Best bank: BDO Unibank
BDO Unibank, the Philippines’ largest bank, turned in an exceptional financial performance in 2023, cementing its position as the country’s best bank.
The bank achieved a record net income of $1.3 billion, marking a 29% increase from the previous year, with a return on common equity climbing to 15.2% from 13%.
Net interest income surged by 25% year on year, driven by a strong net interest margin of 4.65%, up from 4.15% in 2022. Non-interest income also saw a robust 17% growth. Moreover, the bank’s cost-to-income ratio improved from 59.4% to 58.0%, demonstrating enhanced operational efficiency. The market responded positively to the bank’s performance, as evidenced by a 24% increase in its market capitalization over the past year.
BDO Unibank’s balance sheet remained robust. Gross customer loans grew by 9% while deposits expanded by 11%. Despite rising interest rates, asset quality improved, with the non-performing loan (NPL) ratio decreasing to 1.85% and NPL coverage rising to 185%.
The bank has demonstrated the strengths of the hybrid growth model. In 2023, it opened 70 new branches, primarily in rural and provincial areas, aligning with its strategy to serve underbanked communities. In tandem, BDO Unibank accelerated its digital transformation, enhancing its online account opening process with virtual know-your-customer checks and biometric recognition on self-service machines. These initiatives significantly streamlined transactions, resulting in over 90% of new accounts being opened digitally.
Best investment bank: UBS
UBS’s investment banking franchise in the Philippines continues to thrive, solidifying its position as the best investment bank in the country for another year. Under the leadership of Lauro Baja, UBS’s head of global banking for the Philippines and head of global capital markets for Asia Pacific, the bank led numerous groundbreaking transactions.
In 2023, it showcased its dominance in the infrastructure and renewables space. The bank acted as the sole international financial adviser on the successful delisting of Metro Pacific Investments Corporation, one of the largest conglomerates in the Philippines, at $7.5 billion enterprise value and $2.7 billion equity value. This deal marked the largest privatization in the Philippine Stock Exchange (PSE) since its inception. Despite the high barrier of complying with PSE delisting rules, which required the bidder consortium to acquire at least 95% of MPIC’s outstanding shares, UBS successfully navigated the complexities of the transaction.
UBS also demonstrated its expertise in the renewable energy sector, acting as the sole financial transaction adviser on a key deal involving Meralco, the largest electric distribution utility company in the Philippines, acquiring a controlling stake in solar farm company SP New Energy Corporation.
UBS also played a pivotal role in marquee cross-border transactions. It acted as the exclusive financial adviser on the investment in PT Margautama Nusantara, a leading Indonesian private toll road company, by MPTC, the largest toll road developer and operator in the Philippines, and Singapore’s sovereign wealth fund, GIC.
Best international bank: HSBC
Newly onboarded corporate customers at HSBC grew by 21% last year. It introduced Smartserve, which reduces the number of days required to open an account, and Omni Collect, which simplifies the way businesses collect payments.
The bank worked on several sustainable finance deals, including a P1.35 billion ($23.2 million) loan for Razon’s infrastructure arm, which specializes in waste management and materials recovery. It also provided Prime Integrated Waste Solutions with a $24.5 million green loan to finance the acquisition and expansion of a waste management facility in Cebu.
The bank launched five new funds and two new insurance products, as well as Foreign Exchange via Live Chat. This service allows customers to transact through webchat, which has seen more FX transactions completed through the digital platform.
Best digital bank: RCBC
RCBC launched its new RCBC Pulz digital banking app in 2023 and continued to support for digital inclusion.
The app added over a million users within three months of its launch. It offered free bank transfers for transactions up to P1,000 ($18), leading to a 290% increase in transaction volume between December 2023 and January 2024.
RCBC continued to focus on digital financial inclusion both for Filipinos living in remote areas and those working abroad. The RCBC ATM Go programme reached 99% of cities and 81% of towns in the Philippines last year, achieving 112% transaction volume growth compared with 2022.
The bank launched RCBC Online Corporate and saw the volume of electronic fund transfers and client enrolment grow by 15% and 19% respectively. The bank’s app for small and medium-sized enterprises, RCBC Boz, offers digital tools such as e-invoicing, payroll and expense tracking.
Best bank for SMEs: RCBC
RCBC expanded its digital offering for small and medium-sized enterprises and saw impressive growth in the segment in 2023. The SME loans portfolio grew by 16.6% to P125.3 billion ($2.15 billion) over the year.
The bank launched RCBC Boz in November 2023, which allows SME clients to track transactions digitally, issue e-invoicing and automate payroll tasks. The app had processed P4 million in transaction volume and had 4,287 downloads and 7,570 registrations by the end of 2023.
RCBC is employing artificial intelligence (AI) through the Singapore-based fintech, Bizbaz, to predict borrower behaviour in response to growing concern over non-performing loans. The bank is testing the new AI tool against benchmarks, such as the quality of new accounts it generates, time to market and the speed of processing credit decisions, with the plan for a wider roll out.
Best bank for ESG: BDO Unibank
BDO Unibank has worked on sustainable finance in the Philippines since 2010.
It financed a total of P898 billion ($15.4 billion) of sustainable projects in 2023, including 59 largescale renewable energy projects with a total energy install capacity of over 2,300 megwatts. In total, the deals added approximately 25% to the Philippines’ renewable energy capacity and offset 4.4 million tonnes of carbon dioxide per year.
Loans deployed to energy efficiency projects accounted for 46% of the bank’s green finance portfolio. It stopped financing new coal projects in 2019 and will limit its coal exposure in the lending portfolio to no more than 2% by 2033.
In July 2023, BDO Unibank and the Landbank of the Philippines jointly arranged the first gender bond in the country, a P5 billion issue for ASA Philippines Foundation. The lending programme specifically targets women in the lower income sector engaged in microenterprises as principal borrowers.
BDO’s Affordable Basic Infrastructure portfolio accounted for 87% of its social financing. Over P67.4 billion in loans funded social projects under the programme.
Best bank for corporate responsibility: Metrobank
Metrobank spent 2023 supporting health, education, the arts and social initiatives in the Philippines.
Projects launched included Water, Sanitation and Hygiene, Feeding and Nutrition, National Teachers Month and the Metrobank Scholarship programme. Total donations reached P10.4 million ($179,000), helping 2,494,729 people.
The bank focuses on promoting gender diversity and employee growth as part of its sustainable development initiatives. Its EmpowHER campaign includes the WE SHOUT programme, which provides free surgery to impoverished patients. In 2023, P340,000 was raised to enable 20 disadvantaged patients to undergo surgery for the removal of uterine and ovarian tumours.
In 2023, the bank also prioritized important learning and development initiatives. The bank relaunched its Ascend Leadership Programme and increased its LinkedIn Learning engagement.
Best bank for diversity and inclusion: Citi
Citi has long punched above its weight in gender equality and inclusive culture. Women account for 60% of its 7,000 employees. As of December 2023, 58% of the employees at the assistant vice president to managing director levels were women.
Citi Women’s Network, Citi Pride Network, Citi Families Matter Network and Citi Generations Network have offered strong support for employees from diverse backgrounds and situations. The bank has also launched initiatives focused on disability and neurodivergence and continued initiatives to formalize a disability inclusion network.
The bank is also engaged with external partners to promote diversity and inclusion in the market. Launched in 2022, the Digital Financial Inclusion initiative recognizes outstanding microfinance institutions (MFIs) and microentrepreneurs that have successfully adopted digital solutions in their operations. Its aim is to create awareness on MFI digitalization and, in 2023, the programme recognized 20 microentrepreneurs and five microfinance institutions.
Citi also sponsors Project HOPE to provide opportunities for 2,500 out-of-school and vulnerable youth to gain entrepreneurial and employable skills training.
Best bank for corporates: Security Bank
Investments in technology and sustainable financing led to double-digit growth in Security Bank’s lending business last year.
Wholesale banking net income rose by a 34% to P6.8 billion ($117 million) in 2023, representing 75% of total net income, up from 48% in 2022.
The bank lent P91.6 billion in qualified sustainable finance loans over the year and has a target to double its sustainable financing portfolio by 2025.
It launched its Payments Hub and Gateway to improve payments processes with AWS Cloud implementation. It is now focusing on improvements to its supply chain finance offering across the automotive, healthcare and medical industries.
Rising star: UNO Digital Bank
UNO Digital Bank had secured one million customers and $100 million in deposits within 15 months of its launch. It is on track to achieve profitability in the first three years of its operations.
Total assets grew by 283% in 2023, from P1.8 billion ($30.9 million) to P6.8 billion. This is due to loan growth and strategic portfolio acquisitions.
The bank began issuing personal loans in the last quarter of 2023 and has already lent $15 million.
It has collaborated with fast-moving consumer goods distributors and aggregators, to provide small and medium-sized enterprises with a single digital platform for streamlined inventory ordering and financing solutions up to P200,000 in credit lines. The bank also offers solutions such as early wage access loans.
