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OFFICE OF THE CHAIRMAN Luna, Maria Ana M. Vice Presidents STRATEGY AND DEVELOPMENT Dio, Amy Belen R. BPI FOREX CORP.
Senior Vice Presidents Melliza, Madeline H. Catelo, Felices V. Senior Vice President Erguiza, Susan L. President
Cruz, Rosemarie B. Monfort, Virginia L. De Guzman, Ivy Maria E. Javier, Maria Theresa Marcial Fronda, Dennis T. Figueroa, Susan C.
Gayares, Marita Socorro D. Perez, Art Gerald B. De Paula, Noel Isabelo S. Vice Presidents Lazo, Ma Cynthia N.
Madrilejo, Edgardo O. Quimbo, Joseph Sidney D. De Vera, Jose M. Campos, Lourdes Suzanne S. Pagulayan, Rhodora Adelaida C. BPI EUROPE PLC
Vice Presidents Ramirez, Maria Socorro D. Dulay, Melinda V. Gatmaytan, Ma. Lourdes P. Ramos, Erick M. Managing Director
Almazan, Jinky C. Saguindang, Isagani M. Eala, Jo Ann B. Lukban, Maria Consuelo A. Velasco, Ma Josephine P. Opulencia, Ramon G.
Amado, Frances S. Santos, Ma Claudina C. Feranil, Catherine Y. Osalvo, Emmanuel Jesus G. Vice President
Asis, Ma Cristina F. Silos, Marie Elizabeth L. Florentino, Maria Angelica G. Ysmael, Paul Roderick A. BPI/MS INSURANCE CORP. Yulo, Lizbeth Joan P.
Maramag, Angela Pilar B. Soriano, Ma Dina F. Gatuslao, Carlo Carmelo S. President
Mendiola, Nicanor A. Sta Ana, Ana Liza C. Lacerna, Jenelyn Z. ENTERPRISE SERVICES Takahashi, Masayuki BPI INTERNATIONAL FINANCE LTD.
Paz, Jonathan John B. Sta Ana, Lourdes O. Macatangay, Abraham Daniel J. Executive Vice President Business Directors Managing Director
Sumagpang, Sylvia P. Sy, Cristina J. Marquez, Ma. Carmina T. Jocson, Ramon L. Santos, Alberto C. Lin, Archie
Villaflores-Balatan, Melissa B. Tabo, Eleanor S. Navarrete, Armando T. Jr. Senior Vice Presidents Cutiongco, Ma Perpetua A.
Tadique, Rommel D. Ocliasa, Dominique R. Marquez, Pilar Bernadette C. Bernabe, Anthony Lou M. AYALA PLANS INC.
OFFICE OF THE PRESIDENT Taguba, Janette B. Oliva, Arnold E. Mercado, Eugenio P. Kano, Yasuhiro Director & Officer in Charge
Senior Vice President Uichanco Jr., Edilberto N. Paulino, Ma Genalyn R. Pertierra, Rafael J. Tan, Elizabeth J.
Alonso, Joseph Anthony M. Velez, Gemma T. Santiago, Noel A. Remo, Maria Corazon S. BPI DIRECT BANKO, INC.
Cruz, Ma Luisa L. Sison, Ana Maria C. Vice Presidents President BPI ASSET MANAGEMENT AND TRUST CORP.
Vice Presidents CORPORATE CLIENTS Tan, Ma Elizabeth V. Almirante, Joseph Y. Minglana, Jerome B. President
Jacinto, Miriam Jane M. Executive Vice President Urcia, Luis C. Alviar, Jocelyn C. Vice President Miranda, Mario T.
Mina, Andrea G. Montecillo, Daniel Gabriel M. Villaraza, Carmel Ace Q. Bables, Daniel S. Mabiasen, Rodolfo K. Jr. Senior Vice Presidents
Santos, Jose Roman H. Senior Vice Presidents Yu, Jocelyn O. Bednar, Maria Concepcion A. Chua, Smith L.
Silva, Elisa M. Cruz, Luis Geminiano E. Bernales, Dominador R. Jr. BPI CAPITAL CORP. Garcia, Maria Paz A.
Javier, Maria Cristina U. GLOBAL MARKETS Calingasan, Reynaldo C. President Tan, Sheila Marie U.
RETAIL CLIENTS Untalan, Barbara Ann C. Executive Vice President Chan, Aurora Socorro O. Syquia, Juan Carlos L. Vice Presidents
Executive Vice President Veloso, Roland Gerard Jr. R. Paner, Antonio V. Co, Giovanni Cornelius D. (Co-head, Investment Banking) Ayson, Remarie Suzette A.
Gotuaco, Joseph Albert L. Vice Presidents Senior Vice Presidents Del Fierro, Anna Christina U. Senior Vice Presidents Balita, Jose Erwin B.
Senior Vice Presidents Aniceto, Homer L. Biacora, Estelito C. Ejercito, Dennis Joy B. Cariaso, Reginaldo Anthony B. Cervantes, Miguel P. Jr.
Ang, Olga S. Basilio, Maria Cristina A. Calleja, Michael D. Ferrer, Josephine B. (Co-head, Investment Banking) De Peralta, Yvette Mari V.
Chuidian, Tomas S. Biason, Ma Nanette A. Gasmen, Dino R. Flores, Andre M. Huang, Rhoda A. Dee, Allen Martin O.
Jereza, Jose Raul E. IV Casals, Sheree N. Vice Presidents Lee, Eugene O. Vice Presidents Enrile, Roberto Martin S.
King, Angelie O. De Jesus, Marie Joan Socorro J. Agdeppa, Maria Lourdes Valerie C. Leong, Maria Antonia O. Collado, Marie Natalie J. Evaristo, Mario Gerardo Z.
Maranan, Florendo G. Felipe, Herman Rufino S. Arceo, Henry C. Lim, Roseller B. Gealogo, Noravir A. Jalandoni, Carlos A.
Santamaria, Mary Catherine Elizabeth P. Garcia, Jeanette J. Barrameda, Ma Lourdes D. Lustre, Francisca Ann M. Jardeleza, Francis L. Kawpeng, Marijoy Y.
Vice Presidents Go, Raymond H. Cayetano, Alan C. Narboneta, Elfrida S. Picache, Ma Josefina P. Limketee, Aileen Beryl A.
Aguilar, D’artagnan M. Gozar, Carmencita Lilia B. Cebrero, Jaena A. Segundo, Servillano R. Uy-Tioco, George S. Jr. Manalo, Andrae V.
Altea, Bernardo R. Laquindanum, Mary Jane Y. Dytoc, Brenno C. Umayam, Editha F. Sevilla, Christmas G.
Barroquillo, Ericson H. Lim, Maria Teresa Anna K. Fernandez, Rinaldo H. BPI SECURITIES CORP. Taco, Eliza May T.
Bello, Ronald Bernard P. Lualhati, Genaro N. IV Garcia, Cyril S. BPI FAMILY SAVINGS BANK, INC. Managing Director & CEO Valdez, Amalia Lourdes S.
Braganza, Sonia S. Marcos, Noelito C. Guevara, Jenny C. President Narvaez, Hermenegildo Z. Zialcita, Luis Antonio P.
Bustamante, Ma. Carmencita S. Munoz, Barbara S. Manalo, Susana M. Go, Maria Cristina L. Senior Directors
Diomampo, Irene A. Sangco, Jose Martin S. Neri, Emilio S. Jr. Senior Vice Presidents Bonilla, Claro P. BPI INVESTMENT MANAGEMENT INC.
Dionisio, Florisa F. Pineda, Donarber N. Abola, Joaquin Ma. B. Ongpin, Marianna M. President
Escolar, Richmond Ezer O. FINANCIAL PRODUCTS AND SERVICES Salvan, Jose Esteban J. Carlos, Felipe D. Espiritu, Ruben Enrique A.
Farinas, Ritche G. Executive Vice President Singian, Jennifer Gayle P. Dimayuga, Raul Marcelo D. BPI CENTURY TOKYO LEASE AND FINANCE
Galvez, Marwin L. Paterno, Simon R. Sorra, Jethro Daniel S. Ricardo, Victoria Marie G. CORP. BPI FOUNDATION, INC.
Gangoso, Jesusa Camila V. Senior Vice Presidents Tan, Arthur Noel S. Roces, Ma. Mercedes D. President Executive Director
Gasa, Jose Mari Israel V. Gomez, Jesus Angelo O. Vice Presidents Kurebayashi, Hiroyuki San Diego, Ma. Cristina L.
Gonzales, Glenda M. Luchangco, Eric Roberto M. Altamirano, Ramon Noel S. Vice Presidents
Lamasuta, Aileen S. Ocampo, Marie Josephine M. Ampolitud, Mary Jane L. Bandol, Christine Grace A.
Lucero, Joseph L. Parungao, Joseph Philip Anthony S. Ballelos, Luisito R. Ikeda, Masahito
Tagaza, Manuel C. Celestino, Aurora L.
In 2017, the changes in pressures and dynamics Another major governance milestone for Advisory Council Board Charter As we are a financial institution imbued with revoked by the stockholders. The Directors hold
around the world that boards of directors faced 2017 was the creation of the Director’s Code public interest, qualifications for membership their office, charged with the duty of exercising
were diverse and significant in their impact. of Conduct. The renewal of the Employee’s The Advisory Council to the Chairman was The charter of the Board of Directors articulates in our Board of Directors are dictated by our sound and objective judgment for the best
Globally, institutional investors continued Code surfaced the need to create a separate organized following the annual stockholders with specificity the governance and oversight Amended By-Laws, Manual of Corporate interest of the Bank.
their push for more uniform standards of Code for Directors because of the specific meeting in April 2016. The Advisory Council responsibilities exercised by the directors and Governance, the Corporation Code, and relevant
corporate governance while also increasing conduct rules and standards applicable only was formed to expand the range of expertise, their roles and functions in the Bank. It includes regulations of the Bangko Sentral and the SEC. Duties and Responsibilities 102-26
their expectations of the role that boards should to the Board which would not be covered experience, and collective wisdom available to provisions on Board composition, Board
play in responsibly representing shareholders. under the Employee’s Code. There was also the Bank. Committees and board governance, subject to As a publicly listed company, we also take The Board bears the primary responsibility
Regulators, particularly in emerging economies a need for a separate Director’s Code to also the Bank’s Articles of Incorporation, Amended special care to ensure that the Board’s for creating and enhancing the long-term
and those with nascent corporate governance improve compliance with the aforementioned Board of Directors By-Laws and applicable laws and does not limit, composition and the director qualifications shareholder value of BPI, and generating
regimes, responded by aligning approaches to BSP Circular 900 and SEC Code, as well enlarge or change in any way the responsibilities meet the pertinent governance regulations, reasonable and sustainable returns on
corporate governance within and across borders as the standards of the ASEAN Corporate The leadership and stewardship of the Board of of the Board. requirements, and standards of the PSE. shareholder capital by, among others, reviewing
and pushing for governance reforms that Governance Scorecard Version 2. The creation Directors is one of the most important factors and approving the Bank’s mission, vision,
compelled boards in publicly-listed companies of the Director’s Code, predating the issuance accounting for the Bank’s long-term growth The Board Charter is incorporated in our Manual See Annex A149-A153 for full biographies of our strategies and objectives; appointing senior
to demonstrate how much more they are of BSP Circular 969 on Enhanced Corporate and success. In discharging their oversight of Corporate Governance, both of which are Board of Directors. executives and confirming organizational
actively involved in a company beyond guiding Governance Guidelines for BSP Supervised responsibilities as guardians of the Bank’s reviewed annually. The Bank’s updated and structures; approving enterprise-wide
strategy-setting for long-term value creation. Financial Institutions, correctly anticipated the financial prudence and strength, the Board revised Manual of Corporate Governance was Diversity policies and procedures; monitoring business
shifting governance focus and overriding theme provides challenge, oversight, and advice to approved and adopted by our Board of Directors and financial performance; overseeing risk
Not coincidentally, the Bank had already begun both locally and in the region which was: the ensure that BPI continues to do the right things in its entirety on May 31, 2017. The Board Diversity Policy, adopted in 2015, management frameworks and risk appetite, and
further strengthening its corporate governance importance of board quality, composition and the right way, assuring its long-term sustainable underscores diversity at the Board level as fostering regulatory compliance.
framework early in 2017. One of the first major governance. success. Under the leadership of the Chairman, Composition and Qualifications an essential element of sound corporate
initiatives was the redrafting of the Employee’s the Board creates the framework within which governance, sustainable and balanced Selection 102-24
Code of Business Conduct and Ethics. In the Looking ahead to 2018, even with the the Bank’s executive team, headed by our Board membership was reinvigorated in 2017 development, and effective business strategy.
past 2-3 years, regulators had been shifting heightened challenge to transform into a more President and Chief Executive Officer, steers with the election of a new Non-Executive Diversity—in terms of gender, age, cultural Our shareholders may recommend candidates
much of their focus on testing the robustness strategically focused, technologically modern, the business. The Board sets the Bank’s strategy Director to replace an outgoing one at the background, education, professional experience, for board membership for consideration
of the corporate governance framework of and operationally agile institution that provides and risk appetite, and approves capital and Annual Stockholders' Meeting in April. Majority skills, knowledge, length of service, and other by the Nominations Committee. Such
listed companies and financial institutions. relevant and competitive products and services operating plans presented by management for or 14 of the 15-member board still comprised regulatory requirements—is duly considered recommendations are sent to the Committee
BSP Cir. 900, Guidelines on Operational Risk in the face of unyielding competition from sustainable achievement of strategic objectives. of Non-Executive Directors, safeguarding the in the design and selection of the Board’s through the Office of the Corporate Secretary.
Management, and the SEC Code of Corporate fintech disruptors and non-traditional digital independent oversight of management. The composition. Candidates recommended by shareholders
Governance for Publicly-Listed Companies, payment companies, BPI’s main competitive Considering the Bank’s role in the BPI group as only executive Director is the Bank’s President are evaluated in the same manner as Director
both issued in 2016, pointed to the need for us advantage remains to be its uncompromising parent and publicly listed company, the Board of and CEO. The size of our Board is deemed Almost a third of our 2017 Board are women, candidates identified by any other means. The
to review our Code of Conduct and make the integrity and governance standards that Directors ensures that BPI maintains an effective, appropriate given the complexity of operations two of whom are Independent Directors. Committee itself may identify and recommend
necessary amendments. buttress its more than 166-years as a Trusted high-level risk management and oversight of the Bank and the entire BPI group, the qualified individuals for nomination and election
Bank. process across all companies in the group, with geographical spread of our business, and Our full Board Diversity Policy may be read in to the Board. For this purpose, the Committee
The renewed Code is more comprehensive due consideration for the group’s business and the significant time demands placed on the our website, www.bpiexpressonline.com, under may utilize professional search firms and
encompassing conduct provisions aligned Our corporate governance practices are reputation, the materiality of financial and other Directors. About Us/Corporate Governance/Board Matters. other external groups to search for qualified
with the BPI Credo, that bring to the fore the embodied in our Manual of Corporate risks inherent in the business, and the relative candidates.
interests of our clients, employees, shareholders Governance and the Integrated - Annual costs and benefits of implementing specific Our Board of Directors enjoys the trust and Power of the Board of Directors
and the nation. New regulatory mandates on Corporate Governance Report, which may controls. respect of the local and international business The Nominations Committee pre-screens the
consumer protection and data privacy were be read in our website at https://www. community. They are established professionals The corporate powers of a bank shall be candidates and prepares a final list of candidates
incorporated as well. The renewed Code was bpiexpressonline.com under About Us/ The Board also decides on all other important who provide perspective, objectivity, practical exercised, its business conducted and all its prior to the Annual Stockholders' Meeting. Only
approved by the Personnel and Compensation Governance. matters that pertain to the entire group, in wisdom, and sound judgment in their oversight, property controlled and held by its Board of nominees whose names appear on the final
Committee and Executive Committee in August view of their strategic, financial, regulatory and recommendations and evaluation of bank Directors. The powers of the Board of Directors list of candidates are eligible for election to the
and was published on the company website in reputational implications. operations and management. as conferred by law are original and cannot be Board.
September 2017.
The Executive Committee, between meetings with bank policies, applicable laws, and
Chairman Jaime Agusto Zobel de Ayala
of the Board, possesses and exercises all regulatory requirements.
powers of the Board in the management and This Committee also reviews the external
Vice Chairman Fernando Zobel de Ayala direction of the affairs of the Bank subject to auditor’s annual audit plan and scope of
the provisions of its by-laws, and the limitations work, and assesses its overall performance
of the law and other applicable regulations. and effectiveness. In consultation with
It serves as the operating arm of the Board in management, this Committee also approves
Members Cezar P. Consing, President and CEO
Rebecca G. Fernando all matters related to corporate governance. the external auditor’s terms of engagement
Aurelio R. Montinola III It approves all major policies and oversees and audit fees.
Antonio Jose U. Periquet (Independent)
Mercedita S. Nolledo all major risk-taking activities, including the
approval of material credit exposure. Risk Management Committee
Chairman Octavio V. Espiritu (Independent)
The Audit Committee monitors and evaluates The Retirement and Pension Committee Members Delfin C. Gonzalez, Jr.
Rebecca G. Fernando
the adequacy and effectiveness of the Bank’s oversees the fiduciary, administrative,
Chairman Xavier P. Loinaz (Independent) system of internal control systems, risk investment portfolio, and other non-investment
management, and governance practices. It aspects of the Bank’s retirement plan.
provides oversight on the integrity of the
Bank’s financial statements and financial
Members Octavio V. Espiritu (Independent)
Dolores B. Yuvienco (Independent) reporting process, performance of the internal
and external audit functions and compliance
The following is an overview of the Bank’s principal activities and its functional organization (as of December 31, 2017): BPI TABLE OF ORGANIZATION
Corporate
Members Rebecca G. Fernando Secretary
Romeo L. Bernardo (Independent)
Rosemarie B. Cruz, Chief Audit Executive
Related Party Risk Management Corporate Governance
(Non-Voting)
Transaction Committee Committee
Executive Committee Committee
Audit Committee
Marita Socorro D. Gayares, Chief
Compliance Officer (Non-Voting)
Risk Management
Customer Compliance Internal Audit
Related Party Transaction Committee Experience
The Related Party Transaction Committee is It independently reviews, vets, and endorses Strategy & Enterprise
Client Segments Financial Products Global Markets Chief Credit
Development Services
charged with ensuring that the Bank’s dealings significant and material related party
with the public and various stakeholders are transactions—above and beyond transactions
Deposits
imbued with the highest standards of integrity. qualifying under directors, officers, shareholders, Retail Corporate Balance Sheet Strategic & Human
Management Corp Planning Resources
In conjunction with the Executive, Audit, Risk, and related interests restrictions—such that Loans
Centralized Information
and Corporate Governance Committees, this these transactions are dealt on terms no less SME Unsecured Sales Accounting Systems
Committee endeavors to ensure compliance favorable to the Bank than those generally Lending and
Cards Trading Legal Services Centralized
with Bangko Sentral regulations and guidelines available to an unaffiliated third party under the
Operations
Electronic
on related party transactions. same or similar circumstances.
Channels Facilities
Services
Remittance
Security Office
Partnership
Distribution Corporate
Affairs
Cash Sustainability
Management Office
BPI Family BPI Direct BanKo BPI Capital BPI Investment BPI Forex
BPI Asset
Savings Bank, Inc. Inc. Corporation Management Inc. Corporation
Management &
Trust Corporation
BPI International BPI Europe BPI Foundation, BPI/MS BPI PhilAm Life BPI Century Tokyo
Finance Ltd. Plc Inc. Insurance Corp. Assurance Corp. Lease and Finance
Corp.
Organization operational and financial reporting to protect Comprehensive Framework. BPI pursues best and processes, and risk-intelligent data and management policies and methodologies
the Bank’s reputation for integrity and fair practices in enterprise risk management across technology. It oversees and manages our in alignment with our strategy. The CRO,
BPI’s President and CEO is responsible for dealing. We also strive to achieve accountability our businesses and processes. We espouse a exposures to financial and non-financial risks who is primarily responsible for the overall
formulating the business strategy and the in our revenue performance, efficiency in our comprehensive risk management and capital and monitors our regulatory and internal capital management of the BPI Group’s total risk,
overall management of the Bank in order to expenditure of resources, and high quality in management framework, which integrates the adequacy vis-a-vis these exposures. It nurtures ensures that risks are rationally undertaken,
fulfill its objectives. Effective January 2017, the the delivery of services and achievement of identification, measurement, monitoring, and a culture of risk management across the BPI within our risk appetite and commensurate to
Bank has eight senior executive officers, each customer satisfaction. Our management controlling of our risk exposures. We work to Group and exercises oversight over the various returns on capital. Our risk appetite is a careful
responsible for an area of the Bank’s business. is periodically reviewed and rewarded according ensure that we have adequate liquidity and subsidiaries across the enterprise. We manage measure of the amount of risk we are willing
They directly report to the President and CEO. to their performance relative to innovation, capital at all times in order to mitigate risks. Our risks through clearly-delineated functions, using to assume in order to achieve our business
initiatives, assigned targets, and feedback from framework conforms not only with our own the “three lines of defense” model, to ensure objectives. Our risk appetite statements on key
These senior executive officers are Joseph Albert customers, peers, and the Board. rigorous standards, but also with Bangko Sentral effective risk management governance and risk areas are regularly reviewed, approved by,
L. Gotuaco, Executive Vice President, Retail directives promoting an effective internal control processes across the Bank. This model and reported to the Board through the RMC.
Clients; Daniel Gabriel M. Montecillo, Executive We place strong emphasis on prudent capital adequacy assessment and other risk defines the risk management responsibilities
Vice President and Head, Corporate Clients; risk-taking and risk management. Specific management processes. Our risk management of each unit depending on whether they own We track risks according to three major
Simon R. Paterno, Executive Vice President and management committees ensure that framework focuses on three key components: and manage the risk (1st line), oversee risk classifications—credit, market and liquidity, and
Head, Financial Products and Services; Antonio major risks are identified, measured, and sound risk governance; effective processes, management (2nd line), or provide independent operational and IT. Credit risk arises from our
V. Paner, Treasurer, Executive Vice President controlled against established limits. These information systems, and controls; and timely assurance on the quality and effectiveness of risk core lending and investing business; market
and Head, Global Markets; Ramon L. Jocson, key management committees are the Credit and reliable data. management (3rd line). and liquidity risk arises from our business in
Executive Vice President and Head, Enterprise Committee, Assets and Liabilities Committee, managing interest rate and liquidity gaps, as
Services; Maria Theresa Marcial Javier, Chief Operational and IT Risk Management Risk management in BPI follows a top-down Our risk culture is strongly anchored in our vision well as in the trading and distribution of fixed
Finance Officer, Senior Vice President and Committee, Crisis Resiliency Committee, approach, with risk-appetite setting and overall of transparency and integrity in the workplace, income, foreign exchange, and derivative
Head, Strategy and Development; Edgardo O. Information Technology Steering Committee, risk strategy emanating from the Board of creation of sustainable value, and delivery of instruments (as allowed by regulation); and
Madrilejo, Senior Vice President and Chief Risk Capital Expenditures Committee, Anti-Money Directors. Our Board fulfills its risk management maximum returns to shareholders. In order operational and IT risk arises from inadequate
Officer; and Joseph Anthony M. Alonso, Senior Laundering Evaluation Committee, Fraud and function through the Risk Management to succeed in our mission of satisfying our or failed internal processes, people, information
Vice President and Chief Credit Officer. Irregularities Committee, ROPA Sales Committee, Committee. The RMC defines risk appetite responsibilities to our clients, employees, technology and systems, and threats from
and Management Vetting Committee. Members statements at functional risk areas, aggregate, shareholders, and country, we exercise external events that pose risks of financial losses
Planning and Performance Management of these committees are senior officers (in and enterprise levels, and directs our risk proactive and prudent risk management. and damage to our reputation.
the case of the Information Technology strategy anchored on sound risk management Our Risk Management Office, headed by the
The Bank articulates its strategy in periodic Steering Committee, a non- executive board governance, value-enhancing risk methods Chief Risk Officer, leads the formulation of risk
planning exercises, realizes plans in formal member) who are subject matter experts in
budgets, and conducts periodic performance areas of knowledge relevant to the respective
reviews against both our budgets and our past committees. They include client specialists, Risk Management Committee of the Board of Directors
performance. We act in accordance with well- product specialists, senior officers of the
defined operating policies and procedures, and Risk Management Office, and other senior
ensure the accuracy and transparency of our executives. Chief Risk Officer
Our Strategic and Corporate Planning division compare favorably with regulatory and internal The Bank’s total qualifying capital for the years In the normal course of business, the Bank The RPTC is composed of three Directors,
oversees the management of the Bank’s capital limits and buffers. ended 2017 and 2016 were at Php 166.5 billion transacts with related parties which include majority of whom are Independent including
adequacy. Capital adequacy ratio, or CAR, is a and Php 149.0 billion, respectively. The Bank’s its Directors, officers, stockholders and related its chairman, and two non-voting members
measure of the Bank’s total qualifying capital The table below shows the Bank’s CAR total qualifying capital for 2017 and 2016 were interest, subsidiaries and affiliates (including from management, the Chief Audit Executive
relative to its risk-weighted assets, and indicates components for December 2017 and 2016: largely composed of CET1/Tier 1 capital at 93.0% and the Chief Compliance Officer, both of
those under the Ayala group of companies, or
the ability of its capital funds to cover various
and 93.1%, respectively. conglomerate), as well as other related parties whom perform post-reviews to ensure proper
business risks.
Regulatory Capital defined in the Bank’s internal policy. implementation of related party transactions.
Risk
A summary of our CAR is set forth in the audited On the other hand, the Management Vetting
This division also ensures compliance with (Php Mn) 2017 2016
financial statements of this annual report, under These transactions involve credit and non-credit Committee is composed of the Executive Vice
regulatory and internal minimum capital
Credit Risk 116,658 102,839 Note 29.7 (Capital Management). Computation exposures such as borrowings, guarantees, Presidents of the Bank.
adequacy requirements, referred to as the Bank’s
internal minimum CAR, or IMCAR, and Market Risk 2,247 1,459 of the Bank’s CAR in the audited financial agreements for the periodic provision of leases
the CAR management action trigger, or CARMAT, statements was primarily based on or other services, asset purchases and sales, Loans and advances granted to related parties
Operational Risk 11,785 10,287
which incorporate the Bank’s internal capital the CAR reporting template provided by Bangko derivative transactions, trust transactions, as disclosed in the Audited Financial Statements,
buffers and limit triggers, and capture risks Total 130,691 114,585 Sentral circulars and other relevant updates. and investments for which related parties are particularly Note 27 on RPTs and in Schedule B,
beyond Pillar 1 (credit, market, and operational). perceived to have significant influence. As part are generally secured with interest rates ranging
To fully comply with the phased-in of the Bank’s effort to ensure that transactions from 1.37% to 7.64% (including those pertaining
Furthermore, as the central planning unit of the Capital Adequacy
implementation of the Basel III capital and with related parties are normal banking activities to foreign currency-denominated loans) and
(Php Mn) 2017 2016
Bank, this division is responsible for assessing liquidity reforms by the Bangko Sentral effective and are done at arm’s length (particularly, on maturity periods ranging from four days to 14
and raising the strategic capital needs of the CET1/Net Tier1 ¹∕ 154,801 138,691 January 2014, BPI has adopted the Basel III years.
terms and conditions comparable to those
Bank, as well as initiating approvals for dividend
CAR reporting template, as well as aligned offered to non-related parties or to similar
payments to shareholders. T2/Net Tier2 ²∕ 11,682 10,299
with limits and reportorial requirements on transactions in the market), vetting is done either The Bank is committed to ensure strict
Total QC ³∕ 166,484 148,989 liquidity coverage, domestic systemically by the Board-level Related Party Transaction compliance with laws, regulations and reporting
Sound Capital Management. Effective capital
important banks, and leverage ratios. The Bank Committee or Management Vetting Committee, requirements relating to DOSRI and related
management supports the Bank’s assets and
Total CRWA 4∕ 1,166,583 1,028,388 continues to monitor and prepare for possible depending on materiality, prior to implementation. party transactions, by instituting rigorous
absorbs losses that may arise from credit, market
and liquidity, operational and IT, and other risk effects of Basel III revisions to risk-based capital Related parties whose individual and group vetting processes and establishing adequate
Total MRWA 5∕ 22,475 14,590
exposures. The Bank’s capital management requirements by performing simulations, such exposures, existing or potential, are considered controls and oversight mechanisms.
framework ensures that on stand-alone and Total ORWA 6∕ 117,849 102,868 as those relating to the net stable funding ratio, material have been vetted by the RPTC.
group bases, there is sufficient capital buffers at as well as an interim stress testing, based on
all times to support the respective risk profiles TRWA 7∕ 1,306,907 1,145,846 mid-year financial data.
of the various businesses of the Bank, as well
Consolidated Ratios (%)
as changes in the regulatory and accounting Discussions both at the Bank management
standards and other future events. and Board levels also covered the subsequent
CAR 12.74 13.00
phases of the transition and implementation
BPI submits a comprehensive internal capital
CET1 11.84 12.10 plans in order to meet the revised minimum
adequacy assessment process, or ICAAP,
capital and liquidity requirements prescribed by
document annually to the Bangko Sentral, in Solo (Parent) Ratios (%) Basel III, including interdependencies with the
accordance with the Pillar 2 guidelines of the
impending PFRS 9 implementation by January
Basel framework. CAR 11.39 11.62
2018.
The Bank views compliance to mean not only The Compliance Office also helps in efforts The Compliance Office promotes adherence as those on insider trading, whistleblower, and and timely updates of policies and procedures in Enterprise Information Security Management.
adherence to laws, regulations, and standards but, towards achieving adherence to the Bank’s internal and awareness to laws, rules and regulations by related party transactions. accordance with changes in regulations and AML The Enterprise Information Security Management
more importantly, the consistent conduct of the confidentiality regulations (“China Wall”); provides electronically posting information and documents and CFT typologies. (EISM) Unit which is headed by BPI Group’s
affairs of the Bank within a culture of high integrity, regular training and education for employees in a compliance database that is accessible to all The Corporate Governance Department also Enterprise Information Security Officer (EISO),
bounded by conformity to ethical business practice, on the applicable regulations, rules and internal employees. Regular meetings are conducted by the monitors compliance with respect to the Bank’s With increasing global AML initiatives and manages the Bank’s information security
abiding by the principles of fair dealing, accountability standards; and leads the Bank’s business units in Compliance Office with the GCCOs to discuss the participation in regional corporate governance numerous new regulations, we recognize that management program. The information security
and transparency. This ensures that in all our compliance risk assessment, rules-based testing impact of new regulations, decide on the required initiatives jointly sponsored by the SEC and our AML processes and controls are changing program ensures that information assets across the
areas of activity, the Bank and its stakeholders are and reporting. compliance measures and amend compliance the Institute of Corporate Directors such as the from a stand-alone function under Compliance, Bank are protected and secured by technology-
protected from business risks as comprehensively matrices as necessary. Through continued liaison ASEAN Corporate Governance Scorecard. Working to an increasingly complex and overarching based and process-based controls commensurate
as possible. We value most our reputation and The Compliance Office is currently organized and dialogue with regulators, the Compliance closely with the Board-level Audit and Corporate function cutting across legal, risk and operations. to their value. The Bank continues to put a premium
the fact that we are trusted by our shareholders, to cover Regulatory Compliance, Corporate Office ensures the prompt dissemination of new Governance Committees, this department ensures We constantly review our program to ensure on building and maintaining a cyber-aware
clients, employees, partners, and members of the Governance, Anti-Money Laundering Compliance, regulations and other developments affecting bank that the Bank’s corporate governance foundations compliance with the latest legislative and regulatory organization and has correspondingly invested
communities we serve. FATCA Compliance, Enterprise Information operations. can withstand rigorous tests and demands of more developments. Our Board and management support in an Information Security Awareness Program
Security Management, and the Data Privacy stringent supervision, regulation, disclosure, and bank-wide efforts towards establishing strong AML that ensures that employees are aware of the
Oversight of the management of the Bank’s Office. Considering the rapid developments in Regulatory Compliance. Our Regulatory bank governance best practices. assurance mechanisms and globally consistent importance of protecting information and how best
business risk and implementation of its compliance the regulatory sphere as well as the growing Compliance Department covers adherence to all procedures. to handle these assets securely. The Bank has online
function is the responsibility of our Board of complexity of the Bank’s products, services and relevant and applicable Philippine banking laws Anti-Money Laundering Compliance. The information security training programs which
Directors, through the Audit Committee. At the transactions, the Compliance Office evolves in its and regulations. They are in charge especially of prevention of financial crimes is a top priority of Our specialized IT system captures information are taken by employees as mandatory courses
management level, the compliance function is coverage of compliance practice areas to anticipate regulatory compliance management with respect BPI, not only because they pose a significant threat required for covered transaction reports, and and regularly observes the Cyber Security
carried out by the Compliance Office, led by our and meet forward challenges. Enhancement of to the Bangko Sentral’s institutional compliance to our reputation, but because they weaken the detects suspicious transaction patterns for Awareness Month where lectures, workshops and
Chief Compliance Officer. our compliance function’s scope and domain rating system, which comprehensively evaluates integrity of the global financial system. Hence, our reporting to the Anti-Money Laundering Council. demonstrations on current cyber-attacks, emerging
is redefined for new and emerging sources of the effectiveness of a bank’s compliance system in Compliance Office extends its ambit beyond the defense technologies and best practices
The Compliance Office oversees the implementation compliance risk. mitigating business risk. Bank, its policies, and its employees to ensure that And to promote awareness, knowledge and are conducted by regional experts from the Bank’s
of the Bank’s enterprise-wide compliance programs. our clients also act within the law and do not use understanding of AML concepts, principles and partner cyber security firms. EISM also functionally
These programs take into account the size The Compliance Office is also empowered by Partnership-building with our regulators (Bangko the Bank for illegal activities. requirements, all employees are required to attend reports to the Risk Management Office and the
and complexity of the Bank, the relevant rules the accountability to it of 14 Group Compliance Sentral, SEC, PSE, AMLC and PDIC), external auditor, training programs conducted by our AML Department Board’s Risk Management Committee.
and regulations that affect its operations, and Coordinating Officers, or GCCOs, who are embedded and industry organizations (like the Association The Compliance Office’s Anti-Money Laundering or through e-Learning courses available with the BPI
the business risks that may arise due to non- in operational units throughout the Bank. The of Bank Compliance Officers and the Bankers Department is responsible for monitoring customer University, our in-house training academy. Data Privacy Office. Republic Act No. 10173,
compliance. By using regulatory and self- GCCOs are charged with enforcing Compliance Institute of the Philippines) is also essential work and counterparty transactions in compliance with known as the Data Privacy Act of 2012, requires
assessment compliance matrices, compliance Office initiatives, as well as providing timely reports in regulatory compliance management. Through the Anti-Money Laundering Law, its implementing FATCA Compliance. We recognize global government and private sector entities to apply
measures are formulated to mitigate identified to the Compliance Office. continued liaison and dialogue with regulators rules and regulations, and Bangko Sentral Circular No. movements to widen tax regimes across borders the principles of Transparency, Legitimate Purpose
business risks and tested to ensure effectiveness. and interaction with compliance colleagues in 706. Developed under the guidance of the Bangko such as the enactment into law by the United and Proportionality in their processing of personal
The Compliance Office applies a three-layered the industry, this department ensures the prompt Sentral’s Money Laundering and Terrorist Financing States government of the Foreign Account Tax data so that the data is only used in relevant and
The Compliance Office routinely provides advice compliance testing and monitoring process, which dissemination of information on new regulations Prevention Program, the Bank’s anti-money Compliance Act. We value our ability to transact specifically stated ways, is not stored for longer
to individual business units on applicable laws, includes unit self- assessment testing, conducted and compliance-related developments affecting laundering program covers all its subsidiaries and efficiently in US dollars and, in support thereof, than necessary, is kept safe and secure, is used
directives, standards, and regulations as well by GCCOs; independent random testing, performed bank operations. affiliates. established a FATCA Compliance Department to only within the confines of the law and is stored
as provides compliance support to the Group by the Compliance Office; and independent ensure consistent and effective compliance with following people’s data protection rights.
Compliance Coordinating Officer. periodic review by the Bank’s Internal Audit Corporate Governance. The Corporate This program aims to implement sound anti- FATCA regulations throughout the Bank and its Cybersecurity and data privacy and protection
Division, whose results are reported regularly to the Governance Department covers the compliance money laundering practices and combat terrorist subsidiaries. have, today, become corporate governance and risk
It jointly develops guidance on operations and Audit Committee. aspect of the Bank’s corporate governance financing and other financial crimes. It consists of management concerns.
business processes in order to guard against framework and governance requirements, conscientious customer due diligence and know- As required under the rules of FATCA, we have
potential compliance risk, and reviews and assists Overall enforcement is through self-regulation externally, with respect to the laws relevant and your-customer, or KYC, processes; technology and appointed a responsible officer to oversee the BPI has established a comprehensive Data Privacy
in interpretations of laws, implementing rules within the business units, and independent testing applicable to BPI as a bank and as a publicly listed automated tools to identify and detect financial Bank’s compliance with regulations, establish a Program utilizing a combination of policies,
and regulations, standards and guidelines of the and reviews conducted by the Compliance Office company such as the Corporation Code, and the transactions of a suspicious nature; and monitoring, program to ensure its effective implementation, organizational structure, access controls and
Bangko Sentral, SEC, AMLC, PSE, PDIC, IC, National and Internal Audit. Results of these reviews are rules and regulations of the Bangko Sentral, SEC, periodic review, and timely reporting of anti- and accomplish certain certifications with the technologies designed for risk reduction. The Bank
Privacy Commission and other regulatory bodies elevated to the Board’s Audit Committee and, PDIC and the PSE, and internally, with respect money laundering-combating the financing of IRS. Our FATCA compliance program provides for has a Data Privacy Office, headed by a Board-
for compliance, communicating them and verifying with respect to governance issues, the Corporate to BPI’s Amended By-Laws, Manual of Corporate terrorism (AML-CFT) events to senior management. additional requirements on customer due diligence appointed Data Privacy Officer (DPO), a lead senior
adherence. Governance Committee. Governance, Code of Business Conduct and This program also includes regular and effective and documentation and new reporting guidelines management officer.
Ethics, Director’s Code of Conduct and corporate AML-CFT training and awareness programs for to relevant tax authorities.
governance-related policies such all personnel; maintenance of customer data and
transaction documents within prescribed timelines;
106 2017 Integrated Report ENRICHING RELATIONSHIPS 107
The key focus of the DPO is to oversee data Practice of Internal Auditing. The program CODE OF BUSINESS CONDUCT AND ETHICS Manual of Corporate Governance, and fully Covered persons are strictly prohibited from Upon receipt of the whistleblower report, the
privacy compliance and manage data protection includes periodic internal and external quality 102-17 comply and adhere to the principles, standards trading during periods of structured and personnel to whom the report was disclosed
risks for the organization consistent with the assessments and ongoing monitoring of the BPI has Codes of Business Conduct and Ethics for and policies therein. non-structured disclosure (trading blackout). shall immediately initiate the investigation by
Data Privacy Act rules and regulations, issuances performance of the internal audit activity. its directors, officers and employees that provide This prohibition includes passing on material, turning over the details, and documents, if any,
by the National Privacy Commission and Periodic internal assessments are conducted the key practices and behaviors derived from Conflict of Interest. BPI does not tolerate non-public information relating to BPI or of the reported case to the investigating unit of
other applicable laws. Management has also annually, while external quality assessments the BPI Credo and Core Values, that guides what those who place their interest above that of our its clients to anybody who may buy or sell the Bank. The investigation of the whistleblower
appointed Compliance Officers for Privacy (COP) are conducted at least once every five years they say and do, in order that the right decisions institution, our clients, or our business partners. securities. A trading blackout prohibits trading report shall follow due process as stipulated in
for major business units of the Bank. by a qualified independent validator. This unit are taken in performing their respective roles We have in place standards on conflict-of- once the covered person is in receipt of material the Bank’s manual of operations on standards in
maintains its “generally conforms” ratings on and responsibilities across various functions in interest that elevate the interest of the Bank information before a structured or unstructured handling fraud and irregularities.
INTERNAL AUDIT AND CONTROL both internal and external assessments, which the Bank and in handling relationships with all above that of the personal interests of Directors, disclosure is made until after said disclosure.
indicate that its activities have continuously stakeholders. officers, and employees. These standards Our whistleblower policy emphasizes our
Our Internal Audit Division is an independent conformed to professional standards, code of prohibit Directors, officers, and employees All Directors and senior management conform commitment to fostering and maintaining an
body that supports the Audit Committee ethics, and other internal standards. Employee Code of Business Conduct and from using their position of authority or rank to the normal, regular reportorial requirements environment of utmost confidentiality where all
in fulfilling its oversight responsibilities by Ethics. The Code is applicable to and mandatory to directly or indirectly derive personal gain or of the SEC and the PSE for the purchase and sale personnel may act appropriately without fear of
providing an independent, objective assessment The Internal Audit Division is headed by a for all BPI employees at all levels, including advantage. 102-25 of BPI shares. reprisal, and be treated with utmost confidentiality.
on the adequacy and effectiveness of the Chief Audit Executive who is appointed by the officers, as are the core values embodied in An individual who makes a protected disclosure
Bank’s risk management, internal controls, Board and reports functionally to the Board of the Bank’s Credo. As no code could address Our standards on conflict of interest expect all Whistleblower. The Bank supports a shall not suffer harassment, retaliation, or
and governance processes through well- Directors through the Audit Committee and every situation an employee may encounter, all Directors, officers and employees to refrain from whistleblower program, an important adverse employment consequences. Any person
established risk-based audit plans. Internal administratively to the President and CEO. employees, including officers, are required to any conduct that could be viewed unfavorably mechanism for preventing and detecting fraud or who retaliates against any individual who
Audit also ensures that the Bank’s operating This ensures that the Chief Audit Executive follow both the spirit and the letter of the Code, by our clients, co-employees, competitors, misconduct, and enabling fast and coordinated makes a protected disclosure shall be subject to
and business units adhere to internal processes is not dependent on any bank executive or its policies, and procedures. All BPI officers and suppliers, investors, regulators, or the public. incident responses as we establish cause, remedial discipline, including termination.
and procedures and to regulatory and legal operating officer for the security of his or her employees must abide and fulfill their duty and The standards also require full cooperation and actions, and damage control procedures.
requirements. position. Additionally, it ensures that the Chief personal responsibility to read, understand and provision of complete and accurate information In case the whistleblower believes he has been
Audit Executive has access to the Board, on a comply with the Code of Business Conduct and from employees during government, regulatory All personnel, including the Board, officers and subjected to retaliation, he may seek redress
This unit reports directly to the Board through confidential basis, and that the Internal Audit Ethics. or internal enquiries, investigations and audits. employees, as well as clients, suppliers, and all or file a formal complaint to the Head of the
its Audit Committee. It collaborates with Division is independent of bank management, stakeholders, can report any violation of policies, Human Resources Management Group, Chief
other assurance providers such as the Risk both by intent and actual practice. Director’s Code of Conduct. BPI has a Code The standards also cover specific conflict-of- procedures and applicable laws and regulations Audit Executive or Chief Risk Officer.
Management Office, Compliance Office, of Conduct for its Board of Directors, adopted interest situations such as receipt of gifts from which include, but are not limited to, fraud,
external auditors, and other oversight units The Audit Committee recommends to the Board in September 2017, which applies to and third parties, respect for trade secrets, and use sexual harassment, theft, stealing, conflict of Conflict of interest standards, and insider
for a comprehensive review of risks and the appointment of a Bangko Sentral-accredited is binding on all directors of the Bank. The of non-public information, and use of company interest, information security violation, violation trading, and whistleblower policies and
compliance in the institution, and ensures that external auditor for the purpose of preparing or Director’s Code is intended to provide guidance funds, assets and information. of bank policies, rules and regulations, and any guidelines are included in the Bank’s
business units proactively manage the risk and issuing an audit report or related work. It also to directors, whether executive, non-executive other acts which are inimical to the interests of management and operating manual and
compliance exposures. assesses the external auditor’s effectiveness, or independent, with policies on standards Anti-Bribery and Anti-Corruption. The Bank the Bank and the BPI Group. personnel policy manual, each of which is
independence and objectivity, ensuring that for conduct of the business of the Bank, the puts the highest premium on sound, responsible recorded in electronic databases readily
The internal audit function as empowered by key partners are rotated at appropriate intervals. protection of the rights of the Bank and its and effective corporate governance and does The whistleblower may approach any of the accessible to employees. In addition, these
the Internal Audit Charter includes free access The Committee also reviews the external stakeholders, maintaining BPI’s reputation not tolerate bribery or corruption of any kind. It following officers who are the designated policies are regularly reiterated via internal
to all records, properties and personnel. In auditor’s annual plan, scope of work, and, in for integrity and fostering compliance with advocates that Directors, officers and employees contacts for the Bank and the primary e-mail to ensure constant awareness of the need
this respect, the Audit Committee reviews consultation with management, approves the applicable laws and regulations. The Director’s do not tolerate corruption or any form of bribery reporting line: Head of the Human Resources to comply with said policies.
the internal audit function, including its external auditor’s term of engagement and Code, therefore, sets forth policy in several nor provide or accept improper inducements in Management Group, Chief Audit Executive,
independence and the authority of its reporting audit fees. They also oversee the resolution of basic areas that commonly require Directors the course of any business dealing. and Chief Risk Officer. Under extraordinary Data Privacy. BPI has a strong Data Privacy
relationships. The Internal Audit Division disagreements between management and the to exercise sound and informed judgment, circumstances, the whistleblower may also Policy in place, which describes to whom the
continuously improves the capabilities of external auditors in the event that they arise. recognize and deal with ethical issues, report Insider Trading. The Bank has an Insider Trading course the complaint through other reporting policy applies, what personal data the Bank
its auditors through continuous education possible unethical conduct, and foster a Policy which prohibits its covered persons or lines, like the President and CEO or the Chairman collects and how such data is collected, how the
on specialized areas of knowledge, auditing For fiscal year 2017, fees to the Bank’s external culture of openness, fair dealing, diligence and directors, officers, employees, and other parties of the Bank’s Audit Committee. Bank may use personal data for core business
techniques, regulations, and banking products auditor, Isla Lipana & Co., amounted to accountability. who are considered to have knowledge of and marketing purposes, how the Bank may
and services. Php 13.145 million. BPI did not have any non- material facts that have not been disclosed to The whistleblower may send or communicate disclose and share such personal data, how such
audit engagements with its external auditor for Compliance with the Codes. All employees, the public, including any information that will a report, formally or anonymously, with the personal data is stored and retained, and how
The Internal Audit Division has an established the year 2017. including senior officers and directors, likely affect the market price of BPI’s securities primary contacts or communicate in writing, by such data can be accessed or corrected. The
quality assurance and improvement program acknowledge annually through a Statement of or BPI clients’ securities, from buying or selling telephone, in person, or through the external Data Privacy Policy is posted on the company
to ensure that audit activities conform to the Affirmation that they have read and understood these securities for their own personal account. email eye_report@bpi.com.ph or the internal website and complies with the requirements of
International Standards for the Professional the employee Code of Conduct and/or the e-mail BPI Eye Report Box. the Data Privacy Act and the National Privacy
Director’s Code, respectively, as well as the Commission.
regulations and disclosure guidelines. FRAMEWORK Cumulative foreign currency translation (187) - (187) (313) - (313)
Remeasurements of Net Defined Benefit Liability (Asset) (1,764) - (1,764) (1,488) - (1,488)
Apart from structured disclosures, the Bank, In 2017, the Bank, through its Customer Minority interest ¹∕ 435 - 435 339 - 339
through this unit, also discloses information Experience Management Office (CXMO) COMMUNICATION AND INFORMATION General loan loss provision 2∕ 11,682 11,682 - 10,299 10,299
not required under the disclosure rules if, in the established the BPI Customer Assistance Deductions 22,371 - 22,371 22,210 - 22,210
Bank’s estimation, such matters would impact Program to establish guidelines that will help Management is primarily responsible to the Total O/S unsecured credit accommodations 3∕ 1,296 - 1,296 1,846 - 1,846
on investment decisions by interested parties. ensure that all feedback from customers and Board for the adequate flow of information, Total O/S unsecured loans 4∕ 32 - 32 120 - 120
Such matters are disclosed as promptly and potential customers are well handled in such as but not limited to financial information. Deferred tax assets 8,955 - 8,955 8,398 - 8,398
comprehensively as possible by appropriate alignment with the Bank’s consumer protection Any variance between projections and actual Other intangible assets 2,178 - 2,178 2,054 - 2,054
methods. policies. The designated Customer Assistance results requires management’s explanation to Defined benefit pension fund assets 49 - 49 18 - 18
Officers underwent onsite training to equip the Board. Investments in equity 5∕ 2,287 - 2,287 2,645 - 2,645
In carrying out its structured and unstructured them in their function in addressing customer Significant minority investments 6∕ 3,775 - 3,775 3,548 - 3,548
disclosures, the Bank makes full use of the issues and to ensure compliance with the Bank’s The Board is committed to fully disclose at all Other equity investments 7∕ 3,799 - 3,799 3,582 - 3,582
times all material information about the Bank TOTAL QUALIFYING CAPITAL 154,801 11,682 166,484 138,691 10,299 148,990
electronic facilities provided by the PSE’s Consumer Protection Program. The need to
for the benefit of the shareholders. All material % to Total 93% 7% 100% 93% 7% 100%
Electronic Disclosure Generation Technology or conduct continuous information and education
PSE EDGE, a state-of-the-art, fully automated campaign on the Financial Consumer Protection information that could potentially affect the ¹∕ Minority interest in subsidiary banks, which are less than wholly-owned
system that facilitates the efficient processing, Program has been a major priority of the unit. Bank’s share price is publicly disclosed in a 2∕ General loan loss provision, limited to a maximum of 1% of credit risk-weighted assets, and any amount in excess thereof shall be deducted
timely manner through the PSE and SEC. from the credit risk-weighted assets in computing the denominator of the risk-based capital ratio
validation, submission, distribution, and analysis
3∕ Total outstanding unsecured credit accommodations, both direct and indirect, to directors, officers, stockholders and their related interests
of time-sensitive disclosure reports submitted To deepen customer engagement and address (DOSRI)
to the exchange. Information disclosed on PSE specific customer needs, CXMO spearheaded Additionally, we hold meetings, briefings, and 4∕ Total outstanding unsecured loans, other credit accommodations and guarantees granted to subsidiaries and affiliates
EDGE is also promptly disclosed to the SEC as the conduct of the Service Quality Review (SQR) conferences for investors, analysts, and members 5∕ Investments in equity of unconsolidated subsidiary banks and quasi-banks, and other financial allied undertakings
of the media. (excluding subsidiary securities dealers/brokers and insurance companies), after deducting related goodwill, if any (for solo basis only and as
required and via other media, including the where various business units present their applicable) and Investments in equity of unconsolidated subsidiary securities dealers/brokers and insurance
Bank’s site and electronic mail to relevant, performance updates on their defined service companies after deducting related goodwill, if any (for both solo and consolidated bases and as applicable)
More information on BPI’s corporate governance 6∕ Significant minority investments (10%-50% of voting stock) in securities dealers/brokers and insurance companies, after deducting related
interested parties. quality goals to the Bank’s Customer Experience goodwill, if any (for both solo and consolidated bases)
Council. The Customer Experience Council philosophy, policies and practices may be found
7∕ Other equity investments in non-financial allied undertakings and non-allied undertakings
The Investor Relations Unit also provides includes top executives of the Bank. A Customer in our website, www.bpiexpressonline.com.
Schedule A
0
/ On-balance sheet assets
1
/ Credit risk-weighted assets
2
/ Unquoted debt securities classified as loans
December 31, 2017 3/ Loans and receivables arising from repurchase agreements, certificates of assignment/participation with recourse, and securities lending and
borrowing transactions
Exposure after Risk Total 4/ Real and other properties acquired
(Php Mn) risk mitigation Weights CRWA 1/ 5/ Not covered by, and covered by credit risk mitigants, respectively
Total RWA (On-Balance Sheet) 19,084 65,582 42,326 1,013,804 14,202 1,154,999
Total RWA (Off-Balance Sheet) 5,284 - 31 - 757 4,122 - 4,909 Equity contracts - - - - - - -
Credit derivatives - - - - - - -
0
/ Credit equivalent amount Counterparty Exposures arising - - - - - - -
1
/ Credit risk-weighted assets from Financial Assets 2/
2
/ Such as general guarantees of indebtedness and acceptances
Available-for-Sale - - - - - - -
3
/ Such as performance bonds, bid bonds, warranties and stand-by LCs related to particular transactions
4
/ Arising from movement of goods, such as documentary credit collateralized by underlying shipments, and commitments with an original maturity of Held-to-Maturity 1,660 - - 830 - - 830
up to 1 year Total counterparty RWA 3/ 1,660 - - 830 - - 830
of derivative transactions
Interest rate - - - - - - - Counterparty Assets Trading Book CEA 0/ Risk Weights Total CRWA 1/
Equity contracts - - - - - - - (Php Mn) 0% 20% 50% 100% 150%
Credit derivatives - - - - - - - Derivative exposures
Counterparty Exposures arising - - - - - - - Exchange rate 5,848 - 234 1,879 920 - 3,033
from Financial Assets 2/
Interest rate 2,580 - 28 1,200 38 - 1,266
Available-for-Sale - - - - - - -
Credit derivatives 167 - - 83 0 - 83
Held-to-Maturity 2,907 - - 1,454 - - 1,454
Equity contracts 5 - - - 5 - 5
Total counterparty RWA 3/ 2,907 - - 1,454 - - 1,454
of derivative transactions Total counterparty RWA / of derivative transactions
2
8,600 - 262 3,163 963 - 4,388
0
/ Credit equivalent amount
1
/ Credit risk-weighted assets
2
/ Risk-weighted assets
The table below presents the breakdown of the Bank’s market risk-weighted assets for 2017 and 2016:
AMOUNT
MARKET RWA (Php Mn)
2017 2016
Using standardized approach
Interest rate exposures 4,409 9,919
Foreign exposures 17,394 4,411
Equity exposures 672 260
TOTAL MARKET RWA / 0
22,475 14,590
0
/ Risk-weighted assets
Operational risk-weighted assets. We currently use the Basel regulatory basic indicator approach to quantify operational risk-weighted
assets, by using the historical total annual gross income as the main measure of risk. In 2017, the Bank’s total operational risk-weighted assets
stood at Php 117.8 billion.
The table below presents the Bank’s operational risk-weighted assets for the years 2017 and 2016:
AMOUNT
OPERATIONAL RWA (Php Mn)
2017 2016
Gross income (a) 63,794 59,206
Capital requirement 1/ 9,569 8,881
Average capital requirement (b) /2
9,428 8,229
Adjusted capital charge (c) 3/ 11,785 10,287
TOTAL OPERATIONAL RWA 0/ 4/ 117,849 102,868
BPI SENIOR LEADERSHIP
0
/ Risk-weighted assets
1
/ (a) multiplied by 15 percent
2
/ Average of 15 percent of (a) for the past (3) years
3
/ (b) multiplied by 125 percent
4
/ (c) multiplied by factor 10