PRINT PAGE   

Share Price Performance | Historical Dividend Yields | Key Performance Indicators Credit Ratings | Analysts' Page

	2 0 0 8

	BANGKO SENTRAL NG PILIPINAS APPROVES ISSUANCE OF LOWER TIER 2 CAPITAL
	The Bangko Sentral ng Pilipinas has approved the request of BPI to issue and sell 10-Year Unsecured Subordinated Debt qualifying as Lower Tier 2 Capital of up to P15.0 Billion in single or multiple tranches through public issuance.
	FITCH RATES BANK OF THE PHILIPPINE ISLANDS 'AAA(PHL)'
	Fitch Ratings has today assigned the following ratings to Bank of the Philippine Islands (BPI): 'BB' Long-term foreign currency Issuer Default Rating (IDR), 'BB+' Long-term local currency IDR, 'AAA(phl)' National Long-term Rating and 'BB-' (BB minus) Support Rating Floor. The Outlook is Stable. Concurrently, the agency has affirmed BPI's Individual Rating at 'C' and Support Rating at '3'. The ratings reflect BPI's diversified business profile, good franchise and satisfactory balance sheet strength. While the credit profile of Philippine banks will generally weaken amid the more difficult operating environment, BPI, as one of the better-rated Philippine banks, is believed to be more resilient than its peers. A rating downgrade may however stem from a significant deterioration in BPI's financial health, including a much reduced capital position following a significant cash acquisition, although this is expected to be unlikely. BPI's good franchise is reflected in its strong market shares in residential mortgages, auto loans and remittance markets, which in turn render its loan portfolio and revenue base quite well-diversified. This is expected to provide some resilience to its earnings, which has moderated amid the slower economic outlook; ROA was down from 1.7% in 2007 to 1.2% in 9M08 due to weaker tradingprofits and rising provisions. Its asset quality indicators are also likely to slightly deteriorate although Fitch notes that they have so far remained stable. At end-September 2008, BPI's gross NPL ratio stood at 4.3% while its special-mention loan ratio - an indicator of new delinquency - was low at 0.9%. Reserve for foreclosed properties was above average at 21% while that of NPLs was below average at 58% at end-September 2008, albeit improved from 49% at end-2007 on the back of higher provisions. On balance, the bank's strong Tier 1 CAR of 13% has some buffer to absorb fresh markdowns that may be required under the present challenging conditions, and is indeed one of the factors that underpins its ratings. BPI is reportedly interested in acquiring Philippine American Life and General Insurance Co (Philam), the largest insurance company in the Philippines. In the event the acquisition materialises, Fitch believes that BPI - given its prudent track record - will take the necessary steps to preserve its credit profile, which include raising various capital instruments to maintain its satisfactory balance sheet strength. Established in 1851, BPI is the oldest Philippine bank with 830 branches and 1,485 ATMs and is the third-largest bank accounting for 13% of banking system assets. Its main shareholders are the conglomerate Ayala group (33%), Singapore's DBS Bank ('AA-' (AA minus), 20%) and the Roman Catholic Archdiocese of Manila (8.5%). - Fitch Ratings-Singapore-11 November 2008
	DISCLOSURE STATEMENT ON MOA ON THE FIRST MOBILE MICROFINANCE BANK
	Ayala Corporation, the Bank of the Philippine Islands, and Globe Telecom today signed a Memorandum of Agreement to form the country’s first mobile microfinance bank. Subject to the execution of definitive agreements and to getting the necessary approvals from the Bangko Sentral ng Pilipinas and other government regulators, the three companies intend to use Pilipinas Savings Bank, currently a wholly-owned subsidiary of BPI, as their vehicle for the venture. The venture will extend wholesale microfinance loans to microfinance institutions and offer other microfinance products in the future, and will use mobile technology to deliver financial services and expand its retail client base. BPI and Globe will have an equal stake of 40% while Ayala Corporation will own 20% of the bank. The bank will have an authorized capitalization of P500 million and a subscribed capitalization of P350 million. The venture seeks to further enhance the Ayala Group’s participation in building a financial ecosystem within the microfinance community. BPI has an on going wholesale lending program for microfinance institutions while Globe has been providing a number of rural banks and microfinance institutions with its innovative G-Cash product, an SMS based technology, for money transfers and loan collections. Ayala Corporation is one of the country's biggest conglomerates with interests in real estate and hotels, financial services, telecommunications and a portfolio of investments in water distribution, electronics manufacturing and business process outsourcing. BPI is a recognized leader in electronic banking and the largest consumer lender offering a range of consumer products including mortgage lending, automobile financing, deposit taking, credit cards, remittance and foreign exchange. Globe is a leading provider of wireless communications services in the Philippines.
	PRESS STATEMENT JANUARY TO SEPTEMBER 2008 FINANCIAL PERFORMANCE
	Amidst the volatilities in the financial markets in the last three quarters of the year, Bank of the Philippine Islands (BPI) generated P1.5 billion in net income for the third quarter and P5.3 billion for nine months, 30% lower than the previous year. Revenues contracted by 8.7%, with both net interest and non interest income lower than the previous year. Net interest income for the quarter showed an improvement over the same period last year. Net interest income for the year however was still 3.2% behind last year, despite the P26.2 billion expansion in the average asset base. While the bank kept its cost of funds flat at 2.2%, the lower overall asset yields weighed down on net interest spread. Non interest income remained depressed by 17% due to the absence of securities trading income and the lower profits from the insurance subsidiaries. Other than these two items, other categories of income reflected positive gains. The Bank set aside P1.6 billion in impairment losses, P354 million higher than the previous year. The Bank does not have any collaterized debt obligation (CDO) in its books or any direct exposure to any major U.S. investment bank. The Bank regularly undertakes a review of its loan and securities portfolio as well as its bank placements to monitor its credit quality and further mitigate market risks. BPI grew its total resources by a modest 6% to P611.7 billion, paced by the 8% on year expansion in deposits to P493.8 billion. On a year to date basis, deposits were slightly lower than end 2007 as the Bank offered high-yielding investment alternatives to its customers. This partly led to the 25% increase in Asset Management and Trust funds to P301.1 billion. The Bank’s other core businesses recorded outstanding growth, thereby resulting in market share improvement. Lending remained buoyant, with net loans advancing by 21% as all market segments posted double digit growth rates. Loans to the corporate and retail segments increased by 27% and 25%, respectively. The 29% increase in housing loan portfolio, arising from a 33% increment in new loans granted, was a major driver of consumer loan growth. Auto loans were likewise up by 17%. All new consumer loans were subjected to an established credit review system and thus approved within the Bank’s prudent credit standards. The market share of both housing and auto loans thus further improved to 24.9% and 26.5%, respectively. The credit card receivables were also up by 27%. The bank’s net 30-day NPL ratio (BSP version) was stable at 3.3%, better than last year’s 4.4% and the industry NPL of 3.9% while reserve coverage was at a comfortable 70%. The NPL ratio of housing and auto remained below 4%. Remittance volume surged by 38%, surpassing the 17% industry growth and reinforcing the bank’s premier position in the BSP Hall of Fame for overseas Filipino remittances. Notwithstanding the asset growth, the Bank’s capital of P62.3 billion remained adequate and ahead of the 10% minimum regulatory requirement with a risk adjusted capital adequacy ratio at 13.2%. Currently, the Bank has only Tier 1 capital. If market conditions are favorable, the Bank may issue P10.0 to P15.0 billion in peso denominated Lower Tier 2 eligible capital to further strengthen the Bank’s capital base with the expected loan demand in the coming years and to prepare for any acquisition opportunity that may arise. BPI President and Chief Executive Officer Aurelio R. Montinola III commenting on the bank’s performance, said, “2008 has been very tough for the banking industry and given the highly volatile markets, it would be a very positive development if the bank can maintain a return on equity at a double digit level this year. We remain however encouraged by September 2008 over September 2007 growth rates of over 25% in both the remittance and new housing loan fronts. The outlook for 2009, we believe, may be more challenging. We are closely monitoring developments and ready to respond to changing times. Our key businesses are performing reasonably well and with our investments in technology and a 13.2% capital adequacy ratio, we are well positioned to capitalize on favorable shifts in economic opportunities.”
	BOARD APPROVAL OF PESO DENOMINATED LOWER TIER 2 ELIGIBLE CAPITAL
	Consistent with the proactive role of the Bank of the Philippine Islands (BPI) in the financial services sector consolidation and in anticipation of possible emerging acquisition opportunities, the Board of Directors approved on October 15, 2008, the issuance of P10.0 - P15.0 Billion, peso denominated Lower Tier 2 eligible capital subject to the approval of the Monetary Board, Bangko Sentral ng Pilipinas. This move will allow the Bank to effectively respond to any opportunity that may arise.
	PSE DISCLOSURE ON LEHMAN BROTHERS HOLDINGS, INC.
	Bank of the Philippine Islands (BPI), in its letter to the Philippine Stock Exchange (PSE) on September 16,2008 said that as a matter of policy, BPI does not publicly disclose its counterparties as well as its dealings with its counterparties. However, in view of the events surrounding the investment houses in the United States, BPI wishes to inform PSE as well as all its stakeholders that BPI does not have any direct exposure to Lehman Brothers Holdings, Inc. or to any major U. S. investment bank.
	CASH DIVIDEND PAYMENT
	BPI has received the Bangko Sentral ng Pilipinas' approval on August 4, 2008 for the payment of the Php 0.90 regular cash dividend on the outstanding common shares of the capital stock for the first semester of 2008. In accordance with the BPI Board's resolution, the cash dividend is payable on September 3, 2008 to all BPI common shares stockholders of record as of August 19, 2008 .
	PRESS STATEMENT FIRST SEMESTER 2008 OPERATING PERFORMANCE
	The Bank of the Philippine Islands recorded second quarter operating results that were significantly better than the previous quarter. Despite the increasingly difficult business environment, customer flows remained strong even as prudence dictated continued vigilance in risk management. Revenues improved 19% in the second quarter, leading second quarter net income of P2.3 billion to exceed the first quarter net income of P1.5 billion. Total resources reached P626 billion, up 5% over the previous year, as lending growth held up remarkably. Revenues and Net Income The bank’s second quarter net income of P2.3 billion reflected a 47% improvement over the previous quarter. Revenues were up by 19%, mainly driven by the 52% increase in non interest income. Net interest income rose slightly by 3%. Operating expense was kept below inflation, up 7% from the first quarter. For the first semester, total revenues reached P14.7 billion. With margins under pressure and security trading income squeezed in a rising interest rate environment, the bank’s net interest and non interest income fell by 6% and 22%, respectively. The 4% drop in operating expenses however cushioned the full impact of the revenue decrease. Net income thus reached P3.8 billion or 33% lower than the P5.7 billion recorded in the first semester 2007. Customer Flows BPI won its third straight award as the Top Commercial Bank for remittances with a 22% volume growth and a 23% market share in 2007, a feat that elevated the bank to the BSP’s Hall of Fame. First semester 2008 performance was even stronger, as remittances grew 38% and related revenues 40%. Asset management and trust funds grew by 19%. More importantly, in this environment where capital preservation strategy makes a difference, BPI portfolio managers generated positive, albeit, small returns on all actively managed fixed income funds, beating most competitors. On the other hand, 75% of actively managed equity and balanced funds were able to beat benchmarks. The largest funds, ALFM Peso Bond Fund and BPI Premium Bond Fund, ranked as Leaders in Reuters' Lipper Leader Rankings for the 12-month period ending June 30, 2008. Net loans proved resilient, expanding by 16% and with positive contribution from all major market segments. Consumer lending remained the fastest growing area with a 24% increase. Loans for the retail mortgage, credit cards and auto went up by 28%, 22% and 17%, respectively. Demand for credit was equally strong for the large corporates, up 22% and the SMEs, at 11%. Interbank lending also grew by 41% as Treasury moved out of long term bonds into short term placements. All these offset sovereign debt maturities of P7.7 billion and non-performing loans (NPL) reduction of P1.3 billion. Risk Management Net NPLs fell P1.3 billion year on year in June, resulting in a significant drop in the NPL ratio from 4.2% to 3.1%, the lowest in 10 years. On an absolute level, the P10.9 billion NPLs were 54% below the 2001 peak of P23.5 billion and 26% lower than the 2006 level of P14.8 billion. Reserve coverage remained comfortable at 66% (BSP version) as most of the remaining NPLs are secured. Given the rising interest rate environment, Treasury significantly reduced its trading portfolio by 38%, thereby shortening duration by 23%. This allowed BPI to minimize MTM losses even as it stayed within prudential value at risk (VAR) limits. The bank also kept operating expenses flat notwithstanding the double digit inflation in June. Non core assets and activities were slowly reduced, and talent appropriately shifted to higher growth and revenue areas. Looking Forward The President, Mr. Aurelio R. Montinola III said “We are naturally disappointed that first semester income was significantly lower than 2007. Like all Filipinos, the banking industry and BPI had not been spared from the effects of steeply rising inflation, and both net interest margins and non-interest income had been squeezed. Looking forward, our expectation is that the second half will continue to be challenging, due to high inflation, rising interest rates, and peso dollar exchange concerns. However, we have made progress in moving towards a more balanced revenue stream, and a lower risk profile. As we approach our 157th Anniversary, we remain committed and prepared to manage our affairs in a prudent but forward looking manner.”
	SEC APPROVAL OF INCREASE IN AUTHORIZED CAPITAL STOCK AND 20% STOCK DIVIDEND
	The Securities and Exchange Commission (SEC), on June 24, 2008, approved the following: Increase of the present Authorized Capital Stock of the Bank of the Philippine Islands (BPI) from P29,600,000,000.00 TO P49,600,000,000.00; Declaration and issuance of 20% stock dividend on the issued and outstanding common shares of the capital stock of BPI, to all common shares stockholders of record as of the 15th working day after the approval by the SEC of the increase of the authorized capital stock of BPI, said stock dividend to be used to comply with the legal requirement that at least 25% of the increase in authorized capital stock shall be subscribed and fully paid. In view of the SEC approval stated above, and in accordance with the resolution of BPI stockholders at their annual meeting on 03 April 2008, the 20% stock dividend shall be payable to all BPI common shares stockholders of record as of 15 July 2008 and distributable to the said stockholders on 30 July 2008. Amendment of Article “SEVENTH” of the amended Articles of Incorporation of BPI to effect and reflect the increase in the authorized capital stock to P49,600,000,000.00
	CASH DIVIDEND DECLARATION
	During its regular meeting held on June 18, 2008, the Board of Directors of BPI declared a regular cash dividend of P 0.90 per share on the total outstanding common shares of the bank for the first semester of 2008. This will be payable to all common shares stockholders of record as of the 15th day from receipt by BPI of the approval by the Bangko Sentral ng Pilipinas of the said dividend and distributable on the 15th day from said record date.
	PRESS STATEMENT FIRST QUARTER 2008 FINANCIAL PERFORMANCE
	The Bank of the Philippine Islands sustained the growth momentum of its various core businesses. Net loans increased by 14% from the previous year, ahead of the industry’s 9% growth. Business segments which reflected notable results were middle market, small and medium scale enterprises (SMEs), and consumer with growth rates of 18%, 18% and 21%, respectively. Housing loans remained to be a major driver of consumer loan growth with new loans granted in the first quarter increasing by 36%, thereby pushing outstanding portfolio higher by 26%. Credit card billings likewise increased by 26%. Lending to the top corporates was however flat versus the previous year, and, as in prior years’, pulled down the overall loan levels from end 2007. Deposits expanded by 4% to P475 billion from the previous year, but were 7% below the year end level. Asset Management and Trust Assets grew by 24% to P276 billion. For the moment, given the deteriorating world financial markets, the bank intends to keep its balance sheet flattish while allowing its premium clients to shift their investments to higher yielding investment alternatives. The bank also made a conscious effort to trim its sails in the foreign currency markets and look for safe haven assets as early as in the second half of last year. So while BPI registered significant peso loan growth, the more complex operating environment tempered the bank’s profitability. The 300 basis points cut in the U.S. Federal Funds rate from 5.25% to 2.25% further caused a drastic decline in the bank’s foreign currency asset yields upon repricing and replacement of matured securities inventory. Domestically, inflationary pressures escalated thereby reversing the direction of the interest rate movement. The bank responded by shortening duration of its peso securities inventory to avert potential losses that may arise from further rise in interest rate. This however resulted in lower peso asset yields following the lower yields on replacement securities. The bank’s total revenues thus fell by 26% as both interest and non-interest income contracted from the previous year, despite P28 billion in average asset base growth. The rising interest rate scenario provided limited opportunities to generate securities trading gains. In addition, last year’s income of the insurance subsidiaries included a P416 million non-recurring gain on a sale of a property. These two (2) items were mainly responsible for the 46% decline in non-interest income. Notwithstanding a 6% decline in operating expenses, first quarter net income amounted to P1.5 billion, lower than the P3.2 billion realized in the same period last year. Market capitalization remained the largest in the industry at P136 billion as against book value of P64 billion, even as volatile global and local financial market conditions negatively affected the bank’s share price performance. The bank recently declared a 20% stock dividend which was approved by its shareholders in the last annual general meeting. The bank expects the rest of the year to be as challenging as the first quarter, as financial market conditions remain volatile and uncertain. BPI intends to ride out this financial storm by focusing on its strong suits in key banking businesses, enhancing risk management structures, and consistently relying on technology to deliver customer service and operating efficiency.
	CHANGES IN THE COMPOSITION OF THE BOARD OF DIRECTORS
	The Board of Directors (Board) of the Bank of the Philippine Islands (BPI), in its regular meeting on April 16, 2008, approved the following: 1.Resignation of Ms. Jeanette K. Y. Wong as Member of the Board of BPI effective immediately (16 April 2008); and the 2.Election of Mr. Wong Ann Chai as Member of the Board of BPI and as Member of the following Board Committees of BPI, effective 16 April 2008, to fill the vacancy created by the resignation of Ms. Jeanette K. Y. Wong and to serve her unexpired term for 2008-2009, to wit: Executive Committee Nomination Committee Personnel and Compensation Committee
	ANNUAL STOCKHOLDERS' MEETING, APRIL 3, 2008 SHAREHOLDERS' APPROVAL OF: ELECTION OF DIRECTORS/OFFICERS/COMMITTEE MEMBERS, APPOINTMENT OF EXTERNAL AUDITORS, INCREASE IN AUTHORIZED CAPITAL STOCK AMENDMENT TO ARTICLE 7TH OF THE AMENDED ARTICLES OF INCORPORATION, STOCK DIVIDEND DECLARATION
	The stockholders of the bank, at its annual meeting on April 3, 2008 approved the following: (a) The election/re-election of the following as Members of the Board of Directors of BPI for the term 2008-2009 and to hold office as such until their successors are duly elected and qualified: Jaime Augusto Zobel de Ayala II Fernando Zobel de Ayala Aurelio R. Montinola III Gerardo C. Ablaza, Jr. Emily A. Abrera Lilia R. Bautista* Romeo L. Bernardo* Chng Sok Hui Rolando R. Dela Cruz Octavio V. Espiritu* Xavier P. Loinaz Ma Yuen Lin Annie Mercedita S. Nolledo Oscar S. Reyes Jeanette Kai Yuan Wong * Independent Director as defined in Sec. 38 of the Securities Regulation Code and BSP Circular 296. (b) The re-appointment of Isla Lipana & Co. as the External Auditors of BPI for the year 2008; (c) The increase of the present Authorized Capital Stock of BPI particularly the common stock FROM P29.0B TO P49.0B; (d) The amendment of Article “SEVENTH” of the amended Articles of Incorporation of BPI to effect and reflect the above increase in BPI’s Authorized Capital Stock; and (e) The declaration and issuance of 20% Stock Dividend on the total issued and outstanding Common Shares of the capital stock of BPI, payable to all Common Shares Stockholders of record fifteen (15) working days after the approval by the Securities and Exchange Commission of the increase in the Authorized Capital Stock of BPI, said Stock Dividend to be used to comply with the legal requirement that at least 25% of the increase in authorized capital stock shall be subscribed and fully paid. Also, at the Organizational Meeting of the Board of Directors, following the said Stockholders’ Meeting, the following were elected/re-elected as Chairman and Officers of BPI: 1. Jaime Augusto Zobel de Ayala II - Chairman of the Board 2. Aurelio R. Montinola III - President 3. Antonio V. Paner - Treasurer 4. Carlos B. Aquino - Corporate Secretary 5. Santiago L. Garcia, Jr. - Asst. Corporate Secretary Further, at the same Organizational Meeting of the Board of the Directors, the following Committees were reconstituted: Executive Committee i. Jaime Augusto Zobel de Ayala II - Chairman ii. Fernando Zobel de Ayala - Vice-Chairman iii. Aurelio R. Montinola III - Member & President iv. Rolando R. Dela Cruz - Member v. Octavio V. Espiritu - Member (Independent) vi. Xavier P. Loinaz - Member vii. Jeanette Kai Yuan Wong - Member Alternate Members: Mercedita S. Nolledo (alternate for Jaime Augusto Zobel de Ayala II, Fernando Zobel de Ayala and Aurelio R. Montinola III) Chng Sok Hui (alternate for Jeanette Kai Yuan Wong) 2. Audit Committee i. Octavio V. Espiritu - Chairman (Independent) ii. Lilia R. Bautista - Member (Independent) iii. Chng Sok Hui - Member iv. Oscar S. Reyes - Member 3. Corporate Governance Committee i. Lilia R. Bautista - Chairman (Independent) ii. Romeo L. Bernardo - Member (Independent) iii. Chng Sok Hui - Member iv. Mercedita S. Nolledo - Member v. Oscar S. Reyes - Member 4. Nomination Committee i. Jaime Augusto Zobel de Ayala II - Chairman ii. Romeo L. Bernardo - Member (Independent) iii. Xavier P. Loinaz - Member iv. Jeanette Kai Yuan Wong - Member 5. Personnel and Compensation Committee i. Fernando Zobel de Ayala - Chairman ii. Romeo L. Bernardo - Member (Independent) iii. Rolando R. Dela Cruz - Member iv. Jeanette Kai Yuan Wong - Member 6. Risk Management Committee i. Octavio V. Espiritu - Chairman (Independent) ii. Aurelio R. Montinola III - Member & President iii. Gerardo C. Ablaza, Jr. - Member iv. Romeo L. Bernardo - Member (Independent) v. Chng Sok Hui - Member 7. Trust Committee i. Mercedita S. Nolledo - Chairman ii. Fernando Zobel de Ayala - Vice-Chairman iii. Aurelio R. Montinola III - Member & President iv. Gerardo C. Ablaza, Jr. - Member v. Romeo L. Bernardo - Member (Independent) vi. Rolando R. Dela Cruz - Member vii. Xavier P. Loinaz - Member viii. Adelbert A. Legasto - Member & Trust Officer ix. Ma Yuen Lin Annie - Member 8. Retirement/Pension Committee i. Mercedita S. Nolledo - Chairman ii. Aurelio R. Montinola III - Member & President iii. Rolando R. Dela Cruz - Member iv. Lourdes B. Orosa - Member 9. Credit Committee Aurelio R. Montinola III - Chairman & President Gil A. Buenaventura - Vice-Chairman Eduardo D. Jose, Jr. - Member Elvira V. Mayo - Member Mario B. Palou - Member Alberto E. Pascual - Member
	PRESS STATEMENT ANNUAL STOCKHOLDERS' MEETING APRIL 3, 2008
	The Bank of the Philippine Islands (BPI) held its annual stockholders’ meeting on April 3, 2008 with its Chairman, Jaime Augusto Zobel de Ayala II and President, Aurelio R. Montinola III, presenting BPI’s major accomplishments for 2007. Mr. Zobel’s message focused on the resilience of the Philippine economy amidst global uncertainties and BPI’s strong growth and solid capital position. He reported that the bank performed creditably, posting a 13% growth in loans, a Basel 2 compliant capital adequacy ratio of 14.6%, and a net income of P10.0 billion. The return on equity was above 15% for the first time since 1998. Mr. Zobel also touched on the bank’s efforts at constantly improving risk management practices, internal compliance and corporate governance. This included the evaluation of the bank’s Internal Audit Office which obtained a ‘Generally Conforms Rating’ on all 11 international standards and the Code of Ethics for the professional practice of internal auditing. The bank retained its Camels rating of 4 in the latest examination of the Bangko Sentral ng Pilipinas for its overall performance, and was ranked among the Top Five Philippine Publicly Listed Companies in the Institute of Corporate Directors’ Corporate Governance Scorecard. Mr. Zobel likewise discussed the share price performance of the bank, which was negatively affected by the volatility of the global financial markets. The bank paid out cash dividends of P2.80 per share, or a cash yield of 4.2% based on its average share price for 2007. Later in the meeting, the proposed 20% stock dividend was approved by the shareholders. Mr. Montinola, for his part, discussed the 2007 performance milestones of BPI, namely: the strongest lending growth since 1999, the improving asset quality and the diversified revenue streams. Lending was the growth story for the year, on the back of strong corporate and consumer demand. This was the first time in 7 years that the rate of growth hit double digit, and was faster than the industry average. On the other hand, net non-performing loans ratio was below the industry average at 3.5%. He further pointed out that the bank has successfully broaden its revenue sources with contributions from overseas banking, investment banking, asset management, financial markets group, insurance and card banking businesses. BPI also embarked on customer-driven initiatives to make banking experience simpler and more convenient. The bank expects 2008 though to be a more difficult year as profitability may be challenged depending on interest rate movements. As such, BPI will focus and capitalize on its strengths in consumer lending, asset management, overseas banking and treasury, and grow emerging business areas of middle market and SME lending, card banking, bancassurance and corporate finance. It will rely on technology-driven improvement in operating and customer service efficiency. Its most important priority is to deepen relationships with its 3 million customers. BPI believes that its experience and track record of 156 years, and its superior risk management skills will enable it to navigate through the turbulent times ahead. It is likewise confident that the much stronger domestic fundamentals will mitigate some of the adverse impact of global challenges and will allow it to sustain its growth trajectory.
	INCREASE OF BPI'S AUTHORIZED COMMON STOCK FROM P29.0BILLION TO P49.0BILLION AND DECLARATION OF 20% STOCK DIVIDEND
	During its regular meeting held on March 18, 2008, the Board of Directors of BPI approved to recommend the following to the Stockholders: Increase of the present Authorized Capital Stock of BPI particularly the common stock FROM P29.0B to P49.0B; Amendment of Article "SEVENTH" of the amended Articles of Incorporation of BPI to effect and reflect the above increase in BPI's Authorized Capital Stock; and Declaration and issuance of 20% Stock Dividend on the total issued and outstanding Common Shares of the capital stock of BPI, payable to all Common Shares Stockholders of record fifteen (15) working days after the approval by the Securities and Exchange Commission of the increase in the Authorized Capital Stock of BPI, said Stock Dividend to be used to comply with the legal requirement that at least 25% of the increase in authorized capital stock shall be subscribed and fully paid.
	PRESS STATEMENT 2007 FINANCIAL PERFORMANCE
	The Bank of the Philippine Islands (BPI) ended 2007 with operating results that showed both organic growth and profitability. Unaudited total resources were up 9% to P634 billion. Deposits expanded by 10% to P513 billion. Together with P251 billion in trust assets, BPI managed total funds of P764 billion. Lending was strong with growth rates of 11% and 13% on gross and net of loan loss reserves, respectively. These increases were achieved notwithstanding the non-performing loans (NPL) sale transaction for the year and maturities in government promissory notes. Corporate and consumer loans recorded higher volumes. Corporate loans accelerated by 9%, helped by the improved appetite for term loans from the top corporations and the 20% improvement in SME lending. Consumer loans remained the fastest growing portfolio at the rate of 17%, paced by the 24% expansion in retail mortgage. Retail mortgages further gained market share at 24%. Auto loans and credit card receivables likewise rose by 14% and 15%, respectively. BPI sustained its efforts towards a cleaner balance sheet to bring down its non performing assets. Net 90 day non-performing loans (NPL) ratio stood at 3.9% (3.5% using BSP definition) from 6.0% in 2006. In terms of profitability, the bank delivered P10.0 billion unaudited net income or a return on equity of 15.1% and a return on assets of 1.7%. This was 11% higher than the P9.0 billion realized in 2006. Revenues improved by 9%, tempered by the relatively flat net interest income. Average asset base expanded by 8% but was negated by the narrower spreads for the year, as the benchmark average Treasury Bill rates declined by 133 basis points. On the other hand, non-interest income increased by 28% from substantial gains on the sale of bank and foreclosed assets, pre-tax income of insurance subsidiaries, rental income, and foreign exchange and securities trading gains. BPI set aside P1.2 billion in impairment losses. Operating expense rose by 10% on increases in all categories of expenses, including regulatory costs. Total cash dividends declared amounted to P2.80 per share or a cash yield of 4.6%, translating to a dividend payout ratio of 76% of 2007 net income. The remittance business, another area of strength, continued to grow ahead of the industry’s growth rate. To further augment the services provided to the overseas Filipinos, BPI Europe, Plc was formally opened in October. This bank subsidiary will provide better products and services to European-based Filipinos. BPI is optimistic of the future economic prospects in the Philippines. Though 2008 may be more challenging, the economy is expected to stay the course on the strength of resilient domestic demand. For its part, the bank intends to focus on lending, aiming to raise loans growth to 12% for the year, after an 11% rate in 2007 and 6 years of single digit average lending growth.
	CASH DIVIDEND PAYMENT
	The regular cash dividend of Php 0.90 per share and special cash dividend of Php 1.00 per share for the second semester of 2007 on BPI's outstanding common shares are payable on 20 February 2008 to shareholders of record as of 5 February 2008.
	PRESS STATEMENT JANUARY 10, 2008 MEDIA BRIEFING
	As disclosed in the October 30, 2007 press statement on the first nine months performance, Bank of the Philippine Islands (BPI) remains poised for growth in 2008. Lending growth was pleasantly strong and double digit at 11% gross in 2007 and is forecasted at 12% growth in 2008. The outlook on the Philippine economy for 2008 remains positive, and the bank will continue to assist in capital markets development. Gross loans are estimated to have increased by 11% on higher corporate and consumer loan volumes. Notwithstanding increased competitive threats, BPI recorded a strong 17% expansion in consumer loans and remained the biggest player in consumer lending. Market shares for housing and auto stood at 24% and 22% respectively, with new loan releases expanding strongly. New housing and auto loans releases went up by 37% and 18% respectively. Meanwhile, the credit card business posted billings growth of 22%. Another very positive development is the accelerating growth in the bank’s corporate loan portfolio, which increased by 9%, on higher loan drawdowns from existing clients and new names from all markets. New term loans, which are less volatile and higher yielding, were extended for power generation, food manufacturing, business process outsourcing, semiconductors, and real estate/shopping mall projects. More term loans are in the pipeline on increased borrowing appetite from top corporations. Meanwhile, the depth of the SME market was evident as BPI tapped close to 200 new clients from various SME business segments. BPI is positive of economic prospects even as it continues to monitor external developments. It is optimistic that the resilience of domestic demand, on account of the continued strength of the OFW remittances, and increased public investments will help sustain GDP growth at a respectable pace (6.0- 6.2%) for 2008. It expects the same favorable trend in the costs of doing business: manageable though rising inflation, soft interest rates, and strong peso. With the peso appreciating by 6 – 18% in the last three years, BPI is looking at a further 5 – 8% appreciation by end 2008. BPI is also active in capital markets development and in the first Philippine Stock Exchange (PSE) awards night held on January 8, 2007 was given two major awards: 1) Top Five Philippine Publicly Listed Companies of the 2007 ICD Corporate Governance Scorecard and 2) special recognition for BPI Securities for its active investor education program. BPI was also cited as among the Top 3 in Government Securities Primary Dealers. Lastly, major businesses have recorded impressive growth. The overseas remittance business, after earning the Top Commercial Bank for Overseas Filipino Remittances for the second straight year in 2006, has turned in a strong 22% growth as BPI serviced close to US$3.0 billion in remittances in the first 11 months of the year. Also, funds under management was estimated to have grown by over 15% for the year. In card banking, BPI has expanded its POS terminals by acquiring an additional 8,000 terminals, bringing total POS network to over 21,000. The bank also strengthened its ATM network replacing older ATM models with the purchase of 742 brand new ATMs, the year’s biggest investment in the industry. With the replacement, the bank will retain the distinction of not only having the largest individual bank ATM network but also having the youngest fleet of ATMs in the country.
	ANNUAL STOCKHOLDERS' MEETING ANNOUNCEMENT
	The Executive Committee (ExCom) of BPI approved the holding of the bank's Annual Stockholders' Meeting on 03 April 2008 at 9:00 a.m. at the Grand Ballroom, Hotel Intercontinental, Makati City. The agenda for the meeting is as follows: 1. Calling of Meeting to Order. 2. Certification of Notice. 3. Determination and Declaration of Quorum. 4. Approval of the Minutes of the Annual Meeting of the Stockholders on March 29, 2007. 5. Reading of Annual Report and approval of the Bank's Statement of Condition as of December 31, 2007 incorporated in the Annual Report. 6.Approval and confirmation of all acts during the past year of the Board of Directors, Executive Committee, and all other Board and. Management Committees and Officers of BPI. 7. Election of 15 Members of the Board of Directors. 8. Election of External Auditors and fixing their Remuneration. 9. Amendment of Article VII of the Bank's Articles of Incorporation to increase the Bank's Authorized Capital Stock. 10. Declaration of stock dividend. 11. Directors' Bonus. 12. Other Matters. The ExCom also approved that all nominations to the BPI Board of Directors, together with the written acceptance of all nominees, must be received and acknowledged by the bank's Office of the Corporate Secretary not later than the end of business hours of 21 January 2008. The Stock and Transfer Book of BPI will be closed 30 days before the Stockholders' meeting or starting March 4, 2008. Accordingly, only stockholders of record as of March 4, 2008 will be entitled to notice and to vote at said meeting.