Bank Of The Philippine Islands · PSE:BPI

Bank Of The Philippine Islands — 2Q 2020 Earnings Presentation

30 slides from Bank Of The Philippine Islands's earnings presentation, August 2020

  1. Slide 1: Investor Presentation 2Q 2020

    Investor Presentation 2Q 2020 THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.

  2. Slide 2: Macroeconomic Overview

    Macroeconomic Overview 2 THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.

  3. Slide 3: PH: GDP contraction, weak domestic demand

    PH: GDP contraction, weak domestic demand PH economy shrank by 0.2% in 1Q PH jobless rate hits a record high of 17.7% 1Q print < +2.9% Bloomberg consensus forecast, 1st contraction since 4Q 1998 April data reflected the adverse effects of the COVID-19 economic shutdown on the Philippine labor market

  4. Slide 4: PH: Inflation within BSP target, interest rates decline

    PH: Inflation within BSP target, interest rates decline PH CPI prints at 2.5% for June Higher transport cost pushed the consumer price index higher Inflation and BSP Policy Rate (%) PHL Inflation YoY and Contribution Breakdown (%) Source: CEIC Source: PSA BVAL yield curve ROP Yield Curve Pronounced

  5. Slide 5: Banking Industry Updates

    Banking Industry Updates • Loan growth at 8.5% in May 2020 • Deposit growth on an uptrend at 11.5%, with M3 surging up to 16.6% • Industry LDR now closer to 2017 levels 30.0% 120.0% 100.0% M3, Loans ad Deposits Growth 79.0% 80.2% 80.0% 75.6% 75.8% 20.0% 80.0% 16.6% LDR 60.0% 11.9% 11.9% 11.3% 10.0%

  6. Slide 6: Financial and Operating Highlights 2Q 2020

    Financial and Operating Highlights 2Q 2020 6 THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.

  7. Slide 7: Bank Performance Highlights

    Bank Performance Highlights First half 2020 overview Revenue Asset Quality and Provisions  Higher Net Interest Income and  Higher credit cost due to higher NIM due to lower funding cost ECL  Strong securities trading income  Benign NPL given relief measures Earnings Quality and Cost Capital Posi

  8. Slide 8: Profitability

    Profitability 1H 2Q YoY  In P bn Highlights Jun-2019 Jun-2020 Jun-2019 Jun-2020 1H 2Q Net Interest Income 32.36 36.40 16.31 18.27 12.5% 12.0%  Core intermediation business up on Non-Interest Income 13.54 16.29 6.81 9.17 20.3% 34.7% improved NIMs due to lower funding cost Trading Income 2.48 6.80 1

  9. Slide 9: Revenue Mix

    Revenue Mix Net Interest Income still up on NIM expansion from lower Cost of Funds Amounts in P bn Quarterly First Half YoY Growth YoY Growth Asset Yield 5.25% 5.27% 5.19% 5.08% 5.08% 5.26% 4.93% 4.79% -47 bps -33 bps 3.37% 3.55% NIM 3.39% 3.46% 3.63% 3.48% +14 bps +18 bps 3.34% 3.28% 80 2.12% 1.56%

  10. Slide 10: Non-Interest Income

    Non-Interest Income Securities trading gains boost overall Non-Interest Income Fee income down due to lower transaction volumes and fee waivers since ECQ; Diversified Income Sources Remittance fees affected by tighter spreads, lower volumes 20 Amounts in P bn % to June 2020 Total Non-Interest Income

  11. Slide 11: Operational Efficiency

    Operational Efficiency Cost discipline initiatives offset COVID-19-related expenses Cost-to-Income Ratio lower at 42.5% Branch projects deferred Amounts in P bn Local Branches Actual Count 30.0 55.7% CIR 53.0% 52.8% 25.0 51.0% 1,400 49.6% YoY Growth Total 1,200 1,167 1,169 1,169 20.0 1,056 BFB 42.5%

  12. Slide 12: Accelerated digital adoption

    Accelerated digital adoption Digital Transactions (count), as a % of Digital Channel Registration (count) total transactions, increasing growing steadily per month since January 90% 85% 85.9 81% 71% 69.7 65.2 67.8 38.1 30.5 Pre-ECQ ECQ MECQ GCQ Jan Feb Mar Apr May Jun 1/ Digital Transactions include

  13. Slide 13: Balance Sheet

    Balance Sheet  In P bn Highlights Jun-2019 Dec-2019 Jun-2020 YTD YoY Total Assets 2,134.75 2,205.03 2,259.20 2.5% 5.8%  YTD Net Loans and Deposits registered Gross Loans 1,377.13 1,498.69 1,469.76 -1.9% 6.7% mid-single digit growth Net Loans 1,354.35 1,475.34 1,434.39 -2.8% 5.9%  Securities book

  14. Slide 14: Loan Portfolio

    Loan Portfolio Volume (in P bn), Market Share (in %) YoY Growth Rate (in %) Key Takeaways 15% 14% 14% 15% 14% 14% 11% 11% 8% 9% 7% 1,475 1,447 1,434 6% 1,349 1,354 1,372 12% 11% 10% 9% 9% 8% BPI * Focus on asset quality and NIM-accretive loans 1 Industry rather than aggressive volume growth Mar-19 J

  15. Slide 15: Funding and Liquidity

    Funding and Liquidity Volume (in P bn), Market Share (in %) YoY Growth Rate (in %) Key Takeaways 1% 8% 7% 6% Total Depo 13% 12% 12% 12% 12% 5% 11% 1,762 18% BPI 1,608 1,658 1,620 1,695 1,677 4% 1 496 11% Industry *CASA drives Deposit growth 477 526 500 524 444 6% 6% 7% -1% 1,131 1,133 1,120 1,171 1,

  16. Slide 16: Asset Quality

    Asset Quality Provisioning strengthened NPL Cover reflects Benign NPL given relief measures Higher credit cost due to higher ECL aggressive provisioning stance 200% 50 160% 15.0 145.1% 40 140.7% 120% 104.8% 111.5% 37.7 100.7% 102.7% 4.2 95.7% 95.7% 91.9% 96.5% 30 26.7 26.8 93.3% 92.6% 91.4% 3.5 4.6

  17. Slide 17: Capital and Earnings

    Capital and Earnings Comfortable loss absorption buffer Profitability metrics decline due to Robust Capital Ratios Consistent dividend payments aggressive provisioning 30% 3% 11.26% 38.8% 10.66% 10.71% 10.97% 10.27% 10.52% 10.43% 32.9% 34.8% 3% 9.64% 9.84% 32.1% 31.6% 9.38% 8.56% 28.2% 20% 2% 16.57%

  18. Slide 18: Capital Markets

    Capital Markets Sustainable Funding Framework  Initial issue size of P3 billion was oversubscribed  Tenor is 1.75 years with an interest rate of 3.05% p.a. BPI CARE Bonds  Proceeds of the COVID Action Response “CARE” Bonds will be used to finance and refinance eligible Micro, Small and Medium Ent

  19. Slide 19: Appendices

    Appendices 19 THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.

  20. Slide 20: Macroeconomic & Industry Indicators

    Macroeconomic & Industry Indicators 2013 2014 2015 2016 2017 2018 2019 1Q 2020 2Q 2020 GDP Growth 7.2% 6.1% 5.8% 6.8% 6.7% 6.2% 5.9% -0.2% Current Account (% to GDP) 4.2 3.8 2.5 -0.4 -0.7 -2.7 -0.1 0.1 Inflation 2.6% 3.6% 0.7% 1.3% 2.9% 5.2% 2.5% 2.7% 2.5% 1 M3 31.8% 11.2% 9.4% 12.8% 11.9% 9.5% 11.5

  21. Slide 21: BPI at a glance

    BPI at a glance  The first bank in the Philippines and Southeast Asia, and the longest tenured bank with almost 170 years of continuous operating history, with highly reputable shareholders, the largest of which include the Ayala Group, the Roman Catholic Church and GIC  Award winning, universal b

  22. Slide 22: Financial Highlights

    Financial Highlights 1H 2019 Dec 2019 1H 2020  YoY  YTD 1H 2019 Dec 2019 1H 2020  YoY Balance Sheet (in P bn) Profitability (in P bn) Assets 2,134.7 2,205.0 2,259.2 5.8% 2.5% Net Interest Income 32.4 65.9 36.4 12.5% Net Loans 1,354.3 1,475.3 1,434.4 5.9% -2.8% Non-Interest Income 13.5 28.4 16.3 2

  23. Slide 23: Financial Highlights (in USD)

    Financial Highlights (in USD) 1H 2019 Dec 2019 1H 2020  YoY  YTD 1H 2019 Dec 2019 1H 2020  YoY Balance Sheet (in USD bn) Profitability (in USD mn) Assets 42.8 44.2 45.3 5.8% 2.5% Net Interest Income 649.2 1,322.8 730.2 12.5% Net Loans 27.2 29.6 28.8 5.9% -2.8% Non-Interest Income 271.6 569.5 326.

  24. Slide 24: Ownership Structure

    Ownership Structure June 30, 2020 Shareholder Profile Conglomerate synergies as part of the Ayala Group Ayala Group 1 48.5% 2 RCAM 7.3% Core Value Drivers GIC 5.0% Float 39.2% AC Energy and Infrastructure June 30, 2020 Citizenship Profile Portfolio Investments 30% Industrial and 70% Social Infrastru

  25. Slide 25: Investment Information

    Investment Information As of June 30, 2020 Key Metrics FY 2018 FY 2019 1Q 2020 2Q 2020 1 Fundamentals Description CAR 16.09% 16.07% 16.08% 16.52% Stock Price P72.00 per share CET1 15.19% 15.17% 15.19% 15.63% BV per share P61.78 NPL ratio 1.85% 1.66% 1.82% 1.83% P-B Ratio 1.2x NPL cover 85.45% 102.14

  26. Slide 26: Sustainable Finance Framework

    Sustainable Finance Framework  We have developed a Sustainable Finance Framework under which we intend to issue:  Green Bonds and/or Loans – proceeds allocated to selected Eligible Green Projects  Social Bonds and/or Loans – proceeds allocated to selected Eligible Social Projects  The Framework

  27. Slide 27: BPI Management Team

    BPI Management Team Cezar "Bong" Tere John-C Jojo Mon Consing Marcial Javier Syquia Ocampo Jocson President &CEO EVP & CFO EVP EVP EVP & COO 23 years with BPI 25 years with BPI 4 years with BPI 24 years with BPI 4 years with BPI • Elected President and CEO • Chief Finance Officer and • Head of Corpo

  28. Slide 28: BPI Management Team

    BPI Management Team An-an King Ginbee Go Eric Luchangco Sheila Tan Dino Gasmen Cathy Santamaria Jovi Alonso Mayette Gayares SVP BFB President SVP AMTC President SVP &Treasurer SVP & CMO SVP & CCO SVP &CRO 34 years with BPI 16 years with BPI 6 years with BPI 6 years with BPI 6 years with BPI 8 years

  29. Slide 29: 2020 Citations

    2020 Citations Institutional BPI Foundation Bancassurance 11 Manager Best Asset BPI-Philam Life Assurance Best Trade Finance Corp. Provided 2020 WWF Sustainability WWF Climate Support Outstanding Achievement Best Life Insurance 2020 Trailblazer Award (Phils) Award (Phils) in Advocacy Marketing Compa

  30. Slide 30: For your comments and queries contact us

    For your comments and queries contact us via: investorrelations@bpi.com.ph Tel: (632) 8246 5862 https://www.bpi.com.ph/ Integrated Reports https://www.bpi.com.ph/about/investor- relations/integrated-reports Company Disclosures https://www.bpiexpressonline.com/p/1/239 /company-disclosures-main Corpor

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