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Best bank: BDO Unibank
And it’s a bank always willing to peer a little further down the line: witness its acquisition, completed in 2015, of One Network Bank, the country’s fastest-growing rural lender, with 105 branches in poorer regions, where per-capita income and the need for financial services are expanding rapidly.
Manila-listed BDO Unibank outstrips its peers in every important metric; its market capitalization in early August was P562.6 billion ($11 billion), 25% higher than its chief domestic rival, Bank of the Philippine Islands. It continues to deliver robust results in a tough banking market, reporting a 15% rise in net interest income in 2016 to P57 billion, on a 16% increase in outstanding loans, and a 15% jump in total deposits.
And it has continued its strong performance, with a 6% annualized increase in net income in the first quarter of 2017. BDO has said it aims to generate profits of P28 billion in 2017, an annualized increase of 7.3%.
Best corporate and investment bank: Bank of the Philippine Islands
There is a clear winner in this category. Bank of the Philippine Islands (BPI) has long been the best financial institution for corporates, banking the country’s largest firms, as well as many foreign multinationals. Well run, focused and steady – underlined by the fact that the current chief executive, Cezar Consing, in office since 2013, is only the 13th person to run the bank in its 162-year history – BPI is the epitome of stability in an often-turbulent world.
BPI’s product suite spans the full range of corporate banking, from commercial lending (it boasts 6,100 clients with approved corporate credit facilities) to trade finance, foreign exchange to cash management, as well as investment banking, a division that hopes to benefit from an anticipated pick-up in capital markets activity in late 2017 and 2018.
Its total outstanding loan portfolio, at the end of May 2017, was P751 billion ($14.6 billion), and it continues to innovate, offering sustainable-energy financing and, in 2016, implementing an enhanced open account registration process that cut transaction turnaround time from up to a day, to just 30 minutes.
Its stated vision is to remain the country’s “dominant trade finance solutions provider” and the “primary local bank of choice for corporations nationwide”. Highlights from 2017 include helping a local carrier to import new commercial aircraft, a deal that included opening a new $75 million credit line, consulting with the central bank and managing across 15 departments, all within a narrow timeframe.
Best international bank: Citi
Citi emerges as the unalloyed leader in this category – and for good reason. The US lender, which boasts 7,600 staff in the cities such as Manila, San Juan and Cebu, is as committed to the Philippines as ever, a permanent fixture on the banking scene, offering world-class financial services to consumers and corporates alike.
Citi enables more than 1 million affluent individuals to access wealth management and credit payment products. Its services are used daily by every strata of the economy: it extends corporate and investment banking services, and treasury and trade solutions, to foreign multinationals and top-tier local corporates, and to the public sector and leading local financial institutions.
There are few areas that the bank, a large distributor of credit cards and a local pioneer in business process outsourcing and online and mobile banking, does not lead. And it’s as willing as ever to open up its pocket book for valued clients and to maximize its global reach and clout.
A few recent transactions – plucked from a list of many – stand out. In October 2016, Citi acted as bookrunner for a targeted repurchase of International Container Terminal Services’ non-call 2019 and non-call 2021 perpetual bonds, via a tender offer. In January 2017, it led the Republic of the Philippines’ successful return to the international capital markets with a $2 billion sale of 25-year notes that was nine times subscribed. The same month, it acted as joint bookrunner on BDO Unibank’s $1.2 billion rights offer, prompting BDO to praise the US lender for its “invaluable support, credit and advice”.
Best bank for SMEs: Security Bank
Security Bank is a well-oiled universal bank with a solid nationwide presence – 264 branches and 560 ATMs at the end of 2016 – and a thriving thrift bank, Security Bank Savings. The lender, which in 2016 sold a 20% stake to Bank of Tokyo-Mitsubishi for $774 million, reported a 28% rise in net interest income in 2016, with total deposits up 20%. Its non-performing loan ratio fell to just 0.17% at the end of last year, an all-time low.
Productive and profitable, this is one of the most robust lenders the Philippines has to offer. But its real talent comes to the fore when catering to the country’s growing army of small and medium-sized enterprises.
“SMEs are their niche,” says a Manila-based banker. “They know they cannot compete with the big banks on the big corporates, so they’ve made this their segment. They’re very strong.”
Its SME Business Express Loan service – which includes minimal documentary requirements, fast approval and auto-crediting of funds – targets fast-growing young firms looking to meet short-term funding needs.
Philippine lenders haven’t always been great at catering to thriving young enterprises, but in Security Bank under chief executive Alfonso Salcedo Jr, SMEs have a champion.
Best bank for CSR: BDO Unibank
The Philippines does not lack for lenders that can see both the country’s potential and its widespread poverty. Giving something back has long been on the agenda of financial institutions, large and small. But few lenders can compete with BDO Unibank, whose corporate and social responsibility arm, BDO Foundation, has become a surprising first line of help for families that have lost everything, usually due to natural or man-made disasters such as hurricanes and monsoons.
When a crisis occurs, hundreds of BDO volunteers mount relief operations, setting up evacuation control centres to distribute food and water to disaster victims. The foundation also works to rebuild schools and hospitals destroyed by flooding or landslips.
In 2016 alone, BDO Foundation helped rebuild and reopen 11 health centres that serve a population of 800,000 and which had been devastated by heavy rains and typhoons. Relief efforts are directed through BDO Unibank’s more than 1,000 nationwide outlets, with branch officers at both BDO and its rural banking subsidiary, One Network Bank, helping the foundation to pinpoint health centres in the greatest need of help.
In the foundation’s own words, its “advocacy is disaster response” – meaning that it exists to help those who have least and who have lost the most. In a country highly vulnerable to climate change and shifting weather patterns, it’s hard to think of a service that is needed more.
Best digital bank: Union Bank
Most banks take their digital divisions seriously these days, touting their prowess and all-purpose online service. But it’s rare to find a lender that saw the potential in the digital world early – and got it right. Most countries boast at least one standout lender in this category; when it comes to the Philippines, that lender is Union Bank.
Its digital dalliance began way back in 1999, at the dawn of the age of online shopping. Union Bank launched its EON Cyber Account, the country’s first online payment card, and they have remained, in the words of one Manila-based banking analyst, “pioneers in the field ever since”.
Over the years, EON has been transformed, becoming a standalone digital bank in 2015, and constantly upgrading its security features to protect itself and its customers from hackers.
The innovations haven’t stopped there. In March 2017, EON’s stable of services was expanded, allowing users to set their daily withdrawal limits online or via the EON app. EON Zero was established, a service that allows customers to apply for a multipurpose loan with a simple click of the mouse – no form-filling and no waiting time – while EON Duo is a digital credit card expressly designed to give its customers peace of mind when ordering goods or services online or via an app. Overall, an impressive suite of digital services from a far-sighted bank.
Best private bank: HSBCMuch of the private banking that happens in relation to the Philippines happens far from its shores. Of course, a host of local lenders tout their private banking credentials and many do indeed offer excellent services targeted at wealthier customers.
The list starts with the likes of BDO Unibank and Bank of the Philippine Islands, but also includes myriad mid-sized lenders offering quality services to higher net-worth and mass-affluent customers. Both BDO Private Bank and BPI Private Banking have won awards in this category down the years – and rightly so.
But talk to private banking customers on the ground, including executives from leading corporates and lenders, and they are happy to sing the praises of HSBC.
The bank has never lost sight of the importance of this market, buoyed as it is by low inflation, a high growth rate and, under the aegis of the current president, a macro and financial agenda that could finally give the economy the clarity and the momentum it needs.
With growth comes rising salaries; that in turn leads to a need for the kind of world-class service, locally targeted but global in reach, that HSBC Private Banking always provides.