Press Releases


April 2020


APRIL 23, 2020

To our shareholders, business partners, and clients, welcome to our annual gathering.

Perhaps as important as the headline numbers or rating is how we are changing from within.

We are focused on being a more financially inclusive bank.  This is evident in the setting up of our microfinance and SME lending businesses. 

Only three years since its inception, BPI BanKo is now the second largest microfinance bank in the country, with a loan portfolio of Php 4.3 billion, a growth of 100% in 1 year, a market share of 15% among microfinance and rural banks, a network of 300 branches, over 100,000 clients and total loan releases of Php 11 billion.

Asiamoney rated BPI Best Bank for Microfinance because of BanKo’s growth. 

More than the results and the accolades, we are very proud of how BanKo has changed the lives of its clients.

On the SME front, the two-year old Business Bank is attempting to replicate the early success of BanKo.  While the SME loan portfolio grew only 6%, the lower end of the portfolio – that for loans below Php 15 million – showed a 4.3x increase in approved loan applications, reflecting our tailor-fit solutions and dedicated coverage of the segment.

BPI has been rated by Asiamoney as the Best Philippine Bank for CSR because of the work done by BPI Foundation, which has been consistent in its focus on education, entrepreneurship, environment and employee engagement – all critical elements of sustainability.   BPI Foundation’s budget has grown four-fold in the last six years, and beneficiaries have grown in number from 1,700 to over 270,000 over the same period.

BPI makes a meaningful contribution to 14 of 17 of the United Nations’ Sustainable Development Goals. 

We started our green finance journey in 2008 and since then, we have embedded Sustainability in how we conduct our business. 

This is most evident in how we have allocated our loanable funds. Outstanding loans that have an impact on these UN SDGs have increased from Php 147 billion in 2015 to Php 390 billion in 2019, or a CAGR of 28%. The share of these loans to our total portfolio has also increased from 17% to 26% in the last five years.

In 2019, BPI’s commitment was most significant in four (4) SDG’s:  (1) Industry and Infrastructure (40%); (2) Zero Hunger (26%); (3) Affordable and Clean Energy (17%); and (4) Sustainable Cities (9%).  These SDGs account for 92% of BPI’s consolidated SDG-related loan portfolio.  

In the last 7 years, from 2012-2019, BPI’s power generation loan portfolio grew by a CAGR of 37%, with renewables showing the highest CAGR of 44%.

In terms of power generation mix, the Bank’s lending to renewables accounted for 38% of the portfolio, compared to the country’s 21%.

Digitalization is gaining considerable traction, with gains that are tangible and visible.  Online transactions, which in 2019 were up by 50%, account for practically all of the growth in the Bank’s transaction count.  About 40% of the Bank’s customers are now enrolled in one or more of our digital channels, with 25% of all customers regular digital transactors.  Digital service fees now amount to Php 1 billion per annum, with over Php 220 million in API revenues added in 2019 alone. 

The rate at which we are digitalizing will create about 20% additional capacity in our over 850 BPI and BFB branches by the end of 2020.

Data Science is already adding value to our retail businesses.  Coupled with thoughtful changes in polices and processes and more disciplined execution, we are already seeing the value of having recruited and trained 25 data scientists in our various consumer businesses. 

Overall, our SME/consumer loan book grew by 12.5%, outpacing the 7.9% growth of our corporate loan book.  This produced a 76-basis point shift in the year-on-year corporate to SME/consumer loan mix, which contributed to the increase in the bank’s overall net interest margin.

Capital markets has become an important competitive advantage.  BPI’s ability to tap the equity and debt capital markets for its own account is becoming increasingly important as we seek to increase the efficiency of our balance sheet, reduce our funding costs, diversify funding sources and take advantage of lending and investing opportunities.  We followed up on our one equity and two debt capital raisings in 2018 with five debt capital markets transactions in 2019, each one noteworthy. 

We raised $300 million of 5-year money via a green bond, CHF 100 million of 2-year money via a green bond that fetched a negative interest rate (a first in the region), Php 3.1 billion in 5-1/2 year LTNCDs, Php 9.5 billion 2-1/2 year bonds for our savings bank and, at the turn of the year, Php 15.3 billion in 2-year bonds.

The COVID-19 pandemic is making 2020 quite challenging. Operational resilience has been of paramount importance as we seek to ensure the safety of our employees and the continuous delivery of banking services to our clients.  We’ve maintained a skeletal workforce in our head office units across different office sites in Metro Manila. We’ve kept, on average, about a third of our branches open and ensured continuous availability of our online/mobile channels. We have temporarily waived transaction fees. We continue to have an active lending business. Even prior to the passing of the Bayanihan Act, we provided a 30-day grace period to customers in general and a 90-day grace period for our frontliners. Through BPI Foundation, donations were made to the Philippine Red Cross for the provision of face masks and personal protective equipment to COVID-19 frontliners.

The COVID-19 crisis will undoubtedly produce considerable stress on all Philippine businesses, and the SME and Consumer segments in particular. We remain committed to all our client segments. The year will require continued emphasis on managing risks as we expand our SME and consumer businesses, which provide higher lending margins and service fees, an invigorated focus on CASA deposit growth, a moderating of expense growth, continued reallocation of resources in favor of technology and digital and the consumer space, and a determination to continue to upgrade customer service.  The success of all of these efforts will contribute to a more sustainable business and, under favorable market conditions, recovery and growth of our share price.

The financial and operating results of 2019 are heartening, in that they tell us that the many initiatives that we have undertaken in the past few years are beginning to bear fruit.  While there is much more to be done, we would like to take a moment to thank our board of directors for their wise counsel, our management and staff for their professionalism and dedication, and you, our shareholders, for your continued support.  We go to work every day knowing that we owe you our very best efforts. 

Thank you and good morning.