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 Pursuing
a Growth Strategy |
Banco de Oro
Universal Bank (BDO) is one of the fastest-growing banks in the
Philippines, it provides a wide range of corporate, commercial and
retail banking services in the Philippines. These services include
traditional loan and deposit products, as well as treasury, trust
banking, investment banking, cash management, insurance, retail
cash cards and credit card services. As of December 29, 2005 BDO
ranks as the fifth largest bank in terms of resources and loans,
sixth in terms of deposits, and eighth in terms of capital.
BDO’s status in the local banking industry
can be attributed to the bank’s historical growth rates. From
2000 to 2005, the compounded annual growth rate (CAGR) of the bank’s
consolidated total assets was 30.4 percent. Capital funds were 5.6
billion Philippine Pesos in 2000 and soared to 20.2 billion Philippine
Pesos at the end of 2005. The bank’s asset quality indicators
(NPL and NPA) are among the finest in the industry.
For the first quarter of 2006, BDO posted a net
profit of 706.5 million Philippine Pesos, an increase of 25 percent
over the same period in 2005. Net interest income grew 12 percent
to 1.8 billion due to a 16 percent expansion in the bank’s
balance sheet. Non-interest gains rose 51 percent due to higher
securities trading and service fees.
BDO will pursue its growth strategy through selective
acquisitions and/or organic growth.
“We are a niche player and we have to remain
focused in our approach. Our growth strategy has to build upon our
strengths and be consistent with our long-term objectives,”
says Nestor Tan, President of BDO.
The bank’s principal markets consist of select
niches in the corporate market, the middle market-banking segment
(consisting of mid-size corporations and small and medium-size enterprises),
as well as the retail/consumer market.
Over the last years the bank has acquired/merged
with four smaller institutions in a bid to expand its branch network,
enhance its product distribution capabilities and gain access to
new markets. In line with its strategic focus of becoming a leading
full-service bank in the Philippines, BDO proposed a merger of equals
with Equitable-PCI, which is the country’s third largest bank
in assets.
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Attracting International Investors |
Last year BDO
and SM Investments Corporation (SMIC) listed Global Depository Receipts
(GDR) representing BDO shares amounting to USD 100 million on the
London Stock Exchange (LSE). Aside from being the first Philippine
company to tap the international capital markets, BDO GDRs also
represent the sole Philippine issue currently listed on the LSE.
The GDR offering attracted strong interest and orders
from international investors globally, with 41 percent of the GDRs
placed to investors in the United States, 32 percent to investors
in Europe and the remainder to those in Asia. The GDR offering achieved
several objectives, including the facilitation of greater foreign
investor participation and the raising of proceeds for SMIC to support
BDO’s future acquisitions and growth.
In May 2006, SMIC placed out 6.87 million additional
shares, in view of strong interest among foreign investors. Demand
has driven up the price of GDRs to above its offering price prior
to its listing. This success reaffirms international investors confidence
in the BDO team and in the strategy they are undertaking.
| Backbone
to the SM Group of Companies |
BDO is part of the SM Group of Companies. Over the
years Banco de Oro operated as a savings bank providing support
to the SM Group’s retail business. In the mid 1990s, Mr. Henry
Sy, Chairman of SM Group of Companies, decide to build the bank
as one of the major pillars of the Sy Empire. The others are, retail
store operations, commercial center development and leisure and
real estate development.
BDO has benefited enormously from its key position
within the SM Group by leveraging its vast network of retail, commercial,
industrial and financial subsidiaries to expand its financial services
offerings to corporate and retail consumers across the country.
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