Investor Presentation Legal Disclaimer This presentation and the - - PowerPoint PPT Presentation

March 2017

Investor Presentation

Legal Disclaimer

This presentation and the information contained herein as well as the materials distributed herewith ("Presentation") are the sole and exclusive property of BDO Unibank, Inc. (“BDO”) and shall only be used for the purpose intended herein. None of the information contained in this Presentation constitutes a solicitation, offer, opinion, or recommendation by BDO to buy or to sell any securities or financial instrument or to provide any investment service or investment advice. The information contained in this Presentation is based on carefully selected sources believed to be reliable but no representation or warranty as to its accuracy or completeness is made. All statements in this Presentation, other than statements of historical facts, that address activities, events, or developments that BDO expects or anticipates will or may occur in the future (including but not limited to projections, targets, estimates and business plans) are forward- looking statements. BDO’s actual results or developments may differ materially from those expressed or implied in these forward-looking statements as a result of various factors and uncertainties, including but not limited to price fluctuations, actual demand, exchange rate fluctuations, market shares, competition, changes in legal, financial and regulatory frameworks, international economic and financial market conditions, political risks, cost estimates, and other risks and factors beyond our control. Your use of the Presentation shall be at your sole risk and you shall form your own conclusions as to the reliability of any information presented and as to any conclusions to be drawn therefrom. BDO shall not be directly or indirectly liable, in any way, for any inaccuracies, errors, or omissions in the Presentation , including but not limited to any quotes or financial data contained therein, nor for any damages resulting therefrom. Any

• pinion/data/forward-looking statements herein reflected may be subject to change by BDO without notice.

Investor Relations & Corplan: 4F South Tower, BDO Corporate Center 7899 Makati Avenue, Makati City Metro Manila 0726, Philippines Phone: (632) 840 7000 (loc. 6069) Fax: (632) 878 4151 Email: irandcorplan@bdo.com.ph Website: www.bdo.com.ph

3

Presentation Outline

I. Overview II. Financial Highlights III. Ownership, Board and Management IV. Environmental, Social and Governance V. Awards and Citations

4

• The Philippines’ largest bank with total

assets of P2.33 Tn (USD48.96 Bn).

• A full-service universal bank with one of

the widest distribution networks consisting of 1,125 operating branches and over 3,600 ATMs nationwide.

• Part of the SM Group, one of the

country’s largest conglomerates.

About BDO

Milestones

• Expansion through organic growth and M&As

1967

KB license

1994

P77 BN

Merged with Dao Heng Bank Philippines

2001

P36 BN U/KB license

1996

Acquired 1st e-Bank’s banking business

P121 BN

2002

Acquired UOB Philippines’ branch banking business

P234 BN

2005

P862 BN

Acquired GE Money Bank

2009

Acquired Rural Bank of San Juan’s banking business

P1.2 TN

2012 2014

Acquired Citibank Savings, DB Trust and Real Bank

P1.9 TN

Acquired One Network Bank

2015

Acquired by SM Group

1976

Assets P13 BN

2003

Acquired Banco Santander Philippines

P149 BN P617 BN

2007

Merged with Equitable PCI Bank. Acquired Amex Savings Bank Philippines

2016

Joint Ventures with Nomura Securities, and Mitsubishi Motors Phils./Sojitz/JACCS; Acquired exclusive franchise of Diners Club Int’l and full control of Generali Pilipinas Life (renamed as BDO Life Assurance)

P2 TN

• Est. as

Acme Savings Bank

#19 #9 #5 #2 #1 Ranking Commercial Bank Expansion P2.3 TN

6

Market Reach

• Wide and extensive coverage in key areas

26

International Offices

Europe - 12

11 Remittance Offices 1 Representative Office

Middle East - 1

Representative Office

SEA, China, HK, Taiwan, Korea & Japan - 11

1 Full-service Branch 6 Remittance Offices 4 Representative Offices

North America - 2

Remittance Offices

Philippines - 1,125 Branches

As of 20 March 2017

7

Domestic Distribution Network

BDO ONB Total Luzon 310 6 316 Metro Manila 503 1 504 Visayas 108 16 124 Mindanao 79 102 181 Total Branches 1,000 125 1,125

As of 20 March 2017

• With longer banking hours, Saturday banking in select commercial

areas, and weekend banking for over 150 mall based branches

• Widest market reach complemented by over 3,600 ATMs and

electronic channels

8

Business Franchise

#1 Loans #1 Deposits #1 Remittance #1 Trust and Asset Mgt #1 Private Banking Leading Trade Services Provider2 Major Player in Cash Management3 #1 Rural Banking #2 Leasing & Finance #1 Investment Banking4 #1 Insurance Brokerage5

• Market-leading positions in almost all business lines

#1 Credit Cards1

Notes: 1 In terms of cardholder base, merchant acquiring gross billings, and credit card receivables 2 According to The Asset, & Asian Banking and Finance 3 According to The Asian Banker, Asian Banking and Finance, Alpha South East Asia 4 In terms of corporate issuances 5 Among insurance brokers in terms of premiums produced and commissions earned

1,029 566 428 112 104 102 85 80 75 54

BPI MBT SCB CHIB LBP RCBC UCPB PNB SECB

1,905 1,433 1,390 1,236 570 541 377 357 353 347

BPI MBT LBP PNB CHIB UBP DBP RCBC SECB

1,474 1,056 1,055 475 412 388 305 286 234 196

MBT BPI LBP PNB CHIB RCBC SECB UBP DBP

2,330 1,875 1,718 1,396 747 694 628 538 523 519

MBT BPI LBP PNB SECB CHIB DBP RCBC UBP

9

Industry Ranking

Total Assets

(in PHP billions) Source: Company data, consolidated statements of condition (SOC). Ranking as at 31 Dec 2016 Note: Financials prepared by banks under BSP’s SOC requirements differ slightly from reported financials under SEC guidelines due to certain differences in accounting rules requested by the two authorities

Gross Customer Loans Customer Deposits Assets Under Management

• No. 1 among Philippine banks

(in PHP billions) (in PHP billions) (in PHP billions)

BDO Market Share – 19% BDO Market Share – 36% BDO Market Share – 22% BDO Market Share – 18%

BDO Private Bank,

• Inc. 100%

BDO Capital & Investment Corporation 99.9% BDO Leasing and Finance, Inc. BDO - 87.43%, BDO Capital – 1.11% One Network Bank,

• Inc. (A Rural Bank)

99.7583% BDO Remit (USA),

• Inc. 100%

BDO Remit (Japan) Ltd. 100% BDORO Europe Ltd. 100% BDO Remit (Canada) Ltd. 100%** Express Padala (HK) Ltd. 100% (c) BDO Remit(Italia) S.p.A. 100% (a) BDO Remit Limited 100% (c) BDO Remit (Macau)Limited 100% BDO Remit Int’l Holdings B.V. 96.32% Averon Holdings, Inc. 100% BDO Rental,

• Inc. 100%

MMPC Auto Financial Services Corp. 40%

BANKING / FINANCE

BDO Unibank, Inc.

Armstrong Securities 80% (b)

REMITTANCES INSURANCE PROPERTY

BDO Nomura Securities, Inc. 51% BDO Strategic Holdings, Inc. 100% BDO Insurance Brokers, Inc. 100% BDO Life Assurance Holdings Corp. BDO- 98.05%, BDO Capital- 1.95% PCI Insurance Brokers, Inc. 100% (a) Equimark-NFC Development Corp. 60% SM Keppel Land, Inc. 50% NorthPine Land, Inc. 20% Taal Land, Inc. 33.33% (b) Unicorn First Properties, Inc. 35% (a)

OTHERS

Manila North Tollways Corp. 12.4% PCI Travel Corporation 35% (a) Venture Industry for Business Enterprises 24% (a) BDO Life Assurance Company, Inc. (formerly Generali Pilipinas Life Assurance Co., Inc.)100%

• With equity investments in allied and non-allied enterprises

Organizational Structure

** not yet operational.

• Financial Allied Subsidiary
• Financial Allied Affiliate
• Non-Financial Allied Subsidiary
• Non-Allied Undertaking
• Subsidiary/Affiliates of BDO Subsidiaries
• Non-Financial Allied Affiliate

(a) For dissolution (b) For sale (c) For merger BDO Securities Corporation 100% CBN London

• Ltd. 100%

CBN Greece S.A. 99.8% CBN Ireland Remittance Centre Designated Activity Company. 100% CBN Remittance Center S.A. 99.99%

The Banker Top 1000 World Banks – Tier 1 Capital 2015

11

USD Million

239

Rank Origin Bank

243 240 242 245 246 247 248

4,231 4,220 4,219 4,174 4,169 4,079 4,050 4,022 4,007 4,005

1000 2000 3000 4000

Grupo Financiero Banorte Chugoku Bank Alfa Bank Xiamen International Bank BDO Unibank Bank ABC Popular Baoshang Bank Abanca Corporacion Bancaria IDBI 241 244

The Banker Top Philippine Banks – Tier 1 Capital 2015

12

USD Million Bank 1 Rank 2

3

4 5 6 7 8

Acronyms: BPI Bank of the Philippine Islands CHIB China Banking Corp. MBT Metropolitan Bank& Trust SECB Security Bank Corp. PNB Philippine National Bank LBP Land Bank of the Philippines RCBC Rizal Commercial Banking Corp.

4,169 3,348 2,645 1,575 1,052 1,046 1,034 1,005

1000 2000 3000 4000

MBT BPI PNB LBP SECB RCBC CHIB

13

Credit Ratings

Moody’s Fitch Capital Intelligence 28-Oct-2016 21-Feb-2017 26-Aug-2016 Foreign Currency Bank Deposits/Issuer/Debt Rating (IDR) Long Term Baa2 BBB- BBB- Short Term Prime-2 F3 A3 Outlook Stable Stable Positive Senior Unsecured debt Long Term Baa2 BBB- Short Term Prime-2 Outlook Stable BCA/Viability/Financial Strength Rating Baseline Credit Assessment (BCA) baa2 Adjusted BCA Rating baa2 Viability Rating bbb- Financial Strength Rating BBB- Outlook Stable Counterparty Risk (CR) Assessment Long Term Baa1(cr) Short Term P-2 (cr)

Source: Moody’s, Fitch and Capital Intelligence

14

Trading Fact Sheet

Stock Details Type Common Shares Stock Ticker BDO ISIN PHY077751022 Exchange Philippine Stock Exchange Par Value P10.00 Outstanding No. of Shares* 4,367,168,499 Foreign Ownership Up to 40% American Depositary Receipts (ADR) Program Details Type Sponsored Level 1 ADR ADR Ticker BDOUY ISIN US05537Y305 Ratio 1 ADR = 10 Ordinary Shares Depositary Bank Deutsche Bank Trust Company Americas Contact Details ADR Broker Helpline Tel (New York) + 1 212 250 9100 Tel (London) + 44 207 547 6500 Email adr@db.com ADR website www.adr.db.com Depositary Bank's Local Custodian Deutsche Bank AG, Manila

*As of March 27, 2017

15

Presentation Outline

I. Overview II. Financial Highlights III. Ownership, Board and Management IV. Environmental, Social and Governance V. Awards and Citations

2016 Income Statement

(in PHP billion) 2016 2015 YoY% Interest Income 82.0 72.1 13.7% Loans & Other Receivables 73.2 63.8 14.6% Interest Expense 16.4 15.2 8.2% Net Interest Income 65.6 57.0 15.2% Non-interest Income 41.6 31.9 30.3% Fee Income 22.2 19.4 14.5% Insurance Premiums 8.1 0.0

• Trading & FX

4.8 7.2

• 32.5%

Others 6.5 5.4 21.1% Gross Operating Income 107.2 88.9 20.6% Operating Expense 70.1 55.1 27.2% Insurance benefits and claims 5.9 0.0

• Pre-Provision Operating Profit

37.1 33.8 9.9% Provisions 3.8 3.0 27.2% Income bef. Pre-Acquisition 33.3 30.8 8.2% Pre-Acquisition Income

• 0.4

0.0

• Taxes

6.8 5.7 19.2% Net Income 26.1 25.0 4.3% BDO Conso

4Q16 Balance Sheet

(in PHP billion) 4Q16 4Q15 YoY% Resources Reserve Assets 510.8 461.7 10.7% Investment Securities 269.0 225.8 19.2% Gross Customer Loans 1,482.0 1,279.4 15.8% Investment Properties 15.2 14.6 3.8% Other Assets 47.9 49.9

• 3.9%

Total Resources 2,325.0 2,031.3 14.5% Liabilities Deposits 1,905.2 1,663.9 14.5% CASA 1,382.3 1,137.7 21.5% Bills Payable/Sub-Debt 110.6 107.6 2.8% Insurance Contract Liab. 20.5 0.0

• Other Liabilities

71.1 60.2 18.1% Total Liabilities 2,107.4 1,831.6 15.1% Total Capital 217.5 199.6 9.0% Total Liabilities & Capital 2,325.0 2,031.3 14.5% BDO Conso

17

19% 16% 16% 20% 14% 17% 24% 15% 19% 20% 17% 16% 5% 10% 15% 20% 25%

2011 2012 2013 2014 2015 2016

18

Loan Growth

• In line with expectation, focusing on target segments

Industry BDO

531 592 775 959 1,138 1,382 328 339 570 533 526 523 859 932 1,345 1,492 1,664 1,905 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000 2011 2012 2013 2014 2015 2016 Time Deposits CASA

Deposits YoY ∆ 10% 9% 44% 11% 11% 15% CASA YoY ∆ 13% 12% 31% 24% 19% 21% CASA Ratio 62% 64% 58% 64% 68% 73% Cost of Deposits 1.62% 1.50% 0.96% 0.75% 0.81% 0.77%

19

Deposits

(in P bn)

• Sustained growth in low-cost deposits
• With one of the highest CASA ratios

Total

20

Net Income

• Sustainable growth from core income sources
• Continued investments in products and distribution

(in P bn) 26.1 10.8 14.5 22.6 22.8 25.0

0.0 5.0 10.0 15.0 20.0 25.0 30.0

5 10 15 20 25 30 2011 2012 2013 2014 2015 2016

21

Capital

Stock Rights Offer

PHP60 bn  USD1.20 bn

January 2017

To support medium-term growth objectives To provide buffer over higher capital requirements with DSIB surcharge

Capital Adequacy Ratio

CAR

BDO 4Q16

22

Income Statement

(in PHP billion) 2011 2012 2013 2014 2015 2016 Interest Income 50.5 54.0 56.6 63.6 72.1 82.0 Interest Expense 16.9 17.9 13.4 12.4 15.2 16.4 Net Interest Income 33.6 36.1 43.2 51.2 57.0 65.6 Non-interest Income 20.9 24.4 31.8 29.5 31.9 41.6 Fee Income 12.3 13.4 15.5 18.0 19.4 22.2 Insurance Premiums

• - - - -

8.1 Trading & FX 5.6 8.2 12.8 7.1 7.2 4.8 Others 3.0 2.8 3.6 4.4 5.4 6.5 Gross Operating Income 54.5 60.5 75.0 80.7 88.9 107.2 Operating Expense 35.8 39.5 43.3 48.5 55.1 70.1 Insurance Benefits and Claims

• - - - -

5.9 Pre-Provision Operating Profit 18.7 21.1 31.8 32.2 33.8 37.1 Provisions 6.1 4.9 7.0 5.1 3.0 3.8 Income bef. Pre-Acquisition 12.6 16.1 24.8 27.1 30.8 33.3 Pre-Acquisition Income

• - - - -
• 0.4

Taxes 1.7 1.6 2.1 4.2 5.7 6.8 Net Income 10.8 14.5 22.6 22.8 25.0 26.1

23

Balance Sheet

(in PHP billion) 2011 2012 2013 2014 2015 2016 Resources Reserve Assets 203.5 201.4 491.5 488.4 461.7 510.8 Investment Securities 188.4 237.3 227.9 221.5 225.8 269.0 Gross Customer Loans 670.1 769.0 911.5 1,089.4 1,279.4 1,482.0 Investment Properties 10.1 9.1 10.4 13.9 14.6 15.2 Other Assets 22.1 25.0 31.5 50.4 49.9 47.9 Total Resources 1,094.2 1,241.5 1,672.8 1,863.6 2,031.3 2,325.0 Liabilities Deposits 858.6 931.6 1,345.3 1,492.3 1,663.9 1,905.2 Bills Payable/Sub-debt 97.7 100.4 97.3 110.4 107.6 110.6 Insurance Contract Liab.

• - - - -

20.5 Other Liabilities 44.1 55.2 65.8 81.3 60.2 71.1 Total Liabilities 1,000.4 1,087.2 1,508.4 1,684.0 1,831.6 2,107.4 Total Capital 93.8 154.4 164.4 179.7 199.6 217.5 Total Liabilities & Capital 1,094.2 1,241.5 1,672.8 1,863.6 2,031.3 2,325.0

24

Financial Performance Indicators

2011 2012 2013 2014 2015 2016 Profitability Return on Ave. Common Equity 12.4% 12.0% 14.3% 13.6% 13.6% 12.6% Return on Average Assets 1.0% 1.3% 1.6% 1.3% 1.3% 1.2% Margins and Liquidity Net Interest Margin (NIM) 3.5% 3.4% 3.3% 3.2% 3.2% 3.2% Loan to Deposit Ratio 78.1% 82.5% 67.8% 73.0% 76.9% 77.8% Liquid Assets to Total Assets 35.8% 35.3% 43.0% 38.1% 33.9% 33.5% Cost Efficiency Cost to Income Ratio 65.6% 65.2% 57.7% 60.1% 62.0% 65.4% Cost to Assets Ratio 3.4% 3.4% 3.0% 2.7% 2.8% 3.2% Asset Quality NPL Ratio 3.4% 2.8% 1.6% 1.3% 1.2% 1.3% NPL Cover 106.0% 125.7% 170.7% 188.4% 166.1% 139.3% Capital1 CET1 12.0% 11.3% 10.6% Tier 1 Ratio 10.0% 15.2% 14.3% 12.4% 11.7% 10.9% Capital Adequacy Ratio 15.6% 19.1% 15.4% 14.5% 13.3% 12.3% Basel II Basel III

1 Per SOC, BSP

25

Presentation Outline

I. Overview II. Financial Highlights III. Ownership, Board and Management IV. Environmental, Social and Governance V. Awards and Citations

26

Shareholder Structure

• Majority owned by the SM Group

As of 29 December 2016 Name Nationality Shareholdings Percentage

• f

Ownership SM Investments Corp. Filipino 1,463,657,368 40.10% PCD Nominee Foreign 1,114,512,916 30.53% PCD Nominee Filipino 647,923,380 17.75% Multi-Realty Development Corporation Shoemart, Inc. Filipino Filipino 236,476,739 75,254,191 6.48% 2.06% Sub-Total, Top Shareholders 96.93% Total Shares Outstanding* 3,649,967,648

Source: Top 100 Shareholders as of 29 December 2016 *Number of chares outstanding subsequently increased to 4,367,168,499 as of March 27, 2017 due to the purchase of additional common shares by the Bank’s eligible senior officers pursuant to the Banks employee stock option/grant program and issuance of additional shares as a result of the recently concluded stock rights offer.

27

Financial Services Property Retail

Access to SM’s customer network

• Over 17,000 PHL tenants
• More than 9,500 suppliers
• 3.5 million average daily foot

traffic

• In-house business
• Home mortgage financing

for SM property projects

New business

• pportunity
• Goodwill from the SM

franchise

• Joint product development

SM expertise

• Middle market knowledge
• Expertise in retail market

and real estate

Branch locations

• Branches, ATMs in SM malls
• One of the largest integrated

property developer in Southeast Asia by market capitalization

• Dominant domestic mall

developer/operator - 60 malls with GFA of 7.7 mn sq m

• Largest local retail chain with 332

stores nationwide

• Increased presence in

discretionary retail with 1,503

• utlets
• Biggest domestic banking
• perations
• Interests in BDO and China Bank

The SM Group

• Harnessing synergies with the country’s largest conglomerate

• 7 directors out of 11 have an average of 35 years of banking

experience, including a former Partner and Head of Asia Financials Research at Goldman Sachs

• 2 directors are practicing attorneys, and another one is a

Philippine bar topnotcher and member of the State Bar of New York

• One of the strongest Board of Directors in the industry with extensive

banking and finance, legal and business background

Experienced Bankers Practicing Lawyers

• 1 director is a successful businessman who has made his

mark in the field of retailing Successful Entrepreneur

Board of Directors

28

Board of Directors

Henry T. Sy Senior Chairman Emeritus — first appointed to the Board in 1976  Founder and Chairman of the SM Group of Companies  Started his entrepreneurship career in 1958  Chairman of SMIC, SM Prime Holdings and SM Dev. Corp. Jesus A. Jacinto Jr. Vice Chairman — first appointed to the Board in 1996  Chairman and President of BDO Insurance Brokers  Chairman and President of Jaces Corp.  MBA Columbia University Teresita T. Sy Chairperson — first appointed to the Board in 1977  Serves as Director in multiple subsidiaries of BDO  Vice Chairperson of SMIC and Director of other SM Group companies, including Multi-Reality Dev. Corp. Antonio C. Pacis Director — first appointed to the Board in 2004  Director of BDO Capital  Corporate lawyer since 1967  Degree from Harvard Law School Josefina N. Tan Director — first appointed to the Board in 2007  President of BDO Private Bank  Former Director of EPCIB from 2005 to 2007  Former Director of Banco de Oro from 2001 to 2005 Nestor V. Tan President and CEO — first appointed to the Board in 1998  Holds Directorships of numerous BDO subsidiaries  Director of the Bankers Association of the Philippines  MBA Wharton School Dioscoro--Roy I. Ramos Independent Director — first appointed to the Board in 2016  CIO of RY&S Investments Ltd., Hong Kong since 2011  Former Partner and Head of Asia Financials Research from 1994 to 2011 at Goldman Sachs Jimmy T. Tang Independent Director — first appointed to the Board in 1984  Serves as Independent Director since 2002  Previously served as Director since 1984  Chairman and President of AVESCO Group of Companies Gilberto C. Teodoro Independent Director – first appointed to the Board in 2014  Served as Secretary of National Defense from 2007-2009  Masters of Laws from Harvard Law School  Topnotcher, 1989 Philippine Bar Examinations Jones M. Castro Jr. Independent Director — first appointed to the Board in 2012  Served as Head for South Asia and SEA at Wells Fargo Bank  MBA Stanford University Jose F. Buenaventura Independent Director — first appointed to the Board in 2013  Senior Partner of Romulo Mabanta Buenaventura Sayoc & De Los Angeles Law Offices since 1976  Master of Laws from Georgetown University Law Center Christopher A. Bell-Knight Director — re-elected to the Board in 2013  Previously served as BDO Director from May 2005 - Sep 2010  Former VP and Country Head of the Bank of Nova Scotia  Associate of the Chartered Institute of Bankers - British

• With broad business and professional experience

Corporate Support

Senior Management Team

• With extensive professional banking expertise

Anthony Chua Head — Global Operations  With BDO since 2014  Over 30 years of banking experience Dennis B. Velasquez Head — Central Operations  With BDO since 1995  Over 30 years of banking experience Evelyn C. Salagubang Head — Human Resources  With BDO since 2007  Over 20 years experience in HR Lucy Co Dy Head — Comptrollership  With BDO since 1985  Over 30 years of banking experience Ricardo V. Martin Head — IT Group  With BDO since 2001  Over 30 years of banking experience Edwin Romualdo G. Reyes Head — Transaction Banking  With BDO since 2015  29-year banking experience Evelyn L. Villanueva Head — Risk Management  With BDO since 2002  Over 30 years of banking experience Luis S. Reyes Jr. Head — IR & Corplan  With BDO since 2003  Over 30 years of banking experience Rebecca S. Torres Head — Compliance  With BDO since 1978  Over 30 years of banking experience Alvin C. Go Head — Legal  With BDO since 2013  In the practice of law for 30 years Maria Theresa L. Tan General Manager — BDO Insurance  With BDO since 2009  22-year banking and insurance experience Josefina N. Tan Head — Private Banking  With BDO since 2003  Over 30 years of banking experience Eduardo V. Francisco Head — Investment Banking  With BDO since 1999  27-year banking experience Ador A. Abrogena Head — Trust and Investments  With BDO since 1990  Over 30 years of banking experience Walter C. Wassmer Head — Business Lending  With BDO since 1997  Over 30 years of banking experience Rolando C. Tanchanco Head — Consumer Lending  With BDO since 2004  25-year banking experience Jaime C. Yu Head — Branch Banking  With BDO since 1997  Over 30 years of banking experience Pedro M. Florescio III Head — Treasury  With BDO since 2001  Over 30 years of banking experience

Products, Services and Subsidiaries Intermediation

Nestor V. Tan President and CEO

 With BDO since 1997  Over 30 years of banking experience Roberto E. Lapid President — BDO Leasing and Finance

 With BDOLF since 1993  Over 30-years of banking experience Estrellita V. Ong Head — Internal Audit  With BDO since 2011  Over 20 years experience in audit Renato Vergel de Dios CEO & Director – Generali Life  With Generali since 2009  40 years of experience in insurance Ramon T. Militar OIC, One Network Bank  With BDO since 2002  30 years of banking experience

31

Presentation Outline

I. Overview II. Financial Highlights III. Ownership, Board and Management IV. Environmental, Social and Governance V. Awards and Citations

Corporate Governance

Five (5) principles of CG practices Structure and mechanisms in place Full transparency and timely information disclosures Protection of stakeholders’ rights and interests Strict adherence to best practices and ethical standards

• Accountability
• Fairness
• Integrity
• Transparency
• Performance
• Independent Directors
• Segregation of roles
• Checks & Balances
• Code of Conduct &

Business Ethics

Corporate Governance

Board Corporate Governance

Minimum no. of Independent Directors (2) 5 Independent Directors

• Cert. Of Attendance – Board Members
• Cert. Of Qualification of Ind. Directors

Corporate Governance Manual CG Guidelines Disclosure Template SEC Annual Corp Governance Report Leading Practices on Corp Governance Code of Conduct and Business Ethics

Compliant with regulatory requirements

Corporate Social Responsibility

Relief, Rehabilitation and Reconstruction in Disaster hit areas BDO Foundation’s Disaster Response Advocacy

• Relief operations mounted by BDO Volunteers
• Rehabilitation and reconstruction of rural health centers

Corporate Social Responsibility

Relief, Rehabilitation and Reconstruction in Disaster hit areas BDO Foundation’s Disaster Response Advocacy

• Construction of houses in resettlement areas, multi-purpose halls

and school buildings

• Livelihood projects for families with disabled members (PWDs

Corporate Social Responsibility

Relief, Rehabilitation and Reconstruction in Disaster hit areas BDO Foundation’s Disaster Response Advocacy

• Distribution of teaching aids and instructional materials

Tree Planting Activity in support of “Grow a Million Trees” Campaign

Environmental Initiatives

ESG Considerations in Lending Lending Limits and Exclusion List

• Imposes limits and monitors exposure to certain industries,

e.g. Gaming, Tobacco and Alcohol

• Restricts lending to other sectors under the Exclusion List

(those deemed to have adverse or harmful effects on the community and the environment)

• Conducts environmental and social impact assessment

studies for big projects prior to financing

38

Environmental Initiatives

IFC Partner in Sustainable Energy Finance (SEF) Program Green Energy Investments

• Supports green energy investments

in Energy Efficiency (EE) and Renewable Energy (RE) projects

• Includes training of bank staff,

delivering technical assistance assessments to BDO clients and running market awareness initiatives

• Recognized as One of six (6)

Momentum for Change Lighthouse Activities for inspiring climate action in the financing for climate- friendly investments category

39

Environmental Initiatives

Environmental Awareness, Conservation and Management

• Energy conservation
• Water management
• Air quality
• Waste Disposal
• Other activities – tree

planting, clean-ups

• Raises awareness on environmental issues
• Promotes good environmental practices in the workplace
• Mobilizes volunteers for conservation programs

Green Initiatives

“Go Green” Campaign

40

Environmental Initiatives

Sustainability, climate change and wildlife protection

• Joint fund-raising campaign using BDO’s ATM network as key

channel to donate to WWF and support its various programs:

• WWF Corporate Partner of the Year Award in support of

WWF’s projects: ocean conservation, climate solutions, sustainable food and water production and species protection

• Donsol Whale Shark Program
• Environmental Education for

Climate Change

• Agro-Forestry in Ilagan, Isabela
• Food Security in Quezon, Palawan
• Tubbataha Reefs Conservation

Program

• Saving the Manta Rays and Whale

Sharks at Ticao Pass

• Bancas for the Philippines
• Sustainable Handline Tuna Fishing

in Pasuquin, Ilocos Norte

• Mt. Iglit – Baco Natural Park
• Earth Hour
• Biodiversity Protection and

Ecotourism in Donsol

• Double Wild Tamaraw Numbers by

2020

Support for World Wide Fund for Nature (WWF) Philippines

ESG Awards

Silver Awardee Corp Governance Scorecard Awardee for ten (10) consecutive years Among the Best CSR Companies in the Philippines Among the Best ER Companies in the Philippines

Platinum Award

Among the recipients of the 6th Asian Excellence Award

Corporate Governance Asia

Teresita T. Sy Asian Corporate Director Award

Institutional Investor

One of the 15 Recipients of the Institutional Investor Governance Awards 2016

ASEAN Corporate Governance Scorecard

Among the Top 50 Publicly- Listed Companies 2013-2015

42

Presentation Outline

I. Overview II. Financial Highlights III. Ownership, Board and Management IV. Environmental, Social and Governance V. Awards and Citations

43

Awards and Citations, 2014-2017 Best Bank in the Philippines

Asiamoney FinanceAsia

Among the Best Emerging Markets Banks

The Asset Euromoney Global Finance Global Finance

Philippine Bank of the Year 2016

Charlton East Coles

Top 15, Philippine Company of the Year 2016

Awards and Citations, 2014-2017

44

• Best Power Deal

San Buenaventura Power Ltd Co.

• Project Finance Deal /
• Best Energy/Renewable Energy Deal

San Carlos Sun Power

• Best Country Deal

Monde Nissin

• Asia Pacific Power Deal

San Buenaventura Power Ltd Co.

• Transport Deal of the Year

Mactan Cebu International Airport

Best Loan / Project Finance Deal Among the Best Emerging Markets Banks

Global Finance Asiamoney Euromoney Project Finance Magazine The Asset

Best Debt/Equity, M&A House Best Investment Bank Best Private Bank Best Project Finance Bank Best Retail & Wholesale Bank

45

Awards and Citations, 2014-2017

Best Investment Bank Best Private Bank Best Project Finance Bank Best Wholesale Bank

Fund House of the Year - Philippines Best in Treasury & Working Capital – SMEs in the Philippines

FinanceAsia FinanceAsia FinanceAsia The Asset The Asset The Asset The Asset The Asset Euromoney Global Finance Asian Private Banker Asiamoney Asiamoney AsianInvestor

Best in Trade Finance Best in Fund Management Best FX Bank/ Provider

46

Awards and Citations, 2014-2017

Best in Internet Banking Best Retail Bank

The Asset

Best in Internet Banking Best in Trade Finance

Best in Mobile Payment Initiatives Best in Deposit Initiatives

The Asian Banker

Best in Cash Mgt. & Transaction Banking Best FX Bank/ Provider Best in Social Media Initiatives

The Asian Banker The Asian Banker

Best Retail Bank in the Philippines Best Trade Finance Provider in the Philippines 2016 Cash Management Poll as voted by Corporates On-line Banking Initiative of the Year Automotive Lending Initiative of the Year Mortgage & Home Loan Product of the Year

The Asian Banker Asian Banking & Finance Asiamoney Asian Banking & Finance Asian Banking & Finance Global Finance

Excellence in Investor Relations Best in Trade Finance Best in Fund Management Best FX Bank/ Provider

47

Awards and Citations, 2014-2017

Best in Internet Banking

Asiamoney FinanceAsia

Among the Most Trusted Brands

Reader’s Digest

Asset Management Company

• f the Year

The Asset

Impact Investor of the Year Award

Best FX Bank/ Provider Best in Fund Management Excellence in Leadership & Management Excellence in Investor Relations

(Individual Awards)

Best Managed Company in the Philippines – Large Cap

FinanceAsia

Among the Best Managed Public Companies

Asiamoney

Nestor V. Tan Best Executive Most Organized Investor Relations Among the Best Investor Relations Companies in the Philippines Among the Best Senior Management IR Support Teresita T. Sy & Nestor V. Tan One of Asia’s Best CEOs (IR) Pedro M. Florescio One of Asia’s Best CFOs (IR) Luis S. Reyes, Jr. One of the Best IR Professionals (Phils) Best FX Provider in the Philippines Best Investment Management Company

• Philippines

Teresita T. Sy Management Man of the Year 2016 Among the Best at Investor Relations

FinanceAsia Management Association of the Philippines World Finance Global Finance

48

Thank you. www.bdo.com.ph