by P68.8 billion, partly
tempered by the 27 basis points drop in loan yield. On the other hand, interest income on
deposits with BSP and other banks went down by P1.3 billion or 50.6% due to nonremuneration of reserves on deposits effective 6 April 2012. Interest income on held-tomaturity securities also went down by P832 million or 13.8% due to the P12.5 billion
drop in average volume.
•
Interest Expense at P12.7 billion was lower by P168 million from last year’s P12.8 billion
as interest expense on bills payable and other borrowings dropped by P95 million due
to lower volume. Despite the P57.6 billion increase in average volume, interest expense
on deposits also fell by P73 million due to the 18 bps drop in cost.
Other Income increased by P4.0 billion or 25.4% to P19.9 billion. The bulk of the increase came
from the surge in trading gain on securities, which doubled from last year to P5.9 billion as the
bank sold down its inventory to take advantage of the favorable market condition. Other
operating income also rose by P1.2 billion or 17.8% mainly due to higher profit from assets sold,
trust fees, and miscellaneous income. Fees and commissions improved by P504 million or
10.9% on increased bank commissions, service charges, and underwriting fees. These increases
were partly tempered by the decline in income attributable to insurance operations which went
down by P256 million or 27.0% on higher actuarial reserves of Ayala Plans. The overall increase
in other income resulted in a higher GRT of P272 million or 25.4%.
Other Expenses at P24.8 billion was up by P1.4 billion or 6.2% against last year’s P23.4 billion.
Occupancy and equipment-related expenses increased by P660 million or 10.1% on increased
computer equipment and software costs, contractual, and utilities cost. Other operating
expenses was also up by P586 million or 9.0% on higher regulatory cost, management and other
professional fees, insurance others, a quarter worth more in amortization of the acquisition cost of
the ex-ING investment management business, and other miscellaneous transaction related
expenses.
Impairment losses stood at P2.9 billion, P773 million or 36.0% more than the previous year due
to additional provisions set up for non credit related items and foreclosed assets.
Income attributable to Non-Controlling Interest was lower by P41 million or 21.3% on BanKO’s
lower income this year compared to last year, brought about by higher operating costs.
Total Comprehensive Income was at P17.9 billion, P4.2 billion or 30.6% higher than last year’s
P13.7 billion. Net income before minority interest was up by P3.4 billion or 26.1% and other
comprehensive income increased by P754 million.
Actuarial gains(losses) on defined benefit plan, net of tax effect increased by P2.6 billion as
impacted by the change in financial assumption. Fair value reserve on investments of
insurance subsidiaries, went up by P224 million largely due to the upward valuation of Ayala
Plan’s investments. Share in other comprehensive income of associates was also up by
P152 million or 43.2% on higher valuation of BPI Philam’s investments relative to last year. These
increases were partly reduced by the P2.1 billion or 150.6% drop in net change in fair value
reserve on available-for-sale securities on lower market valuation of the bank’s securities
inventory. Currency translation differences were also down by P99 million due to the general
strengthening of the Philippine Peso.
18
Comprehensive Income of Non-Controlling Interest went down by P33 million or 17.2%
corresponding to the drop in income of BanKO.
2013 vs. 2012. For the year 2013, the Bank earned a net income of P18.8 billion, representing a
P2.5 billion, or 15.0%, increase relative to P16.4 billion earned in 2012. Growth in net income was
sustained by increases in revenues (up P5.1 billion or 10.8%) and lower provisions (down P275
million or 9.4%). This strong performance was partly reduced by the increase in operating
expenses and income tax by P1.9 billion, or 7.7%, and P995 million, or 31.5%, respectively,
Revenue growth came from increases in both net interest income (up by P2.9 billion) and noninterest income (up by P2.2 billion).
Net Interest Income of P30.3 billion increased 10.4% from last year’s P27.5 billion. This increase
occurred as the average asset base expanded by P151.4 billion but effect was somewhat offset
as net interest margin declined by 26 basis points.
•
Interest Income increased P693 million, or 1.7%, to P40.8 billion from previous
year’s P40.1 billion. Interest income on loans and advances increased by P1.6 billion, or
5.1%, largely due to the P78.5 billion increase in average loan volume but was partly
tempered by the 70 basis points drop in loan yield. Interest income on deposits with
BSP and other banks also increased by P411 million, or 33.5%, due to higher volume.
On the other hand, interest income on available-for-sale securities and on held-tomaturity securities declined by P808 million, or 23.6%, and P261 million, or 5.0%,
respectively, due to lower yields. Interest income on trading securities decreased P157
million, or 18.5%, due to decline in both volume and yield. Gross receipts tax increased
P70 million, or 5.1%, as a result of the overall increase in interest income.
•
Interest Expense of P10.5 billion declined P2.2 billion, or 17.2%, from last year’s P12.7
billion. In spite of the P125.2 billion increase in average volume, interest expense on
deposits declined P2.1 billion due to a 52 basis points drop in cost. Interest expense on
bills payable and other borrowings also decreased P59 million, or 5.8%, due to lower
interest rate.
Other Income increased P2.2 billion, or 11.3%, to P22.2 billion from prior year’s P19.9 billion.
Other operating income increased P1.6 billion, or 20.8%, owing largely to increases in trust
fees, bank premises rental, profit from assets sold and miscellaneous income. Fees and
commissions increased P774 million, or 15.1%, on higher service charges, bank commissions,
and underwriting fees. Income attributable to insurance operations increased P755 million or
108.8% on higher premiums and investment income of the Bank’s insurance subsidiaries and the
lower actuarial reserves of the Bank’s pre-need insurance company after its reserves
strengthening in 2012. Income from foreign exchange trading increased by P360 million, or
21.4%, due to better foreign exchange position management. Trading gain on securities ended
P1.1 billion, or 18.1%, lower than last year due to lower securities inventory level as tempered by
market corrections. The overall increase in other income resulted in a higher GRT of P213 million,
or 15.8%.
Other Expenses at P26.7 billion increased P1.9 billion, or 7.7% from last year’s P24.8 billion.
Other operating expenses increased P883 million, or 12.4%, on higher regulatory cost, fines
and penalties, litigation expenses, management and other professional fees, and other
miscellaneous transaction related expenses. Occupancy and equipment-related expenses
increased P847 million, or 11.8% on account of higher computer equipment and software costs,
contractual, rental, and depreciation costs.
Impairment losses stood at P2.6 billion, P275 million, or 9.4% lower than the previous year due
to last year’s provisions for non credit related items and foreclosed assets.
Provision for Income Tax increased P995 million, or 31.5% to P4.2 billion. Current taxes
increased P572 million, or 16.0%, on higher income subject to ordinary corporate income tax.
Deferred taxes increased P424 million, or 101.3% on lower provisioning and on accounts with
timing difference.
19
Income attributable to Non-Controlling Interest increased P33 million, or 21.7%, on higher
income of the non-life insurance subsidiary and on BanKO’s lower loss this year compared to last
year.
Total Comprehensive Income was at P14.2 billion, P3.7 billion, or 20.7%, lower than last year’s
P17.9 billion. Net income before minority interest increased P2.5 billion, or 15.1%, but this
increase was negated by the P6.2 billion decline in Other comprehensive income.
The decline in Other comprehensive income was largely due to the P3.3 billion, or 454.4%
decrease in Net change in fair value reserve on available-for-sale securities on lower market
valuation of the Bank’s securities inventory. Share in other comprehensive income of
associates decreased P590 million, or 117.4% on lower valuation of BPI Philam’s investments
relative to last year. Fair value reserve on investments of insurance subsidiaries, also
declined P470 million, or 292.2%, largely due to lower valuation of Ayala Plan’s investments.
Restated Actuarial gains(losses) on defined benefit plan, net of tax effect decreased P2.2
billion, or 128.0% due to change in financial assumption. Currency translation differences,
however, was up by P336 million, or 324.5% due to the general strengthening of the US Dollar.
Comprehensive Income attributable to Non-Controlling Interest declined P34 million, or
21.6% due to lower market valuation of the insurance’s subsidiaries’ investments.
Key Performance Indicators
2011
15.3
1.6
3.7
55.9
14.9
Return on Equity (%)
Return on Assets (%)
Net Interest Margin (%)
Operating Efficiency Ratio (%)
Capital Adequacy Ratio (%)
2012
17.9
1.9
3.6
52.3
14.2
2013
18.1
1.9
3.3
50.9
13.7
The Bank’s key financial performance ratios for the last three years showed consistent profitability
and adequate capitalization. The same ratios are also used to evaluate the performance of the
bank’s subsidiaries.
Return on equity (ROE), the ratio of net income to average equity, from 2011 to 2013, showed
the Bank’s efficient utilization of capital. ROE for 2013 at 18.1% was higher than last year’s 17.9%
and 2011’s 15.3%. Return on assets (ROA), the ratio of net income to average assets, at 1.9%,
is the same as last year and up from 2010’s 1.6%. This was indicative of the Bank’s effective use
of its resources. The Bank’s ROE and ROA both showed increasing trends primarily due to the
continuing improvement in net income.
Net interest margin (NIM), the ratio of net interest income to interest bearing assets, at 3.3%,
was lower than last year’s and 2011’s 3.6% and 3.7%, respectively. The average interest bearing
assets increased 18.9%, however, its impact was partly offset by the higher decline in asset yield
than the cost of funds.
The operating efficiency (cost to income) ratio, the ratio of operating expenses to income,
decreased from last year’s 52.3% to this year’s 50.9% as revenues grew at a faster pace than
operating expenses. Operating efficiency ratio in 2011 was at 55.9%.
Capital adequacy ratio (CAR), computed using the standard risk weights assigned to the Bank’s
assets compared with its qualifying capital, measures the capability of Bank’s capital funds to
cover its various business risks. The Bank’s CAR under the Basel II framework was recorded at
13.7%. Last year’s CAR was at 14.2% and 2011’s was at 14.9%. This year’s CAR was lower
than last year as the risk weighted assets increased at a faster rate than the qualifying capital.
Credit risk weighted assets substantially increased largely due to the loan portfolio upsurge while
20
growth in qualifying capital was tempered by the redemption of the P5.0 billion unsecured
subordinated debt which was classified as a Tier 2 capital. This year’s CAR remained
substantially higher than the BSP requirement of 10%. The Bank’s capital is composed largely of
Tier 1 capital.
Material Event/s and Uncertainties:
Other than the disclosure enumerated above, the bank has nothing to report on the following:
a)
Any known trends, demands, commitments, events or uncertainties that will have a
material impact on its liquidity.
b)
Events that will trigger direct or contingent financial obligation that is material to the
company, including any default or acceleration of an obligation.
c)
Material off-balance sheet transactions, arrangements, obligations (including contingent
obligations), and other relationships of the bank with unconsolidated entities or other
persons created during the reporting period.
d)
Any material commitments for capital expenditures.
e)
Any known trends, events or uncertainties that have had or that are reasonably expected
to have a material favorable or unfavorable impact on net sales/revenues/income from
continuing operations.
f)
Any significant elements of income or loss that did not arise from the Bank’s continuing
operations.
g)
Any seasonal aspects that had a material effect on the financial condition or results of
operations.
Future Prospects
Near Term Prospects
The Philippine economy has experienced strong growth recently and is expected to maintain its
momentum over the near term, with GDP growth in 2014 forecasted by the Philippine government
to average between 6.5 – 7.5%. Consumer spending, which is supported by the steady stream of
remittances from Overseas Filipinos, will continue to be a reliable source of expansion in the
coming year, as will be the country’s service sector.
The recent tragedy caused by super typhoon Yolanda is expected to slow the overall growth of
the economy in the near-term. Although the storm damage impaired 4Q 2013 GDP to some
extent, full year 2013 GDP hit achieved a 7.2% growth rate, higher than 6.8% achieved in 2012.
Reconstruction efforts are expected to be carried out in the coming months, which may be seen to
offset the lost output.
With forecasted inflation still expected to be within BSP’s 2014 inflation target of 3 – 5%,
monetary authorities have ample scope to keep interest rates stable, despite recent spikes in
consumer prices. In contrast with other emerging market central banks, which are under pressure
to hike interest rates in response to the Fed Taper and stem capital outflows, the BSP has the
ability to keep interest rates steady given the Philippines’ current account surplus and strong
currency reserve position.
BPI intends to capitalize on the Philippines’ economic growth by further investing in its already
significant institutional, corporate and retail banking franchises. In 2014, BPI aims to grow loans at
trends higher than achieved in recent years. The Bank believes its growth will be driven by its strong
focus on its corporate customer base, the growing market of middle class Filipinos, heightened
activity of government and private enterprises, as well as more substantial capital flows from offshore
investors and multinational and regional corporations.
21
Medium to Long Term Prospects.
Although the current state of the Philippines’ infrastructure remains weak, creating a drag versus
ASEAN peers, the current administration has set up programs to increase government spending
from 2.5% of GDP (P299.4 billion) in 2013 to 5% of GDP (P834.5 billion) in 2016, as
recommended by the World Bank. These figures, based on the Dept. of Budget Management
(DBM)'s earlier pronouncements, do not yet include PPP projects. Aside from PPP projects, and
the deliberate pace of their rollout, the heightened infrastructure spending will improve the
country’s competitiveness in the global arena, especially in light of the much anticipated ASEAN
Economic Community (AEC) 2015. The AEC is expected to open windows of opportunity for the
financial services industry as well as other Philippine business, in terms of expansion within the
ASEAN region.
The clear government direction to catch up with its ASEAN neighbors in terms of infrastructure,
the growing foreign interest on various business opportunities following the country's investment
grade status, and the current administration's good governance initiatives, will help set the
economy on a higher growth trajectory. Medium term GDP growth rate is forecasted at 7.0 –
8.0% with inflation rate remaining benign at 2.0 – 4.0%.
In the medium term, BPI intends to sustain its strong growth momentum along multiple fronts. The
Bank will continue its accelerated growth across both corporate and consumer loans, thereby
maintaining its healthy mix of loan portfolio across market segments. The Bank will continuously
develop its capabilities in the areas of equity and debt capital markets, project financing, and
financial advisory, and explore more capital markets opportunities. The Bank will continually focus
on maintaining and expanding its market share, and leveraging international branches and
relationships with domestic and foreign financial institutions. BPI will further strengthen its
operational capabilities through continued investment in its IT infrastructure, management
information systems and human resources in order to drive customer responsiveness,
productivity, cost competitiveness, and ultimately profitability.
Approximate Number of Holders as of February 19, 2014.
There were approximately 12,074 common shareholders of BPI as of February 19, 2014.
Equity Ownership of Foreigners on Common Shares as of February 19, 2014.
Nationality
1.
American
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
Brazilian
British
Canadian
Cayman Isl
Chinese
Danish
Dutch
German
Indian
Indonesian
Japanese
Luxembourg
Non-Filipino
Number of
Stockholders
40
1
2
7
1
24
1
1
2
1
3
1
1
1
Number of
Shares
2,295,930
Percent of
Holdings
0.0584 %
40
7,002
50,737
341,845,066
282,186
1,000
216,000
446
10,000
360,607
187
3,369
1,014,890,763
0.0000 %
0.0001 %
0.0012 %
8.6999 %
0.0071 %
0.0000 %
0.0054 %
0.0000 %
0.0002 %
0.0091 %
0.0000 %
0.0000 %
25.8288 %
22
Nationality
15.
16.
17.
Others
Singaporean
Spanish
Total
Number of
Stockholders
3
4
2
Number of
Shares
19,274
2,649
229,870
1,360,215,126
Percent of
Holdings
0.0004 %
0.0000 %
0.0058 %
34.6172%
Top 20 Stockholders as of February 19, 2014
Name of Stockholders
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
11.
12.
13.
14.
15.
16.
17.
18.
19.
20.
Number of
Shares Held
Percent of
Holdings
PCD Nominee Corporation (PCD)
(Non-Filipino)
(Filipino)
Ayala DBS Holdings, Inc.
Ayala Corporation
AC International Finance Limited
Roman Catholic Archbishop of Manila
Michigan Holdings, Inc.
Estate of Vicente M. Warns
BPI Group of Companies Retirement Fund
The First Resources Management &
Securities Corporation
Mercury Group of Companies
Xavier P. Loinaz
Hermann Barreto Warns
Sahara Management & Dev. Corp.
BPI – ESPP 2013
Foresight Realty & Development Corp.
Hyland Realty & Dev't. Corporation
Marian Paris Warns
Southwood Mindanao Corporation
Ma. Immaculada Z. Ortoll
Total
1,014,890,763
436,263,247
837,630,845
776,802,113*
341,845,066
301,063,608*
81,184,755
7,550,868
4,174,243
25.8288%
11.1028%
21.3176%
19.7695%
8.6999%
7.6620%
2.0661%
0.1922%
0.1062%
4,000,000
0.1018%
3,242,767
3,123,465*
3,011,609
2,535,146
2,363,850
1,958,595
1,935,413
1,744,187
1,614,464
1,431,043
1,291,654*
3,829,657,701
0.0825%
0.0795%
0.0766%
0.0645%
0.0602%
0.0498%
0.0493%
0.0444%
0.0411%
0.0364%
0.0329%
97.4648%
*Excluding stock rights lodged under PCD.
Discussion of compliance with leading practices on Corporate Governance
(a)
Assessment by the Board of Directors to measure or determine the level of compliance
/observance not only with its Manual of Corporate Governance but also other external
regulations and rules prescribing good corporate governance practices is regularly done.
Aside from the Corporate Governance Manual, several other manuals have been instituted
by Management to establish bank policies and guide the employees in carrying out their
respective functions and duties, to address business operations and to instill business
ethics, office decorum and employee discipline.
23
(b)
Monthly meetings and active role taken by Risk Management Committee, Audit Committee
in ensuring adequacy of internal control mechanisms, monitoring of events and
development in the global financial markets and establishing appropriate policy
directives. Other duly constituted board committees, like the Corporate Governance
Committee, Personnel and Compensation Committee among others, ensure that the
functions, duties and responsibilities prescribed in their respective charters are observed.
Management continuously conducts periodic assessment of Bank’s performance through
quarterly management reviews. Thus, business performance (actual vis-à-vis targets),
compliance with business hurdle rates and financial parameters/ratios, as well as health,
safety and environmental requirements are evaluated regularly.
(c)
Company’s vision, mission, strategic objectives, key policies and procedures for the
management of the company are clearly established and communicated down the line.
BPI has also adopted a Code of Ethics including policies on Administrative Offenses and
Sanctions, Disciplinary Actions, Handling Conflict of Interest, Whistleblower Policy and
Anti-Sexual Harassment for its officers and employees. These policies serve as guide to
matters involving work performance, dealings with officers and employees, clients and
suppliers, handling of assets, records and information, avoidance of conflict of interest
situations, as well as the reporting and handling of complaints from whistleblowers,
including reports on fraudulent practices.
(d)
Continuously enhancing adherence to the principles of transparency, accountability and
fairness. Consistent timely disclosure of material information not only to the Philippine
Stock Exchange but also to the Securities and Exchange Commission, the Bangko Sentral
ng Pilipinas and other regulatory bodies and in the Company’s own website. Participating
actively and diligently in responding to the scorecard for good governance compliance for
publicly listed companies and banks conducted by different government regulators/ and or
group.
(e)
BPI’s Directors and Senior Officers have recently attended a seminar on Money
Laundering and Terrorist Financing Prevention Program and AML Risk Rating System and
Corporate Governance and Risk Rating Management Summit.
Upon the written request of the stockholders, the Corporation undertakes to furnish
said stockholder with a copy of SEC Form 17-A free of charge. Any written request
for a copy of SEC Form 17-A should be directed to the Office of the Corporate
th
Secretary, Bank of the Philippine Islands, c/o Ms. Milagros B. Alianza 19 Floor BPI
Building, Ayala Avenue corner Paseo de Roxas, Makati City.
24

2013 Definitive Information Statement

Transcription

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