|Minutes of BPI's Annual Stockholders' Meeting held 18 April 2013|
The Annual Meeting of Stockholders of the Bank of the Philippine Islands (BPI or the Bank) was held at the Ballroom 2, Fairmont Makati, 1 Raffles Drive, Makati Avenue, Makati City on the 18th day of April 2013 at 9:00 in the morning, in accordance with Article IV (Stockholders’ Meetings) of BPI’s Amended By-Laws.
I. Call to Order
The Chairman of the Board of Directors, Mr. Jaime Augusto Zobel de Ayala, (the “Chairman”) presided over and called the meeting to order at 9:00 A.M. The Corporate Secretary, Mr. Carlos B. Aquino (the “Corporate Secretary”), recorded the minutes of the meeting.
II. Notice of Meeting and Quorum
The Corporate Secretary reported to the Chairman and informed the assembly that in accordance with the requirements of the Corporation Code of the Philippines and the Amended By-Laws of BPI, written notice of the time, date, place and purpose of the annual meeting was sent to all stockholders of BPI entitled to notice and to vote and the same was published on the March 26, 2013 and April 10, 2013, issues of the Philippine Daily Inquirer, a newspaper of general circulation in the Philippines.
The Chairman then asked if there was a quorum at the meeting to transact all the items in the agenda. The Corporate Secretary reported to the Chairman and announced to the assembly that there were present at the meeting, in person and by proxy, stockholders owning/representing 2,966,809,238 or 83.42% of the 3,556,356,173 total issued and outstanding common shares of the capital stock of BPI entitled to vote and be voted at the meeting. Thereupon, the Chairman declared that a quorum was present and that the meeting was duly convened.
The following members of the Board of Directors of BPI were likewise present at the meeting: 1) Mr. Jaime Augusto Zobel de Ayala - Chairman of the Board of Directors and Executive Committee, 2) Mr. Fernando Zobel de Ayala - Chairman of the Personnel and Compensation Committee, 3) Mr. Aurelio R. Montinola III - President and Chairman of the Credit Committee, 4) Mr. Romeo L. Bernardo - Chairman of the Nomination Committee, 5) Ms. Mercedita S. Nolledo - Chairman of the Trust Committee and Retirement and Pension Committee, 6) Mr. Xavier P. Loinaz - Chairman of the Audit Committee, 7) Chief Justice Artemio V. Panganiban - Chairman of the Corporate Governance Committee, 8) Mr. Cezar P. Consing, 9) Ms. Rebecca G. Fernando, 10) Mr. Antonio Jose U. Periquet, 11) Mr. Khoo Teng Cheong, and 12) Mr. Oscar S. Reyes.
III. Rules of Conduct and Procedures
Before proceeding, the Chairman asked the stockholders to please first identify themselves as they are recognized by the Chair and that the remarks be restricted to the item of the agenda under consideration. The Chairman then requested the Corporate Secretary to discuss the voting procedures for the meeting.
The Corporate Secretary explained that each stockholder had been given a ballot to enable him to vote in writing per item in the agenda. He further said that the ballot boxes were at the registration table and inside in the ballroom. The Corporate Secretary added that each outstanding share would entitle the stockholder to one vote except in the election of directors where the stockholders may cumulate their votes.
IV. Approval of Minutes of Annual Stockholders’ Meeting on April 19, 2012
The Chairman announced that the next order of business was the approval of the minutes of the annual meeting of stockholders held on April 19, 2012, copies of which were distributed to the stockholders and proxies who were present at the meeting and electronic copy was available on the website of the Bank.
On motion duly made and seconded, it was -
“RESOLVED, That the minutes of the annual meeting of stockholders of the Bank of the Philippine Islands held on April 19, 2012, be, and are hereby, approved as recorded”.
Of the total number of shares present and entitled to vote and be voted at the meeting, 99.59% voted in favor of this proposal, none voted against and 0.41% abstained from voting.
V. Approval of the Bank’s Statements of Condition as of and for the Years Ended 31 December 2012, 2011 and 2010
The next item in the agenda was Annual Report on the operations and other activities of BPI and its subsidiaries during the year 2012, copies of which were also distributed to the stockholders and proxies present, inclusive of the Statements of Condition of BPI for the years ended 31 December 2012, 2011 and 2010 as incorporated in said Annual Report.
At this juncture, the Chairman read to the body his message to the stockholders, to wit:
Fellow Shareholders, good morning! Welcome to the Annual Stockholders’ Meeting of the Bank of the Philippine Islands.
Let me start my report with a broad overview of the macro-economic conditions in 2012. It was a year of contrasting economic performance. The continuing economic recovery of the Euro zone and a stagnating US economy resulted in global gross domestic product slowing to 3.2%. GDP growth in other emerging markets likewise slowed to 5.1% as growth in China and India decelerated to 7.8% and 4.5% respectively.
The Philippines was more resilient, as the domestic economy posted its fastest GDP growth of 6.6% since 1988 in a non-election year. This exceptional performance was more clearly reflected in two economic indicators: per capita GDP which surged to 4.8% from prior year’s 2.2% and the deficit-to-GDP ratio at 2.3%
This robust growth was largely driven by the services sector, particularly the business process outsourcing industry which contributed USD13 billion in revenues, surpassing India as the world’s top destination for BPO voice services, and the overseas Filipino remittances which hit an all-time high of USD21.4 billion or 6.3% higher. These inflows continue to fuel domestic consumption and are reducing our vulnerability to slowing export receipts relative to most emerging markets. These have also resulted in a solid external liquidity position which has pushed our country’s’ international reserves to a record USD84 billion, equivalent to almost a year’s worth of imports.
Recognizing the country’s strong economic performance, the international rating agencies in 2012, have again raised our sovereign credit ratings to just a notch below investment grade. More recently, Fitch Ratings has upgraded the Philippines’ sovereign rating to investment grade and the other rating agencies are expected to follow suit.
Confidence in the domestic market was also seen as the Philippine Stock Exchange Index rose to its highest level at 5,182.7, a 33% rise in local currency terms over 2011, making it one of the best performing stock markets in the region.
Philippine companies also broadly benefitted from record low interest rates and a benign inflation environment which both contributed to strong corporate earnings results.
Under these very positive conditions, Bank of the Philippine Islands achieved another banner year as the bank continued to create value for its stockholders while participating and contributing to the country’s growth story. In 2012, our share price rose by 72% to Php95.00, from Php55.20 by end-2011. This was equivalent to 3.5 times our book value per share of Php27.30. BPI’s market capitalization reached Php337.8 billion and remained the highest in the industry.
BPI continued to lead in profitability with our net income reaching a record high of Php16.3 billion with a return on equity of 17.5%.
Our risk-based capital adequacy ratio (CAR) remained robust at 14.2%, well above the regulatory minimum of 10%. Moreover, our tier one CAR stood at 12.8%, providing us with enough buffer to comply with the full adoption of Basel III in January 2014.
Even as BPI retains its strong capitalization structure, we have submitted an application to the BSP for the implementation of the Foundation Internal Rate Based (IRB) approach on large corporate loans.
On the risk management side, we conducted the validation of 21 Treasury and market risk models and two scoring models. To further enhance the Bank’s physical security, all our Cash Centers and 127 branches were connected to the Central Video Monitoring System of our Security Operations Centers. Both of these projects will continue through 2013 and the coming years to cover all market risk and credit models as well as all branches.
Our Internal Audit Team maintained its ‘Generally Conforms’ overall rating on all Standard and IIA Code of Ethics in the External Quality Assurance Review by SGV & Co./ Ernst and Young.
As a validation of our corporate governance practices, we were again recognized as one of the top-rated Publicly Listed Companies in the Corporate Governance Scorecard of the Institute of Corporate Directors for 2011. BPI was awarded the Gold category for upholding shareholders’ rights, disclosure and transparency, and board responsibilities, among others.
BPI has clearly delivered consistent growth in shareholder value. However, these financial metrics have been driven by strategic plans that, beyond our internal business objectives, incorporate the broader goal of contributing to the country’s growth agenda. An integral component of this, given our role as bankers operating in an emerging market, is to ensure greater financial inclusion. We believe this to be a key component to building a stronger and a more empowered nation.
Following are some of our initiatives on this front:
BPI Globe BanKO (BanKO), our mobile-based microfinance banking arm, serves as our platform for more inclusive banking. In 2012 we doubled BanKO’s partner outlets to almost 2,000 and grew our account holder base to 280,000. We continued to offer affordable financial products such as micro-insurance, -deposits, and -loans.
In 2012, we likewise made significant headway in integrating our environmental initiatives with our business operations. BPI entered into a memorandum of understanding with Green Philippines Islands of Sustainability, a project funded by the European Union under the SWITCH-Asia Programme, which is geared towards the adoption of the “EcoSwitch” approach in greening the Bank’s supply chain.
We also embarked on the second phase of our Climate Risk Assessment study with WWF-Philippines to cover the cities of Cagayan de Oro, Dagupan, Laoag and Zamboanga.
This year also marks our fourth year of partnership with the International Finance Corporation (IFC) in providing loans to green projects under our Sustainable Energy Finance (SEF) Program. Our SEF initiatives were expanded to help raise energy and resource efficiency in the public sector. We granted Php4.2 billion loans thru the SEF, which resulted in savings of 89,821 MWh per year of energy, production of 630,742 MWh per year of clean energy, and abated carbon emissions by 645,774 tons per year.
The economic challenges of many developed economies will most likely persist in 2013. While this may continue to impact different parts of the world, including the Philippines, we believe BPI remains strongly positioned to seize opportunities that may arise, even within the framework of an unsettled global market.
As one of the largest financial institutions in the country, we remain committed to our primary goal of making banking easy for our customers and contributing productively to the country’s economic and social development agenda. We hope that we can continue to count on the trust and confidence of all our stakeholders as we move forward in our journey towards greater and broader financial reach in our nation.
Let me now call on the President, Mr. Montinola for his management report.
At this juncture, the President read his report to the stockholders to wit:
Thank you, Mr. Chairman!
Fellow Shareholders, good morning. And thank you for your presence here today.
We started the year 2012 with concerns on the global economy which lingered around the sovereign debt problems in the Eurozone, and the persistent talk of a “fiscal cliff” in the US.
Fortunately, the Philippines decoupled from global banking woes, and Philippine GDP grew to a beyond expectation 6.6% growth in 2012.
At BPI, as our annual report shows, we continued to do what we do best:
- help the country,
- help the BSP,
- help our community,
- help our customers,
- help our employees,
- and in the process help ourselves.
As you know, BPI has many firsts:
- oldest bank in the Philippines and Southeast Asia,
- first to issue paper currency called pesos fuertes,
- financier of the first tram service, the first telephone system and the first electric utility
Pre-2000, following our tradition of banking innovation, we also introduced ”Anytime, Anywhere Banking” with
- the first automated teller machine (ATM) in 1983,
- cashless shopping with the first debit card system in 1987
- phone banking in 1991,
- check-free bill payment in 1996 and
- online banking in 1999
More recently, we demonstrated a “Let’s Make It Easy” campaign, with a “Bank Anywhere” capability, a paperless, pre-processing queue system, and numerous online application products.
2012 itself turned out to be our best year ever with a loan growth of 16%, and a record net profit of Php16.3 billion, 27% higher than 2011, on our 161st Anniversary. Our return on equity was 17.5%, exceeding our 15.2% ROE for 2011 and our goal of sustainable ROE of 15%.
BPI remained as the most valuable bank in the country, with a market capitalization of Php338 billion as of end 2012. Our capital position is strong, with a Capital Adequacy Ratio of 14.2% and Tier 1 CAR of 12.8%. We are ready for the full adoption of Basel III effective January 2014.
Given our strengths and positioning, we added about a million new customers in 2012 bringing our total customer base to about 6 million.
At this point, allow me to share with you some details of our Bank’s performance.
Our deposit base expanded by 18% to Php802 billion. We introduced new products to fit the needs of our depositors that allow them to enjoy higher yields and the flexibility to build up their funds.
One empowering innovation is a 9.56-square meter paperless, full-service branch at the Asian Development Bank headquarters. While it is considered the smallest physical branch in the country, we are still able to serve our customers with all their transactional needs and prove that function, not space, matters.
We launched a BPI Express Assist Online facility, an online branch transaction appointment system, as well as real-time EOL internet enrollment and services thru the ATM. For more accessibility, we set up additional online banking kiosks, which now total 141.
BPI continued to be a leader in point of sale terminal distribution with over 24,000 installed all over the country. We have 820 branches and the country’s largest ATM network with almost 1,900 machines. We also enhanced our almost 200 Express Deposit Machines to process cash deposits in real time without a need for an ATM card.
We have always believed in the “Power to Choose”, and have further strengthened our Phone Banking, Mobile Banking, and Online Banking capabilities.
Today, we are pleased to report that our channels have been well accepted by our customers. 78% of transactions are now being done in these alternative channels and we are seeing a steady increase in enrollment.
BPI Express Online users now number almost 1.2 million, or a 38% increase. BPI Express Mobile client enrollment increased by 51% to almost 440,000.
We also pilot tested BPI Mobile Wallet, which allows clients to turn their smartphones into a “virtual wallet”, when buying items from our merchant partners.
We are also experimenting with the most powerful online tool today: social media. By making the most of our social networking presence, we are able to impart our 161 years of expertise on money management to the general public, as well as touch base with its increasingly mobile customer base, through Facebook and Twitter.
In credit cards, we remained one of the largest issuers in the country with a cardholder base of 1.1 million. Card usage and loans both went up by 19%.
We complemented our extensive Mastercard portfolio by launching our first ever Visa credit card with Ayala Land, Inc., the BPI Amore Visa, with exclusive privileges inside Ayala Malls.
BPI also played a significant role in the establishment of the country’s first privately-run positive credit card bureau through TransUnion. This has hastened the verification process as well as the processing of credit card applications.
Our personal loans gained momentum as outstanding portfolio reached Php1 billion.
Our debit card transactions processed through our Express Payment System facility went up by 16%, while transaction volume on our prepaid card business increased by 439%. We also powered the almost 500,000 Jollibee Food Corporation Happy Plus card, the first reloadable offline contactless card, that offers convenient cashless payments and rewards customers with loyalty points.
BPI Family Savings Bank, our consumer banking arm, sustained its leadership position in the industry with a 16% loan portfolio growth. Faster loan approval process, and wider provincial coverage due to the opening of new lending desks, resulted in an 18% rise in retail mortgage loans, and a 10% growth in auto loans.
We further improved our www.bpiloans.com website by simplifying the Auto, Housing, and Ka-Negosyo loan application forms and providing a comprehensive list of cars, properties and business franchise. Online applications thus increased by 188% from the previous year.
To benefit home buyers, we also forged stronger partnerships through joint programs with key real estate organizations like Philippine Association of Real Estate Boards, Real Estate Brokers Association of the Philippines and Subdivision and Housing Developers Association.
Our Ka-Negosyo business loans with ATM make it easier for entrepreneurs to access emergency funds anytime. Pre-qualified SMEs can also avail of our zero collateral loans which reached a half a billion portfolio in our first year of launch.
Our highly coveted Ka-Negosyo Best List, a roster of the country’s best and brightest franchise brands, now has 61 accredited brands.
We remained among the top lenders in the country. Our corporate loan portfolio grew by 14% to Php365 billion. Despite this growth, we were able to maintain our asset quality, as our non performing loan ratio fell to 1.3%, significantly lower than the industry’s 2.15%.
We created the Asian and PEZA Corporate Teams to capitalize on these two fast growing segments. The combined performance of the two teams resulted in a year-on-year loan growth of 28%.
Our much awarded cash management business continued to thrive through our web-based solution, BPI ExpressLink, whose customer base grew by 19%. Volume of transactions went up by 4% from a year ago. Moreover, we also extended this service beyond Metro Manila to other key cities.
BPI Capital Corporation, our investment bank subsidiary, continued to be an active contributor in capital market development.
We handled a total of six corporate bond offerings with total combined issue size of Php67 billion. We were the Sole Domestic Bookrunner for the Php13.6 billion overnight private placement of Ayala Land, Inc. shares, considered the largest equity raising by a real estate company in Asia (ex-Japan).
We also acted as Issue Manager and Selling Agent for the record-breaking issuance of Php180 billion of 15- & 20- year Retail Treasury Bonds, the largest in terms of issue size since the start of the program.
BPI Securities Corporation, our stock brokerage arm, experienced a near doubling of value turnover on the back of a strong equities market and major block sale transactions.
Our Financial Markets team attained record-high trading gains on opportunities arising from volatilities in peso bond prices.
We also maintained our lead in the government securities, swap and foreign exchange markets. The Bureau of the Treasury named us the top local bank in the primary market for peso government securities. We were also ranked No. 1 by the Philippine Dealing and Exchange Corporation in terms of trading volume in the secondary market for peso bonds.
Our remittance business also continued to dominate with a market share of over 25%. To reach out to more overseas Filipinos, we opened a BPI Europe branch in Milan Italy and a representative office in the United Arab Emirates, added tie-ups in East Asia and forged an alliance with Remitly.com in North America.
2012 was another solid year for BPI Asset Management as assets under management grew by 11% to Php739 billion, for a 23.5% share of the industry. Fees were up 13%, growing to Php2.9 billion.
BPI Investments Online was integrated with Investments via Mobile to provide our clients with another channel for investments. We also made a bold move of removing the holding period requirement on all unit investment trust fund products complementing our low Php10,000.00 minimum investment.
We also brought to Manila for the first time, the World’s Most Listened to Personal Finance Expert, and One of the World’s 100 Most Powerful Women, Suze Orman. Over 1,000 BPI clients learned from her financial advice for attaining financial freedom.
Our insurance business contributed a pre-tax net income of Php693 million.
BPI-Philam Life Assurance Corp., our strategic partnership with The Philippine American Life Insurance Company in bancassurance, generated total direct premiums of Php11.5 billion, 78% higher than the previous year.
BPI/MS Insurance Corporation, our non-life insurance subsidiary, maintained its standing as the best financially managed non-life insurance company in the Philippines for more than five years. It posted a 22% growth in gross premiums written to almost Php5 billion from year-ago. Net income after tax stood at Php570 million, 21% higher than in 2011. This translated to an ROE of 25%. BPI Globe BanKO, our mobile-based microfinance banking arm, continued to make headway in providing valuable economic assistance to micro-entrepreneurs.
BPI Globe BanKO, our mobile-based microfinance banking arm, continued to make headway in providing valuable economic assistance to micro-entrepreneurs.
In 2012, we granted total loans amounting to Php2.5 billion to 55 microfinance institutions all over the country. This included rural banks, cooperatives, non-government organizations, and people’s organizations.
Affordable and accessible financial services are still the driving spirit behind BanKO. We continued to utilize the community banking model by doubling our partner outlets to nearly 2,000 in 2012.
We believe that “If you focus on your Customers and Employees, the business results will follow.” Over the last four years, we focused on democratizing senior management education. Among the various programs, the BPI Leadership Excellence Acceleration Program or BPI LEAP, a partnership with Harvard Business Publishing, stands out for its breadth and scope. As such, this was awarded “People Program of the Year” for 2012 by the Philippine Management Association of the Philippines.
We are also happy to note that in a survey conducted by Towers Watson, that our employee engagement score ended higher at 82% as shown in 17 out of 18 indicators.
Allow me to close with a 10-year summary of the Philippine Banking Industry and BPI.
We earlier heard our Chairman explain how the country has improved and become investment grade.
I will explain how the Philippine banking industry progressed to where it is now – one of the best banking systems in the world at a time when others still have performance and perception issues.
The Philippine banking industry is Healthy – Capital Adequacy Ratios have significantly increased from 15.9% in 2007 to 17.5% in June 2012, NPLs are at their lowest in 10 years.
The industry is also Helpful – double digit lending growth in the past 3 years, more financial inclusiveness, and increased number of branches and transaction options.
BPI itself has significantly outperformed the industry in the past 10 years.
BPI’s loan growth rate the last 3 years has ranged from 16-20%, superior to the industry growth of 4-15%.
Despite the increase in portfolio, BPI’s NPL ratio has stayed lower than industry, from a high of 6.8% in 2005 to 1.5% in 2012.
In funds intermediation, BPI’s deposit growth of 18% in 2012 was well ahead of industry’s 8%. Our trust assets under management also grew by a 22% CAGR the past 10 years, higher than industry’s 19%.
BPI’s ROE has always been among the highest in the industry. ROE of 17.5% in 2012 was significantly ahead of industry’s 12.3%.
ROA of 1.9% was likewise ahead of industry’s 1.6%.
We also are one of the very few banks with a BSP CAMELS rating of 4.
Today, we can therefore say that BPI richly deserves its status as the ONLY Investment Grade Philippine bank rated by Fitch.
According to Fitch’s April 2013 report, “BPI’s ratings have been the highest, due to its established domestic presence, sound financial metrics and prudent management.”
As the country, the banking industry, and BPI, have improved, so have you, our supportive and loyal shareholders, benefitted. Total Shareholder Return for 2012 was an unprecedented 75%.
BPI’s market capitalization has grown from Php63 billion by end of 2002 to Php338 billion by end of 2012, or a CAGR of 18%. As of yesterday April 17, this has further increased to Php369 billion or US$8.9 billion.
With a strong Team BPI, we are confident that BPI will continue to move forward with quality sustainable growth.
I will be turning over today the leadership of BPI to my successor, Cezar Consing, a competent and experienced professional with many years in the international banking arena. I firmly believe that he will further take BPI to a new level and position BPI as one of the best Asean banks in the near future.
In closing, I wish to thank our very distinguished BPI Board and our very capable BPI management for creating the governance structure as well as the customer centric and team oriented performance to keep BPI as a beacon of financial stability for over 161 years, and as a banking trailblazer in the many years to come.
Finally, to our shareholders and stakeholders, we give you our unwavering assurance that you will always be foremost in our goals as contained in our sustainability framework. We are most grateful for your continued support over the years.
Thank you! And have a good day!
Thereupon, on motion duly made and seconded, the stockholders approved the
Annual Report and the 2012 Audited Financial Statements to wit:
“RESOLVED, that the Annual Report of the Bank and the 2012 Audited Financial Statements incorporated in the said Annual Report be, and are hereby approved”.
For the 2012 Annual Report and Statement of Condition, of the total number of shares present and entitled to vote and be voted at the meeting, 99.59% voted in favor of this proposal, none voted against and 0.41% abstained from voting.
VI. Approval and Confirmation of All Acts during the Past Year of the Board of Directors, Committees and Officers
The next item on the agenda was the approval and confirmation of all acts taken up by the Board of Directors, all Committees and Officers of BPI during the past year up to the date of this annual stockholders meeting. Upon request of the Chairman, the Corporate Secretary explained to the stockholders the nature of the acts and resolutions approved by the Bank in the regular course of its business.
The Corporate Secretary said that these acts include among others approval of loans, credits, contracts, housekeeping matters done to promote the interest and business of the Bank.
Thereupon on motion duly made and seconded, the stockholders adopted and approved the following resolution:
“RESOLVED, That all acts, proceedings and resolutions of the Board of Directors (Board), Executive Committee, Audit Committee, Trust Committee, Nomination Committee, Personnel and Compensation Committee, Risk Management Committee, Corporate Governance Committee, all other Board and Management Committees heretofore taken and adopted at their various meetings held during the past year up to the date of this annual stockholders meeting and as recorded in the minutes of their respective meetings, and all acts of the Officers and Management of the Bank of the Philippine Islands (BPI) during the past year up to the date of this meeting in carrying out and promoting the interests and business of BPI be, and the same are hereby approved, ratified and confirmed. These will include among others, acts of approval of loans, credits, contracts, and other acts which have been covered by disclosures to the Philippine Stock Exchange and the Securities and Exchange Commission. Also included are resolutions involving housekeeping matters such as authorized signatories, bank related transactions, adoption and/or amendment of manual of operations and charters of various committees and By-Laws of the Bank, and CAPEX”.
Of the total number of shares present and entitled to vote and be voted at the meeting, 99.54% voted in favor of this proposal, none voted against and 0.46% abstained from voting.
VII. Election of 15 Members of the Board of Directors
The next item in the agenda was the election of fifteen (15) members of the Board of Directors for the ensuing year.
At the request of the Chairman, Mr. Romeo L. Bernardo, Chairman of the Nomination Committee reported that as approved by the Nomination Committee of BPI and subsequently confirmed by the Board of Directors, the following were nominated for election/re-election as members of the Board of Directors of BPI for the year 2013-2014 and until their successors are duly elected and qualified:
1. Jaime Augusto Zobel de Ayala
2. Fernando Zobel de Ayala
3. Aurelio R. Montinola III
4. Romeo L. Bernardo
5. Chng Sok Hui
6. Cezar P. Consing
7. Octavio V. Espiritu
8. Rebecca G. Fernando
9. Solomon M. Hermosura
10. Khoo Teng Cheong
11. Xavier P. Loinaz
12. Mercedita S. Nolledo
13. Artemio V. Panganiban
14. Antonio Jose U. Periquet
15. Oscar S. Reyes
Mr. Bernardo further reported that there were only fifteen (15) nominees for the 15 Board seats to be filled up. All the nominees had been evaluated and approved by the Nomination Committee of BPI in a meeting called for that purpose which approval was subsequently confirmed by the Board of Directors. The Nomination Committee concluded that the 15 nominees were qualified to serve as directors of the Bank. All nominees have given their consent to the nomination.
The Nomination Committee was composed of Mr. Romeo L. Bernardo as Chairman and Messrs. Jaime Augusto Zobel de Ayala, Xavier P. Loinaz, and Ms. Chng Sok Hui as members.
Of the above-named nominees, five (5) were nominated and elected as Independent Directors namely: Messrs. Romeo L. Bernardo, Octavio V. Espiritu, Xavier P. Loinaz, Artemio V. Panganiban and Antonio Jose U. Periquet. These candidates were nominated by Mr. Gil M. Lopez, a long-time stockholder of BPI. None of the aforementioned nominees had any business or personal relationship with Mr. Lopez. The Nomination Committee had determined that all the five independent director nominees were qualified to be elected as such. The Bank adopted Rule 38 of SRC (Requirements on Nomination and Election of Independent Directors) and compliance therewith had been observed.
Thereafter on motion duly made and seconded, the stockholders adopted the following resolution:
“Resolved that there being only 15 nominees for the 15 Board seats, votes be cast in favor of the said nominees and that they be declared elected as members of the Board of Directors of BPI for the year 2013-2014 and until their successors are duly elected and qualified”.
As tabulated by the office of the Secretary and validated by the auditors, the votes received by the nominees were as follows:
VIII. Re-Engagement of Isla Lipana & Co. as External Auditors of BPI for Year 2013 and Fixing of Their Remuneration
The next item in the agenda was the election of BPI’s External Auditors and fixing their remuneration.
At the request of the Chairman, Mr. Xavier P. Loinaz, Chairman of the Audit Committee reported to the stockholders that at the meeting of the Board of Directors of BPI on March 20, 2013, the Board, upon recommendation of the Audit Committee, approved and recommended to the stockholders for their approval, the re-engagement of Isla Lipana & Co. as the External Auditors of BPI and its major subsidiaries and affiliates for the year 2013 for a fee of ₧ 12.3 Million. He further reported that the Audit Committee of BPI had evaluated the performance of Isla Lipana & Co. during the past year and the Committee was satisfied with their performance.
Thereupon, on motion duly made and seconded, the stockholders adopted the following resolution:
“Resolved that the re-engagement of Isla Lipana & Co. as the External Auditors of BPI and its major subsidiaries and affiliates for the current fiscal year for a fee of ₧ 12.3Million be, and is hereby, approved”.
Of the total number of shares present and entitled to vote and be voted at the meeting, 98.76% voted in favor of this proposal, 0.49% voted against and 0.75% abstained from voting.
IX. Other Matters
The Chairman then inquired if there were other matters anyone may want to take up.
Mr. Philip Turner, one of the stockholders present, asked about the number of BPI ATM machines in the Philippines, and BPI’s responsibilities regarding the safe and secure operation of its ATMs. Mr. Montinola replied that BPI has 1,900 ATM machines. He explained that BPI does what it can to ensure that customers feel safe transacting with the Bank. BPI was one of the first to introduce cameras, and now has installed PIN shields, and also issued advisories to customers not to disclose their PIN. BPI works with Bancnet and Megalink to ensure that these are conveyed to everyone.
Mr. Turner then inquired if Mr. Montinola was aware of situations where sleeves are placed inside the card slot, which then reads the information on the card’s magnetic strip, and transmits the data to a cellphone to empty the account. Mr. Montinola said that this is unfortunately a worldwide phenomenon. He referred to recent newspaper accounts on foreigners coming to the Philippines to do what is known as “skimming”, which is effectively to replicate the magnetic stripe of the card and use it in other places. Mr. Montinola pointed out that there is now a chip in BPI credit cards under the so-called EMV specifications. This technology is safer and harder to clone, and the Bank will move in this direction over time.
The Chairman expressed his thanks to Mr. Turner and opened the floor to other questions.
Another stockholder, related his experience with the limitations on withdrawal of funds over the counter and thru ATMs, and for different products such as SDA and MaxiSaver. He asked, in view of the financial turmoil in other countries and if ever said turmoil extends to our country, if a customer would be able to withdraw all of his money. Mr. Montinola said that the rules for withdrawal depend on the instrument and whether withdrawal takes place at a teller or an ATM. There is an element of choice for the customer. Mr. Montinola also said that historically BPI has been known in the Philippines as a safe bank. The stockholder thanked Mr. Montinola.
Another stockholder, Mr. Soliven, recalled an incident where he was informed that his account did not have sufficient funds, which turned out to be due to double recording of a check transaction. He said that the Bank’s branch manager immediately acknowledged the error, corrected the double recording and reversed the charges. Mr. Soliven then asked about the Bank’s efforts to upgrade and improve its server and application systems. Mr. Montinola replied that there is a constant effort on the part of the Bank to upgrade its systems. As the Bank goes through these upgrades, there are occasional issues. The Bank has a well-established customer care unit to deal with these issues, and its instructions are to resolve the problem as quickly as possible.
Mr. Francisco V. Kabiling, Jr. another stockholder, extended his compliments to Mr. Montinola and thanked him for the replies to his questions when they met on another occasion. Mr. Kabiling then asked about PDIC insurance on and/or accounts. Mr. Montinola said that, although it would be best to clarify with PDIC, his understanding is that an and/or account is treated as a different account. He added that this would be referred to the appropriate group in BPI for confirmation.
Mr. Eduardo Roy T. Lucero, a client and stockholder of BPI since the 1970s, congratulated the management and staff of BPI for a very good year. Mr. Lucero also said that he has always known Mr. Montinola to be very helpful and courteous. He expressed hope that the next President will jump start the Bank, in the same way as Mr. Montinola did when Mr. Loinaz turned over the reins to him. On another note, Mr. Lucero then stated that Filipinos have a very strong connection to family, and suggested that BPI as an institution communicate the message of strengthening the family in the Philippines. The Chairman thanked Mr. Lucero for his comments.
The Chairman then thanked the stockholders for their inputs and noted that all their comments are well taken and assured them that the appropriate group of the Bank will take a look at their feedback and evaluate the same.
There being no other comments or questions from the stockholders and no other matters to discuss, the meeting was, on motion duly made and seconded, adjourned at 10:45 A.M.
|BPI 2013 Net Income at P18.8 Billion|
Bank of the Philippine Islands (“BPI” or the “Bank”) posted net income of P18.8 billion for the full year 2013, representing a 15% increase over P16.3 billion net income earned in 2012. Net income in the year 2013 translated to an ROE of 18% and an ROA of 1.9%.
Total resources as of year-end 2013 stood at P1.2 trillion, or 21% higher than that of the previous year, as a result of solid performance in the Bank’s diversified businesses. Deposits grew robustly, by 23% to P989 billion, driven by savings and demand deposits, which grew by more than 40% year-on-year.
BPI’s net loan portfolio increased by 21% to P635 billion as both the corporate and consumer market segments delivered double digit growth of 23% and 13%, respectively. Asset quality further improved, with the Bank’s 90-day gross NPL ratio closing at 1.80%, as compared to 2.09% as of year-end 2012. The Bank’s reserve-to-NPL ratio ended the year at 105%. Impairment losses stood at P2.6 billion, compared with P2.9 billion in 2012.
Total securities portfolio declined 8% year-on-year, from P205 billion to P188 billion, with combined available-for-sale (“AFS”) and held-for trading (“HFT”) positions declining 28%, from P128 billion to P92 billion, reflecting the Bank’s risk posture in the context of the changing interest rate environment.
On the revenue side, net interest income grew by 10% as the Bank’s average asset base grew by P151 billion, or 18%. Non-interest income also increased, by 11%, mainly due to higher fees & commissions and other operating income. Growth of operating expenses stood at 7%, with increases largely attributable to regulatory costs, technology, and occupancy-related costs.
BPI recently announced the successful conclusion of its P25 billion stock rights offer (the “Rights Offer”) which was strongly oversubscribed as of the end of the offer period on January 30, 2014, reflecting strong support and confidence from the Bank’s shareholders. Proceeds from the Rights Offer will support strategic growth initiatives, and further strengthen the Bank’s capital adequacy, amidst new Basel III regulation and positive economic prospects in the Philippines. The shares to be issued pursuant to the rights offer are scheduled for listing on February 10, 2014. On a pro-forma basis, completion of the Rights Offer will result in a Tier 1 capital adequacy ratio for BPI of approximately 16.6%, based on the Bank’s capitalization at the end of 2013.
BPI President and CEO Cezar P. Consing commented, "We are pleased with our results for 2013, and are going into 2014 with very strong momentum. We are as committed to our shareholders as they are to us, and thank them for their outstanding support.”
Member: PDIC. Maximum Deposit Insurance for Each Depositor P500,000.