The Bank of the Philippine Islands (BPI) today held its first annual stockholders’ meeting via virtual conferencing as it reaffirmed its focus on digitalization, financial inclusion, and sustainability, with a continued emphasis on managing risks, especially those brought on by the coronavirus, or COVID-19.
BPI President and CEO Cezar P. Consing said BPI remains committed to address the needs of all of the Bank’s client segments despite challenges triggered by the pandemic.
“The COVID-19 pandemic has shown the importance of being able to access and transact digitally. And that is why we will continue what has been a 3-year digitalization journey, and continue to invest in technology. The pandemic has also revealed the vulnerability of our MSME sector, which employs the majority of our country’s workers. Our objective to become more financially inclusive and sustainable as a company requires that we continue to support this very important segment.”
Digitalization, which has been an important component of BPI’s strategy in the past few years, has accelerated digital banking.
“Digitalization helps reduce our cost to serve and facilitates banking access and transactions, thereby fostering financial inclusion and sustainability in our operations,” said Mr. Consing.
“Digitalization is gaining considerable traction, with gains that are tangible and visible. Online transactions, which in 2019 were up by 50 percent, account for practically all of the growth in the Bank’s transaction count. About 40 percent of the Bank’s customers are now enrolled in one or more of our digital channels, with 25 percent of all customers being regular digital transactors,” he said.
Mr. Consing revealed that during the enhanced community quarantine (ECQ), 90 percent of all of the Bank’s transactions were done outside branch premises, a significant jump from 72 percent pre-ECQ, reflecting an accelerating shift to digital banking. He also noted the value of BPI’s data science team, which mines BPI’s wealth of data to come up with improvements in policies and processes that allow the Bank to be nimbler in seizing opportunities.
He said changes from within are as important as the headline numbers and the Bank’s investment or credit ratings. “We are focused on being a more financially inclusive bank. This is evident in the setting up a few years ago of our microfinance and SME lending businesses,” said Mr. Consing.
Since its inception three years ago, BPI Direct BanKo, BPI’s microfinance arm, is now the second largest microfinance bank in the country, with a loan portfolio of P4.3 billion, a growth of 100 percent in one year, a market share of 15 percent among microfinance and rural banks, a network of 300 branches, a client base of over 100,000, and total loan releases of P11 billion.
BPI’s Business Banking, which focuses on SMEs, is just two years old and is attempting to replicate the early success of BanKo.
“While the SME loan portfolio grew only 6 percent, the lower end of the portfolio – that for loans below P15 million – showed a 4.3x increase in approved loan applications, reflecting our tailor-fit solutions and dedicated coverage of the segment,” said Mr. Consing.
BPI also demonstrated its commitment to the communities it serves through its corporate social responsibility and sustainability initiatives.BPI was awarded by Asiamoney as the Best Bank for CSR because of its focus on financial education, environment, and employee volunteerism or Bayanihan – all critical elements of sustainability. Its beneficiaries in the last six years have grown from 1,700 to over 270,000.
“BPI makes a meaningful contribution to 14 of 17 of the United Nations’ Sustainable Development Goals. Since starting our green finance journey in 2008, we have now embedded sustainability in how we conduct our business,” said Mr. Consing.
Outstanding loans that have an impact on the UN SDGs have increased from P147 billion in 2015 to P390 billion in 2019, a compounded annual growth rate of 28 percent. The share of these loans to the total loan portfolio of the Bank increased from 17 percent to 26 percent in the last five years.
BPI’s power generation portfolio grew by a CAGR of 37 percent, from 2012 to 2019, with renewable energy registering a CAGR of 44 percent. Lending to renewables now account for 38 percent of the portfolio, compared to the country’s 21 percent renewable share of all energy.
“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,” he said.