2013 Annual Report - China Banking Corporation

2013 Annual Report
About The Cover
“One’s conduct should be modelled after a tree, the trunk is rooted
while its leaves flourish...” - Chinese proverb
China Bank’s identity and history are anchored on deeply-rooted and
time-honored values, and a heritage of principled banking that
nurtured generations of trusted and successful partnerships. These deep
roots provide a firm foundation for the Bank’s growth.
Corporate Profile
China Banking Corporation (China Bank), stock symbol CHIB, was
incorporated on July 20, 1920 and commenced business on August 16, 1920 as
the first privately-owned commercial bank in the Philippines, catering initially to
the needs of Chinese-Filipino businessmen. It played a key role in post-World
War II reconstruction and economic recovery through its support to businesses
and entrepreneurs in critical industries. China Bank was listed on the local stock
exchange by 1947, and acquired its universal banking license in 1991. The Bank
serves the corporate, commercial, middle, and retail markets with a wide range
of domestic and international banking services. It is one of the largest universal
banks in the country in terms of assets, capital base, and market value.
Contents
2
4
9
27
31
48
54
56
58
59
Performance Highlights
Letter to Stockholders
Operating Highlights
Corporate Social Responsibility
Corporate Governance
Board of Directors
Management Committee
China Bank Senior Officers
Subsidiaries Senior Officers
Management Directory
60
158
166
169
170
180
Financial Statements
Branches
Off-Branch ATM Locations
Business Centers
Subsidiaries and Affiliates
Products and Services
Vision
Mission
Drawing strength from our rich history,
we will be the best, most admired, and
innovative financial services institution,
partnering with our customers,
employees, and shareholders in wealth
creation.
We will be a leading provider of
quality services consistently delivered
to institutions, entrepreneurs, and
individuals, here and abroad, to meet
their financial needs and exceed rising
expectations.
Core Values
•
•
•
•
•
•
•
Integrity
High Performance Standards
Commitment to Quality
Customer Service Focus
Concern for People
Efficiency
Resourcefulness/Initiative
We will be a primary catalyst in the
creation of wealth for our customers,
driven by a desire to help them
succeed, through a highly motivated
team of competent and empowered
professionals, guided by in-depth
knowledge of their needs and
supported by leading-edge technology.
We will maintain the highest ethical
standards, sense of responsibility and
fairness with respect to our customers,
employees, shareholders, and the
communities we serve.
Annual Report 2013
1
PERFORMANCE HIGHLIGHTS
NET INCOME
In Million Pesos
TOTAL RESOURCES
RETURN ON EQUITY
TOTAL DEPOSITS
In Million Pesos
In Million Pesos
5,100
413,698
354,268
11.31%
5,003
324,160
271,977
12.22%
262,553
216,134
5,076
13.81%
5,004
15.37%
257,379
213,042
4,103
14.49%
STOCKHOLDERS’ EQUITY
233,865
193, 290
TOTAL CAR
In Million Pesos
CASH DIVIDENDS PAID
In Million Pesos
STOCK DIVIDENDS
In Million Pesos
1,557
45,400
15.39%
1,298
1,416
42,738
16.00%
1,180
1,287
39,622
16.34%
1,073
1,170
35,453
975
16.26%
1,064
30,198
12.80%
BRANCHES
887
ATM
MARKET CAPITALIZATION
In Million Pesos
367
84,232
561
316
70,864
511
293
46,959
475
269
46,551
431
247
36,078
380
0
18000
36000
54000
72000
LOAN PORTFOLIO BY INDUSTRY CLASSIFICATION
2012
2
26.00%
14.69%
17.24%
12.51%
7.53%
5.69%
1.99%
2.51%
0.78%
11.06%
Real Estate, Renting & Business Services
Wholesale & Retail Trade
Manufacturing
Financial Intermediaries
Transportation, Storage & Communication
Electricity, Gas & Water
Construction
Agriculture
Mining & Quarrying
Others
26.46%
15.13%
14.37%
8.57%
8.23%
5.87%
2.67%
1.83%
0.35%
16.52%
2013
90000
For the Year (In Pesos)
Gross Revenues
Gross Expenses
Net Interest Income
Non-Interest Income
Provision for Impairment & Credit Losses
Operating Expenses
Net Income
At Year End (In Pesos)
Total Resources
Loan Portfolio (Net)
Investment Securities
Total Deposits
Stockholders’ Equity
Number of Branches
Number of ATMs
Number of Employees
2011
2012
2013
16,868,396,443
11,792,725,622
8,551,739,056
4,191,798,474
155,097,500
6,965,360,995
5,075,670,821
18,944,484,432
13,941,474,733
8,062,340,832
5,793,614,751
236,756,182
8,193,901,086
5,003,009,699
19,241,744,999
14,141,297,499
9,935,990,627
5,160,591,519
414,335,872
8,907,262,337
5,100,447,500
262,553,425,440
145,238,662,573
61,191,602,901
216,133,713,301
39,621,797,950
293
475
4,633
324,160,046,756
190,100,306,325
66,431,352,746
271,977,239,870
42,738,205,056
316
511
5,198
413,697,922,996
220,540,902,915
66,921,226,657
354,268,202,680
45,399,699,439
367
561
5,594
13.81
2.06
3.76
54.66
38.38
67.20
3.68
134.74
15.48
16.34
12.22
1.71
2.90
59.14
36.47
69.90
2.55
134.88
15.15
16.00
11.31
1.45
2.98
59.00
42.80
62.25
1.99
146.62
14.50
15.39
46,959,091,864
3.56
1,287,127,404
12*
25.73
3.02%
1,072,705,100
10
39.80
27.74
1.43
70,863,932,958
3.51
1,415,852,016
12*
27.89
2.20%
1,179,975,500
10
54.60
29.93
1.82
84,232,037,822
3.57
1,557,449,076
1.2
31.04
2.03%
1,297,874,280
10
59.00
31.80
1.86
Key Performance Indicators (In %)
Return on Average Equity
Return on Average Assets
Net Interest Margin
Cost to Income Ratio
Liquid Assets to Total Assets
Loans to Deposit Ratio
Non-Performing Loans Ratio
NPL Cover
Capital Adequacy Ratio (Tier 1)
Capital Adequacy Ratio (Total CAR)
Shareholder Information
Market Capitalization (In Pesos)
Earnings Per Share (In Pesos)
Cash Dividends Paid (In Pesos)
Cash Dividends Per Share (In Pesos)
Cash Payout Ratio (In %)
Cash Dividend Yield (In %)
Stock Dividends Paid (In Pesos)
Stock Dividends Per Share (in %)
Market Value Per Share (In Pesos)
Book Value Per Share (In Pesos)
Price to Book Ratio (x)
*Based on authorized and outstanding shares of stock before stock split.
Annual Report 2013
3
LETTER TO STOCKHOLDERS
Hans T. Sy
Gilbert U. Dee
Peter S. Dee
The year was marked by capacity building, strategic acquisitions, and
branch network expansion to strengthen the Bank’s positioning in all
major client segments.
4
China Bank SM Aura Premier Branch. In 2013, China Bank branches located inside community malls and shopping centers nationwide reached 47, 27 of which are inside SM malls.
The Philippines was among the best performing economies
in the world, riding on the crest of positive investor confidence
backed by a flourishing financial sector, subdued inflation, low
costs of borrowing and demonstrated resilience in the face of
successive natural catastrophes. The 2013 GDP growth of 7.2%,
the country’s highest in twelve years, was underpinned by the
strong growth in services and manufacturing sectors that offset
the slowing momentum in agricultural output. Significant gains in
the government’s tax effort combined with the clamor for tighter
controls on discretionary budget allocations further reduced
reliance on deficit spending. The uptick in OFW remittance inflows
and investment activity drove liquidity levels even higher, partly
fueling the steady appreciation in real estate and equity prices.
The gains in domestic output would have been more
impressive, but a series of natural calamities devastated the Central
Philippines during the last quarter. The province of Bohol was the
epicenter of a 7.2 magnitude earthquake that wrought massive
destruction on its countryside and transport infrastructure. Relief
and reconstruction efforts had barely begun when Typhoon Haiyan
(Yolanda), the most powerful storm in recent history, pummeled
the Visayas region, leaving behind over 6,000 fatalities and
P571 billion in economic losses. These twin catastrophes set GDP
back by 30 basis points because of severe setbacks in agricultural
and commercial activities.
Concerns over the repercussions of winding down the US
Federal Reserve’s liquidity infusion program set off an outflow of
portfolio funds from the emerging markets back to the relatively
safe US securities and stocks. This compounded the volatility in
the financial and foreign exchange markets, particularly for the
emerging economies. As a result, sharp corrections in equity and
bond valuations happened across developing Asia and BRICS
as interest rates rebounded in reaction to the widening of risk
premiums. The Philippine Stock Exchange (PSE) index fell from its
historical high of 7,392 last May 15 back to its December 2012
level, before resuming its upward trajectory.
The Philippines received its first “investment grade” credit
rating from Fitch Ratings and Standard & Poors last March and May,
respectively, followed by Moody’s in October 2013. The country
was perceived to have a sound financial system, a stable business,
and fiscal environment that can sustain economic gains and credit
growth. The Philippine banking system was also the only one in
the world to receive a positive outlook from the leading credit
rating agencies, based on the strength of its capital position, asset
quality, corporate governance, and the efficacy of reforms pursued
by the Bangko Sentral ng Pilipinas (BSP). Capital adequacy and
non-performing loans ratio for the industry further improved to
18.62% and 0.19%, respectively, and this showed that the industry
has prepared for Basel 3 implementation in 2014. A combination of
high market liquidity, low borrowing costs and moderate headline
inflation provided the BSP with ample policy space to retain its
accommodative interest rate policy. Liquidity in the financial system
remained at an all-time high despite the phaseout of Special Deposit
Accounts (SDA) through agency accounts on November 30, 2013.
The said phaseout triggered a massive migration of excess funds
from SDA to bank deposits, loans, and government securities.
2013 was a particularly challenging year for China Bank
as we simultaneously built up asset base, capital funding, and
service infrastructure, while consolidating our presence in the
fast growing and competitive SME and consumer segments.
We believe that the ongoing economic rebound will accelerate
household consumption, investment activity, and infrastructure
building, so your Bank should be ready to capture opportunities
Annual Report 2013
5
LETTER TO STOCKHOLDERS
universal bank, China Bank, or the thrift bank, CBS, within three
years. The share purchase agreement for 84.77% shareholdings
in Plantersbank was signed on December 18, 2013.
• Higher quality of earning assets as non-performing loans (NPLs)
declined 10% to P4.52 billion, reducing NPL ratio to 1.99% and
improving loan loss coverage ratio to 146.62%, one of the best
in the industry.
• Despite the challenging backdrop in 2013, your Bank reported
a net income of P5.10 billion, up 1.95% from P5.00 billion in
2012. This income performance translates to an 11.31% return
on equity and 1.45% return on assets.
We considerably ramped up and diversified China Bank’s
revenues from non-lending sources by focusing on recurring
income from commissions, underwriting activities, wealth
management, and new businesses, as against opportunistic
gains from fixed income securities trading and bond sales.
Consequently, the downtrend in the share of treasury-managed
assets to total resources continued, dropping to its 5-year low of
16.18% from 20.49% last year. Fee revenues, net of trading gains,
grew by 13.15% over the last year, mostly from gains on sale of
acquired assets, investment banking fees, and dividend income.
We began to realize the broad potentials of our joint venture with
the Manufacturers Life Insurance Company (Phils.), Inc. (Manulife
Philippines), with bancassurance commissions up 38% in 2013.
Meanwhile, trading profit fell as we cut down the size and
duration of our bondholdings in anticipation of a possible uptick
in market rates in the latter part of 2013. Trust fees also declined
by 24.32% with the phase-out of SDA investments under Trust
Fund arrangements.
Asset growth in 2013 was mainly driven by robust demand
across all major customer segments: consumer, commercial and
corporate borrowers that expanded the loan book by 16.01% to
P220.54 billion. Corporate lending growth was driven by releases
to the Top 500 corporations from the
aviation, power generation, leisure,
and real estate sectors. We saw much
potential in the commercial/middle market
sectors so we assigned more resources to
acquire and build up credit and deposit
relationships, specifically at the branch
and business center levels. Consumer
banking volume, made up of auto finance,
home mortgage, and developer loans,
increased by 30% from more competitive
loan pricing, faster turnaround time,
tie-ups with major property developers,
and improved branch incentive and
Hans Sy, China Bank chairman, and Ambassador Jesus Tambunting, Plantersbank chairman and CEO, shake hands
after the MOA signing at Plantersbank’s head office in Makati City on September 18, 2013. With them are China
referral programs. As the newest addition
Bank SEVP & COO Ricardo Chua (from left) and Plantersbank’s Director Jose Tambunting and President & COO
to the consumer product menu, the
Carlos Borromeo.
from this broad-based business growth. The year was marked
by capacity building, strategic acquisitions, and branch network
expansion to strengthen the Bank’s positioning within all major
client segments. At the same time, we also took steps to preserve
our uniquely entrepreneurial approach to banking that values
long-term business relationships and proactive client engagement
over short-term profits. Together, these bold strategies will
serve as the catalyst for transforming China Bank from a midtier, niche player, into a top five bank in the banking industry.
The following highlights our 93rd year:
• Fitch Ratings affirmed its national rating of AA- for China Bank,
which is one notch below the top bank rating in the country.
Capital Intelligence also affirmed its credit rating for China Bank
(Financial Strength BBB-) and recently upgraded its Foreign
Currency Long-Term rating to BB+ from BB-, following the
upgrade in the Philippines’ sovereign rating.
• The only bank among the five recipients of the PSE Bell Awards.
It is China Bank’s second consecutive year to receive the said
award, in recognition of our adherence to high standards of
corporate governance.
• Partnered with MasterCard in 2013 for the launching of core
China Bank credit cards, Prime, Platinum, and World in 2014.
• Approval by the Monetary Board of the merger between China
Bank Savings, Inc. (CBS) and Pampanga-based rural lender Unity
Bank, a Rural Bank Inc. (Unity Bank) with CBS as the surviving
bank. Exactly a year ago, BSP approved China Bank’s acquisition
of 99.95% of Unity Bank’s outstanding equity.
• The Bank inked a memorandum of agreement with Planters
Development Bank (Plantersbank), the country’s largest privatelyowned independent development bank, on September 18, 2013
to acquire more than two thirds of Plantersbank shares. On
December 13, 2013, the Monetary Board gave its approval-inprinciple of the merger between Plantersbank with either the
6
Henry Sy, Sr.
Honorary Chairman
and Advisor to the Board
upcoming launch of China Bank credit cards should add value
to existing client relationships by offering bills consolidation,
flexible payment options, and eventually cash advances using
secure EMV technology. The thrust for lending was matched by
marketing efforts on the funds acquisition, financial supply chain
management, trade finance and insurance side to capture more
value from the account relationships. We applied more stringent
lending and credit evaluation standards to preserve the quality of
loans as seen in the lower NPL ratio of 1.99% and higher loan loss
coverage ratio of 146.62%.
The sheer volume of liquidity in the market combined with
the keen competition for loans pushed benchmark yields to their
all-time lows, aggravating the compression in interest margins. To
protect our net interest income, our Treasury Group calibrated its
cost of funding against prevailing money market rates, while closely
monitoring asset pricing vis-à-vis the risk and maturity profiles of
underlying securities or counterparties/borrowers concerned. The
final tranche of China Bank’s five-year Long-Term Certificates of
Time Deposit (LTNCD) matured in the third quarter, further adding
to the pool of investible funds that were largely deployed as
customer loans. Our wealth and fund management units worked
hand-in-hand to quickly deploy SDA maturities into alternative
placements, thereby reducing the risk from client turnover. We
also worked with the SM Group to meet the banking requirements
of their numerous merchants, suppliers, and contractors. Overall, a
combination of higher loans volume and improved matching and
pricing of deposits led to a 23% increase in net interest income to
P9.94 billion. Net interest margin improved to 2.98%.
Capital funds reached P45.40 billion, 6.23% higher than
2012, from the retention of net profits. China Bank remains the only
bank in the industry that has not resorted to issuing Tier 2 equity.
In anticipation of the forthcoming Basel 3 capital requirements, we
endeavored to build greater capacity and competency in the risk
management area, particularly for risk-based pricing, design, and
validation of risk models, stress-testing and liquidity measurement.
As business expansion becomes an even more capital intensive
exercise, Management devoted more time and resources to the
capital planning and conservation effort to ensure that efficient
capital deployment becomes an integral part of strategy setting
and day-to-day decision-making. Despite the spate of acquisitions
and loans, your Bank reported a Tier 1 capital adequacy ratio (CAR)
of 14.50% and a total CAR of 15.39% — substantially higher
than the 10% regulatory minimum requirement. We also declared
cash dividends of P1.2 per share equivalent to total dividends
of P1.56 billion, for a 31% payout ratio, which when combined
with the appreciation in share price and stock dividends gave our
stockholders one of the best total returns in the banking industry.
We again reviewed and reworked our enterprise structure,
given the brisk pace of business expansion on all fronts: China
Bank Savings, the Plantersbank and Unity Bank acquisitions,
investment banking deals, bancassurance commissions,
branch openings and wealth management. To sustain our
competitiveness and profitability, Management saw the need to
cluster functionally-related businesses into relationship banking,
financial capital markets and investment, and the savings bank
subsidiary. Meanwhile, the operations and support units were
grouped into the corporate support segment (technical, general
and administrative services) and business operations segment
(lending, remittance, international, and treasury operations). The
refocusing of our business lines will promote greater interaction
and teamwork among the marketing and support units in the
client acquisition and account servicing process, as well as develop
their banking expertise across multiple product lines and markets.
Our Branch Banking Group (BBG) led the most ambitious
expansion program in China Bank’s 93-year history, with one
branch opening almost every week. At the same time, our thrift
Annual Report 2013
7
LETTER TO STOCKHOLDERS
banking subsidiary CBS continued to beef up its own branch
network, opening new branches and integrating and renaming the
branches of Unity Bank. With an even wider reach, our deposits
rose 30% to P354 billion – 42% of which is low-cost checking and
savings account. The branches are not the only point of interaction
with our existing and potential customers. Our robust alternative
channels – ATM, internet, mobile, and phone banking – provide
convenient and secure 24/7 banking service.
We also increased our area offices, branch clusters, and credit
processing centers to widen product reach, improve response time,
and expand the lending and referral business to acquire a larger
customer network and strengthen our relationship with existing
clients.
CBS made significant progress in 2013 by more than
doubling the size of its loan portfolio to P9.7 billion and growing
deposits by 68%, while reporting profitable operating results for
the period. CBS pursued its strategy of expanding its share of the
consumer, SME and middle market segments – both organically
and through acquisitions – and of tapping the rich potential of this
fast growing market. CBS also partnered with Savemore Market
to open 10 mini-branches within their stores, marking the savings
bank’s entry into community banking. CBS itself originated from
the Manila Bank acquisition in 2007 and rapidly grew with the
network expansion and merger of Unity Bank’s operations. Unity
Bank’s 15 branches are located in the fast developing Central
Luzon area, which is home to a large number of OFWs and midsized businesses. The signing of the share purchase agreement
to acquire 84.77% of Plantersbank during the last quarter of
2013 was the start of our strategic partnership with the country’s
largest private development bank and leading bank for SMEs,
creating opportunities for broadening China Bank’s geographic
coverage and presence in the high potential middle/SME markets.
Plantersbank’s network of 78 branches with two unused licenses,
client base of 70,000, and resources of P50 billion should bring
HANS T. SY
Chairman
and Chairman of the Executive Committee
8
China Bank one step closer to our goal of becoming a Top 5 bank.
In fact, the combined China Bank and Plantersbank resources hit
the P460 billion mark (as of December 31, 2013), which ranks fifth
among the largest domestic and private commercial banks. We
ended the year with 367 branches — 295 for China Bank and 72
for CBS. With the addition of Plantersbank, the combined branch
network reached 445, well over our target of 400 branches by
2014.
We put together an integration task force to identify and
leverage the significant opportunities arising from the combined
strengths of China Bank, CBS, and Plantersbank. There would be
immediate peso benefits accruing from a larger earning asset base
together with the economies of scale arising from a lower cost
of funds, upgrade in credit ratings and rationalization of shared
support services. Additionally, this task force would handle the
alignment of banking processes and systems, job evaluation and
placement and streamlining of the network, including branch
relocation. A major concern is the integration of our newest
employees with the existing complement of 5,594 people, but
given the mandate to continually grow the business, there is room
for anyone who is willing to work and grow with the China Bank
group.
We thank and acknowledge the support of our Board
of Directors and Senior Management as we boldly pushed our
banking frontiers into new businesses and acquisitions to enrich
our 93-year old franchise and secure our future market position.
We are also grateful to you, our valued clients and stockholders, for
your continued trust and confidence in us. The path to becoming
a top tier player in the industry would be full of challenges and
risks, given the competitive domestic environment and the
forthcoming ASEAN regional integration, but the opportunities to
deliver superior value to our shareholders and customers would far
outweigh any risk.
GILBERT U. DEE
Vice Chairman
PETER S. DEE
President
and Chief Executive Officer
OPERATING HIGHLIGHTS
A Year of Growth
and Expansion
Our customer-oriented and sustainable growth strategy
resulted in another successful year. China Bank continued
to be a part of the lives of millions of people, providing
innovative and responsive banking products and services
when, where, and how our customers want them;
extending loans and credit facilities, a wide range of
financial solutions, and expert advice to drive business
growth; and offering our financial know-how and portfolio
management capability to facilitate wealth creation. With
our strong foundation, professional touch, and personalized
approach to service, we are building deeper relationships,
creating value, and making a difference.
Annual Report 2013
9
ANYTIME, ANYWHERE BANKING
O
ur expanding distribution channels
enable us to reach more customers
and grow our deposit base and overall
consumer business. Last year, we opened
12 China Bank and 39 China Bank Savings
branches and mini branches for a total of 51
new branches, bringing the combined network
to 367 branches nationwide at end-2013. We
also renovated six branches and refurbished
and relocated another five branches to bigger
and better locations. This broader presence
translated into a significant increase in new
customers, deposits, consumer loans, and
fee-based income. The branches were chiefly
responsible for the growth of our checking and
savings accounts (CASA), effectively lowering
our funding costs.
Outside of branch banking, our customers
can count on a consistently positive experience
and convenient access to their China Bank
accounts anytime and anywhere they live,
work, and travel. We closed 2013 with 505
China Bank and 56 China Bank Savings ATMs
10
BRANCH NETWORK
As of December 31
2012 2013
China Bank - Metro Manila
148
149
China Bank - Provinces
135
146
Luzon
66
71
Visayas
41
45
Mindanao
28
30
China Bank Savings
TOTAL BRANCH NETWORK
33
72
316
367
for a total of 561 ATMs nationwide. In 2013,
we acquired a new ATM/payment switch,
Authentic, an electronic funds transfer
authorization and routing system. Designed
to be future-proof and service oriented
architecture-ready, Authentic will boost China
Bank’s switching system capability for real-time
transmission of ATM, point-of-sale, mobile,
and internet transactions in between issuing
and acquiring banks; as well as enable faster
OPERATING HIGHLIGHTS
15%
50%
of the branches are
located in community
malls and shopping
centers
increase in CASA
10%
increase in
deposit accounts
8%
increase in loans
originated by branches
deployment of value-added services across all
channels. In recent tests, Authentic handled
over 10,000 transactions per second.
ATM NETWORK
As of December 31
2012
2013
China Bank - Metro Manila
230
235
China Bank - Provinces
248
270
Luzon
131
144
Visayas
64
68
Mindanao
53
58
33
56
511
561
China Bank Savings
TOTAL ATM NETWORK
We also provide convenient and secure
internet and mobile banking service through
China Bank Online. In 2010, we launched China
Bank Online for Mobile, a mobile-optimized
version of China Bank Online to make it faster
and easier for China Bank customers to check
their account balance, transfer funds, and pay
bills using wi-fi or 3G-enabled cellular phones
and tablets.
We followed this up in 2013 with the
release of our mobile banking application for
Apple mobile devices (iPhone, iPad, iPod, and
iTouch), available for free download on the
Apple App Store. The China Bank App enables
China Bank customers to perform the same
transactions as China Bank Online on their
Apple mobile devices, it also features product
updates to keep clients posted on new offers
and a geo-positioning locator to make it easy
to find China Bank branches and ATMs. The
China Bank Mobile App for Android devices
will soon be available on Google Play. We also
redesigned the China Bank corporate website to
feature a more streamlined navigation, sleeker
visual design, and better tools like a branch/
ATM locator and a user-friendly UITF calculator
which is very useful for anyone interested to
invest in any of our Unit Investment Trust Fund
(UITF) products. The new website features the
full e-book of A Matter of Trust: The China Bank
Story, which can be downloaded for free, and a
new login page for retail customers enrolled in
China Bank Online. The new site has also been
optimized for improved speed and connectivity,
featuring social media integration with direct
links to the Bank’s Facebook, Twitter, Google+,
YouTube and LinkedIn.
38%
of the ATMs are in off-branch
locations like shopping
centers, transport terminals
and commercial districts
13%
Increase in ATM
cardholders
Annual Report 2013
11
20%
increase in China Bank
Online enrollments
22%
increase in active users
(more than 90 days log-in)
8,480
downloads of China Bank
Online App (as of March 2014)
12
China Bank TellerPhone, which was
launched in 1988 as the first landline phone
banking service in the country, was upgraded
in 2013 to make it relevant in this era of smart
phones. It now runs on the more powerful
Altitude system, making China Bank TellerPhone
a practical alternative banking channel for
customers who don’t have a computer or
smartphone, or who remain wary about using
such devices for financial transactions. Aside
from account balance inquiry, checkbook
request, fund transfer and bills payment, the
new and improved China Bank TellerPhone now
has options for inquiry on China Bank products
and services and request for transaction history
and statement of account, allows customization
of transactions, and enables more bills payment
transactions with an expanded basket of billers.
The option to speak to a live phone banker
is also available, transforming China Bank
Tellerphone from a transaction-driven channel
to a cross-selling and up-selling channel.
To maximize the overall efficiency of
our branch network and electronic banking
channels, we increased our sales force, made
improvements in processes and turn around
times, strengthened the collaboration between
the branches and the business units, maintained
our high customer service standards, and
continued to engage, interact, and connect
with our customers in any platform convenient
to them—branch, e-channel, contact center,
and even social media.
Moving forward, we are aligning our
businesses to best serve customers, taking
full advantage of the synergies and crossselling opportunities across the China Bank
Group to deliver consumer banking solutions
more effectively and efficiently, and give our
customers a seamless and positive experience
with every interaction. We will continue to
implement our branch expansion program and
enhance our e-banking services in line with
advancing technology and changing customer
habits.
CUSTOMER-CENTRIC PRODUCTS
AND SERVICES
We develop banking products and
services with our customers’ needs in mind.
We understand that our customers are busy
and they value simplicity and excellent service,
that they want the cost of banking to be
transparent and easy to understand, and
that they appreciate having the right banking
products that fit their specific needs. In 2013
we enhanced our product offerings to deepen
and broaden our customer relationships.
We launched China Bank Overseas
Kababayan Services in 2013 to provide overseas
Filipino workers (OFWs) with accessible financial
solutions to help them make the most of their
hard-earned money. China Bank Overseas
Kababayan Services is an array of competitive
products and services for the remittance,
savings, and consumer loan needs of migrant
and working Filipinos abroad and their
CBS: MINI BUT FULL SERVICE
Our thrift bank arm China Bank Savings (CBS)
introduced the mini branch concept in 2013 to increase
market coverage more efficiently and cost effectively.
By branching out to “in-store” locations like Savemore,
CBS uses less resources opening and running them
than conventional branches, and at the same time,
makes banking more accessible and inclusive. Mini
branches occupy an average of 25 sq.m. with only three
personnel, and although they are open seven days a
week and for longer hours, the mini branches are 80%
cheaper to operate than traditional branches. What’s
more, the mini branches’ approachable vibe and simple
account opening and loan procedures encourage the
un-banked segment to open accounts for the first time.
CBS’ mini branches offer the best of both worlds—
face to face interaction with friendly tellers and fast
and convenient service through e-banking channels.
Each mini branch is a full service branch offering all the
products and services of CBS, and is equipped with an
ATM, a night depository, and Online Banking Kiosk.
OPERATING HIGHLIGHTS
beneficiaries. China Bank On-Time Remittance,
Overseas Kababayan Savings (OKS) Account,
OKS HomePlus, and OKS AutoPlus, make up
the menu of Overseas Kababayan Services. We
complemented this with more overseas and
domestic remittance tie-ups to make sending
and receiving remittances more convenient
through China Bank.
Also last year, we teamed up with global
financial services giant MasterCard, marking
our entry into the credit card business; and
this year, we are launching three credit card
types: China Bank Prime, China Bank Platinum,
and China Bank World MasterCard. The China
Bank Cards will be bundled with features
such as cash advance, funds transfer, balance
transfer, balance conversion, convenient bills
payment facility, year-round 0% installment
programs, and flexible payment options, as
well as exclusive deals/discounts/promos from
major establishments, rewards, cash rebates,
and exchange points for miles. The China
Bank Cards will be equipped with two of the
world’s most advanced security technology,
EMV & 3D Secure. The cards will also come
with the MasterCard Paypass contactless
payment technology that will allow tap & go
transactions, and a budgeting and security
tool to make it easy for cardholders to manage
their spending and prevent the fraudulent use
of their cards.
We are also coming out with our
proprietary cash cards for customers looking
for a basic and convenient re-loadable
card product. The retail business will cover
consumer e-loading, person-to-person fund
transfers, family and household transmission
of funds such as children’s allowances, money
for grocery or gas and other payments, and
local remittances; while the corporate side
of the business will cover payroll, corporate
allowances, loan disbursements, dividend
payments, and the like.
39
39 tie-up arrangements
with banks, money transfer
organizations, and exchange
houses in the Middle East,
Asia, Europe and
United States
4,000
Over
cash pay-out outlets
nationwide
1,200
Over
remittance partner locations
worldwide
35%
Of the stores under the SM Food
Retail Group, CBS decided to open
the mini branches in Savemore
because it is more “grassroots”
and accessible. The mini branches
complete CBS’ ‘”hub and spoke”
business model. The idea is to
serve a big area with a traditional
branch complemented by mini
branches that also offer a full
range of services.
increase in the amount of
remittances
CBS closed 2013 with 72
branches, 27 of which are in
Metro Manila, including 10 mini
branches in Savemore. This year,
15 mini branches in Savemore
and Hypermart outlets are in
the pipeline, plus 25 traditional
branches.
Annual Report 2013
13
16%
increase in Consumer Banking
Group’s outstanding loan
portfolio
18%
increase in new consumer
loans booked
74%
of new auto loans were
branch-referred
CONSUMER LOANS THAT MAKE DREAMS COME TRUE
For China Bank, consumer financing is vital to relationshipbuilding. In 2013, we continued to make it easy and affordable for
our customers to own a home or a vehicle.
We offered one of the lowest consumer loan rates in the
market, with options for rate fixing to protect borrowers from
future rate increases.
A number of strategic initiatives were implemented to
corner a bigger share of the consumer loan market. For housing
loans, we focused on developing new and strengthening existing
sales channels. Dedicated account officers consistently visited
major accredited developers for greater access to buyer-loan
applications. We also expanded the sales team and beefed up
the manpower requirements to
complete the branch-referred
loans and developer channels, established new tie-ups with
pocket developers, and adjusted the loan packages (terms and
rates) to be more competitive. For auto loans, the fast turnaround
time for approvals was maintained at one day or less. A special
reduced interest rate was offered during the holidays. We also
sustained our internal sales blitz, holding test-drive events at
selected branches in partnership with auto dealers.
Our consumer loans China Bank HomePlus and China Bank
AutoPlus are available at all China Bank branches and nine
consumer banking centers nationwide.
45%
of new housing loans were
branch-referred
CBIBI: ASSURED FUTURE
Our insurance brokerage subsidiary, China Bank Insurance Brokers, Inc. (CBIBI), marked its 15th
anniversary in 2013. The year also saw the appointment of a new president, Ms. Julieta P. Guanlao,
following the retirement of Mr. Gerard E. Reonisto who had been with the company since its
inception, building it from a P1.5 million company in 1998, into one of the best-performing insurance
brokerage firms in the country with P369 million in assets as of end-2013. Ms. Guanlao has over two
decades of experience in insurance sales, marketing, and business development. Prior to China Bank,
she held key positions in several companies like Philam Insurance (now AIG Phils), YGC, and Ibero
Asistencia (Mapfre), responsible for both top line and bottom line growth.
With a solid track record of working with A-rated insurers of excellent security and expertise in their
field, a comprehensive range of affordable and customizable insurance solutions for China Bank and
non-China Bank customers, an efficient broking and claims infrastructure, and excellent customer
service, CBIBI continued to post strong growth in 2013 amidst stiff competition. Net income after
tax grew 41% and commission income increased 15%, for a profit margin of 41%. Under new
leadership, the company is gearing up to reach the next benchmark of P500 million in assets in the
next five years.
14
THE BUSINESSMAN’S BANK
C
15%
increase in IBG’s outstanding
loan portfolio; 56% of the
portfolio is long-term
62%
increase in foreign currency
loans
27%
increase in commercial loans
183%
increase in factoring volume
hina Bank, built by entrepreneurs, is the
local businessmen’s bank. We are unique
in our in-depth understanding of the
way Chinese-Filipino businessmen do business,
and our personal, very attentive approach to
customer service. In 2013, we continued to do
what we do best: helping businesses grow and
achieve their goals.
We provide the right financing products to
meet individual company requirements through
our Institutional Banking Group (IBG)—from
revolving credits, term credits, foreign currency
loans, trade finance facilities, purchase of
receivables or factoring, to project finance, loan
syndication, and long-term specialized program
lending.
The demand for funding for working capital,
construction, investment in equipment, and trade
finance remained strong last year, with a steady
15% increase in new loans booked. The active
management of customer relationships, marketfocused segmentation, comprehensive credit
risk assessment system, and streamlined credit
processes, led to an expansion of quality lending
across a broad cross-section of industries.
We also focused on expanding the
breadth of our customer relationships to
include a comprehensive range of financial
solutions. Private Banking Group, Trust Group,
and Treasury Group worked closely with our
commercial and corporate clients in designing
securities portfolios that complemented
their specific investment objectives. Guided
by market-intelligence and state-of-the-art
financial systems, we expertly managed our
customers’ portfolios, carefully allocating assets
to quality money market funds and investment
quality fixed income obligations.
We also offer a full range of international
banking products and services, the complete
variations in inward and outward remittance
modes, with global connections and relationships
with practically all the biggest European, Asian
and U.S. banks and leading international
remittance institutions. We continued to explore
new products, systems and methods, even cousage of the proprietary systems of our global
banking partners and remittance institutions, to
give our customers what they want and need for
their businesses to flourish.
Annual Report 2013
15
CREDIT MANAGEMENT GROUP (CMG):
SUPPORTING THE LOANS GROWTH
Key changes were made in China Bank’s approval authorities and
related credit policies in 2013, streamlining the credit approval
process and helping us achieve the increased growth targets
amidst stiff competition and the low interest rate environment.
First off, the property appraisal process was automated through
the Credit Documentation Management System (CDMS). For the
pilot stage, the property appraisal reports of selected lending
teams were processed, transmitted, and tracked electronically,
creating greater efficiency and minimizing errors. IBG’s credit
files were digitized and can now be accessed quickly and securely
by authorized personnel through CDMS. CMG also conducted a
full review of the performance of the Bank’s loan portfolio vis-àvis industry prospects. The report provided Management with a
definitive view of the quality of our loan portfolio and served as
a guide for the review of China Bank’s lending efforts in terms of
exposure by industry and other measures of concentration.
CENTRALIZED OPERATIONS GROUP (COG):
FACILITATING ACCURATE GLOBAL TRANSACTIONS
COG, which manages the transaction banking
services for our customers, continued to
improve our service delivery capabilities and
optimize the speed at which transactions
are processed. Despite the rise in transaction
volumes and the increased number of
counterparties and clients with and for whom
business was done in 2013, COG maintained
our operational efficiency and high straightthrough processing (STP) rate, facilitating
accurate cross-border transactions and minimizing operational risks
and operating costs for everyone involved. In 2013, the Bank of
New York Mellon Corporation recognized China Bank’s outstanding
payment formatting and high STP rate. Bank of America Merrill
Lynch also recognized our high STP rate, naming China Bank as the
“Leading Commercial Payment Partner Bank in the Philippines” for
two consecutive years, 2011 and 2012.
DRIVING BUSINESS EFFICIENCY
Companies need to be more efficient to boost productivity,
profitability, and competitiveness. Through our Cash
Management Services Division, we help businesses of all sizes
efficiently manage their company’s liquidity, collections, and
disbursements with our suite of cash management solutions. In
2013, new initiatives and enhancements were implemented to
build up our cash management business, making it one of the
drivers of both float and fee income for the Bank, and creating
business efficiencies for our customers to reduce administrative
cost and time through the streamlining of their day-to-day
operations, effectively allowing them to focus on revenuegenerating activities and other matters that require greater
attention in managing and growing their businesses.
MANAGING GOVERNMENT’S CASH RESOURCES
China Bank signed agreements with the Bureau of Treasury (BTr), Bureau of Internal
Revenue (BIR) and Bureau of Customs (BOC), laying down the framework for the
implementation of the treasury single account (TSA) beginning January 2014. The
TSA is a unified structure of government bank accounts that aims to consolidate and
optimize the use of government cash resources. Establishing a unified structure of
government bank accounts with TSA will solve the fragmented system for handling
government receipts and payments. The government expects savings of a minimum
P1.5 billion from an integrated financial management system. As an authorized
agent bank, we accept tax payments and customs duties. Payments can be made
through our nationwide branch network or electronically via BIR EFPS.
16
2,709 sales deals
52%
closed in 2013, up
China Bank Online Corporate has been
extended to China Bank Savings through a
partnership agreement.
The cut-off time for automatic debit
and credit was extended to 9:00 p.m.,
including weekends and holidays
82 corporate customers were converted
from manual to electronic payroll
crediting in 2013 on top of the first 66
converted in 2012,
148
totaling
corporate
clients converted.
OPERATING HIGHLIGHTS
MOMENTUM FOR
INDUSTRY MOVERS
We offer a wide array of advisory
and capital-raising services to corporate
clients through our Investment Banking
Group. Our dedicated team of seasoned
investment bankers develops tailormade funding and liability management
solutions for all types of corporations,
and structures and carries out placements
for the entire range of capital markets
products. Last year, China Bank was very
active in the debt capital markets, having
been involved in over P140 billion and
US$390 million worth of transactions
and becoming one of the top choices of
issuers.
INVESTMENT BANKING
DEALS IN 2013
FLYING HIGH IN AIRCRAFT FINANCING
China Bank was the sole arranger of the two biggest aircraft
financing transactions in the local aviation industry in 2013—the
US$140 million ten-year term loan to partially finance the acquisition
of Cebu Pacific’s four new Sharklet-equipped Airbus A320, with
Cebu Pacific as the financial lessee, marking the first aircraft
financing to be arranged by a local bank; and the US$141 million
financing for three Airbus A321-200 with flag carrier Philippine
From left: China Bank’s FVP Victor Martinez, EVP William Whang, and FVP
Virgilio Chua, with Cebu Pacific President & CEO Lance Gokongwei.
Airlines as operating lessee, putting in motion its comprehensive
fleet renewal program.
From left: China Bank FVP & Investment Banking Group Head Virgilio Chua,
PAL VP for Treasury Stewart Lim, and China Bank’s Account Officer Dianne
Camille Concepcion and FVP Victor Martinez .
In a launch event on January 21, 2013, Cebu Pacific officials unveiled
their first sharklet-equipped Airbus A320, becoming the first airline
company in the Philippines and the second in the world with
the new fuel-saving large wing tip devices. Meanwhile, the first
of Philippine Airlines new state-of-the-art jets, said to be one of
the most modern and safest airplanes to soar the Philippine skies,
arrived in Manila from Hamburg, Germany on August 7, 2013.
Annual Report 2013
17
A PARTNER IN WEALTH CREATION
F
17%
increase in assets under
management
37%
increase in income
18
or over nine decades, we have built
a reputation of being a reliable and
trusted banking partner, with the
resources and expertise to manage our
customers’ personal and business finances,
and the capabilities and connections to link
clients with opportunities that will help them
achieve their investment goals. Guided by our
mission to be a catalyst of wealth creation,
we set out to shape our customers’ financial
future in 2013, understanding what’s really
important to them and delivering personalized
solutions that combine the highest standards of
professionalism with genuine warmth.
Our Private Banking Group (PBG) is
committed to providing top-notch solutions,
in-depth specialist knowledge, and first-rate
service to our high net-worth clients. The
solutions we develop are calibrated to cover all
investment conditions, including the amount of
assets invested, risk tolerance, and investment
horizon; Our dynamic open architecture
approach gives our private banking clients
access to the best-in-class products of other
institutions; and our relationship managers
constantly monitor the market and apply the
latest findings to client portfolios.
A key initiative in 2013 was the acquisition
of a new wealth management system, Sopra
Banking for Wealth Management, to automate
a large number of processes and calculations,
and more importantly, give us a full 360-degree
insight into our private banking customers,
including the capability to simulate actions or
model future behavior.
We also developed an estate/legacy
planning program with our bancassurance
affiliate MCBLife.
Dubbed GIFT (Growing
Investments and Family Treasures), the program is
a holistic approach to estate planning, providing
legal, tax, and trust solutions.
SOUND INVESTMENT ALTERNATIVES
2013 was tough and challenging for the
local trust industry in general. After years of
double-digit growth rates, the acceleration
was suddenly arrested by BSP’s memorandum
limiting access to its Special Deposit Account
OPERATING HIGHLIGHTS
(SDA) facility to managed trust accounts
and pooled funds, and excluding investment
management and other agency accounts.
Agency accounts invested in SDAs were
mandated to be fully phased out in 2 stages: 30%
by July 31 and the remaining 70% by November
30, 2013. Expectedly, the implementation of
the memorandum dramatically reduced the
industry’s AUM (or Assets Under Management)
given the sizeable share of agency and other
fiduciary accounts invested directly in SDAs.
With massive amounts of money freed
from SDAs, the challenge was recapturing these
funds through our other products and services.
Our Trust Group responded aptly by expanding
and vigorously marketing our Unit Investment
Trust Fund (UITF) offerings.
We now have five UITF products: China
Bank GS Fund, Dollar Fund, Balanced Fund,
Money Market Fund, and our newest UITF, China
Bank Equity Fund, which provides investors
with an excellent opportunity to participate in
the bullish Philippine equities market and earn
potentially higher returns.
UITFs can serve as perfect alternatives
to SDAs as these funds are managed by
professional fund managers and invested
in a wide array of financial instruments
such as money market instruments, fixed
income securities like bonds/notes issued by
government and corporate issuers, as well as
listed equities which are usually accessible
only to big investors. China Bank UITFs have
been performing well, providing moderate to
aggressive investors with competitive returns.
Meanwhile, to further enhance yield on the
China Bank Money Market Fund, the Trust
Group sought and gained approval by the BSP
for the reduction of the fee in managing the
said Fund.
To rally the branches and other frontline
units to actively offer UITFs to clients, Trust Group
launched the “U Book, U Win, UITF SurePrize
Promo” that rewards qualified branches that
meet the required minimum increase in UITF
levels within the promo period: September 16,
2013 to January 15, 2014. The promo was a
success, with UITF ADBs increasing by P4 billion
during the four-month promo period.
New UITF products are underway which
will cater to clients with short- to intermediateterm investment horizon and who would like to
generate potentially higher returns than deposit
products. Aside from UITFs, our Trust Group will
also be focusing this year on strengthening our
fund management services, notably retirement
funds, directed investments, and fully discretionary
managed funds, and will be looking into growth
opportunities from recently-passed regulations on
other types of UITFs such as feeder funds and fundof-funds. Also in the pipeline are regional trust desks
in key locations in Luzon and Mindanao (to add to
the existing Cebu Trust desk established in late
2012) to support the frontline units and enhance
awareness for trust products and services in these
areas. With the public’s growing sophistication and
awareness on investment products and the Bank’s
rapidly expanding branch network, the Trust Group
is expected to ride on these synergies and register
positive asset and revenue growth in the coming
years.
THE CHINA BANK EQUITY FUND:
CAPITALIZING ON THE BULLISH EQUITIES MARKET
The China Bank Equity Fund was launched in June 2013 as part of the Bank’s
continued efforts to provide a comprehensive range of investment solutions to
clients. Classified as an “equity fund,” up to 90% of funds held may be invested
in select equities listed at the local bourse. The remaining balance will be invested
in short-term tradable fixed-income securities and bank deposits mainly to support
liquidity and redemption requirements. The China Bank Equity Fund is professionally
managed by China Bank Trust Group and is available at all China Bank branches
nationwide.
The China Bank Equity Fund is for clients with an “aggressive”
investor risk profile who are willing to accept a greater level
of risk involving volatility of returns and possible
erosion of principal. By assuming a longer
investment horizon of, at least, one year, the
investor will be in a better position to weather
short-term volatilities that maybe encountered
by the Fund due to changes in prevailing market
conditions and, thus, enjoy the potential benefits
of capital appreciation and favorable long-term
returns. The minimum investment is P50,000.00
for a minimum investment holding period of
30 calendar days. Additional contributions can be made
anytime in minimum amounts of P10,000.00.
Annual Report 2013
19
Our Treasury Group managed to ride out
the markets’ volatility, taking advantage of the
swings to take in some gains for the trading
desks. The Fixed Income desk, in particular, was
recognized by The Asset Magazine as one of
the Best Traders in Philippine Peso Bonds for the
second year in a row. The retail business saw
increased volumes as we actively participated in
the local government securities and corporate
bond offerings, both as a selling agent and as
underwriter.
Our Financial Engineering Desk applied
for a Type II Derivatives License with the BSP
in 2013, approved in the first quarter of 2014.
Having this license enables us to capitalize
on hedging and income opportunities, and
more importantly, provide additional hedging
instruments for our customers. Treasury Group
is looking at acquiring more derivative licenses
in the next two years to expand China Bank’s
capacity to provide more sophisticated product
alternatives to clients.
The Asset and Liability Management
(ALM) Desk signed off the Fund Transfer Pricing
(FTP) module of the ALM System, marking the
completion of the ALM project in 2013. The
ALM system includes Static, Dynamic and
Advance Liquidity modules. These modules are
currently used by our Risk Management Group,
Corporate Planning Division, and Treasury
Group to quantify portfolio gains or losses,
measure and forecast product profitability
across the balance sheet while managing bank
wide liquidity and earnings volatility. The FTP
module will further enhance interest income
allocation among business units and is expected
to be an integral part of the budgeting process
starting 2014.
Scheduled for an upgrade in 2014 is the
Kondor Plus, the treasury system currently in place.
MCBLIFE: BANCASSURANCE SUCCESS
According to a report released in June 2013 by the Insurance Commission, Manulife China Bank Life Assurance Corporation (MCBLife) ranked ninth
among the top life insurance companies in the country, with P4.51 billion in total premium income as of December 31, 2012. MCBLife had only
been in operation for five years in 2012, and it already ranked higher than the other bancassurance companies that have been around longer and
even bested other more established insurance companies operating in the country. In just a few years, MCBLife has cornered 12% share of business
amongst bancassurance players. Its insurance sales reached P286 million in 2013, representing a hundred fold growth since its inception in 2007.
From the onset, our bancassurance affiliate MCBLife was expected to generate significant benefits for both China Bank and Manulife Philippines—
we can broaden our fee-based income and Manulife can serve more customers across the country through our fast-growing branch network.
MCBLife hit its full stride and became a major recurring business contributor to China Bank as early as 2010, its third full year. In 2013, MCBLife
posted a 49% increase in sales. Remarkably, 44% of Manulife’s total
wealth sales came from MCBLife, contributing to an increase of 86% in
total bancassurance sales in 2013 over 2012.
MCBLife offers a full range of innovative insurance and financial products
for health, wealth, and education, making China Bank a one-stop shop for
banking and insurance. MCBLife, in collaboration with our Private Banking
Group and Institutional Banking Group, recently introduced new services
to address the financial and protection needs of our high net worth and
institutional clients, further strengthening the Bank’s value proposition to
these market segments. On top of the 226 financial sales associates (FSA)
deployed at China Bank branches nationwide, MCBLife is assigning highlyskilled financial consultants (FCs) at strategic China Bank branches to
service the sophisticated estate planning and wealth management needs
of private banking clients. MCBLife is also providing tailor-fit solutions to
the Bank’s commercial and corporate clients.
MCBLife will soon launch an innovative sales tool to support the
bancassurance team of FSAs and FCs, along with several new products:
Flexisure, Horizons, and Affluence Income.
20
OPERATING HIGHLIGHTS
PLANTERSBANK: UNITING FOR OPTIMUM PERFORMANCE
Our recent acquisition of Planters Development Bank (Plantersbank), the largest privately-owned
independent development bank with a 40-year history of serving small-and medium-scale
enterprises (SMEs), supports our strong commitment to SME finance. This deal bolsters China
Bank’s current strategy in two areas—growing our middle market/SME portfolio and accelerating
our network expansion program. With this acquisition, we combine the strong legacy of both
institutions to strengthen China Bank’s presence in the SME and middle market, and ensure the
continued development of broad-based access to financial products and solutions for SMEs.
Plantersbank is the fourth largest thrift bank in the Philippines in terms of assets and loans, which
stood at P50.2 billion and P34.5 billion, respectively, as of December 31, 2013. Of Plantersbank’s
total loan portfolio, over 60% is lent to SME-focused loan categories. It has a network of 78 branches
as of end-2013—24 in Metro Manila, 44 in Luzon, and five each in Visayas and Mindanao—and 64
ATMs nationwide. Its success in SME banking has been recognized through numerous citations and
awards, reinforcing its position as the country’s leading bank for SMEs.
China Bank’s acquisition of Plantersbank was
featured as a “Deal of the Month” in the March
2014 issue of Acquisition International, a leading
monthly corporate finance publication with a
global readership.
With Plantersbank now part of the China Bank Group, China Bank is the fifth largest private
universal bank in the country with P464 billion in assets as of December 31, 2013. The addition of
Plantersbank’s 78 branches to our 367 China Bank and CBS branches as of end-2013, brings the
combined branch network to 445 branches—well over the 400 branch network we targeted for
2014.
Plantersbank will continue to operate as a separate entity under the China Bank Group for about a year. We are working very hard and very
thoroughly for a seamless and successful merger, ensuring that we will be stronger in the SME and middle markets. The Integration Committee is
leading the integration and transition activities, enjoining all China Bank, CBS, and Plantersbank personnel to work together in harmony to attain
established targets for 2014, and at the same time, ensure that business goes on and our customers are not affected by the transition. The eventual
merger will make China Bank a more formidable competitor. We will have a wider, more strategic geographic footprint as CBS will absorb the 78
branches and the two unopened branch licenses of Plantersbank. The combined expertise of the China Bank and Plantersbank team in SME finance
will bring about an effective platform for the pro-active and consistent support for entrepreneurs to start and grow their businesses with us.
Annual Report 2013
21
OUR PEOPLE, OUR STRENGTH
I
5,594
China Bank and subsidiary
employees
6,906
Including Plantersbank
employees
n 2013, we continued to develop and enhance
our human capital as well as focused on
boosting employee morale and productivity
and improving our recruitment, training,
and performance management processes to
effectively support our expanding operations.
HUMAN CAPITAL
We closed 2013 with 5,594 China Bank and
subsidiary employees. Regular China Bank rank
and file employees are members of the China
Banking Corporation Employees Association
(CBCEA) and are covered by a collective
bargaining agreement.
Combined with Plantersbank’s 1,290
employees as of December 31, 2013, our
manpower is 6,906-strong.
Individually, our dedicated and hard
working employees have diverse talents and
perspectives that lead to more innovative ideas
and solutions, and collectively, we are one solid
team who share the same values and a strong
sense of extended family that compel us to
move in one direction.
CHINA BANK AND SUBSIDIARY
EMPLOYEES
2012
2013
Senior Officers
143
149
Junior Officers
1,291
1,522
Rank & File
TOTAL
3,764
3,923
5,198
5,594
Including Plantersbank
2013
22
Senior Officers
244
Junior Officers
2,133
Rank & File
4,529
TOTAL
6,906
COMPENSATION AND BENEFITS
China Bank’s compensation policy is
anchored on our objective of attracting,
retaining, and motivating competent and
dedicated employees to support our vision of
becoming the best, most admired financial
services institution. Our Human Resources
Division (HRD), with the approval of our Board
of Directors, has established a comprehensive
benefits and competitive compensation package
that mirrors the Bank’s long-term approach to
working relationships, commitment to equal
employment opportunity and the best labor
practices, and adherence to meritocracy.
We believe that it is in the best interest
of both the Bank and our employees to fairly
compensate our workforce according to the
nature of the job, qualifications and experience,
and individual performance. Our salary structure
consists of grades, with each position assigned
a specific job title and grade based on the
evaluation of job content and the compensable
factors. Upon initial hire, placement within a salary
range is according to the level of qualifications
and experience of the individual relative to the
position’s requirements. Our employees’ salaries
are within the prescribed bank salary ranges
for their respective corporate ranks/pay class.
HRD conducts periodic reviews of our salary
administration programs and recommends to
the Board salary range adjustments that reflect
current competitive practices.
Opportunities for pay increases are linked
to officers’ performance during the year.
Promotions and merit increases are given in
accordance with the approved Compensation
Policies. The profit sharing/performance bonus
is based on the officer’s performance and
also in accordance with the Bank’s By-Laws
that a percentage of the Bank’s net earnings
is allocated/distributed on the basis of the
Chief Executive Officer’s recommendation as
approved by the Board of Directors.
MANPOWER
In 2013, HRD strengthened our Performance
Management System, aligning the employees’
Performance Key Result Areas to the Balance
Score Card of the respective units which support
the Bank’s over-all business objectives.
In addition to a competitive compensation
package, we also provide a comprehensive
benefits package for our regular employees.
This includes medical, hospitalization, and
check-up programs; car plan (for officers);
financial assistance programs (e.g. housing,
car, appliance, and personal loans); employee
retirement plan; leave privileges (vacation leave,
sick leave, maternity/paternity leave, study leave,
and other leaves as mandated by law); group life
and accident insurance coverage; rice subsidy;
meal and transportation allowances; and bank
uniforms.
COMPANY CULTURE
Beyond the benefits and perks we give
employees, what makes China Bank a desirable
place to work for is our culture. China Bank’s
culture, defined by our mission and vision, is
characterized by openness, loyalty, and more
importantly, a trust in each other that regardless
of how much the Bank has grown over the
years, the small-company, close-knit family feel
remains. Our employees conduct themselves
and perform their duties consistent with our
core values—integrity, high performance
standards, commitment to quality, customer
service focus, concern for people, efficiency,
and resourcefulness / initiative—and together,
we embrace and drive change and innovation,
with everyone in the team contributing, making
a difference, having fun, and feeling rewarded
for their hard work.
Trust is at the heart of the China Bank
culture and we demonstrate this by having
clearly defined roles and expectations, and
providing employees with the requisite tools,
training, and authority to succeed in their
careers and contribute to the Bank’s success.
We believe that employees who feel trusted
and respected will strive harder to maintain that
trust and are less likely to do something that will
result in a loss of trust. In line with this, we have
a succession plan that brings a sense of purpose
and sustainability to employees. HRD conducts
periodic reviews of the talent pipeline and
implements individual career development plans
to ensure that intellectual capital is not lost, but
transitioned from one employee to another.
Below is a table showing the number of
China Bank and subsidiary employees hired
and promoted in 2012 and 2013 (excluding
Plantersbank employees):
Year
Hired
Promoted
2012
1149
612
2013
1145
716
We also endeavor to maintain a good
relationship with our retired employees. For
the last ten years, we hold a gathering for
retired China Bank employees every 3rd week
of January. This is a special occasion that is
anticipated yearly by the members of the CBC
Retirees’ Association as this is where they
reconnect with former China Bank colleagues
and friends.
PROFESSIONAL DEVELOPMENT
We place great importance on the
continuing skills development of our manpower
to maintain our high standards of service
across the entire network and to adapt to the
changing business conditions and regulatory
environment. We have a comprehensive inhouse training program developed with industry
experts to build our employees’ operational,
technical, marketing, service, communication,
and leadership skills, as well as update their
knowledge of our Bank policies and all relevant
laws and regulations. In addition to the in-house
training program, our employees have access
to external training programs. We sponsor or
reimburse the training/tuition fees of employees
who take courses aligned with a professional
designation in their current role. We also
have a comprehensive development plan for
our Management Trainees, which includes
a mentoring program with members of our
Annual Report 2013
23
ORGANIZATIONAL CHART
Board of Directors
Board Committees
Corporate
Governance
Compliance
Audit
Compliance
Office
Audit Division
Executive
Committee
Compensation
Retirement
Office of the Vice Chairman
Trust
Investment
Risk
Management
Trust
Group
Risk
Management
Group
Corporate
Secretary
President and CEO
Credit Committee
Management Committee
Information Security Office
Security Office
Chief Operating Officer
Corporate Planning
& Investor Relations
Relationship
Banking
Retail Banking
Business
Chief Finance Officer
Business
Operations
Financial Capital Markets
& Investment
Corporate
Support
Lending
Business
Management Committee as mentors. The China
Bank Training Academy and our Intranet portal
for e-training are vital to meeting our objective
of empowering our manpower.
Below is a table showing the number of
trainings conducted in 2012 and 2013 with the
the corresponding number of participants.
Officer Training
Staff Training
External
Executive
Total
2013
Programs
Conducted
112
184
189
40
525
Officer Training
Staff Training
External
Executive
Total
2012
Programs
Conducted
97
233
166
23
519
Participants
3,381
5,598
414
75
9,468
Participants
2,591
6,042
256
26
9,030
* One employee may have attended several training programs.
24
REWARDS AND RECOGNITION
We recognize the importance of connecting
performance to rewards.
Promotions are
bestowed on deserving employees who work
hard and perform well; in addition, we have a
Rewards and Recognition program to foster a
positive and productive working environment
and to motivate employees to always aim for
excellence. Specifically for the branch personnel,
we have the Annual Branch Banking Group
National Convention where the top performing
branches and branch managers are recognized
for their exemplary performance in different
categories.
MANPOWER
Rewards & Recognition Program Awards
Model Employee Award
Quick Win Award
Breakthrough Idea Award
Top Sales and Marketing Award
Product of the Year
Deal of the Year
Project of the Year
Special Citation Award
Critical Project Completion Award
Special Meritorious Circumstances Award
BBG National Convention Awards
Branch of the Year
Top CASA (Checking & Savings Account) Contributors
Top Sales Associates
Top Performers / Referrors
(for Bancassurance, Consumer Banking Group,
Cash Management, Insurance, Private Banking Group,
Treasury Group, and Trust Group
EMPLOYEE RELATIONS
We maintain our good relationship with our
employees to keep them contributing and fully
involved in their work. Aside from providing a
rewarding and enriching work experience, we
offer our employees a safe and nurturing work
environment where everyone is treated fairly
and respectfully.
The HRD-Employee Relations Department
(ERD) provides consultative services for all our
employees, in line with its mandate to contribute
to high productivity, motivation, and morale,
and to cultivate an environment where our
people work collaboratively and communicate
openly with one another. HRD-ERD is a
confidential resource for employees with a
problem, complaint, question, or who simply
need a sounding board. It advises employees
on applicable regulations, legislation, bargaining
agreements, as well as grievance and appeal
rights and discrimination and whistleblower
protections. It manages conflicts and corrects
poor performance and employee misconduct,
applying the Bank’s policies and regulations fairly
and equitably to resolve employee grievances
and appeals and promote a better understanding
of China Bank’s goals and policies.
EMPLOYEE WELFARE
We take genuine interest in our people’s
welfare. We advocate a good work-life balance
to keep our team motivated, healthy, and
energized.
Our employees enjoy adequate
personal and family time-off, and are allowed
to have flexible work schedules, as warranted.
In place are various sports, recreational,
and health and wellness programs to provide
our employees with activities outside of the
workplace, strengthen camaraderie, and
promote community participation and personal
growth. We have a year-round schedule of
sports activities like bowling, basketball, and
badminton, as well as health and wellness
programs in the form of group exercises (e.g.
Zumba and Aerobics) as a way to improve one’s
physical condition and not only to release stress
after a hard day’s work. This is in addition to the
series of activities (i.e. check-up, immunization)
and articles on health and wellness which we
publish monthly.
We also continually review our HR policies,
developing new ones not only in compliance
with laws and regulations, but also in keeping
with our commitment to protect our greatest
asset—our people. All HR policies are available in
China Bank’s intranet system for easy reference
of employees.
Policy on Battered Women Leave
The policy provides for the general guidelines and
conditions for the grant of this benefit for covered China
Bank employees in line with the State’s policy embodied in
Republic Act No. 9262.
The Battered Woman Leave Benefit comprises
ten working days with pay consisting of basic salary, all
allowances and other monetary benefits, extendible when
the necessity arises as specified in the protection order.
Employee shall submit protection order prior to extension.
Policy on Hepatitis B Prevention and Control in the
Workplace
The policy provides for the general guidelines as to
the welfare of the employees affected with Hepatitis B;
i.e., to guarantee full respect for human rights and uphold
the dignity of the concerned employee in line with the
State’s effort for prevention and control of Hepatitis B
in the workplace, pursuant to Department of Labour &
Employment (DOLE) Department Advisory No. 05, Series
of 2010.
The policy calls for preventive strategies, such as
providing adequate hygiene facilities and ensuring the
proper disposal of infectious and potentially contaminated
Annual Report 2013
25
materials, and screening, diagnosis, treatment, and
referral of affected employees to the Bank’s health
provider for appropriate medical evaluation/monitoring
and management.
An employee who contracts Hepatitis B infection
in the performance of his/her duty is entitled to sickness
benefits under the Social Security System and employees’
compensation benefits under Presidential Decree No. 626.
Policy on Drug-free Workplace
The policy provides for the general guidelines
to protect and safeguard the health and well-being of
employees from the harmful effects of dangerous drugs,
and in the process ensure safe and efficient business
operation pursuant to DOLE Department Order No. 5303, Series of 2003 in accordance with Article V of Republic
Act No. 9165, otherwise known as the “Comprehensive
Dangerous Drug Act of 2002.”
The policy enhances the Bank’s existing drug
awareness education and information program and
expands the workplace drug-testing program to
include not only pre-employment drug-testing but also
unannounced random drug testing and reasonable
suspicion-testing.
The Bank undertakes to protect
and uphold the right to privacy of an individual who
undergoes drug testing and/or is confirmed to be a
drug user except in cases when it is required by law or
in cases of overriding public health and safety concerns,
and where such disclosure has been authorized in writing
by the person concerned. Any employee who (a) tested
positive for the use of Dangerous Drugs; (b) is found guilty
of the prohibited activities mentioned in Section III hereof;
or (c) refuses to submit to testing under this Policy shall
be subject to appropriate disciplinary action, which shall
include termination, subject to the provisions of Article
282 of the Labor Code.
Policy on Solo Parent Leave
The policy provide for the general guidelines and
conditions for the grant of this benefit for covered China
Bank employees in line with the State’s policy embodied in
Republic Act No. 8972.
The Solo Parent Leave Benefit applies to all China
Bank employees, regardless of employment status,
considered a “Solo Parent” as categorized in Section
III (b) and has complied with the conditions provided in
Section VI of the policy. China Bank employees who are
solo parents are entitled to seven working days of paid
Solo Parent Leave for every calendar year, in addition to
other leave privileges under existing laws and company
policies, to enable them to perform parental duties and
responsibilities where their physical presence is required.
Policy on Tuberculosis Prevention and Control in the
Workplace
The policy provides for the general guidelines as to
the welfare of the employees affected with Tuberculosis;
i.e., to guarantee full respect for human rights and uphold
the dignity of the concerned employee in line with the
State’s effort for prevention and control of
Tuberculosis (TB) in the workplace pursuant to DOLE
Department Order No. 73-05 Series of 2005.
The policy states that employees who have or had
TB shall not be discriminated against. Instead, they shall
be supported with adequate diagnosis and treatment, and
shall be entitled to work for as long as they are certified by
the Bank’s accredited health provider as medically fit and
shall be immediately restored to work as soon as their illness
is controlled. There will also be work accommodation
measures to accommodate and support employees
26
with TB which may include flexible leave arrangements,
rescheduling of working times and arrangements for
return to work. Moreover, a TB awareness program shall
be undertaken through information dissemination, and
that workplaces will be provided with adequate and
appropriate ventilation in compliance with Rule 1076.01
of the DOLE-Occupational Safety and Health Standards
to ensure that contamination from TB airborne particles
is controlled.
Policy on HIV and AIDS Prevention and Control in
the Workplace
The policy provides for the general guidelines on
the uniform and fair approach to the effective prevention
of HIV/AIDS amongst employees and the comprehensive
management of HIV-positive employees and employees
living with AIDS pursuant to DOLE Department Order No.
102-10, Series of 2010 in compliance with Republic Act
No. 8504.
The policy states that employees shall not be
discriminated against, from pre- to post-employment,
including hiring, promotion or assignment, because of their
HIV/AIDS status, be it actual, perceived or suspected with
HIV infection; that compulsory HIV testing shall not be a
pre-condition to employment; that employees shall not be
terminated from work if the basis is the actual, perceived
or suspected HIV status; and that employees shall practice
non-discriminatory acts against co-employees. Access to
personal data relating to an employee’s HIV status shall
be bound by the rules of confidentiality consistent with
the provisions of R.A. No. 8504 and the ILO Code of
Practice. HIV/AIDS-related information of employees shall
be kept strictly confidential and kept only on medical files,
whereby access to information shall be strictly limited to
medical personnel or if legally required in accordance
with the provision of R.A. No. 8504 and its Implementing
Rules and Regulations. The Bank shall take measures
to reasonably accommodate employees AIDS-related
illnesses and institute workplace program for HIV/AIDS
education, prevention, and control.
Policy on Breastfeeding in the Workplace
The policy provides for the general guidelines and
conditions for the grant of this benefit for covered China
Bank employees pursuant to the Expanded Breastfeeding
Promotion Act (RA 10028).
The Bank shall implement a breastfeeding program
as part of its human resource development, which shall
include, among others, (a) information dissemination
on the benefits of breastfeeding; (b) conduct adequate
orientation on lactation management; and (c) implement
a support system for nursing employees.
The policy states that nursing employees are entitled
to break intervals of not less than a total of 40 minutes for
every eight-hour working period to breastfeed or express
milk, in addition to the regular time-off for meals. These
break intervals, which shall include the time it takes an
employee to get to and from the workplace lactation,
shall be counted as compensable work time, provided that
the nursing employee notifies her immediate Supervisor,
prior to the use of the break interval, that she will make
use of the Bank’s lactation stations and provided, further,
that the nursing employees signs in the corresponding
Logbook maintained in the Bank’s designated Lactation
Stations for every use thereof. For Branches, it is
sufficient for a nursing employee to inform her immediate
Supervisor, prior to the use of the break interval, that she
will be breastfeeding or expressing milk.
CORPORATE SOCIAL RESPONSIBILITY
Responsible
Operations
Annual Report 2013
27
Corporate Social Responsibility (CSR) is a vital part of
China Bank’s long-term success. We integrate social,
environmental, and governance practices into our day-today business activities to maintain a balance between our
business interests and our stakeholders’ welfare, and create
a positive impact on our people, customers, investors,
the environment, the economy, and the communities we
In 2013, we continued to focus on
promoting financial inclusion, sustainable
finance, environmental protection, and social
development. We engaged our employees
and partnered with our customers, various
community groups, and charitable organizations
to support causes that serve the interests and
the needs of society as a whole, and help provide
solutions to economic, social, and environmental
challenges.
FINANCIAL INCLUSION
We are expanding our nationwide footprint
and improving our service delivery channels to
provide financial access to more people, with the
aim of bringing into the mainstream economy
those who are not in the realm of financial
services. Through our savings bank subsidiary
China Bank Savings (CBS), we continue to
explore new ways of increasing financial
inclusion. In July 2013, CBS began opening mini
branches in Savemore outlets in Metro Manila,
tapping the un-banked and underserved sectors
and making it easy for them to start banking
relationships with low—even zero—initial
deposit accounts and micro financing. Open daily
and designed in look and in processes to be very
accommodating to first time bank customers,
CBS mini branches serve a wide range of clients:
from maids, cigarette vendors, tricycle drivers—
people who would otherwise be intimidated
transacting in a traditional bank branch—to
students, housewives, and professionals. CBS
mini branches, now numbering ten, have close
to 5,000 accounts. 30% of the mini branches’
28
customer profile belongs to the D & E socioeconomic class.
15 more CBS mini branches in Savemore
as well as SM Hypermart outlets will be opened
within the year.
We also continue to support small- and
medium-scale enterprises (SMEs), increasing
our lending to the sector by 10% in 2013. To
accelerate our SME strategy, we acquired two
banks under the Bangko Sentral ng Pilipinas’
(BSP) Strengthening Program for Rural Banks
(SPRB) Plus: Pampanga-based rural bank Unity
Bank in November 2012, merged with CBS on
January 20, 2014, and Planters Development
Bank (Plantersbank), MOA in September
2013, with the Share Purchase Agreement
executed on January 15, 2014. The acquisition
of Plantersbank, the country’s largest private
CBS mini branches attract people from all walks of life to
bank as they go about their grocery shopping.
CORPORATE SOCIAL RESPONSIBILITY
development bank and leading bank for SMEs,
bolsters our current strategy in two areas—
growing our middle market/SME portfolio
and our network expansion program. We
are moving forward, making full use of our
common strengths and harnessing the synergies
to achieve cost efficiencies and ensure the
continued development of broad-based access
to financial products and solutions for SMEs.
SUSTAINABLE ENERGY FINANCE
Society’s expectations and the interests of
future generations are crucial to China Bank’s
financing decisions. Beyond the numbers, we
take into consideration the environmental,
social, and governance risks involved in
supporting certain businesses and industries.
Our partnership with IFC, a member of the
World Bank Group, for technical assistance
and advisory services under IFC’s Sustainable
Energy Finance (SEF) Program, enables us to
identify potential renewable energy and clean
development projects, analyze the project
risks, and package viable financial structures
to promote sustainability and improve business
bottom lines.
In 2013, China Bank helped finance a
number of energy projects that have adopted
“clean coal technology” to produce power in
an economical and environmentally responsible
manner. These include the 300-megawatt
capacity expansion of the coal-fired power plants
of Semirara Mining Corp. subsidiary Southwest
Luzon Power Generation Corp.in Calaca,
Batangas; the construction of Global Business
Power Corp. subsidiary Toledo Power Corp.’s
82-megawatt coal-fired power plant in Toledo
City, Cebu; the construction and operation of
Aboitiz Power Corp. subsidiary Therma South,
Inc.’s two 150-megawatt circulating fluidizedbed (CFB) electric power generation facility
in Davao City and Davao del Sur, which once
operational by 2015 will be the largest coal-fed
power plant in Mindanao; and the construction
and operation of one of the most advanced
and most fuel-efficient plants in the Visayas,
a 135-megawatt CFB power plant project in
Concepcion, Iloilo, expected to be operational
by mid-2016.
ENVIRONMENTAL PROTECTION
Our people are our partners in protecting
the environment. As with all of China Bank’s
CSR activities, we encourage staff involvement,
working hand in hand with them to raise
awareness of environmental issues and promote
reducing, reusing, and recycling.
For over ten years now, China Bank has
a solid waste management program, which
we continuously implement and improve
on. Garbage is properly segregated and the
recyclable materials are turned over to our
recycling partners at regular intervals.
China Bank is actively involved in the
program “Promoting Energy Efficiency in
the Makati Central Business District” which
primarily aims to promote energy efficiency
and help alleviate climate change. And in
the last six years, we have implemented
projects to progressively reduce our
operation’s impact on the environment, like
switching to energy-efficient lighting and air
conditioning systems, acquiring technologies
to automate processes, including installing
video conferencing facilities at our head
office and business centers in Luzon, Visayas,
and Mindanao to reduce the need for travel
and thereby contribute to a reduction in land
and air travel emissions. We also developed
policies on conserving energy, water, and
paper supplies bank wide and have begun
using recycled paper on our annual reports,
and eventually other publications and printed
marketing materials.
We continued to implement in 2013 our
internal “Going Green” campaign launched
in 2012, encouraging our employees to adopt
as well as promote sustainable working
and living practices to others. The heads of
the different branches, departments, and
subsidiaries are the environment ambassadors
tasked to remind the staff to support the
campaign at every possible opportunity, as
well as to monitor and police their own areas
of responsibility. As a result, we generated
electricity, paper, and ink savings in 2013
despite the continued branch and manpower
expansion.
Annual Report 2013
29
16-year old Mark Joseph B. Millagrosa is one of the 16 CFC-ANCOP scholars sponsored by China Bank. He completed his high school education at the San Isidro National High
School through the scholarship program. He graduated on March 27, 2014 and intends to pursue an engineering degree.
SOCIAL DEVELOPMENT
Community involvement is a cornerstone
of China Bank’s CSR program. We support
various
noteworthy
projects
for
the
underprivileged sector, provide educational
assistance to promising children, undertake
charitable fundraising, and encourage employee
volunteerism in our efforts to give back to society.
At the same time, our branches nationwide
actively participate in a number of local events
such as sports tournaments, cultural fairs,
and anniversary celebrations and conventions
of different associations, organizations, and
universities to uphold community values
and traditions and foster camaraderie in the
communities where we operate.
In 2013, we continued to contribute to
social development. We again supported the
Child Sponsorship Program of CFC-ANCOP
(Answering the Cry of the Poor, a ministry of
Couples for Christ), sponsoring 16 ANCOP
scholars for the school year 2013-2014. At
the same time, deserving children of China
Bank employees continue to benefit from our
scholarship programs for high school and college
education—the G.U.D Scholarship Fund, named
after Board Vice Chairman Gilbert U. Dee, and
the D.C.C. Scholarship Fund, named after one of
our founding fathers, Dee C. Chuan.
30
China Bank is committed to help in times
of great need. We conducted donation
drives for the victims of the three major
disasters in 2013: Typhoon Maring, Bohol
Earthquake, and Typhoon Yolanda. Over
P3 million in employee and client donations
were raised and turned over to the Philippine
Red Cross and CFC-ANCOP for their relief and
rehabilitation efforts.
As always, our mandate is to secure our
people first. Our priority in any calamity is the
safety and welfare of our personnel. Using all
means and resources available, we conducted
a search and rescue and several waves of
relief operations for employees and their
families affected by the recent super typhoon.
Demonstrating our company spirit, China Bank
employees volunteered to help in these efforts.
Aside from making monetary and in-kind
donations, they donated their time, helping
locate missing colleagues, and repacking and
distributing relief goods.
We also had a separate internal donation
drive and provided a calamity assistance
package to affected employees which include
cash assistance, calamity loan equivalent to a
maximum of four months’ salary at a reduced
interest and flexible payment terms, and special
leaves that are not chargeable against vacation
leave credits.
CORPORATE GOVERNANCE
Responsibility
to Stakeholders
Annual Report 2013
31
China Bank’s awards in good governance clearly indicate the seriousness
of our advocacy and our track record in living up to continuously improving
benchmarks. We are committed to building and maintaining relationships based
on trust and fairness with all our stakeholders, and conducting our business
ethically and in accordance with internationally-recognized best practices.
In 2013, we continued to practice the
principles of good governance and made
strategic and operational improvements
to achieve greater transparency and
create long-term value.
We have submitted our Annual
Corporate Governance Survey Disclosure
Form to the Philippine Stock Exchange
(PSE), as required, which is the basis of
the Annual PSE Bell Awards.
Our adherence to the high standards
of corporate governance was again
recognized by the PSE. At the 2013 Bell
Awards, China Bank was again named
as one of the best-governed companies
in the Philippines—the only bank among
the top five awardees in the publiclylisted companies category and one of
China Bank Chairman Hans T. Sy accepting the award from SEC Chairperson Teresita J. Herbosa, head of the 2013
Bell Awards panel of judges. Looking on are (from left) Deloitte Philippines Managing Partner and CEO Gregorio
only two other awardees to have been in
S. Navarro, PSE Bell Awards judge; and PSE Chairman Jose T. Pardo.
the top five twice in a row. China Bank
was also the recipient of the Gold Award
CORPORATE OBJECTIVE
for Corporate Governance by the Institute of Corporate Directors
Our goal is to be among the top five banks in the country in
(ICD) in 2011 and 2012.
terms of resources and size of the branch network. The Bank’s five
As we expand our operations through organic growth and
year plan articulates our strategies to generate greater value from
strategic alliances, we will continue to strengthen our corporate
the network expansion, new businesses, and stronger presence
governance practices to ensure that we are not just consistent with
in the MME and SME markets. In the process, we will build a
the rule of law, but that China Bank is run soundly and prudently,
more responsive, cost efficient, and market focused organization
in a manner that fits the best interests of our stakeholders.
that is primed to meet the challenges of a fast changing financial
environment.
CORPORATE GOVERNANCE POLICY
The Board of Directors, Management, employees, and
BOARD OF DIRECTORS
shareholders believe that good corporate governance is a
The Board of Directors is the highest governing authority at
necessary component of what constitutes sound strategic
China Bank. The Board, responsible for the governance of the Bank
business management and will therefore undertake greater effort
and accountable to our shareholders, guides our overall philosophy
necessary to create more and continuing awareness within the
and direction and sets the pace for our current operations and
organization.
future developments. Governance by the Board also includes
monitoring Management’s performance, establishing standards of
accountability, and setting our corporate values.
32
CORPORATE GOVERNANCE
China Bank has a high-performance Board whose members have diverse and relevant skills and work well together as a team. Our 2013 Board is composed of eleven directors and one
adviser, Honorary Chairman Henry Sy, Sr. Of the eleven, three
are executive directors: Vice Chairman Gilbert U. Dee, President
and CEO Peter S. Dee, and Senior Executive Vice President and
Chief Operating Officer Ricardo R. Chua. The rest are nonexecutive directors. China Bank has no executive director who
serves on more than two boards of listed companies outside of
the group. The Board composition complied with the regulatory
requirements.
INDEPENDENT DIRECTORS
To create a strong element of independence in the China
Bank Board, we have three independent, non-executive directors:
Dy Tiong, Alberto S. Yao, and Roberto F. Kuan. We exceeded the
legal requirement of no less than two independent directors, and
fully complied with all the applicable rules on the nomination and
election of our independent directors.
We define an independent director as holding no interests
or relationships with China Bank, the controlling shareholders, or
the management that would influence their decisions or interfere
with their exercise of independent judgment. As stated in our
Corporate Governance Manual, our independent directors have
a term of five years, with a two-year cooling off period before
they can serve for another five years; and while they are in our
Board, they are not allowed to hold interlocking directorships in
more than five listed companies.
CHAIRMAN
The roles of the chairman and president/chief executive
officer (CEO) are segregated but complementary to ensure an
appropriate balance of power and greater accountability. The
chairman of the board is Hans T. Sy. He was our vice chairman
from 1989 until 2001, when he became chairman. He has never
been a CEO of China Bank or held any executive positions in
the Bank. As chairman, he is responsible for the leadership and
effective running of the Board. His duties also include maintaining
a relationship of trust with board members; ensuring that the
Board takes an informed decision, and that board meetings are
held in accordance with our by-laws, taking into consideration
the suggestions of the CEO, management, and the directors;
and maintaining quality and timely lines of communication and
information between the Board and management.
PRESIDENT AND CEO
Peter S. Dee is our incumbent president and CEO, elected in
1985. Subject to the control of the Board which has direct charge
of the business of the Bank and general supervision of the business
affairs and property of the Bank, he is primarily responsible for
the achievement of agreed objectives and execution of strategy
as established by the Board, and for leading the senior executive
team in the day-to-day running of the business. In the absence
or inability of the chairman and the vice-chairman of the Board,
Annual Report 2013
33
he is authorized to preside over the board meetings and the
stockholders’ meeting.
ELECTION OF THE BOARD
The position of a China Bank director is a position of trust;
thus, the directors are selected for their integrity, leadership,
experience at policy-making levels, and their ability to render
independent judgment. The shareholders nominate candidates
by submitting the nomination to any of the members of the
Nomination Committee, the Corporate Governance Committee,
or the corporate secretary on or before the prescribed date. The
Corporate Governance Committee reviews and evaluates the
qualifications of the candidates, the full Board confirms these
candidates’ nomination, and the shareholders elect the directors
during the Annual Stockholders’ Meeting.
Upon their election, the members of the Board are issued a
copy of their general and specific duties and responsibilities as
prescribed by the Manual of Regulations for Banks (MORB), which
they acknowledged to have received and certified that they read
and fully understood the same. Copies of the acknowledgement
receipt and certification are submitted to the Bangko Sentral
ng Pilipinas (BSP) within the prescribed period. Moreover, the
directors also individually submit a Sworn Certification that they
posses all the qualifications as enumerated in the MORB. These
certifications are submitted to BSP after their election. Additional
certifications are executed by independent directors to comply
with the Securities Regulation Code and BSP rules which are then
submitted to the SEC.
SUCCESSION
Succession, replacement or vacancy in the Board is addressed
in the Bank’s By-Laws, stating that vacancies in the Board may
be filled by appointment or election of the remaining directors,
if still constituting a quorum; otherwise, the stockholders shall
fill such vacancy in a regular or special meeting called for this
purpose. Ultimately, it is the Board’s discretion whether to fill up
such vacancy or not.
BOARD MEETINGS
The organizational meeting of the Board is held after the
Annual Stockholders’ Meeting. Regular Board meetings are held
at least once a month; however, special board meetings may be
called by either the chairman or CEO, or upon the request of
three directors.
34
The directors are expected to prepare for, attend, and
participate in these meetings, and to act judiciously, in good faith,
and in the best interest of China Bank and our shareholders.
The Board is informed on an ongoing basis of the Bank’s
performance, major business issues, new developments, and the
impact of the economic environment. The Board also has full
and unrestricted access to management and employees of the
Bank and affiliated companies, external consultants and advisors,
and the corporate secretary, Vice President Corazon I. Morando,
in the execution of their duties. The meetings of the Board and
its committees are recorded in minutes, and all resolutions are
documented.
In 2013, the China Bank Board had 15 meetings, including
the organizational meeting.
Board
Name
No. of
meetings
attended
%
Chairman
Hans T. Sy
14
93
Vice Chairman
Gilbert U. Dee
13
87
Member
Peter S. Dee
14
93
Member
Joaquin T. Dee
15
100
Member
Herbert T. Sy
15
100
Member
Harley T. Sy
13
87
Member
Jose T. Sio
14
93
Member
Ricardo R. Chua
14
93
Independent
Dy Tiong
13
87
Independent
Alberto S. Yao
14
93
Independent
Roberto F. Kuan
14
93
BOARD COMMITTEES
China Bank has eight board-level committees and three
management-level committees. Members of the different
committees are appointed by the Board at the annual
organizational meeting, taking into account the optimal mix of
skills and experience of the members.
The composition and duties of these committees are set
forth in their respective committee charters in compliance with
legal requirements. The charters are posted in our website
www.chinabank.ph.
Executive Committee (ExCom) has the powers of the Board
in the management of the business and affairs of China Bank
between meetings of the Board of Directors, to the fullest extent
permitted under Philippine law.
CORPORATE GOVERNANCE
The ExCom convened 36 times in 2013.
Name of Director
Attendance
%
Hans T. Sy
32
89
Gilbert U. Dee
32
89
Peter S. Dee
32
89
Joaquin T. Dee
36
100
Ricardo R. Chua
35
97
Risk Management Committee (RMC) is responsible for the
oversight and development of all the Bank’s risk management
functions, including the evaluation of the risk management
plan to ensure its continued relevance, comprehensiveness, and
effectiveness.
The RMC convened 13 times in 2013.
Name of Director
Attendance
%
Alberto S. Yao
12
92
Hans T. Sy
11
85
Gilbert U. Dee
13
100
Joaquin T. Dee
13
100
Audit Committee primarily oversees all matters pertaining to
audit, including the evaluation of the adequacy and effectiveness
of the Bank’s internal control system. It is the view of the Audit
Committee that the Bank’s internal control system is adequate
and appropriate.
It likewise provides oversight on the activities of Management
and the internal and external auditors.
The Audit Committee had 12 joint meetings with Compliance
and Corporate Governance Committees in 2013.
Name of Director
Attendance
%
Hans T. Sy
12
100
Joaquin T. Dee
12
100
Dy Tiong
9
75
Alberto S. Yao
11
92
Roberto F. Kuan
9
75
Compliance Committee is tasked to ensure that Management
is doing things in accordance with the prescribed rules, policies,
procedures, guidelines and the like, and that appropriate
corrective actions are being taken when necessary or required.
Corporate Governance Committee (CorpGov) is responsible
for ensuring the Board’s effectiveness and due observance of
Corporate Governance principles and guidelines, and oversees
the periodic evaluation of the Board and its Committees, as well
as of Management.
The CorpGov Committee had 12 joint meetings with the
Audit and Compliance Committees and seven joint meetings
with the Nominations Committee.
Name of Director
Attendance
%
Hans T. Sy
7
100
Joaquin T. Dee
7
100
Dy Tiong
6
86
Alberto S. Yao
7
100
Roberto F. Kuan
7
100
Nominations Committee is tasked to review and evaluate the
qualifications of all persons nominated to the Board, as well as
appointments requiring Board approval and promotions favorably
endorsed by the Promotions Review Committee.
Compensation or Remuneration Committee provides
oversight over the remuneration of senior management and
other key personnel, ensuring that compensation is consistent
with the Bank’s culture, strategy and control environment.
The Committee convened four times in 2013.
Name of Director
Attendance
%
Hans T. Sy
4
100
Gilbert U. Dee
4
100
Peter S. Dee
3
75
Joaquin T. Dee
4
100
Dy Tiong
3
75
Herbert T. Sy
4
100
Trust Investment Committee (TIC) is responsible for the
investment supervision over all the portfolios or funds under the
management of the Trust Group. It acts upon all trust business
for acceptance as well as approval of all investments for trust and
agency accounts, unless this function is specifically delegated by
the Board to the head of the Trust Group or other senior officers
of the Bank, consistent with existing regulations.
Annual Report 2013
35
The TIC convened 12 times in 2013.
Management
Committee
Name of Director
Roberto F. Kuan
Attendance
%
11
92
Chairman
Credit Committee
Board of
Trustees of CBC
Employees’
Retirement Fund
Ricardo R. Chua
Gilbert U. Dee
Gilbert U. Dee
Peter S. Dee
Harley T. Sy
11
92
Peter S. Dee
11
92
Vice
Chairman
Ricardo R. Chua
Jose T. Sio
11
92
Members
Gilbert U. Dee
Nancy D. Yang
Peter S. Dee
Rene J. Sarmiento
11
92
Peter S. Dee
Samuel L. Chiong*
Ricardo R. Chua
Nancy D. Yang
Ramon R. Zamora
Samuel L. Chiong*
William C. Whang
Rene J. Sarmiento
Ananias S. Cornelio III ** Ramon R. Zamora
Melissa F. Corpus **
Rhodora Z. Canto
Antonio S.
Espedido, Jr.
Alberto Emilio V.
Ramos**
William C. Whang
Alexander C.
Escucha
Virgilio O. Chua***
Rosemarie C.
Gan****
Management Committee (ManCom) formulates the Bank’s
business plans and budget as directed by the Board and reports
to the Board on the implementation of corporate strategies
designed to fulfill the Bank’s corporate mission and business
goals. At the operating level, it covers top management
matters such as, but not limited to, environmental assessment,
objectives setting, performance and budget review, asset/liability
management, organizational and human resource development,
product development, and major operating policies.
Credit Committee (CreCom) reviews and approves all credit
applications within its credit approval authority. It also reviews all
credit applications exceeding its credit approval authority, and if
found acceptable, endorses such to the Executive Committee or
the Board of Directors.
Board of Trustees of CBC Employees’ Retirement Plan is
responsible for the investment and disbursement of the assets
of CBC Employees’ Retirement Plan in accordance with SEC
regulations and the best interests of the plan holders.
36
No. of
Meetings
in 2013
49
50
* Retired January 31, 2014
** Non-voting member
*** Effective January 8, 2014
**** Effective February 13, 2014
BOARD ORIENTATION AND TRAINING PROGRAM
In place is a full orientation and continuing education process
for the Board. In accordance with the MORB, all our directors
have attended the required Corporate Governance Seminar.
On January 8, 2014, the Board, together with members
of the ManCom attended a Corporate Governance Workshop
conducted by the Bank in collaboration with ICD. The workshop
was a good learning opportunity for the board and the rest of the
attendees, including officers of the Compliance Office, Human
Resources Division, Internal Audit, Risk Management Group,
and Office of the Corporate Secretary, as it provided useful
insights on current governance issues, including the impact of
the ASEAN economic integration by 2015, the ASEAN Corporate
Governance Scorecard (ACGS), and the performance governance
system of ICD.
CORPORATE GOVERNANCE
BOARD AND CEO EVALUATION
In compliance with the existing rules and on international best
practices, an annual self-assessment is conducted by the Board—
the individual members, the committees, and the collective since
2005. A specific CEO self-assessment was introduced in 2010
in compliance with the best practices on corporate governance.
The formal self-rating system focuses on the level of compliance
with leading practices and principles on good governance and
identifies areas for improvement.
Below is the rating system used:
Rating
Poor - Leading practice or principle is not
adopted in the company’s Manual of Corporate
Governance
1
Needs Improvement - Leading practice or principle
is adopted in the Manual but compliance has not
yet been made
2-3
EXECUTIVE OFFICERS OF THE BANK
Our executive officers, subject to control and supervision of
the Board, collectively have direct charge of all business activities
of the Bank, and are responsible for the implementation of the
policies set by the Board.
China Bank has a long history of highly qualified and
experienced management teams with track records of delivering
on business plans and achieving results in the financial services
industry. The members of our current senior management
team have a mix of business, legal, and financial expertise, with
an average of over 20 years’ experience in the banking and
financial services sectors and has demonstrated leadership not
only at China Bank, but also with other leading Philippine and
international financial institutions.
Description
0
Fair - Leading practice or principle is adopted in
the Manual and compliance has been made but
with major deviation(s) or incompleteness
4
Good - Leading practice or principle is adopted in
the Manual and compliance has been made but
with minor deviation(s) or incompleteness
5
Excellent - Leading practice or principle is adopted
in the Manual and full compliance with the same
has been made
Position
We also adopted the SEC-prescribed performance
assessment for the Audit Committee in 2012. In accordance with
SEC Memorandum Circular No. 4, Series of 2012, the results are
validated by the Corporate Governance Compliance Officer and
forms part of the record of the Bank which may be examined by
the Commission from time to time. The results are summarized
and reported also to the Board. Based on the results of the annual
evaluation, there are no significant deviations and in general, the
Bank has fully complied with the provisions and requirements of
the Corporate Governance Manual.
Name
Age
Citizenship
Vice Chairman of the Board of Directors
Gilbert U. Dee
78
Filipino
President and Chief Executive Officer
Peter S. Dee
72
Filipino
Senior Executive Vice President
and Chief Operating Officer
Ricardo R. Chua
61
Filipino
Executive Vice President
Antonio S. Espedido, Jr.
58
Filipino
Executive Vice President
William C. Whang
55
Filipino
Senior Vice President
Nancy D. Yang
74
Filipino
Senior Vice President
Samuel L. Chiong*
64
Filipino
Senior Vice President
Ramon R. Zamora
65
Filipino
Senior Vice President
Rene J. Sarmiento
60
Filipino
Senior Vice President
Alexander C. Escucha
57
Filipino
Senior Vice President
Alberto Emilio V. Ramos
54
Filipino
Senior Vice President
Rosemarie C. Gan
56
Filipino
First Vice President II
Virgilio O. Chua
47
Filipino
Annual Report 2013
37
Position
Name
Age
Citizenship
First Vice President II
Victor O. Martinez
48 Filipino
First Vice President I
Philip S.L. Tsai
63
Filipino
First Vice President I
Gerard T. Dee
50
Filipino
First Vice President I and Chief Risk Officer
Ananias S. Cornelio III
38
Filipino
Vice President and Corporate Secretary
Corazon I. Morando
72
Filipino
* Retired January 31, 2014
COMPENSATION OF DIRECTORS
AND EXECUTIVE OFFICERS
In accordance with the Bank’s amended By-Laws,
members of the Board of Directors are entitled to a per diem
of P500.00 for attendance at each meeting of the Board or of
any committees and to 4% of the Bank’s net earnings. The
directors’ remuneration covers all China Bank Board activities
and membership of committees. Non-executive directors do
not receive any performance related compensation. On the
other hand, our executive officers receive compensation based
on their performance, banking experience, employment status,
position, and rank in the Bank. The compensation policy for
employees is on page 22.
INTERNAL AUDIT
The Internal Audit function covers the independent and
objective evaluation of the Bank’s risk management, control,
and governance processes. This is handled by the Audit Division,
headed by the chief audit executive (CAE), Vice President Marilyn
G. Yuchenkang. The CAE has dual reporting lines in order to
maintain organizational independence—functionally to the Audit
Committee and administratively to the president and CEO. The
Audit Division performs its mandated tasks based on the Boardapproved Internal Audit Charter. Its authority cuts across all
functions, units, processes, records, and personnel in relation to
the conduct of its role. A risk-based audit approach is used for
the preparation of the Annual Audit Plan.
Based on the results of the division-wide annual risk
assessment, the primary focus of assurance services in 2013 was
operational risk. Majority of the audit engagements last year were
conducted to determine the effectiveness of control processes
in place to mitigate this prioritized risk. The Audit Division also
conducted an Internal Quality Assessment to determine the
degree of Internal Audit Activity’s conformance with the Institute
of Internal Auditors’ (IIAs’) Definition of Internal Auditing, Code
of Ethics and Standards, and to prepare Audit Division in the
upcoming External Quality Assessment Review.
38
To continually develop the internal audit team’s skills and
capabilities vis-à-vis the changing banking landscape and new
regulations, the audit personnel attended various internal and
external trainings, some of which focused on specialized areas,
like ICAAP, Risk Models Validation, Treasury, Trust, Anti-fraud, etc.
The division is also acquiring an audit tool for data analytics that
will expedite the gathering and processing of audit information,
as well as to broaden audit coverage and enhance efficiency in
performing audit procedures.
Overall, the Audit Division works continually to improve
existing process and methodology to provide quality services and
to add value to the Bank and other stakeholders.
EXTERNAL AUDIT
The Audit Committee is responsible for the appointment of
an external auditor to ensure its independence from the internal
auditors. SyCip Gorres Velayo & Co. (SGV), a member firm of
Ernst & Young, has been China Bank’s external auditor for over
20 years, with the partners rotated every five years, as required by
law. Ms. Vicky Lee Salas was assigned in 2011 as SGV’s partnerin-charge for China Bank. No member of the Board or senior
Management (FVP-up) was a former employee or partner of SGV
in the last two years.
SGV plays a crucial role in ensuring that our financial
statements factually represent our accounting records and are
treated and presented in accordance with Philippine Financial
Reporting Standards (PFRS). Throughout the years that SGV
has been auditing the Bank, it has not found any significant
exceptions, such as cases of fraud or dishonesty, and any other
matters which could potentially result in material losses to the
Bank and our stakeholders. SGV representatives are present at
the Bank’s annual stockholders meeting to respond to matters
concerning their audit of the Bank.
Fiscal Year
2013
2012
Audit Fees
P1,860,000.00
P1,780,000.00
CORPORATE GOVERNANCE
The audit fees are inclusive of other assurance and related
services by the external auditor that are reasonably related to
the performance of the audit or review of the Bank’s financial
statements. The matter of the 2013 audit fees was taken up
and approved by the Audit Committee at its regular meeting on
February 19, 2014.
SGV is again recommended for appointment at the
scheduled 2013 annual stockholders meeting.
RISK MANAGEMENT
We recognize that the business of banking necessarily
entails risk, and that proper risk mitigation, not outright risk
avoidance, is the key to long-term success. Our risk management
principle centers on determining how much risk we are willing
to bear for a given return, deciding if the risks represent viable
opportunities, and finding intelligent approaches to managing
risks. Our corporate governance structure keeps pace with the
changing risks that China Bank faces and will be facing in the
coming years with a dynamic risk management program that
calls for the continuing reassessment of risks and controls and
the timely reporting of these risks to the Board.
As mandated under existing regulations, the Board is
responsible for the approval and overseeing the implementation
of risk management policies. The Board has delegated this
function to the Risk Management Committee (RMC) which
includes among others, the development of various risk strategies
and principles, control guidelines policies and procedures,
implementation of risk measurement tools, monitoring of key
risk indicators, and the imposition and monitoring of risk limits.
The RMC regularly reviews China Bank’s risk profile and the
effectiveness of risk management systems. Moreover, internal
auditors test and evaluate our risk management program to
determine whether it is effective and communicate the results to
the Board and the Audit Committee.
The Risk Management Group (RMG), headed by our chief risk
officer, First Vice President Ananias S. Cornelio III, is responsible
for executing the risk management function and the guidelines
set by the RMC, including the identification and evaluation on
a continuous basis of all considerable risks to the business, and
challenging business lines regarding all aspects of risks arising
from the Bank’s activities.
In 2013, RMG continued to strengthen China Bank’s risk
management framework to effectively assess, manage, and
monitor China Bank’s risks across a broad range of activities.
MARKET AND LIQUIDITY RISK
The objective of our market risk policies is to obtain the
best balance of risk and return while meeting our stakeholders’
requirements. Meanwhile, our liquidity risk policies center on
maintaining adequate liquidity at all times to be in a position
to meet all obligations as they fall due. RMG continued to
implement its roadmap in 2013 including enhancements and
projects in support of these objectives.
Budget and capital considerations (Pillar II guidelines) are
now effectively embedded into risk taking activities via the Valueat-Risk (VaR) limits. The annual VaR Limits review incorporates the
impact of the 1-day and 10-day VaR on Capital Adequacy Ratio
(CAR) as a basis for establishing limits, in addition to the annual
trading budget and the Bank’s risk tolerance.
China Bank’s application for Type 2 Derivatives license
was completed by the end of 2013, final approval from the
BSP is expected in early 2014. The guidelines for trading
financial derivatives, Product Programs for dealing in derivative
instruments, and models for measuring and monitoring market
risk exposures on derivative products are all in place. Historical
Simulation VaR has also been applied for financial derivatives
instruments, including Interest Rate Swaps and Foreign Exchange
Swaps and Forwards. Only the standard products such as bonds
remain under Parametric VaR.
For interest rate risk, the monitoring of actual interest rate
volatilities is now included in the regular reporting to the RMC to
apprise the members when actual volatilities exceed the 1% shift
used for monitoring Earnings-at-Risk (EaR). RMG is looking to
improve interest rate risk measurement with a sensitivity analysis
of the Bank’s accrual portfolio that will be in line with the Funds
Transfer Pricing (FTP) plans of the business. A Balance Sheet
Value at Risk (BSVAR) is also another tool RMG is considering,
depending on the robustness of the existing system.
Independent validation of our internal risk measurement
models – VaR, EaR, and MCO, was concluded in 2013 and the
findings were presented by the external consultant to the RMC.
On stress testing, RMG developed an Integrated Stress
Testing framework (IST) for the January 2014 ICAAP submission,
in addition to the various stress tests already in place. Instead of
the previous Internal Models Approach that only determines the
capital charge of individual risks on a silo basis, the IST framework
allows us to evaluate China Bank’s overall vulnerabilities on
specific events or crisis and gauge the Bank’s ability to withstand
stress events. The IST market risk capital requirements are based
on the impact of adverse changes in market risk factors that could
potentially affect the Bank’s trading and investment portfolios.
Annual Report 2013
39
Moving forward, RMG plans to further enhance scenario analysis
and stress testing.
On Liquidity Stress Testing, another stress scenario was
added to assess vulnerabilities on the Large Funds Provider
(LFP). The Sensitivity Analysis on Liquidity Stress Testing was also
introduced to determine the level of deposit run-off that the
Bank can withstand during stress events.
Meanwhile, our Contingency Funding Plan (CFP) policies and
guidelines were enhanced to define the roles and responsibilities
of key personnel in the event of a liquidity crisis and activation
of the CFP.
The static module of the ALM system was implemented in
2013, enabling a more efficient reporting of the Bank’s exposures
on liquidity and interest rate risk in the balance sheet. This important
information on the Bank’s exposures generates insights that lead
to the formulation of timely and effective interest rate strategies
and funding plans. In the pipeline is the implementation of the
Advanced Liquidity Module to automate liquidity stress testing.
In line with the Operational Risk Division’s Business Continuity
Plan (BCP) level 1 testing, the access to the ALM and Treasury system
and the resumption of RMG’s normal activities was successfully
tested in a drill held at the Bank’s Binondo Recovery Center.
Towards the end of the year, RMG provided Management
with an estimate of the Bank’s Liquidity Coverage Ratio (LCR) and
Net Stable Funding Ratio (NSFR) based on its interpretation of the
guidelines set under the Basel III framework and available data.
Moving forward, RMG formed a team in 2014, which includes
representatives from Treasury and Accounting, units responsible for
managing the Bank’s liquidity and financial regulatory reporting, to
spearhead the Bank’s adoption of Basel III International Framework
for Liquidity Risk Measurement, Standards and Monitoring. RMG
will also be evaluating the adoption of other Basel III recommended
monitoring tools, if applicable.
CREDIT RISK
Our policies for managing credit risk are determined at
the business level with specific procedures for different risk
environments and business goals.
For 2013, RMG focused on improving China Bank’s ability
to properly price credit risk. This includes periodic monitoring and
evaluation of the existing linkage between loan pricing and credit
risk rating. In line with this, a surface-level validation of the Internal
Credit Risk Rating System (ICRRS) was done to have a broad
assessment of the performance of the ICRRS in terms of predicting
credit-worthiness and probability of default of borrowers. This is in
addition to the process validation done by SGV in 2012. Based on the
conclusions drawn upon the results of the surface-level validation,
Management approved the engagement of a third-party consultant
40
to perform a comprehensive quantitative validation of the ICRRS and
if necessary, based on the output from the initial phase, proceed to
the next phase, which is the recalibration of the ICRRS.
The use of a Risk-Matrix Grid was introduced in determining
the lending units to be prioritized for review based on certain
variables which include number of past dues and past due levels,
portfolio growth, and regularization of previous deficiencies.
RMG also reviewed the existing credit risk limits/thresholds
(e.g. internal SBL, industry division limit) and recommended
changes to ensure that the limits/thresholds do not curtail business
operations and yet stays within the risk appetite of the Board.
RMG likewise quantified the impact to the capital ratios of the
Bank based on the guidelines provided in the BSP exposure draft
on Credit Value Adjustment and Asset Value Correlation.
The scenarios and assumptions used in the stress testing
exercise for quarterly reporting to the RMC and for the Internal
Capital Adequacy Assessment Process (ICAAP) was also enhanced
to include the possibility of downgrade of accounts whose risk
ratings were more than a year ago and the risk that unrated
accounts (but subject to Internal Credit Risk Rating System or
ICRRS) will turn out to be substandard.
In addition, the Credit Review and Control Department
(CRCD) completed the credit review of all consumer lending units
in 2013 where the quality of the loan portfolio and compliance to
regulatory and internal credit policies were assessed. The review
covered roughly 62% of the consumer loan portfolio, representing
over 1,400 auto and housing loan borrowers.
The review included the establishment of trends and common
factors affecting the quality of the portfolio, as well as the profiling
of borrowers by market segments and demographics, with the end
objective of identifying risk areas in order to manage and minimize
past due incidence.
For 2014, focus shall be on further enhancing the credit risk
models of the Bank. Priority shall be the ICRRS qualitative and
quantitative validation engagement with a third-party reviewer,
which is expected to be started and completed within the year.
Aside from the ICRRS, RMG also intends to further enhance the
Borrower Credit Score (BCS) and do a second round of surfacelevel review using the results of the first review performed in 2013
as the base line. The BCS is a credit scoring model intended for
SME accounts and covers borrowers who do not qualify to be
subjected to the ICRRS.
OPERATIONAL AND IT RISK
We have a framework of policies, procedures, and tools to
ensure that China Bank’s operational and IT risks are managed in a
timely and efficient manner. RMG continued to effectively assess,
monitor, control, and report such risks, implementing new projects
CORPORATE GOVERNANCE
and improvements in 2013, and further strengthened the Bank’s
disaster preparedness.
In line with our Business Continuity Plan (BCP), China Bank’s
first fully equipped Business Recovery Center (BRC) was opened
on July 26, 2013 at the China Bank Building in Binondo. The
BRC addresses the business component of the BCP. A separate
facility, the Disaster Recovery Center (DRC) in Alabang, part
of the Disaster Recovery Plan (DRP), addresses the technology
component. Both facilities ensure that China Bank is adequately
prepared for disaster recovery and business resumption. The BRC
can accommodate critical units of the Bank to recover from an
unexpected business interruption. Equipped with workspaces,
computer and communication systems, the facility can support
parallel operations 24x7. The site has already been utilized by the
critical units that already concluded their BCP testing recently. For
2014, RMG intends to align the business impact assessment’s
Recovery Time Objective (RTO) with the DRP to further improve
the recovery of critical systems in case of business disruption.
RMG also completed the IT Risk Assessment Exercise and the
Risk and Control Self-Assessment (RCSA) 2012-2013 Exercise. The
former was conducted to improve the IT process areas through
proper identification of associated risks and planning for the
appropriate response to mitigate risks and/or seize opportunities
to increase its business value, while the latter was to obtain
a taxonomy/library of operational risks and key controls for the
implementation of the prescribed operational risk map/matrix. In
the pipeline is an “assurance testing” in selected units or branches
to validate, sanitize and detect defects in the RCSA exercise so that
the RCSA output can become reliable.
Moving forward, the RCSA design and implementation
process will be fine-tuned by improving the data consolidation
using the Basel risk event type instead of the operational risk
description. RMG also plans on refining the Key Risk Indicator (KRI)
strategy by exploring the data gathering centrally from the source
units and standardizing KRI library definitions and categories. The
KRI is an operational risk management tool that provides alerts to
identify operational losses before it happens and raise the red flag
if such goes beyond the defined threshold.
TRUST RISK
On August 17, 2012, BSP came out with Circular 766,
Guidelines in Strengthening Corporate Governance and Risk
Management Practices on Trust, Other Fiduciary Business, and
Investment Management Activities. The circular mandates Trust
entities to “develop and implement a formal, comprehensive, and
effective risk management program that outlines, among other
things, the risk management processes that effectively identify,
measure, monitor and control risks affecting the clients and the
Trust Entity.” In line with this, RMG continued to strengthen
China Bank’s risk management practices on Trust by enhancing
the policies, processes, and procedures for market risk, liquidity
risk, credit risk, operational risk and compliance risks specific to
the Trust Group in 2013. In addition to the various risk parameters
established to manage the exposure under Trust, a stress testing
framework was also developed specifically for Unit Investment
Trust Fund (UITF) portfolio.
CAPITAL MANAGEMENT
At the core of our overall performance landscape is a sound
capital management framework to ensure that China Bank delivers
shareholder value. Our capital management approach is focused
on maintaining a strong capital base to support the development
of our business and to meet the regulatory capital requirements at
all times.
Senior Management is primarily responsible for prudent
capital management, ensuring that China Bank meets the BSP’s
minimum capital requirement and any future increase in capital
requirement.
ANTI-MONEY LAUNDERING
We are committed to complying with the provisions of
the Anti-Money Laundering (AML) law. Over the years, our
Compliance Office, headed by our chief compliance officer
(COO), Vice President Marissa B. Espino, has been developing
and implementing programs to prevent China Bank from being
used for money laundering, through a combination of proper
KYC (Know Your Customer), deterrence, detection, and recordkeeping in order to facilitate investigations. To create bank-wide
awareness, AML trainings are regularly conducted and the revised
Money Laundering and Terrorist Financing Prevention Program
(MLPP) Operations Manual is posted in our intranet system for easy
reference.
HEALTH AND SAFETY
The health and safety of our people and the integrity of
our business are important aspects of our operations. We are
committed to maintain safe and healthy working conditions,
providing adequate facilities like a well-stocked clinic at the
Makati headquarters and first aid kits at all branches, conducting
inspections of buildings and departments, and disseminating
information to ensure a safe and secure working environment.
In addition to providing employees with comprehensive medical
and dental benefits, we employ a registered nurse and a doctor
to engage and consult with employees on health concerns and
provide advice and supervision on occupational health. Regular
health and safety bulletins aimed at preventing accidents and
Annual Report 2013
41
minimizing cases of work-related ill health are regularly e-mailed
to all our employees and are posted in the Bank’s intranet system.
We also have emergency procedures / evacuation plans in case
of fire or other significant incident and periodically hold fire and
earthquake drills. Escape routes in all our buildings and branches
have signs. Evacuation plans are tested from time to time and
updated as necessary.
CODE OF ETHICS
We are firmly committed to honest and ethical conduct of
our business. Our Code of Ethics provides clear guidelines on
acceptable and unacceptable behavior and business practices at
China Bank, applicable to all our directors and employees. To
promote adherence to the Code and deter wrongdoing, any
breach of conduct is subject to appropriate actions. Training
and compliance monitoring are integral parts of our Code
of Ethics. All new employees are given a copy of the Code of
Ethics booklet. Receipt thereof is acknowledged in writing. The
PDF format of the Code is also available in the Bank’s Intranet
under Compliance Office’s Public Folder, for easy reference. New
employees likewise undergo the New Employees’ Orientation
Course (NEOC) wherein our Code of Ethics is comprehensively
discussed.
WHISTLE-BLOWING
We have a whistle-blowing policy, wherein employees,
customers, shareholders, and third party service providers are
encouraged to report questionable activity, unethical conduct,
fraud or any other malpractice by mail, phone or e-mail,
without fear of reprisal or retaliation because the identity of the
whistleblower is kept confidential. Disclosures are directed to
Chief Compliance Officer Marissa B. Espino, who is responsible
for determining the sufficiency and validity of the report. If
determined sufficient in form and substance, the CCO shall
refer the disclosure either to the Audit Division and/or Human
Resources Division (HRD) for further investigation. If the CCO
finds the report baseless, she is required to respond to the
whistleblower of its status within 24 hours from receipt thereof.
Meritorious disclosure, as may be determined by the CCO, should
be given recognition and may be entitled to an award as deemed
necessary by the HRD or the Investigation Committee.
42
Reports/disclosures may be sent to:
Mailing Address:
CHIEF COMPLIANCE OFFICER
China Banking Corporation
P. O. Box 2182, Makati Central Post Office
1226 Makati City, Philippines
Mobile number: 0947-9960573
E-mail address: whistle_chib@yahoo.com
A disclosure form is also available at www.chinabank.ph
CONFLICT OF INTEREST
Conflict between the interest of the Bank and the interest of
the employees should be avoided at all times. In cases of conflict,
the interest of the Bank should prevail. Our employees are not
allowed to have direct or indirect financial interests that conflict
or appear to conflict with their duties and responsibilities as
employees of the Bank; to engage in other work outside of the
Bank without the Bank’s written permission; and to have work
competitive with the Bank.
INSIDER TRADING
We adopted a policy on securities transactions to reinforce
existing laws against insider trading. Our policy on insider trading
prohibits directors, officers, and employees who are considered
to have knowledge of material facts or changes in the affairs of
China Bank which have not yet been publicly disclosed, including
any information likely to affect the share price of the Bank’s
stock, to directly or indirectly engage in financial transactions as
a result of, or primarily relying upon, “insider information.” Also
covered are consultants and advisers and all other employees
who are made aware of undisclosed material information.
RELATED PARTY TRANSACTIONS
We recognize that Related Party Transactions may give rise
to a conflict of interest.
Through the Board of Directors, we ensure that transactions
with related parties are reviewed to make sure that such are
conducted at arm’s length or upon terms not less favorable to the
Bank than those offered to others, and that corporate or business
resources of the Bank are not misappropriated or misapplied;
and more important, that these transactions are duly disclosed as
prescribed by BSP Circular 749, Series of 2012.
CORPORATE GOVERNANCE
CHINA BANKING CORPORATION
Significant Related Party Transactions as of December 2013
Name of Counterparty and Relationship
Type of Transaction
Angela T. Dee-Cruz (Officer of the Bank)
Omnibus Line
BDO Private Bank, Inc. (Subsidiary of an Affiliate)
Foreign Exchange Pre-settlement risk limits
BDO Unibank, Inc. (Affiliate)
Treasury Interbank limits
Foreign Exchange Pre-settlement risk limits
Money Market Line
Pre-settlement risk
Amount/Contract Price
PhP51.0 Mn
Amounts ranging from US$500 K to US$1.0 Mn
US$10.0 Mn
Amounts ranging from US$500 K to US$15.0 Mn
US$4,575,060.00
Amount in excess of the limits: Jan. 2013 - US$l.50 Mn
Jan. 2013 (3 instances of US$50,000)
Jan. 2013 - US$200,000
Feb. 2013 - US$50,000
Pre-settlement risk
Amounts ranging from US$0.050 Mn to US$2.250 Mn
Pre-settlement risk
Amounts ranging from US$0.025 Mn to US$0.100 Mn
PhP200.0 Mn
CBC Trust Group
Pre-settlement risk
China Bank Savings, Inc.
Pre-settlement risk
US$2.80 Mn
China Bank Savings, Inc. (Subsidiary)
Pre-settlement risk
US$400.0 Mn
China Bank Savings Trust
US$400.0 Mn
Henry Sy, Sr. (Stockholder)
Loan Line
PhP300.0 Mn
JJACCIS Development Corporation (JDC)/
Suntree Holdings Corporation (SHC) (Related Interest)
Omnibus Line
PhP200.0 Mn
Manufacturers Life Insurance Co.
Pre-settlement risk limit
PhP1.30 Bn
The Manufacturers Life Insurance Co. (Phils.), Inc.
and Manulife China Bank Life Assurance Corporation
(Financial Allied Affiliate)
Pre-settlement risk limit
PhP90.0 Mn
US$400 K
The Manufacturers Life Insurance Co. (Phils.), Inc.;
Manulife China Bank Life Assurance Corporation
Government Securities Dealing
Philippine Business Bank (PBB) (Related Interest)
PhP600.0 Mn
PhP400.0 Mn
PhP300.0 Mn
PhP573.0 Mn
Underwriting of Initial Public Offering
PhP1.0 Bn
Trading Program
Planters Development Bank (PDB) (Subsidiary)
Money Market Lines
Quantum Amusement Corporation (QAC) (Related Interest)
Loan
Rizal Commercial Banking Corporation (RCBC) (Related Interest)
Pre-settlement risk limits
Money Market Line
RCBC Savings Bank (Related Interest)
PhP2.0 Bn
PhP74.450 Mn
Amounts ranging from US$1.0 Mn to US$5.0 Mn
US$2,801,160.00
Bonds pre-settlements
Government Securities Dealings
US$50 Mn
PhP350.0 Mn
Government Securities Dealings
PhP1.5 Bn
Loan Line
PhP2.0 Bn
Loan extension
SM Development Corporation (SMDC) (Affiliate)
Tender Offer
PhP1.85 Bn
PhP2,229,695.92
Case-to-case Loan
Loan Line
SM Investments Corporation (Stockholder)
Trust - SMIC Bonds
SM Investments Corporation (SMIC)
Loan Line
PhP8.5 Bn
PhP200.0 Mn
PhP472.515 Mn
PhP15.5 Bn
SM Hotels and Conventions Corporation (SMH) (Affiliate)
SM Prime Holdings, Inc. (SMPH) (Affiliate)
Multi-Realty Development Corporation (MRDC) (Affiliate)
Sybase Equity Investment Corporation (SEI) (Affiliate)
SM Land, Inc. (SML) (Affiliate)
Loan
PhP750.0 Mn
Loan Line
SM Prime Holdings, Inc. (Affiliate)
PhP1.0 Bn
Sale of Real Estate Property
PhP77.0 Mn
Sps. Irwin Marland and Consuelo Dee Ponce (Related Interest)
Loan Line
PhP80.0 Mn
Summerhills Home Development Corporation (Related Interest)
Loan Line
PhP50.0 Mn
Super Industrial Corporation (SIC) (Related Interest)
Omnibus Line
PhP50.0 Mn
Sysmart Corporation (Affiliate)
Loan Line
PhP2.0 Bn
Loan Extension
Union Motor Corporation (Related Interest)
Omnibus Line
PhP1.85 Bn
PhP150,000,000.00
Annual Report 2013
43
Related party refers to any of the Bank’s directors, officers,
stockholders and their related interests (DOSRI). Related interests
mean individuals related to each other or common law, and
two or more corporations owned or controlled by a single
individual or by the same family group or the same group of
persons. Prior to Board approval, the Audit Committee reviews
all related party transactions. No director is allowed to participate
in the discussion/deliberation, including approval of a transaction
where he is a related party.
The table on the previous page shows the Bank’s significant
related party transactions (P50 million and above) as of
December 2013.
CONSUMER WELFARE PROTECTION
Our customers are the lifeline of our business and we go
to great lengths to maintain their trust and loyalty. We are
committed to fair and economically sound consumer practices,
adhering to RA 7394 or the Consumer Act of the Philippines of
1991, the BSP’s Consumer Laws, and the various laws regulating
the financial industry as well as protecting consumers; promoting
consumer interest by providing complete and truthful information
to build confidence in our products, services, and our institution;
and upholding consumer rights by developing and implementing
a system to address and manage customer complaints and other
customer issues.
SUPPLIER/CONTRACTOR SELECTION
We maintain high legal, ethical, and professional standards
in the management of the Bank’s resources. We ensure that the
goods or services procured are fit for the purpose and provide
the Bank with the best value available; that risks to personnel,
company assets, and the environment arising from the
contracting or supply of materials, equipment, and services are
reduced to a level which is as low and as reasonably practicable
as possible; and that we deal with suppliers and contractors that
have the necessary experience, capability, and financial viability to
undertake the work safely, economically, and technically correct,
in an environmentally sound manner, and in accordance with the
contract, schedule, and applicable laws and regulations. We are
committed to fair marketplace practices, selecting suppliers and
contractors through an open and non-discriminatory process,
based on criteria that ensure a thorough and competitive
selection process: quality, price, service, and overall value to
China Bank. We follow standards of objectivity, impartiality, and
equality of opportunity, preventing any favoritism or interference
from conflicts of interest in the selection of suppliers and
contractors. We have a supplier/contractor accreditation process
44
which is the preliminary step to pre-qualification at China Bank.
Suppliers and contractors invited to bid are evaluated accordingly
prior to contract award. They are also evaluated on the basis
of actual performance as compared to promised delivery dates,
quality of work / goods, and adherence to agreed specifications
and purchase order prices.
DISCLOSURE AND TRANSPARENCY
We are committed to a high standard of disclosure and
transparency to facilitate understanding of the Bank’s true
financial condition and the quality of our corporate governance.
All material information about China Bank is adequately and
punctually disclosed, in accordance with SEC and PSE’s disclosure
policy. In addition to compliance with the reportorial requirements
like publishing our quarterly financial statements in leading
newspapers and producing a comprehensive annual report for
the Annual Stockholders’ Meeting, we promptly disclose major
and market-sensitive information like dividend declarations, joint
ventures and acquisitions, sale and disposition of significant assets,
as well as financial and non-financial information that may affect
the investment decision of the investing public, in the form of press
releases in newspapers and reports in our internal publication. We
also electronically file our disclosures through the Online Disclosure
System (Odisy) now, Electronic Disclosure Generation Technology
(Edge) of PSE which are then posted on the PSE website. Our
corporate website is likewise regularly updated to include the
latest news and current information about the Bank.
INFORMATION FOR SHAREHOLDERS
Date of foundation
China Bank was incorporated on July 20, 1920 and opened
for business on August 20, 1920.
The Bank is registered with the Securities and Exchange
Commission under SEC registration number 443.
China Bank’s amended By-laws may be downloaded from
our website www.chinabank.ph or requested from the Office of
the Corporate Secretary:
Atty. Corazon I. Morando
Vice President and Corporate Secretary
11/F China Bank Building
8745 Paseo de Roxas corner Villar Street
Makati City 1226, Philippines
Tel. Nos.: (632) 885-5131, 885-5132
Fax No.: (632) 885-5135
Email: lbelarmo@chinabank.ph
CORPORATE GOVERNANCE
Registered Head Office
China Bank Building
8745 Paseo de Roxas corner Villar St.
Makati City 1226, Philippines
Name, Address of Record Owner
& Relationship with Issuer
Title of Class
Common
Common
Common
Common
Share capital
China Bank’s authorized capital stock as of 31 December
2013 was P20.0 Billion, with total issued and outstanding shares
of 1,427,661,658. Record and beneficial owners holding 5% or
more of voting securities as of February 28, 2014:
PCD Nominee Corporation
37th Floor, Tower I, The Enterprise Center, 6766 Ayala
Ave. corner Paseo de Roxas, Makati City
Stockholder
SM Investments Corporation
10th Floor L.V. Locsin Bldg.,
6752 Ayala Avenue, Makati City
Stockholder
Sysmart Corporation
10th Floor L.V. Locsin Bldg.,
6752 Ayala Avenue, Makati City
Stockholder
PCD Nominee Corporation
37th Floor, Tower I, The Enterprise Center
6766 Ayala Ave. corner Paseo de Roxas, Makati City
Stockholder
Name of Beneficial
Owner & Relationship
with Record Owner
Citizenship
No. of
Shares Held
Various stockholders/
clients
Non-Filipino
331,488,039
23.22%
Henry Sy, Sr.
(Indirect ownership)
Stockholder
Filipino
245,594,580
17.20%
Henry Sy, Sr.
(Indirect ownership)
Stockholder
Filipino
211,488,651
14.81%
Various stockholders/
clients
Filipino
169,861,118
11.90%
Percentage
Directors and Management as of February 28, 2014:
(a)
(b)
Title of Class
Name
Position
Directors
Common
Common
Common
Common
Common
Common
Common
Common
Common
Common
Common
Total
Hans T. Sy
Gilbert U. Dee
Peter S. Dee
Joaquin T. Dee
Dy Tiong
Herbert T. Sy
Harley T. Sy
Alberto S. Yao
Roberto F. Kuan
Jose T. Sio
Ricardo R. Chua
Chairman of the Board
Vice Chairman
President & CEO
Director
Independent Director
Director
Director
Independent Director
Independent Director
Director
Director, SEVP & COO
Amount & Nature of
Beneficial /
Record Ownership
Executive Officers (in addition to Messrs. Gilbert U. Dee, Peter S. Dee and Ricardo R. Chua)
Common
Nancy D. Yang
Senior Vice President
Common
Rene J. Sarmiento
Senior Vice President
Common
Rosemarie C. Gan
Senior Vice President
Common
Gerard T. Dee
First Vice President
Total
GRAND TOTAL
Citizenship
Percent
1,700,479
7,596,545
929,060
27,460,246
131,571
271,513
61,886
4,719
17,941
1,870
77,484
38,253,314
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
Filipino
0.119%
0.532%
0.065%
1.923%
0.009%
0.019%
0.004%
0.000%
0.001%
0.000%
0.005%
2.679%
1,569,216
14,091
16,973
4,180
1,604,460
Filipino
Filipino
Filipino
Filipino
0.110%
0.001%
0.001%
0.000%
0.112%
39,857,774
2.791%
Annual Report 2013
45
Stock exchange listing
The shares of China Bank are listed on the Philippine Stock
Exchange under stock code “CHIB.”
the basis of outstanding stock held by them, as often and at such
times as the Board of Directors may determine and in accordance
with law and applicable rules and regulations.
The payment of dividends in the future will depend on the
Bank’s earnings, cash flow, financial condition and other factors.
Dividends may be declared only from unrestricted retained
earnings. Circumstances which could restrict the payment
of cash dividends include, but are not limited to, when the
Bank undertakes major projects and developments requiring
substantial cash expenditures. The Board of Directors may, at any
time, modify the Bank’s dividend pay-out ratio depending on the
results of operations and future projects and plans of the Bank.
As of December 31, 2013, the Bank had retained earnings
of approximately P29,080 million or P20.37 per Common Share,
a significant amount of which is available for the payment of
dividends.
Participation and voting rights at the annual stockholders
meeting
Shareholders may participate in the annual stockholders
meeting in person or through their authorized representatives.
Only stockholders of record as of March 20, 2013 were entitled
to notice of and vote at the 2013 meeting. The stock and
transfer books of China Bank were closed from April 15 to
May 2, 2013. Shareholders who cannot personally attend the
meeting designated their authorized representative by submitting
a proxy instrument to the Office of the Corporate Secretary, not
later than 5:00 p.m. of April 26, 2013.
Dividend Policy
As stipulated in China Bank’s by-laws, dividends shall be
declared and paid out of the unrestricted retained earnings which
shall be payable in cash, property, or stock to all stockholders on
For the years ended December 31
Earnings per Share
Cash dividends per Share
Stock dividend per Share
2011
P3.56
P12
2012
P3.51(1)
P12(2)
10%
2013
P3.57
P1.2
10%
(1)
(2)
10%
Notes:
(1)
Restated to show the effects of stock split and stock dividend distributed in 2013.
(2)
Based on authorized and outstanding shares of stock before stock split.
Stock and cash dividends declared for 2013 and for the two most recent years are as follows:
Stock dividend per
Share
Stock dividend
amount
10%
P1,073 million
10%
10%
Cash Dividend Per
Share
Cash Dividend
Amount
BSP Approval Date
P12(1)
P1,287 million
P1,180 million
P12(1)
P1,416 million
P1,298 million
P1.2
P1,557 million
Record Date
Payment Date
June 10, 2011
July 1, 2011
July 27, 2011
May 30, 2012
June 22, 2012
July 18, 2012
June 21, 2013
July 19, 2013
August 14, 2013
Notes:
(1)
Based on authorized and outstanding shares of stock before stock split. In relation to foreign shareholders, dividends payable may not be remitted using foreign exchange sourced from the
Philippine banking system unless the investment was first registered with the BSP.
Investor relations
Inquiries from investors, analysts, and the financial community are handled by the Investor Relations Office:
Alexander C. Escucha
Senior Vice President
Head of Corporate Planning & Investor Relations
28/F BDO Equitable Tower
8751 Paseo de Roxas
Makati City 1226, Philippines
Tel. No.: (+632) 885-5601
Email: investor-relations@chinabank.ph
46
CONGLOMERATE MAP
As of December 31, 2013
SM Retail Inc.
(100%)
SM Prime Holdings Inc.
(51.1%)
Multi-Realty Development
Corporation (90.9%)
China Bank Savings, Inc.
(95.2518%)
Intercontinental Development
Corporation (99.7%)
*Unity Bank (A Rural Bank)
(99.949%)
BDO Unibank Inc.
(46.7%)
CBC Properties &
Computer Center, Inc. (100.0%)
China Banking Corporation
(20.0%)***
CBC Insurance Brokers, Inc.
(100.0%)
Primebridge Holdings, Inc.
(98.2%)
**CBC Forex Corporation
(100.0%)
Sodexo Motivation Solutions
Philippines, Inc. (40.0%)
Manulife China Bank Life Assurance
Corporation (5.0%)
Atlas Consolidated Mining and
Development Corporation (29.0%)
Henfels Investments
Corporation (99.0%)
Premium Leisure & Amusement Inc.
(18.1%)
Legend:
SMIC Subsidiary
Subsidiary of SMIC Subsidiary
Belleshares Holdings, Inc.
(Formerly SM Commercial Properties, Inc.)
Belle Corporation
(18.1%)
Mountain Bliss Resort and
Development Corporation (100.0%)
Manila Southcoast Development
Corporation (94.4%)
(59.0%)
Associates
Associate of SMIC Subsidiary
Financial Allied Subsidiary
Non Financial Allied Subsidiary
Financial Allied Affiliate
Notes:
*
Merged with China Bank Savings, Inc. effective
January 20, 2014
** For dissolution
*** Refers to SMIC’s Effective Ownership in China
Bank (17.2% represents direct ownership)
Bellevue Properties Inc.
(62.0%)
Asia Pacific College
(51.8%)
Nagtahan Property Holdings
(99.7%)
Annual Report 2013
47
BOARD OF DIRECTORS
HANS T. SY
Hans T. Sy, 58, Filipino, is the chairman of the
Board.
He is also the chairman of the Executive
Committee and the Compensation or Remuneration
Committee, as well as a member of the Risk
Management, Compliance, Corporate Governance,
and Nominations committees. He was elected to the
China Bank Board on May 21, 1986, serving as vice
chairman from 1989 to 2011, when he became chairman.
He is the president of SM Prime Holdings, Inc. and serves as
adviser to the board of SM Investments Corporation, both
companies are listed in the Philippine Stock Exchange (PSE).
He is also a director of various companies in the SM Group.
He holds a degree in Mechanical Engineering from the
De La Salle University.
HENRY SY, SR.
Henry Sy, Sr., 89, Filipino, is the honorary chairman of the
Board since May 18, 2006* and advisor to the Board since 1997.
He is also the chairman of SM Investments Corporation and SM
Prime Holdings, Inc., and the chairman emeritus of BDO Unibank,
Inc. He holds an Associate in Commercial Science degree from
the Far Eastern University and was conferred a doctorate degree
in Business Management Honoris Causa by the De La Salle
University.
*
Election was formalized on February 7, 2007 after clearances
from BSP and SEC were obtained
48
GILBERT U. DEE
PETER S. DEE
Gilbert U. Dee, 78, Filipino, is the vice chairman of the
Board. He is a member of the Executive, Risk Management, and
Compensation or Remuneration committees. He is also the
chairman of the Board of Trustees of CBC Employees’ Retirement
Plan, co-chairman of the Credit Committee, and a member of
the Management Committee. He was elected to the China Bank
Board on March 6, 1969, serving as chairman from 1989 to 2011.
He is also in the boards of companies not listed in the PSE: China
Bank Properties and Computer Center, Inc. (CBPCCI) and Union
Motor Corporation as chairman, and Super Industrial Corporation
as director. He was formerly a director of Philippine Pacific Capital
Corporation, Philex Mining Corporation, and CBC Finance
Corporation, and the president of GAB Investment Corporation.
He obtained his Banking degree from the De La Salle University
and his MBA degree in Finance from the University of Southern
California.
Peter S. Dee, 72, Filipino, is a director and the president &
chief executive officer of China Bank. He is also a member of the
Executive, Compensation or Remuneration, and Trust Investment
committees, the co-chairman of the Credit Committee, and
a member of the Management Committee and the Board of
Trustees of CBC Employees’ Retirement Plan. He was elected to
the China Bank Board on April 14, 1977 and became president &
CEO in 1985. He is likewise in the boards of CBPCCI, China Bank
Insurance Brokers, Inc. (CBIBI), Hydee Management & Resources
Corporation, and GDSK Development Corporation as director, and
in the boards of PSE-listed corporations City & Land Developers, Inc.
and Cityland Development Corporation, as independent director.
He served as director of Sinclair (Phils.), Inc. and Can Laquer, Inc.
He is a graduate of the De La Salle University / University of the East
with a degree in Commerce. He also completed a Special Banking
course from the American Institute of Banking.
Annual Report 2013
49
BOARD OF DIRECTORS
JOAQUIN T. DEE
DY TIONG*
Joaquin T. Dee, 78, Filipino, is the chairman of the Compliance
Committee and a member of six other committees: Executive,
Risk Management, Audit, Corporate Governance, Nominations,
and Compensation or Remuneration committees. He was
elected to the China Bank Board on May 10, 1984. He is also
affiliated with three other companies, none of which are listed
in the PSE: JJACCIS Development Corporation and Enterprise
Realty Corporation as president/director, and Suntree Holdings
Corporation, as treasurer/director. He was the vice president for
sales and administration of Wellington Flour Mills from 1964 to
1994. He holds a degree in Commerce from the Letran College.
Dy Tiong, 84, Filipino, is the chairman of the Nominations
Committee. He is also a member of the Audit and Compensation
or Remuneration committees. He was elected to the China
Bank Board on May 9, 1985. He is also the vice chairman of
Panelon Philippines, Inc., the honorary chairman of Chiang Kai
Shek College, and the chairman emeritus of the Dr. Sun Yat
Sen Society, all of which are not listed in the PSE. He was the
president of CBC Finance, Inc. from 1980 to 2001 and Panelon
Development Corporation from 1990 to 1994. He holds a
Business Administration degree from the National Jean Kuan
College.
*
Independent Director
50
HERBERT T. SY
HARLEY T. SY
Herbert T. Sy, 57, Filipino, is a member of the Compensation
or Remuneration Committee. He was elected to the China
Bank Board on January 7, 1993. He is also in the boards of
SM Supermarket, SM Hypermarket, and Savemore Market, all
non-listed companies, as vice chairman; and director of PSE-listed
company SM Prime Holdings, Inc. He has also been a director
and/or officer for more than five years in companies engaged
in food retailing, rubber manufacturing, investment, real estate
development, and mall operations. He obtained his Management
degree from the De La Salle University.
Harley T. Sy, 54, Filipino, is a member of the Trust Investment
Committee. He was elected to the China Bank Board on
May 24, 2001. He is the president of PSE-listed company SM
Investments Corporation (SMIC) and holds positions in various
companies not listed in the PSE—treasurer of SM Land, Inc.,
and director in SM Synergy Properties Holdings Corporation,
Sybase Equity Investments Corporation, and Tagaytay Resort
Development Corp., to name a few. He has a Finance degree
from the De La Salle University.
Annual Report 2013
51
BOARD OF DIRECTORS
ALBERTO S. YAO*
ROBERTO F. KUAN*
Alberto S. Yao, 67, Filipino, is the chairman of the Risk
Management and Audit committees and a member of the
Compliance and Corporate Governance committees. He was
elected to the China Bank Board on July 7, 2004 and is also
an independent director of China Bank subsidiaries China Bank
Savings (CBS) and Planters Development Bank (Plantersbank).
He also serves in companies not listed in the PSE: as president
& CEO of Richwell Trading Corporation, Richwell Philippines,
Inc., Europlay Distributor Co., Inc., and Internationale Globale
Marques Inc.; and the president of Richphil House Incorporated
and Megarich Property Ventures Corp. He was the vice president
for merchandising of Zenco Sales, Inc. from 1968 to 1975. He
holds a Business Administration degree from the Mapua Institute
of Technology.
Roberto F. Kuan, 65, Filipino, is the chairman of the Corporate
Governance and Trust Investment committees. He was elected to
the China Bank Board on May 5, 2005 and is also an independent
director of CBS and Plantersbank. He likewise holds directorships
/ trusteeships at St. Luke’s Medical Center, SLMC Global City, Inc.,
St. Luke’s College of Medicine - William H. Quasha Memorial,
Brent International School, Inc., and Seaoil Phils., Inc. He is also an
independent director of PSE-listed Far Eastern University, Inc. He
obtained his Business Administration degree from the University
of the Philippines and Masters in Business Management (MBM)
degree from the Asian Institute of Management (AIM). He also
attended the Top Management Program conducted by AIM in
Bali, Indonesia in 1993. In 2011, he was conferred a doctorate
degree in Humanities Honoris Causa by the Lyceum Northwestern
University.
*
Independent Director
52
JOSE T. SIO
RICARDO R. CHUA
Jose T. Sio, 74, Filipino, is a member of the Trust Investment
Committee. He was elected to the China Bank Board on
November 7, 2007. He is also the executive vice president and
chief financial officer (CFO) of PSE-listed SM Investments
Corporation, the holding company of the SM Group. He was
voted as CFO of the Year in 2009 by the Financial Executives of the
Philippines and recently chosen as Best CFO (Philippines) by Alpha
Southeast Asia 2013 in Hong Kong. He is the advisor to the board
of listed BDO Unibank, Inc. and is also a director of companies
not listed in the PSE: SM Keppel Land, Inc., Manila North Tollways
Corporation, and First Asia Realty Development Corporation. He
was a partner of SyCip Gorres Velayo & Co. (SGV) from 1977 to
1990. He holds an Accounting degree from the University of San
Agustin and an MBA degree from New York University, USA.
Ricardo R. Chua, 61, Filipino, chief operating officer (COO)
of China Bank, is a member of the Executive Committee. He is
also the chairman of the Management Committee, vice chairman
of the Credit Committee, and a member of the Board of Trustees
of CBC Employees’ Retirement Plan. He was elected to the Board
on May 8, 2008. He is also in the boards of CBS and CBPCCI.
He likewise holds directorships in CAVACON Corporation,
Plantersbank, and Sun & Earth Corporation, all non-listed
companies, among others. He was a director and the treasurer
of CBC Venture Capital Corp. from 1989 to 2003, and a director
of the Philippine Clearing House Corp. from 2005 to 2011. A
certified public accountant, he graduated cum laude from the
University of the East. He completed his MBM degree at the
Asian Institute of Management (AIM).
Annual Report 2013
53
MANAGEMENT COMMITTEE
ANTONIO S. ESPEDIDO, JR., executive
vice president*, is the head of the Financial
Capital Markets & Investment Segment
and concurrent head of the Treasury
Group. He is also a director of China Bank
subsidiaries CBC Forex Corporation (CBC
Forex), China Bank Savings, Inc. (CBS), and
Planters Development Bank (Plantersbank).
He held various executive positions at the
Bank of the Philippine Islands (BPI) and
Citytrust / BPI, among others, prior to
joining China Bank, and has had extensive
training on fund transfer pricing, project
management, and portfolio management.
He also attended the recent Corporate
Governance Workshop conducted by the
Institute of Corporate Directors (ICD) for
China Bank directors and senior officers.
He graduated from the University of
San Francisco, USA with a Business
Administration degree.
WILLIAM C. WHANG, executive vice
president*, is the head of the Lending
Business Segment and concurrent head of
Institutional Banking Group. He is also a
director of China Bank Insurance Brokers,
Inc. (CBIBI) and director/treasurer of China
Bank Properties and Computer Center, Inc.
(CBPCCI). He served in a variety of senior
management roles at Metrobank, Republic
National Bank of New York, International
Exchange Bank, and Sterling Bank of Asia,
and had attended numerous seminars and
conferences on corporate governance,
branch based marketing, quality service
management, and sales management. He
holds a Business Management degree from
the De La Salle University.
NANCY D. YANG, senior vice president,
is the head of the Retail Banking Business.
She also serves in the boards of CBS as vice
chairman and of CBIBI and Plantersbank as
director. She had attended several training
programs here and abroad, including the
Allen Management Program, BAI Retail
Delivery Conference in San Francisco
and Florida, USA, Environmental Risk
Management for Bankers conducted by
the Bank of America, and most recently,
ICD’s Corporate Governance Workshop.
She holds a Bachelor of Arts degree from
the Philippine Women’s University and a
post graduate scholarship grant in Human
Development & Child Psychology from
Merrill Palmer Institute in Detroit, Michigan,
USA.
SAMUEL L. CHIONG, senior vice president,
was the BBG deputy group head, director and
treasurer of CBPCCI and CBIBI, and director
of CBS until his retirement on January 31,
2014. He was previously connected with The
Consolidated Bank & Trust Corporation and
State Investment House, Inc. He completed
his Economics degree from the Ateneo de
Manila University and attended law school
in Ateneo de Davao University and Xavier
University. He also took the Advanced Bank
Management Program at the Asian Institute
of Management (AIM).
RAMON R. ZAMORA, senior vice
president, is the head of the Centralized
Operations Group, Remittance Business
Division, and Correspondent Banking
Division. He is also a director of CBC Forex,
CBPCCI, CBS, and Plantersbank. He was
formerly a vice president at Citibank N.A.
and has had extensive training on financial
products, credit risk management, IFRS,
finance professional module, and corporate
governance, among others. He holds an
Economics degree from the Ateneo de
Manila University.
Seated: Gilbert U. Dee and Peter S. Dee. Standing from left: Alberto Emilio V. Ramos, Rosemarie C. Gan, Virgilio O. Chua, and Alexander C. Escucha
54
RENE J. SARMIENTO, senior vice
president, is the head of the Trust Group.
He is also a director of CBS and the
president of Sarmiento-Jacinto, Inc. and
Great Success Realty Corp. He has over 30
years of investment and trust operations
experience gained from Ayala Investment
and Development Corporation, Far East
Bank & Trust Company, and Security Bank
Corporation. A certified public accountant,
he holds an Accounting degree, magna cum
laude, from the De La Salle University, and
a Masters in Business Management (MBM)
degree from AIM.
ALEXANDER C. ESCUCHA, senior vice
president, is the head of Corporate Planning
Division and Investor Relations Office. He
is also a director of CBS and Plantersbank,
the chairman of the UP Visayas Foundation,
Inc., and is an international resource person
at The Asian Banker. He had served as
chairman of the Federation of ASEAN
Economic Associations, and as president of
the Philippine Economic Society, Corporate
Planning Society of the Philippines, and
the Bank Marketing Association of the
Philippines. Before China Bank, he was a
vice president at the International Corporate
Bank. He graduated cum laude from the
University of the Philippines with a degree
in Economics.
ALBERTO EMILIO V. RAMOS, senior vice
president, is the president / director of CBS.
He is also a director of Plantersbank and a
trustee / treasurer of the Chamber of Thrift
Banks. He joined China Bank in 2006 as head
of the Private Banking Group, after serving as
the president of Philam Asset Management,
Inc. He held key executive positions at BPI,
Citytrust Banking Corporation, Western
State Bank, Tokai Bank of California, Urban
Development Bank, and Filinvest Credit
Corporation. He had attended numerous
training programs on treasury products,
asset-liability management, credit and
financial analysis, performance appraisal and
strategic marketing. He graduated from the
De La Salle University with degrees in Political
Science and Marketing Management. He
also holds an MBM degree from AIM and
has a Treasury Professional Certificate from
the Banker’s Association of the Philippines.
ROSEMARIE C. GAN, senior vice
president*, is the deputy group head of the
Retail Banking Business and concurrent head
of the Binondo Business Center (BBC). She
has been with the Bank for over 35 years
and has had extensive exposure and training
in marketing, financial analysis, credit
portfolio management, strategic planning,
and corporate governance. She graduated
magna cum laude from the University of
Santo Tomas with a Management degree
and was a recipient of the distinguished
Rector’s Award. In 2013, she attended AIM’s
Advanced Bank Management Program.
VIRGILIO O. CHUA, first vice president II,
is the head of Investment Banking Group.
He has 26 years of experience in the
fields of investment banking, corporate
banking, and credit risk management. He
also has had extensive training on capital
markets and investment banking, project
finance, mergers and acquisitions, account
management, financial markets, corporate
risk assessment, and corporate governance.
Before joining China Bank, he held senior
executive positions at Citibank N.A., First
Metro Investment Corp., and ING Bank, N.V.
He holds a Management Engineering degree
from the Ateneo de Manila University.
* Effective February 13, 2014
Seated: Nancy D. Yang and Ricardo R. Chua. Standing from left: Ramon R. Zamora, Samuel L. Chiong, William C. Whang, Rene J. Sarmiento,
and Antonio S. Espedido, Jr.
Annual Report 2013
55
CHINA BANK SENIOR OFFICERS*
First Vice Presidents
From left: Ananias S. Cornelio III,
Philip S.L. Tsai, Gerald Majella T.
Dee, and Victor O. Martinez
Vice Presidents
From left: Lilibeth R. Cariño,
Cristina P. Arceo, Layne Y.
Arpon, Albert V. Alcala,
Marie Carolina L. Chua,
and Luis M. Afable, Jr.
Vice Presidents
From left: Maria Luz B. Favis,
Jose Francisco Q. Cifra,
Ma. Carla U. Ermita, Angela
D. Cruz, Atty. Marissa B.
Espino, Melissa F. Corpuz,
and Jose L. Osmeña, Jr.
Excluding ManCom Members
*
56
Vice Presidents
From left: Dorothy T.
Maceda, Christina F.
Gotuaco, Corazon I.
Morando, Lily I. Reyes-Lao,
Madelyn V. Fontanilla,
and Delia Marquez
Vice Presidents
From left: Wilfredo L. Sy,
Henry D. Sia, Manuel C.
San Diego, Elizabeth C. Say,
Shirley G.K.T. Tan, Stephen
Y. Tan, and Edward Eli B. Tan
Vice Presidents
From left: Geoffrey D. Uy,
Marilyn G. Yuchenkang,
Maire Karabel D. Viola,
Manuel M. Te, Marisol M.
Teodoro, Noemi L. Uy,
and Maria Rosanna
Catherina L. Testa
Annual Report 2013
57
CHINA BANK SUBSIDIARIES SENIOR OFFICERS
CHINA BANK PROPERTIES AND COMPUTER CENTER, INC.
From left: General
Manager Philip M. Tan,
Chief Technology Officer
Editha N. Young, and
VP Augusto P. Samonte
CHINA BANK INSURANCE BROKERS, INC.
From left: President
Julieta P. Guanlao and
Bancassurance Head
Cynthia B. Nono
CHINA BANK SAVINGS, INC.
From left: EVP Jaime Valentin
L. Araneta, FVPs Jan Nikolai M.
Lim, and Jose Ramon O. Sta.
Maria, VPs Edgar D. Dumlao,
and Anna Maria P. Ylagan
From left: VPs Rosalinda T.
Munsayac, Ma. Consuelo S.
Ruffy, Emmanuel C. Geronimo,
and Edralin G. Agbayani
58
CHINA BANK MANAGEMENT DIRECTORY
VICE CHAIRMAN
Gilbert U. Dee
PRESIDENT & CHIEF EXECUTIVE
OFFICER
Peter S. Dee
SENIOR EXECUTIVE
VICE PRESIDENT &
CHIEF OPERATING OFFICER
Ricardo R. Chua
EXECUTIVE VICE PRESIDENTS
Antonio S. Espedido, Jr.
William C. Whang
SENIOR VICE PRESIDENTS
Alexander C. Escucha
Rosemarie C. Gan
Alberto Emilio V. Ramos
Rene J. Sarmiento
Nancy D. Yang
Ramon R. Zamora
FIRST VICE PRESIDENTS
Virgilio O. Chua
Ananias S. Cornelio III
Gerard Majella T. Dee
Victor O. Martinez
Philip S. L. Tsai
VICE PRESIDENTS
Luis M. Afable, Jr.
Albert V. Alcala
Cristina P. Arceo
Layne Y. Arpon
Lilibeth R. Cariño
Marie Carolina L. Chua
Jose Francisco Q. Cifra
Melissa F. Corpus
Angela D. Cruz
Ma. Carla U. Ermita
Marissa B. Espino*
Maria Luz B. Favis
Madelyn V. Fontanilla
Cristina F. Gotuaco
Dorothy T. Maceda
Delia Marquez
Corazon I. Morando
Jose L. Osmeña, Jr.
Lily I. Reyes-Lao
Manuel C. San Diego
Elizabeth C. Say
Henry D. Sia
Wilfredo L. Sy
Edward Eli B. Tan
Shirley G.K.T. Tan
Stephen Y. Tan
Manuel M. Te
Marisol M. Teodoro
Maria Rosanna
Catherina L. Testa
Geoffrey D. Uy
Noemi L. Uy
Maire Karabel D. Viola
Marilyn G. Yuchenkang
SENIOR ASSISTANT VICE
PRESIDENTS
Evelyn T. Alameda
Rogelio B. Avellanosa
Camilo S. Cape
Jeannette H. Chan
Grace A. Cruz
James Christian T. Dee
Adela A. Evangelista
Cesare’ Edwin M. Garcia
Ma. Arlene Mae G. Lazaro
Shirley C. Lee
Maria Alicia P. Libo-on
Mandrake P. Medina
Juvy J. Pabustan
Danilo T. Sarita
Francisco Eduardo A. Sarmiento
Cynthia U. Surpia
Clara C. Sy
Belenette C. Tan
Irene C. Tanlimco
Jasmin O. Ty
Virginia Y. Uy
George C. Yap
Jocelyn O. Yu
ASSISTANT VICE PRESIDENTS
Baldwin A. Aguilar
Ma. Hildelita P. Alano
Patrick Y. Ang
Edwin D. Aquino
Marissa A. Auditor
Ma. Luisa O. Baylosis
Restituto B. Bayudan
Yasmin I. Biticon
Victor Geronimo S. Calo
Victoria G. Capacio
Victoria L. Chua
Ma. Jeanette D. Cuyco
Ricardo J. De Guzman III
Norman D. Del Carmen
Reynaldo P. Del Rosario, Jr.
Jinky T. Dela Torre
Gemma B. Deladia
Therese G. Escolin
Grace Y. Ho
Vivian T. Kho
Melecio C. Labalan, Jr.
Eric Y. Lee
Juan Jesus C. Macapagal
Jennifer Y. Macariola
Jocelyn A. Manga
Ordon P. Maningding
Remedios Emilia R. Olivar
Enrico J. Ong
Ma. Victoria G. Pantaleon
Frederick M. Pineda
Rafael Ramon C. Ramos
Ana Ma. Raquel Y. Samala
Maria Sheila V. Sarmenta-Dayao
Ma. Cecilia D. So
Maria Marta Theresa S. Suarez
Jeanny C. Tan
Julieta C. Tan
Ma. Cecilia V. Tejada
Edna A. Torralba
Ma. Edita Lynn Z. Trinidad
Christopher C. Ty
Hudson Q. Uy
Lauro C. Valera
Esmeralda R. Vicente
Anthony Ariel C. Vilar
Rosario D. Yabut
Carina L. Yandoc
Vicente S. Yap, Jr.
Michelle Y. Yap-Bersales
Mary Joy L. Yu
SENIOR MANAGERS
Kathlyn I. Abalos
Nellie S.D. Alar
Ramiro A. Amanquiton
Jay Angelo N. Anastacio
Freddie S. Bandong
Eric Von D. Baviera
Meneleo S. Bernardo
Robert O. Blanch
Jonathan C. Camarillo
Alex M. Campilan
Hermenegildo G. Carino
Crisostomo L. Celaje
Ma. Rosalie F. Cipriano
Aida D. Cristobal
Esperose S. De Claro
Rodolfo S. De Lara
Meliza O. De Leon
Mary Ann R. Ducanes
Susan U. Ferrer
Pablito P. Flores
Alexander V. Gaite
Ma. Salome D. Garcia
Michelle Lorei R. Gayoma
Marites B. Go
Virginia G. Go
Francisco Raymund P. Gonzales
Lucia I. Gorayeb
Ruth D. Holmes
Gladys Antonette P. Isidro
Alex A. Jacob
Maria Margaret U. Kua
Ma. Giselle A. Liceralde
Ma. Gladys C. Liwag
Mary Ann L. Llanes
Gloria G. Mañosca
Ronald R. Marcaida
Sheila Jane F. Medrero
Erlan Antonio B. Olavere
Remberto D. Orcullo
Alfred Paul L. Paiso
Josephine D. Paredes
Flora C. Peña
Julie Ann T. Pring
Noreen S. Purificacion
Roberto C. Ramos
Hidelisa L. Robiñol
Maria Luisa C. Rodriguez
Arnulfo H. Roldan
Alejandro F. Santos
Charmaine V. Santos
Edgardo M. Santos
Fernando S. Santos III
Ma. Graciela C. Santos
Roque A. Secretaria, Jr.
Emilie L. Sia
Ernanie V. Silvino
Paul D. Siongco
Anna Liza M. Tan
Roxana Angela S. Tan
Michaela L. Teng
Mary Ann E. Tiu
Nelson L. Tiu
Jacqueline T. Tomacruz
Ruben M. Torres
Cristina C. Ty
Edwin S. Ventura
April Marie O. Yago
Sandra Mae Y. Yao
Vivian L. Yong
Hanz Irvin S. Yoro
* seconded from Plantersbank
Annual Report 2013
59
FINANCIAL STATEMENTS CONTENT
60
61
Management’s Discussion on Results of Operations and Financial Condition
62
Disclosure on Capital Structure and Capital Adequacy
68
Report of the Audit Committee to the Board of Directors
69
Statement of Management’s Responsibility for Financial Statements
70
Independent Auditors’ Report
71
Balance Sheets
72
Statements of Income
73
Statements of Comprehensive Income
74
Statements of Changes in Equity
76
Statements of Cash Flows
78
Notes to Financial Statements
MANAGEMENT’S DISCUSSION ON RESULT OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
China Bank recorded a net income of P5.10 billion for 2013, up by 1.95% from the P5.00 billion registered in the same period last year.
This income performance translates to an 11.31% return on equity and 1.45% return on assets.
Total operating income consisting of net interest income and fee-based income grew by 8.95% or P1.24 billion to P 15.10 billion.
However, total operating expenses (including provision for impairment and credit losses) increased by 10.57% or P890.94 million
mainly from the Bank’s on-going business and branch expansion.
Net interest income improved to P9.94 billion, 23.24% higher than 2012 due to higher volume of earning assets that generated more
interest income, coupled with a decline in borrowing costs that decreased interest expense. Consequently, net interest margin stood
at 2.98% from 2.90% last year.
Total fee-based income decreased by 10.93% to P5.16 billion from P5.79 billion last year mainly from the 34.68% drop in trading
gains to P1.90 billion as interest rates volatility diminished opportunities for trading gains. Trust fees were lower at P135.23 million
due to lower trust volume from the full phase-out of SDA investments held under Trust arrangements. Gain on sale of investment
properties increased by 58.79% to P462.74 million due to higher sales volume of foreclosed properties. The foreign exchange loss
of P89.66 million was due to the negative interest differential on forex swaps and forex revaluation losses. Service charges, fees
and commissions increased by 10.52% boosted by investment banking fees and commissions. Miscellaneous income, mainly from
dividends earned by the Parent bank and higher bancassurance commissions, grew to P1.09 billion. Share of total fee-based income
to total revenues was at 26.82%.
Total operating expenses (excluding provision for impairment and credit losses) increased by 8.71% as the Bank continued to expand
business operations, open new branches, hire additional manpower and invest in technology. The material components of operating
expenses include compensation & fringe benefits which accounted for 34.94%, occupancy cost at 13.81%, taxes & licenses at
9.30%, and depreciation & amortization at 8.45%. Cost-to-income ratio stood at 59.00%. With the growth in the Bank’s loan portfolio,
provision for impairment and credit losses was increased to P414.34 million, improving the loan loss coverage ratio to 146.62% from
134.88% in 2012.
The sustained profitability contributed to the Bank’s capital strength, enabling the consistent payment of dividends to stockholders.
For 2013, China Bank paid cash dividends of P1.20 per share for a total of P1.56 billion, representing a total payout of 31.04% of prior
year’s net income. The Bank also declared a 10% stock dividend or P1.30 billion.
FINANCIAL CONDITION
As of year-end 2013, the Bank’s total assets expanded to P413.70 billion or 27.62% higher than 2012, mainly from growth in loan
portfolio and liquid assets supported by strong deposit growth.
Driven by higher demand from all customer segments: consumer, commercial and corporate, loans and receivables-net grew to
P220.54 billion or by 16.01%. Customers from real estate, renting & business services comprised 26.46% of the Bank’s gross loan
portfolio (inclusive of UDSCL), followed by wholesale & retail trade at 15.13%, manufacturing at 14.37%, and financial intermediaries
at 8.57%. More effective credit risk management led to a 10.0% drop in the Bank’s non-performing loans (NPLs) to P4.52 billion,
reducing the NPL ratio to 1.99% and improving the loan loss coverage ratio to 146.62%, one of the best in the industry.
Liquid assets increased by 49.76% to P177.06 billion as higher liquid funds were allocated to deposits with banks and placements
with BSP. Total investment securities which consist of Financial Assets at Fair Value through Profit or Loss, Available-for-Sale and
Held-to-Maturity Financial Assets reached P66.92 billion, representing 16.18% of total assets in keeping with the Bank’s strategy of
reducing the share of treasury-managed assets to total assets.
On the liabilities side, total deposits increased by 30.26% to P354.27 billion, which can be attributed to the growth across all products:
demand deposits by 26.60%, savings deposits by 37.01% and time deposits by 16.88%. The growth in deposits mainly funded the
expansion in loan portfolio.
Total capital funds reached P45.40 billion, 6.23% higher than 2012. The Bank’s capital is largely comprised of Tier 1 (core) capital, the
increase in which is mainly due to current year profits. Net unrealized gains (losses) on available for sale financial assets declined by
P1.44 billion or 105.83% due to the decrease in market value of unsold securities. The Bank’s Tier 1 capital adequacy ratio (CAR) of
14.50% and total CAR of 15.39% remained substantially higher than the 10% regulatory minimum requirement.
Annual Report 2013
61
DISCLOSURE ON CAPITAL STRUCTURE AND CAPITAL ADEQUACY
Capital Fundamentals
We believe that China Bank can only achieve sustainable growth by maintaining strong capital fundamentals. Major business initiatives are
undertaken with the appropriate capital planning which also takes into consideration constraints and changes in the regulatory environment.
This is necessary to ensure that our commercial objectives are equally aligned with our ability to maintain a capital position superior to the
industry. The Board and Senior Management recognizes that a balance should be achieved with respect to China Bank’s earnings outlook
vis-à-vis capital fundamentals that can take advantage of growth opportunities while increasing the Bank’s ability to absorb shocks.
Risk-based capital components, including deductions, on a parent and consolidated basis:
Qualifying Capital
In PhP Million
Tier 1 Capital
Paid-up common stock
Additional paid-in capital
Retained Earnings
Cumulative Foreign Currency Translation
Minority Interest
Less: Unsecured DOSRI
Less: Deferred income tax
Less: Goodwill
Total Tier 1 Capital
Less: Investment in Subsidiary-50%
Net Tier 1 Capital
Tier 2 Capital
General Loan Loss Provisions
Unrealized Gain AFS Equity
Total Tier 2 Capital
Less: Investment in Subsidiary-50%
Net Tier 2 Capital
Total Gross Qualifying Capital
Less: Total Investment in Subsidiary
Total Qualifying Capital
2013
Consolidated
2012
2011
2013
Parent
2012
2011
14,276.62
671.50
26,527.68
66.35
49.85
(520.98)
(1,732.30)
(222.84)
39,115.88
(120.51)
38,995.37
12,978.74
671.50
23,968.99
(65.51)
51.56
(258.69)
(1,768.48)
(241.31)
35,336.80
(102.14)
35,234.66
11,798.77
671.50
21,657.17
25.34
(1,164.18)
(1,693.71)
(222.84)
31,072.05
(85.84)
30,986.21
14,276.62
671.50
26,258.03
66.35
(520.52)
(1,724.64)
(222.84)
38,804.50
(768.26)
38,036.24
12,978.74
671.50
23,976.91
(65.51)
(258.26)
(1,756.63)
(222.84)
35,323.91
(822.72)
34,501.19
11,798.77
671.50
21,657.17
25.34
(1,164.01)
(1,684.11)
(222.84)
31,081.82
(726.78)
30,355.04
2,452.99
39.14
2,492.13
(120.51)
2,371.62
41,608.01
(241.01)
41,367.00
2,055.59
29.80
2,085.39
(102.14)
1,983.25
37,422.19
(204.28)
37,217.91
1,797.95
0.05
1,798.00
(85.84)
1,712,17
32,870.05
(171.67)
32,698.38
2,341.85
39.14
2,380.99
(768.26)
1,612.73
41,185.49
(1,536.52)
39,648.97
1,985.88
29.80
2,015.68
(822.72)
1,192.96
37,339.59
(1,645.45)
35,694.14
1,760.80
0.05
1,760.85
(726.78)
1,034.07
32,842.67
(1,453.55)
31,389.12
Risk-based capital ratios:
2013
Consolidated
2012
2011
2013
Parent
2012
2011
Tier 1 capital
39,115.88
35,336.80
31,072.05
38,804.50
35,323.91
31,081.82
Tier 2 capital
2,492.13
2,085.39
1,798.00
2,380.99
2,015.68
1,760.85
41,608.01
37,422.19
32,870.05
41,185.49
37,339.59
32,842.67
(Amounts in PhP Million)
Gross qualifying capital
Less required deductions
(241.01)
(204.28)
(171.67)
(1,536.52)
(1,645.45)
(1,453.55)
Total qualifying capital
41,367.00
37,217.91
32,698.38
39,648.97
35,694.14
31,389.12
196,154.27
Risk weighted assets
268,851.16
232,552.93
200,163.25
257,239.52
225,145.24
Tier 1 capital ratio
14.50%
15.15%
15.48%
14.79%
15.32%
15.48%
Total capital ratio
15.39%
16.00%
16.34%
15.41%
15.85%
16.00%
The regulatory qualifying capital of the Group consists of Tier 1 capital (core), which comprises paid-up common stock, additional paidin capital, surplus including current year profit, surplus reserves and minority interest less required deductions such as unsecured credit
accommodations to DOSRI, deferred income tax, and goodwill. The other component of regulatory capital is Tier 2 capital (supplementary),
which includes net unrealized gain on AFS equity securities (subject to a 55.00% discount) and general loan loss provision.
62
The capital requirements for Credit, Market and Operational Risk are listed below, on a parent and consolidated basis
Capital Requirement
in PhP Million
Credit Risk
Market Risk
Operational Risk
Total Capital Requirements
2013
24,472.70
372.44
2,039.97
26,885.12
Consolidated
2012
20,487.93
693.30
2,074.06
23,255.29
Parent
2011
17,903.86
213.96
1,898.51
20,016.33
2013
23,360.48
372.44
1,991.02
25,723.95
2012
19,787.83
693.30
2,033.40
22,514.53
2011
17,530.14
213.96
1,871.33
19,615.43
Credit Risk-Weighted Assets
On-balance sheet exposures, net of specific provisions and not covered by CRM (in PhP million):
December 2013
On-Balance Sheet Assets
Cash on Hand
Checks and Other Cash Items
Due from BSP
Due from Other Banks
Financial Assets at FVPL
Available-for-Sale Financial Assets
Held-to-Maturity Financial Assets
Unquoted Debt Securities Classified as Loans
Loans and Receivables
Loans and Receivables arising from Repurchase
Agreements
Sales Contract Receivables
Real and Other Properties Acquired
Other Assets
Total On-Balance Sheet Assets
Consolidated
Exposures,
net of Specific
Exposures not
Provisions Covered by CRM
7,217.74
7,217.74
83.93
83.93
78,880.88
78,880.88
23,218.10
23,218.10
4,865.08
4,856.41
44,819.53
43,952.53
12,441.67
12,441.67
2,411.03
2,411.03
221,462.38
208,926.37
Parent
Exposures,
net of Specific
Exposures not
Provisions Covered by CRM
6,973.57
6,973.57
83.72
83.72
75,591.06
75,591.06
22,547.97
22,547.97
4,865.08
4,856.41
43,775.39
42,908.39
12,413.71
12,413.71
2,066.92
2,066.92
212,095.51
199,591.55
-
-
-
-
462.81
1,756.14
8,704.83
406,324.12
462.81
1,756.14
8,704.83
392,912.44
392.30
1,430.59
7,120.25
389,356.07
392.30
1,430.59
7,120.25
375,976.44
December 2012
On-Balance Sheet Assets
(in PhP million)
Cash on Hand
Checks and Other Cash Items
Due from BSP
Due from Other Banks
Financial Assets at FVPL
Available-for-Sale Financial Assets
Held-to-Maturity Financial Assets
Unquoted Debt Securities Classified as Loans
Loans and Receivables
Loans and Receivables arising from Repurchase
Agreements
Sales Contract Receivables
Real and Other Properties Acquired
Other Assets
Total On-Balance Sheet Assets
Consolidated
Exposures,
net of Specific
Exposures not
Provisions Covered by CRM
6,055.42
6,055.42
134.47
134.47
40,634.87
40,634.87
4,388.13
4,388.13
5,008.01
5,000.00
36,496.83
35,695.13
17,122.90
17,122.90
2,804.72
2,804.72
189,867.53
176,381.08
Parent
Exposures,
net of Specific
Exposures not
Provisions Covered by CRM
5,902.60
5,902.60
126.54
126.54
37,572.60
37,572.60
4,151.12
4,151.12
5,008.01
5,000.00
35,677.71
34,876.01
17,093.97
17,093.97
2,462.13
2,462.13
185,484.85
172,030.51
446.00
446.00
-
-
475.53
2,042.99
9,562.04
315,039.45
475.53
2,042.99
9,562.04
300,743.28
378.71
1,739.42
8,440.45
304,038.11
378.71
1,739.42
8,440.45
289,774.05
Annual Report 2013
63
DISCLOSURE ON CAPITAL STRUCTURE AND CAPITAL ADEQUACY
December 2011
Consolidated
Exposures,
net of Specific
Exposures not
Provisions Covered by CRM
5,926.04
5,926.04
103.98
103.98
30,119.34
30,119.34
2,875.95
2,875.95
8.56
40,034.00
39,177.80
17,601.93
17,601.93
3,085.10
3,085.10
145,077.88
144,653.58
On-Balance Sheet Assets
(in PhP million)
Cash on Hand
Checks and Other Cash Items
Due from BSP
Due from Other Banks
Financial Assets at FVPL
Available-for-Sale Financial Assets
Held-to-Maturity Financial Assets
Unquoted Debt Securities Classified as Loans
Loans and Receivables
Loans and Receivables arising from Repurchase
Agreements
671.00
Sales Contract Receivables
Real and Other Properties Acquired
Other Assets
Total On-Balance Sheet Assets
Parent
Exposures,
net of Specific
Exposures not
Provisions Covered by CRM
5,819.04
5,819.04
103.43
103.43
29,568.22
29,568.22
2,695.66
2,695.66
8.56
39,006.77
38,150.57
17,517.43
17,517.43
2,628.18
2,628.18
143,443.52
143,032.92
671.00
-
-
389.70
389.70
240.35
240.35
2,313.17
11,752.11
259,958.76
2,313.17
11,752.11
258,669.70
2,228.68
10,732.32
253,992.15
2,228.68
10,732.32
252,716.79
Credit equivalent amount for off-balance sheet items, broken down by type of exposures (in PhP million):
2013
Consolidated
Parent
Notional
Credit
Notional
Credit
Principal Equivalent
Principal Equivalent
Off-balance Sheet
Assets
Direct Credit Substitutes
0.00
Transaction-related
15,937.73
contingencies
Trade-related
contingencies arising
4,647.72
from movement of
goods
Other commitments
(which can be
unconditionally
132,250.22
cancelled at any time
by the bank without
prior notice)
Total Notional Principal
and Credit Equivalent 152,835.67
Amount
2012
Consolidated
Parent
Notional
Credit
Notional
Credit
Principal Equivalent
Principal Equivalent
2011
Consolidated
Parent
Notional
Credit
Notional
Credit
Principal Equivalent
Principal Equivalent
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
7,968.86
15,937.35
7,968.68
7,374.39
3,687.20
7,374.39
3,687.20
7,812.56
3,906.28
7,812.56
3,906.28
929.54
4,647.72
929.54
4,320.16
864.03
4,320.16
864.03
6,084.79
1,216.96
6,084.79
1,216.96
0.00 128,276.41
0.00 182,100.31
0.00 176,713.92
0.00 173,803.23
0.00 169,231.93
0.00
8,898.40 148,861.48
8,898.22 193,794.86
4,551.23 188,408.47
4,551.23 187,700.58
5,123.24 183,129.28
5,123.24
Credit equivalent amount for counterparty credit risk, broken down by type of exposures (in PhP million):
December 2013
Standardized Approach
Interest Rate Contracts
Exchange Rate Contracts
Equity Contracts
Credit Derivatives
Total Notional Principal and
Credit Equivalent Amount
64
Consolidated
Notional
Credit
Principal
Equivalent
3,800.00
27.48
46,863.66
942.73
-
Parent
Notional
Principal
3,800.00
46,863.66
-
50,663.66
50,663.66
970.21
Credit
Equivalent
27.48
942.73
970.21
December 2012
Consolidated
Notional
Credit
Principal
Equivalent
43,593.18
623.42
Standardized Approach
Interest Rate Contracts
Exchange Rate Contracts
Parent
Notional
Principal
43,593.18
Credit
Equivalent
623.42
Equity Contracts
-
-
-
-
Credit Derivatives
-
-
-
-
43,593.18
623.42
43,593.18
623.42
Total Notional Principal and
Credit Equivalent Amount
December 2011
Standardized Approach
Interest Rate Contracts
Exchange Rate Contracts
Equity Contracts
Credit Derivatives
Total Notional Principal and
Credit Equivalent Amount
Consolidated
Notional
Credit
Principal
Equivalent
29,280.08
412.13
-
Parent
Notional
Principal
29,280.08
-
29,280.08
29,280.08
412.13
Credit
Equivalent
412.13
412.13
The following credit risk mitigants are used in the December 2013 CAR Report:
•
ROP warrants
•
ROP guarantees
•
Holdout vs. Peso deposit / Deposit substitute
•
Holdout vs. FCDU deposit of resident
•
Holdout vs. FCDU deposit of non-resident
•
Assignment / Pledge of Government Securities
Total credit exposure after risk mitigation, broken down by type of exposures, risk buckets, as well as those that are deducted from capital
(in PhP million):
2013
Weight Band
Below 100%
100% and
Above
Total
On-balance
sheet
203,364.08
189,548.34
392,912.42
Consolidated
Off-balance
sheet Counterparty*
4,398.95
787.22
4,499.46
8,898.41
182.99
970.21
Total
208,550.25
On-balance
sheet
195,463.38
194,230.79
402,781.04
180,513.04
375,976.42
Parent Company
Off-balance
sheet
Counterparty
4,398.95
787.22
4,499.28
8,898.23
Total
200,649.55
182.99
970.21
185,195.31
385,844.86
Parent Company
Off-balance
sheet
Counterparty
797.51
305.73
Total
128,765.60
2012
Weight Band
Below 100%
100% and
Above
Total
On-balance
sheet
132,296.20
168,447.08
300,743.28
Consolidated
Off-balance
sheet
Counterparty*
797.51
305.73
3,753.72
4,551.23
317.69
623.42
Total
133,399.44
On-balance
sheet
127,662.36
172,518.49
305,917.93
162,111.69
289,774.05
3,753.72
4,551.23
317.69
623.42
166,183.10
294,948.70
Parent Company
Off-balance
sheet
Counterparty
0.00
154.91
Total
104,210.59
2011
Weight Band
Below 100%
100% and
Above
Total
On-balance
sheet
106,480.10
152,189.60
258,669.70
Consolidated
Off-balance
sheet Counterparty*
0.00
154.91
5,123.24
5,123.24
257.22
412.13
Total
106,635.01
On-balance
sheet
104,055.68
157,570.06
264,205.07
148,661.11
252,716.79
5,123.24
5,123.24
257.22
412.13
154,041.57
258,252.16
Annual Report 2013
65
DISCLOSURE ON CAPITAL STRUCTURE AND CAPITAL ADEQUACY
Total credit risk-weighted assets, broken down by type of exposures (in PhP million):
2013
Weight Band
Below 100%
100% and
Above
Covered by
CRM
Excess GLLP
Total
On-balance
sheet
46,427.54
Consolidated
Off-balance
sheet Counterparty*
879.79
298.58
Total
47,605.91
On-balance
sheet
44,616.45
Parent Company
Off-balance
sheet
Counterparty
879.79
298.58
192,912.54
4,499.46
182.99
197,594.99
183,610.36
4,499.28
182.99
97.86
0.00
0.00
97.86
97.86
0.00
0.00
239,437.94
5,379.25
481.57
(571.76)
244,727.00
228,324.67
5,379.07
481.57
Total
45,794.82
188,292.63
97.86
(580.47)
233,604.84
2012
Weight Band
Below 100%
100% and
Above
Covered by
CRM
Excess GLLP
Total
On-balance
sheet
26,623.29
Consolidated
Off-balance
sheet
Counterparty*
159.50
100.24
Total
26,883.03
On-balance
sheet
26,227.09
Parent Company
Off-balance
sheet
Counterparty
159.50
100.24
Total
26,486.83
171,913.47
3,753.72
317.69
175,984.88
165,338.60
3,753.72
317.69
169,410.01
2,690.87
0.00
0.00
2,690.87
2,690.93
0.00
0.00
2,690.93
194,256.62
3,913.22
417.93
(709.50)
197,878.27
Parent Company
Off-balance
sheet
Counterparty
0.00
70.78
Total
19,702.52
201,227.63
3,913.22
417.93
(679.50)
204,879.28
2011
Weight Band
Below 100%
100% and
Above
Covered by
CRM
Excess GLLP
Total
On-balance
sheet
19,720.42
Consolidated
Off-balance
sheet Counterparty*
0.00
70.78
Total
19,791.20
On-balance
sheet
19,631.74
154,541.10
5,123.24
257.22
159,921.56
150,914.66
5,123.24
257.22
82.12
0.00
0.00
82.12
82.12
0.00
0.00
82.12
328.00
(756.26)
179,038.62
328.00
(778.37)
175,301.39
174,343.64
5,123.24
170,628.52
5,123.24
156,295.12
*Counterparty RWA covering Derivatives & Repo-style Transactions
The credit ratings given by the following rating agencies were used to determine the credit risk weight of On-balance sheet, Off-balance
sheet, and Counterparty exposures:
For all rated credit exposures regardless of currency
Standard & Poor (S&P)
Moody’s
Fitch
Philratings
66
Market Risk-Weighted Assets
The Standardized Approach is used in China Bank’s market risk-weighted assets. The total market risk-weighted asset of the Bank as of
December 2013 is PhP3.7 Bn for both parent and consolidated basis. This is composed of Interest Rate exposures amounting to PhP3.0 Bn
and Foreign Exposures amounting to PhP0.7Bn.
Consolidated and Parent Company
2013
2012
35.22
169.61
Interest Rate Exposures (in PhP Mn)
Specific Risk
General Market Risk
PHP
USD
Total Capital Charge
Adjusted Capital Charge
Subtotal Market Risk-Weighted Assets
116.90
89.24
241.36
301.70
3,016.96
249.15
85.17
503.93
629.92
6,299.17
57.23
22.63
133.41
166.77
1,667.66
Foreign Exchange Exposures
Total Capital Charge
Adjusted Capital Charge
Subtotal Market Risk-Weighted Assets
2013
56.60
70.75
707.48
2012
50.71
63.39
633.86
2011
37.75
47.19
471.90
3,724.44
6,933.03
2,139.56
Total Market Risk-Weighted Assets
2011
53.55
Operational, Legal, and Other Risks
For Operational Risk, the exposure of the Bank is profiled using a number of methodologies which also include a scenario analysis exercise
as part of the internal capital adequacy assessment process (ICAAP) to validate if the computed capital requirement using the Basic Indicator
Approach (BIA) is enough to cover estimated losses arising from very adverse operating conditions and major incidents. For the 2014 ICAAP
submission, the Bank allocated the amount of PhP2.04Bn as capital for Operational Risk which is more than adequate to cover the exposure
from our scenario analysis exercise. In fact, the BIA provides a capital buffer of as much as PhP 903.54Mn.
Tools such as the Risks and Controls Self-Assessment (RCSA), the analysis of historical Loss Reports and the monitoring of Key Risk
Indicators (KRI) further allow Risk Management to identify high risk areas, loss drivers, and trends which can be acted upon by Management
to prevent material failures in our processes, people, systems, and resiliency measures against external events. These results are periodically
reported to Management and cover all aspects of the business from core operating capabilities of the units, all products and services,
outstanding legal cases, and even its sales and marketing practices.
Operational Risk-Weighted Assets
The BIA is used in computing China Bank’s Operational risk-weighted assets. On a parent basis, the Bank’s Operational
risk-weighted assets as of December 2013 is PhP19.91 Bn while on a consolidated basis, the Bank’s Operational risk-weighted assets is
PhP20.40 Bn. On a parent basis, the Bank’s Operational risk-weighted assets as of December 2012 is PhP20.33Bn while on a consolidated basis,
the Bank’s Operational risk-weighted assets is PhP20.74Bn. On a parent basis, the Bank’s Operational risk-weighted assets as of December
2011 is PhP18.71Bn while on a consolidated basis, the Bank’s Operational risk-weighted assets is PhP18.99Bn.
Internal measurement of interest rate risk in the banking book
The Bank’s interest rate risk (IRR) originates from holdings of interest rate sensitive assets and interest rate sensitive liabilities. Internally, the
Earnings-at-Risk (EaR) method is used to determine the effects of adverse interest rate change on the Bank’s interest earnings. The Bank’s
loans is assumed affected by interest rate movements on its repricing date for floating rates and on its maturity date for fixed rates. Demand
and savings deposits, on the other hand, is generally not interest rate sensitive. Provided in the table below are the approximate reduction in
annualized interest income of a 100bps adverse change across the PhP and USD yield curves.
Earnings-at-Risk
in PhP Million
PhP IRR Exposures
USD IRR Exposures
2013
(401)
(219)
Consolidated
2012
(355)
(122)
2011
(552)
(179)
Parent Company
2013
2012
(432)
(358)
(216)
(117)
Annual Report 2013
2011
(552)
(177)
67
REPORT OF THE AUDIT COMMITTEE TO THE BOARD OF DIRECTORS
FOR THE YEAR ENDED DECEMBER 31, 2013
The Audit Committee is a Board-constituted body that is charged to evaluate the adequacy and effectiveness of the Bank’s financial
reporting and internal control, monitor compliance with legal and regulatory requirements, provide oversight over external and internal
audit functions, and monitor management’s activities in managing risks of the Bank. The Committee is composed of three (3) nonexecutive directors, two (2) of whom are independent directors including the Chairman. The Committee’s roles and responsibilities are
defined in the Audit Committee Charter approved by the Board of the Directors.
In 2013, the Committee held twelve (12) meetings. In line with the Charter, relevant laws and regulations, and international standards,
the Committee confirms the following:
 Consistent with the guidelines of the Securities and Exchange Commission for the assessment of performance of Audit Committees,
and with global standards and practices, conducted self-assessment of performance effectiveness of the Committee.
 Exercised full discretion to invite officers to attend meetings to allow them to bring to the attention of the Committee any matter
or concern, and enable the Committee to effectively discharge its functions by obtaining feedback, evaluating the issues, arriving
at resolutions and recommendations, and obtaining follow-up action.
 With respect to the external auditors:
-
Reviewed the qualifications, performance, competence and independence of the external auditor, and endorsed the reelection/re-appointment of SyCip Gorres Velayo & Co. (SGV & Co.) / Ernst & Young as the Bank’s external auditor for 2013.
-
Discussed and passed upon the results of audit of the consolidated financial statements of the Bank and subsidiaries as of 31
December 2013, noting that the external auditors did not find any significant deficiencies or material weaknesses in internal
controls, and has not noted any significant error or been made aware of irregularities during their audit. Further to this, the
Committee reviewed and endorsed the audited financial statements, and approved the fees of the external auditor for the
financial audit of the Bank.
-
Discussed with them new issuances by the Bureau of Internal Revenue, Securities and Exchange Commission, and/or Bangko
Sentral ng Pilipinas (BSP), and their significance on the operations of the Bank.
 As to the internal auditors of the Bank:
-
Considered the regular and special internal audit reports on and replies of branches and units of the Bank, review of other audit
projects, and summary of audit findings; and monitored any outstanding issues relating to their audit.
-
Reviewed the effectiveness of the internal audit function, and confirmed the independence and objectivity of the internal
auditors, including their compliance with the Institute of Internal Auditors’ International Standards for the Professional Practice
of Internal Auditing (IIA-ISPPIA) and Code of Ethics.
-
Discussed on semestral basis, the accomplishments versus plans and budgets of the Branch Audit Department, Head Office
and Subsidiaries Audit Department, IT Audit Department, and Quality Assurance and Control Department, including the
approval of the Quality Assurance and Improvement Program (QAIP), which provides step-by-step procedures in conducting
quality assessments and providing key information of the Bank’s QAIP activities to ensure that quality and continuous
improvements are carried out in the internal audit function, in accordance with Standards 1300 of the IIA-ISPPIA as well as
BSP requirements.
-
Reviewed and favorably acted upon the proposed annual audit plans and budget after ensuring their conformity with the
Bank’s objectives.
-
Participated in the review, improvement and approval of audit rating systems for branches and various departments, which
systems are designed to translate the results of a regular audit into a descriptive numeric assessment on each of the activities
reviewed that would reflect the general condition of the unit at the time of the audit.
-
Reviewed the performance of the Chief Audit Executive.
 Jointly with Compliance Committee, discussed the BSP Report of Examination as of October 31, 2012, latest issuances from the
regulators, and updates and developments on global best practices.
 Timely informed the Board of Directors of the matters taken up during Committee meetings.
Based on the review and discussion made by the Audit Committee referred to above, and subject to the limitations on duties and
responsibilities referred to in the Charter, the Committee recommends to the Board of Directors that the audited financial statements
and related schedules be approved, included and/or incorporated in the Annual Report for the year ended December 31, 2013.
Makati City, March 5, 2014.
ALBERTO S. YAO
Chairman
68
JOAQUIN T. DEE
Member
DY TIONG
Member
STATEMENT OF MANAGEMENT’S RESPONSIBILITY FOR FINANCIAL STATEMENTS
The Management of China Banking Corporation (the Bank) is responsible for the preparation and fair presentation of the
consolidated financial statements for the years ended December 31, 2013 and 2012, including the additional components
attached therein, in accordance with Philippine Financial Reporting Standards. This responsibility includes designing and
implementing internal controls relevant to the preparation and fair presentation of the consolidated financial statements that
are free from material misstatement, whether due to fraud or error, selecting and applying appropriate accounting policies, and
making accounting estimates that are reasonable in the circumstances.
The Board of Directors reviews and approves the consolidated financial statements and submits the same to the stockholders.
SyCip Gorres Velayo & Co., the independent auditors appointed by the stockholders, has examined the consolidated financial
statements of the Bank in accordance with Philippine Standards on Auditing, and in its report to the stockholders, has expressed
its opinion on the fairness of presentation upon completion of such examination.
Hans T. Sy
Chairman of the Board
Peter S. Dee
President and CEO
Ricardo R. Chua
Senior Executive Vice President and COO
Antonio S. Espedido, Jr.
Executive Vice President and Principal Financial Officer
Delia Marquez
Vice President - Controller
Republic of the Philippines
Makati City S.S
Signed this 20th day of February 2014, affiants exhibiting to me their Social Security System Nos. as follows:
Name
Hans T. Sy
Peter S. Dee
Ricardo R. Chua
Antonio S. Espedido, Jr.
Delia Marquez
Doc. No.:
Page No:
Book No:
Series of:
188
46
12
2014
SSS Nos.
03-4301174-3
03-1183011-8
03-2416389-8
03-5696688-5
03-7205726-0
CHRISTINE L. ZERNA-BRIONES
Notary Public for the City of Makati
Appt. No. M-447 (2013-2014)
11/F China Bank Bldg.
8745 Paseo de Roxas, Makati City
PTR No. 4234459; 01.10.14; Makati City
IBP No. 945838; 12.12.13; Pampanga
Roll of Attorney’s No. 42549
Annual Report 2013
69
INDEPENDENT AUDITORS’ REPORT
The Stockholders and the Board of Directors
China Banking Corporation
8745 Paseo de Roxas corner Villar Street
Makati City
Report on the Financial Statements
We have audited the accompanying consolidated financial statements of China Banking Corporation and Subsidiaries (the Group) and the parent
company financial statements of China Banking Corporation (the Parent Company), which comprise the consolidated and parent company balance
sheets as at December 31, 2013 and 2012, and the consolidated and parent company statements of income, statements of comprehensive
income, statements of changes in equity and statements of cash flows for each of the three years in the period ended December 31, 2013, and
a summary of significant accounting policies and other explanatory information.
Management’s Responsibility for the Financial Statements
Management is responsible for the preparation and fair presentation of these financial statements in accordance with Philippine Financial
Reporting Standards, and for such internal control as management determines is necessary to enable the preparation of financial statements
that are free from material misstatement, whether due to fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with
Philippine Standards on Auditing. Those standards require that we comply with ethical requirements and plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures
selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether
due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity’s preparation and fair
presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of accounting
policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the
financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Opinion
In our opinion, the consolidated and the parent company financial statements present fairly, in all material respects, the financial position of the
Group and of the Parent Company as at December 31, 2013 and 2012, and their financial performance and their cash flows for each of the three
years in the period ended December 31, 2013 in accordance with Philippine Financial Reporting Standards.
Report on the Supplementary Information Required Under Revenue Regulations 15-2010 and 19-2011
Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplementary
information required under Revenue Regulations 15-2010 and 19-2011 in Notes 37 and 38 to the parent company financial statements,
respectively, is presented for purposes of filing with the Bureau of Internal Revenue and is not a required part of the basic financial statements.
Such information is the responsibility of the management of China Banking Corporation. The information has been subjected to the auditing
procedures applied in our audit of the basic financial statements. In our opinion, the information is fairly stated in all material respects in relation
to the basic financial statements taken as a whole.
SYCIP GORRES VELAYO & CO.
Vicky Lee Salas
Partner
CPA Certificate No. 86838
SEC Accreditation No. 0115-AR-3 (Group A),
February 14, 2013, valid until February 13, 2016
Tax Identification No. 129-434-735
BIR Accreditation No. 08-001998-53-2012,
April 11, 2012, valid until April 10, 2015
PTR No. 4225181, January 2, 2014, Makati City
March 5, 2014
70
BALANCE SHEETS
Consolidated
December 31,
2012
December 31,
(As restated 2013
Notes 2 and 10)
ASSETS
Cash and Other Cash Items
Due from Bangko Sentral ng Pilipinas
(Notes 7 and 16 )
Due from Other Banks (Note 7)
Securities Purchased Under Resale
Agreements (Note 7)
Financial Assets at Fair Value through
Profit or Loss (Note 8)
Available-for-Sale Financial Assets
(Note 8)
Held-to-Maturity Financial Assets
(Note 8)
Loans and Receivables (Notes 9 and28)
Accrued Interest Receivable (Note 15)
Investment in Subsidiaries (Note 10)
Investment in Associates (Note 10)
Bank Premises, Furniture, Fixtures and
Equipment (Note 11)
Investment Properties (Note 12)
Deferred Tax Assets (Note 26)
Branch Licenses (Notes 10 and 13)
Goodwill (Note 13)
Other Assets (Note 14)
LIABILITIES AND EQUITY
Liabilities
Deposit Liabilities (Notes 16 and 28)
Demand
Savings
Time
Bills Payable (Note 17)
Manager’s Checks
Income Tax Payable
Accrued Interest and Other Expenses
(Note 18)
Derivative Liabilities (Note 24)
Other Liabilities (Note 19)
Equity
Equity Attributable to Equity Holders
of the Parent Company
Capital stock (Note 22)
Capital paid in excess of par value
Surplus reserves (Notes 22 and 27)
Surplus (Notes 22 and 27)
Net unrealized gains (losses) on availablefor-sale financial assets (Note 8)
Remeasurement gain on defined benefit
asset or liability
Cumulative translation adjustment
Non-controlling Interest
January 1,
2012
(As restated Note 2)
Parent Company
December 31,
2012
December 31,
(As restated 2013
Note 2)
January 1,
2012
(As restated Note 2)
P7,281,640,616
P6,160,371,861
P6,050,366,433
P7,035,251,105
P5,996,785,687
P5,902,040,106
78,968,132,522
23,885,538,128
40,659,682,959
4,527,376,998
30,122,324,047
2,745,404,931
75,678,312,048
23,215,575,357
37,597,455,540
4,289,620,222
29,571,232,355
2,729,474,436
−
446,000,000
671,000,000
−
–
–
10,421,423,053
12,166,678,192
2,446,064,218
10,421,423,053
12,166,678,192
2,446,064,218
44,349,256,775
41,571,441,141
45,784,601,478
43,196,190,593
40,676,728,810
44,676,609,090
12,150,546,829
220,540,902,915
1,899,408,789
−
21,245,838
12,693,233,413
190,100,306,325
1,834,766,400
–
21,245,838
12,960,937,205
145,238,662,573
1,765,726,064
–
24,480,868
12,122,589,213
210,762,269,411
1,801,594,853
1,927,749,787
21,245,838
12,665,325,779
185,361,754,668
1,789,455,915
1,927,546,513
21,245,838
12,877,757,205
143,426,574,049
1,734,364,664
1,526,180,870
21,245,838
5,279,940,404
4,755,316,371
4,922,208,392
4,725,647,705
4,240,859,684
4,226,814,198
2,410,529,492
2,819,311,640
3,414,896,222
2,078,092,008
2,419,007,629
3,305,272,865
627,795,898
637,425,891
882,969,788
763,461,954
788,268,395
877,562,259
837,600,000
837,600,000
477,600,000
455,000,000
455,000,000
455,000,000
222,841,201
222,841,201
222,841,201
222,841,201
222,841,201
222,841,201
4,801,120,536
4,706,448,526
4,823,342,020
4,398,466,854
4,289,504,018
4,437,649,695
P413,697,922,996 P324,160,046,756 P262,553,425,440 P398,825,710,980 P314,908,078,091 P258,436,683,049
P76,735,905,420
207,557,387,057
69,974,910,203
354,268,202,680
8,299,194,525
859,892,248
6,768,350
P60,612,813,027
151,495,924,676
59,868,502,167
271,977,239,870
3,526,807,973
801,208,565
5,226,599
P54,627,745,221
111,366,522,296
50,139,445,784
216,133,713,301
1,641,473,347
487,057,846
30,667,483
P75,632,975,179
197,464,868,647
66,734,009,661
339,831,853,487
8,299,194,525
704,488,259
−
P59,900,275,608
150,345,928,515
52,827,905,234
263,074,109,357
3,526,807,973
736,088,844
–
P54,217,174,543
109,231,601,827
48,524,077,921
211,972,854,291
1,641,473,347
445,940,641
23,145,879
1,501,925,478
154,808,366
3,207,431,910
368,298,223,557
1,622,233,107
570,575,771
2,918,549,815
281,421,841,700
1,446,533,180
146,616,341
3,045,565,992
222,931,627,490
1,445,621,346
154,808,366
2,816,377,585
353,252,343,568
1,556,838,090
570,575,771
2,610,579,224
272,074,999,259
1,417,595,676
146,616,341
3,228,833,471
218,876,459,646
14,276,616,580
671,504,726
775,068,774
29,079,842,263
12,978,742,300
671,504,726
733,440,119
26,873,535,782
11,798,766,800
671,504,726
678,182,490
24,506,423,787
14,276,616,580
671,504,726
775,068,774
29,261,041,727
12,978,742,300
671,504,726
733,440,119
26,973,507,752
11,798,766,800
671,504,726
678,182,490
24,487,646,477
1,360,625,140
1,885,084,757
1,344,965,592
1,860,311,032
(79,257,616)
(73,855,091)
604,715,114
177,480,174
31,808,630
596,643,032
196,428,958
38,474,734
66,347,664
(65,510,615)
25,337,144
66,347,664
(65,510,615)
25,337,144
45,394,837,505
42,729,817,626
39,597,108,334
45,573,367,412
42,833,078,832
39,560,223,403
4,861,934
8,387,430
24,689,616
−
–
–
45,399,699,439
42,738,205,056
39,621,797,950
45,573,367,412
42,833,078,832
39,560,223,403
P413,697,922,996 P324,160,046,756 P262,553,425,440 P398,825,710,980 P314,908,078,091 P258,436,683,049
See accompanying Notes to Financial Statements.
Annual Report 2013
71
STATEMENTS OF INCOME
Consolidated
INTEREST INCOME
Loans and receivables (Notes 9 and 28)
Trading and investments (Note 8)
Due from Bangko Sentral ng Pilipinas and
other banks (Note 7)
INTEREST EXPENSE
Deposit liabilities (Notes 16 and 28)
Bills payable and other borrowings (Notes
17 and 23)
NET INTEREST INCOME
Trading and securities gain - net (Notes 8
and 20)
Service charges, fees and commissions
(Note 20)
Gain on sale of investment properties
Trust fee income (Note 28)
Gain (loss) on asset foreclosure and dacion
transactions (Note 12)
Foreign exchange gain (loss) - net
(Note 24)
Miscellaneous (Notes 10, 12 and 20)
TOTAL OPERATING INCOME
Compensation and fringe benefits
(Notes 23 and 28)
Occupancy cost (Note 25)
Taxes and licenses
Depreciation and amortization (Notes 11
and 12)
Stationery, supplies and postage
Insurance
Provision for impairment and credit losses
(Note 15)
Transportation and traveling
Entertainment, amusement and recreation
Professional fees, marketing and other
related services
Repairs and maintenance
Miscellaneous (Note 20)
TOTAL OPERATING EXPENSES
INCOME BEFORE INCOME TAX
PROVISION FOR INCOME TAX (Note 26)
NET INCOME
Attributable to:
Equity holders of the Parent Company
(Note 31)
Non-controlling interest
Basic/Diluted Earnings Per Share
(Note 31)
Parent Company
Years Ended December 31
2011
(As restated Note 2)
2013
2012
(As restated Note 2)
2011
(As restated Note 2)
2013
2012
(As restated Notes 2 and 10)
P10,372,075,442
3,227,341,138
P9,522,024,446
3,373,834,036
P8,158,228,328
3,913,249,272
P9,729,506,391
3,158,295,958
P9,245,295,416
3,297,564,886
P7,986,157,528
3,857,166,402
481,736,900
14,081,153,480
255,011,199
13,150,869,681
605,120,369
12,676,597,969
408,149,958
13,295,952,307
188,552,690
12,731,412,992
574,124,245
12,417,448,175
4,047,245,174
4,963,125,873
3,991,837,571
3,737,550,341
4,730,727,574
3,870,059,041
97,917,679
4,145,162,853
9,935,990,627
125,402,976
5,088,528,849
8,062,340,832
133,021,342
4,124,858,913
8,551,739,056
97,917,679
3,835,468,020
9,460,484,287
125,402,976
4,856,130,550
7,875,282,442
133,021,342
4,003,080,383
8,414,367,792
1,904,885,163
2,916,299,207
1,468,637,210
1,614,807,963
2,787,172,905
1,453,123,700
1,156,459,862
462,742,999
420,721,273
1,046,352,293
291,424,782
555,954,835
985,257,308
247,787,229
517,288,168
1,004,074,075
467,216,863
416,286,552
949,167,096
291,630,417
552,576,294
849,127,833
228,756,708
515,752,305
219,470,577
50,538,556
310,677,828
191,126,297
51,837,658
304,776,902
(89,663,242)
1,085,974,887
15,096,582,146
259,100,974
673,944,104
13,855,955,583
107,063,636
555,087,095
12,743,537,530
(96,189,849)
1,082,832,730
14,140,638,918
260,605,044
499,813,658
13,268,085,514
106,956,091
510,292,275
12,383,153,606
3,112,588,968
1,229,979,549
828,261,895
2,850,571,322
1,065,386,034
819,755,015
2,444,326,187
901,711,635
750,210,547
2,762,462,214
1,059,665,123
751,875,186
2,604,402,428
949,205,463
784,434,373
2,282,461,955
837,412,398
715,120,851
752,886,033
699,570,330
690,029,507
825,295,807
605,316,347
568,346,857
716,104,851
489,649,771
458,998,134
595,746,442
681,351,714
664,178,791
620,913,478
598,933,969
555,981,693
665,727,176
477,540,719
458,871,679
414,335,872
344,079,528
221,735,895
236,756,182
316,530,142
206,536,313
155,097,500
215,824,972
179,846,324
278,540,863
321,264,135
190,673,800
200,181,569
292,606,142
188,736,887
155,097,500
200,829,432
168,035,429
174,074,631
164,317,392
689,738,609
9,321,598,209
5,774,983,937
674,536,437
P5,100,447,500
165,064,472
166,580,997
604,517,780
8,430,657,268
5,425,298,315
422,288,616
P5,003,009,699
112,542,338
162,803,387
533,342,849
7,120,458,495
5,623,079,035
547,408,214
P5,075,670,821
157,803,302
162,285,099
680,378,003
8,306,224,672
5,834,414,246
649,928,260
P5,184,485,986
143,382,546
168,287,583
611,515,823
7,718,581,954
5,549,503,560
412,557,140
P5,136,946,420
109,829,246
154,751,809
497,649,972
6,723,328,166
5,659,825,440
519,226,442
P5,140,598,998
P5,103,258,492
(2,810,992)
P5,100,447,500
P5,018,197,140
(15,187,441)
P5,003,009,699
P5,076,104,662
(433,841)
P5,075,670,821
P3.57
P3.51*
P3.56*
* Restated to show the effects of stock dividends distributed in 2013 (Note 22).
See accompanying Notes to Financial Statements.
72
STATEMENTS OF COMPREHENSIVE INCOME
Consolidated
NET INCOME
OTHER COMPREHENSIVE INCOME (LOSS)
Items that recycle to profit or loss in
subsequent periods:
Changes in fair value of AFS investments:
Fair value gain for the year, net of tax
Gains taken to profit or loss (Note 20)
Cumulative translation adjustment
Items that do not recycle to profit or loss in
subsequent periods:
Remeasurement gain on defined benefit
asset or liability, net of tax
OTHER COMPREHENSIVE INCOME (LOSS)
FOR THE YEAR, NET OF TAX
TOTAL COMPREHENSIVE INCOME FOR
THE YEAR
Total comprehensive income attributable to:
Equity holders of the Parent Company
Non-controlling interest
Parent Company
Years Ended December 31
2011
(As restated Note 2)
2013
2012
(As restated Note 2)
2011
(As restated Note 2)
P5,184,485,986
P5,136,946,420
P5,140,598,998
2,057,470,675
(2,572,816,115)
(90,847,759)
1,636,189,520
(1,634,157,490)
87,610,861
2013
2012
(As restated Notes 2 and 10)
P5,100,447,500
P5,003,009,699
P5,075,670,821
2,177,977,312
(2,701,942,417)
(90,847,759)
1,678,024,992
(1,649,670,999)
87,610,861
428,205,189
145,327,978
31,792,966
400,214,074
157,954,224
38,474,734
(881,300,767)
(469,484,886)
147,757,820
(886,748,330)
(448,238,975)
128,117,625
P4,219,146,733
P4,533,524,813
P5,223,428,641
P4,688,707,445
P5,268,716,623
P4,222,468,955
(3,322,222)
P4,219,146,733
P4,548,561,308
(15,036,495)
P4,533,524,813
P5,222,709,324
719,317
P5,223,428,641
565,027,367
(2,006,391,602)
131,858,279
297,493,719
(1,716,314,402)
131,858,279
P4,297,737,656
See accompanying Notes to Financial Statements.
Annual Report 2013
73
STATEMENTS OF CHANGES IN EQUITY
Balance at January 1, 2013, as previously reported
Effect of retroactive application of PAS 19 (Revised) (Note 2)
Prior-period adjustment (Note 10)
Balance at January 1, 2013, as restated
Total comprehensive income for the year
Additional acquisition of non-controlling interest
Transfer from surplus to surplus reserves
Stock dividends - 10%
Cash dividends - P1.2 per share
Balance at December 31, 2013
Balance at January 1, 2012, as previously reported
Effect of retroactive application of PAS 19 (Revised) (Note 2)
Balance at January 1, 2012, as restated
Total comprehensive income for the year
Share of non-controlling interest in Unity Bank’s net assets
Additional acquisition of non-controlling interest
Transfer from surplus to surplus reserves
Stock dividends - 10%
Cash dividends - P1.2 per share
Balance at December 31, 2012
Balance at January 1, 2011, as previously reported
Effect of retroactive application of PAS 19 (Revised) (Note 2)
Balance at January 1, 2011, as restated
Total comprehensive income for the year
Additional acquisition of non-controlling interest
Transfer from surplus to surplus reserves
Stock dividends - 10%
Cash dividends - P1.2 per share
Balance at December 31, 2011
Capital Stock
(Note 22)
P12,978,742,300
–
–
12,978,742,300
−
−
−
1,297,874,280
–
P14,276,616,580
P11,798,766,800
–
11,798,766,800
–
–
–
–
1,179,975,500
–
P12,978,742,300
P10,726,061,700
−
10,726,061,700
–
–
–
1,072,705,100
–
P11,798,766,800
Capital Paid in
Excess of
Par Value
P671,504,726
–
–
671,504,726
−
−
−
–
–
P671,504,726
P671,504,726
–
671,504,726
–
–
–
–
–
–
P671,504,726
P671,504,726
−
671,504,726
–
–
–
–
–
P671,504,726
Surplus
Reserves
(Notes 22 and 27)
P733,440,119
–
–
733,440,119
−
−
41,628,655
–
–
P775,068,774
P678,182,490
–
678,182,490
–
–
–
55,257,629
–
–
P733,440,119
P626,607,259
−
626,607,259
–
–
51,575,231
–
–
P678,182,490
Surplus
(Notes 22 and 27)
P26,603,776,718
373,606,157
(103,847,093)
26,873,535,782
5,103,258,492
−
(41,628,655)
(1,297,874,280)
(1,557,449,076)
P29,079,842,263
P24,205,703,726
300,720,061
24,506,423,787
5,018,197,140
–
–
(55,257,629)
(1,179,975,500)
(1,415,852,016)
P26,873,535,782
P21,607,769,897
233,956,963
21,841,726,860
5,076,104,662
–
(51,575,231)
(1,072,705,100)
(1,287,127,404)
P24,506,423,787
See accompanying Notes to Financial Statements.
Balance at January 1, 2013, as previously reported
Effect of retroactive application of PAS 19 (Revised) (Note2)
Balance at January 1, 2013, as restated
Total comprehensive income for the year
Transfer from surplus to surplus reserves
Stock dividends - 10%
Cash dividends - P1.2 per share
Balance at December 31, 2013
Balance at January 1, 2012, as previously reported
Effect of retroactive application of PAS 19 (Revised) (Note2)
Balance at January 1, 2012, as restated
Total comprehensive income for the year
Transfer from surplus to surplus reserves
Stock dividends - 10%
Cash dividends - P1.2 per share
Balance at December 31, 2012
Balance at January 1, 2011, as previously reported
Effect of retroactive application of PAS 19 (Revised) (Note2)
Balance at January 1, 2011, as restated
Total comprehensive income for the year
Transfer from surplus to surplus reserves
Stock dividends - 10%
Cash dividends - P1.2 per share
Balance at December 31, 2011
See accompanying Notes to Financial Statements.
74
Capital Stock
(Note 22)
P12,978,742,300
–
12,978,742,300
–
–
1,297,874,280
–
P14,276,616,580
P11,798,766,800
−
11,798,766,800
–
–
1,179,975,500
–
P12,978,742,300
P10,726,061,700
–
10,726,061,700
–
–
1,072,705,100
–
P11,798,766,800
Capital Paid in
Excess of
Par Value
P671,504,726
–
671,504,726
–
–
–
–
P671,504,726
P671,504,726
−
671,504,726
–
–
–
–
P671,504,726
P671,504,726
–
671,504,726
–
–
–
–
P671,504,726
Surplus
Reserves
(Notes 22 and 27)
P733,440,119
–
733,440,119
–
41,628,655
–
–
P775,068,774
P678,182,490
−
678,182,490
–
55,257,629
–
–
P733,440,119
P626,607,259
–
626,607,259
–
51,575,231
–
–
P678,182,490
Consolidated
Equity Attributable to Equity Holders of the Parent Company
Net Unrealized
Gains/(Losses)
Remeasurement
on Available-forgain on defined
Cumulative
Sale Financial
benefit asset or
Translation
Assets (Note 8)
liability
Adjustment
P1,360,625,140
P–
(P65,510,615)
–
177,480,174
–
–
–
–
1,360,625,140
177,480,174
(65,510,615)
(1,439,882,756)
427,234,940
131,858,279
−
−
−
–
–
–
–
–
–
–
–
–
(P79,257,616)
P604,715,114
P66,347,664
P1,885,084,757
P–
P25,337,144
–
31,808,630
–
1,885,084,757
31,808,630
25,337,144
(524,459,617)
145,671,544
(90,847,759)
–
–
–
–
–
–
–
–
–
–
–
–
–
–
–
P1,360,625,140
P177,480,174
(P65,510,615)
P1,857,899,586
P–
(P62,273,717)
−
–
−
1,857,899,586
–
(62,273,717)
27,185,171
31,808,630
87,610,861
–
–
–
–
–
–
–
–
–
–
–
–
P1,885,084,757
P31,808,630
P25,337,144
Total
P42,282,578,388
551,086,331
(103,847,093)
42,729,817,626
4,222,468,955
−
–
–
(1,557,449,076)
P45,394,837,505
P39,264,579,643
332,528,691
39,597,108,334
4,548,561,308
–
–
–
–
(1,415,852,016)
P42,729,817,626
P35,427,569,451
233,956,963
35,661,526,414
5,222,709,324
–
–
–
(1,287,127,404)
P39,597,108,334
Non-controlling
Interest
(Note 10)
P8,816,044
(375,625)
(52,989)
8,387,430
(3,322,222)
(203,274)
−
−
−
P4,861,934
P24,745,053
(55,437)
24,689,616
(15,036,495)
99,952
(1,365,643)
–
–
–
P8,387,430
P25,715,136
(60,487)
25,654,649
719,317
(1,684,350)
–
–
–
P24,689,616
Total Equity
P42,291,394,432
550,710,706
(103,900,082)
42,738,205,056
4,219,146,733
(203,274)
−
−
(1,557,449,076)
P45,399,699,439
P39,289,324,696
332,473,254
39,621,797,950
4,533,524,813
99,952
(1,365,643)
–
–
(1,415,852,016)
P42,738,205,056
P35,453,284,587
233,896,476
35,687,181,063
5,223,428,641
(1,684,350)
–
–
(1,287,127,404)
P39,621,797,950
Parent Company
Surplus
(Notes 22 and 27)
P26,601,279,907
372,227,845
26,973,507,752
5,184,485,986
(41,628,655)
(1,297,874,280)
(1,557,449,076)
P29,261,041,727
P24,186,694,908
300,951,569
24,487,646,477
5,136,946,420
(55,257,629)
(1,179,975,500)
(1,415,852,016)
P26,973,507,752
P21,522,829,639
235,625,575
21,758,455,214
5,140,598,998
(51,575,231)
(1,072,705,100)
(1,287,127,404)
P24,487,646,477
Net Unrealized
Gains/(Losses) on
Available-forSale Financial
Assets (Note 8)
P1,344,965,592
–
1,344,965,592
(1,418,820,683)
–
–
–
(P73,855,091)
P1,860,311,032
−
1,860,311,032
(515,345,440)
–
–
–
P1,344,965,592
P1,858,279,002
–
1,858,279,002
2,032,030
–
–
–
P1,860,311,032
Remeasurement gain
on defined benefit
asset or liability
P–
196,428,958
196,428,958
400,214,074
–
–
–
P596,643,032
P–
38,474,734
38,474,734
157,954,224
–
–
–
P196,428,958
P–
−
−
38,474,734
–
–
–
P38,474,734
Cumulative
Translation
Adjustment
(P65,510,615)
–
(65,510,615)
131,858,279
–
–
–
P66,347,664
P25,337,144
−
25,337,144
(90,847,759)
–
–
–
(P65,510,615)
(P62,273,717)
–
(62,273,717)
87,610,861
–
–
–
P25,337,144
Total Equity
P42,264,422,029
568,656,803
42,833,078,832
4,297,737,656
–
–
(1,557,449,076)
P45,573,367,412
P39,220,797,100
339,426,303
39,560,223,403
4,688,707,445
–
–
(1,415,852,016)
P42,833,078,832
P35,343,008,609
235,625,575
35,578,634,184
5,268,716,623
–
–
(1,287,127,404)
P39,560,223,403
Annual Report 2013
75
STATEMENTS OF CASH FLOWS
Consolidated
CASH FLOWS FROM OPERATING
ACTIVITIES
Income before income tax
Adjustments for:
Trading and securities gain on
available-for-sale financial
assets (Note 20)
Depreciation and amortization
(Notes 10 and 11)
Gain on sale of investment properties
Gain on bargain purchase (Note 10)
Provision for impairment and credit
losses (Note 15)
Unrealized market valuation loss
(gain) on derivative assets and
liabilities (Note 24)
Gains on asset foreclosures and
dacion transactions
Changes in operating assets and
liabilities:
Decrease (increase) in the
amounts of:
Financial instruments at FVPL
Loans and receivables
Other assets
Increase (decrease) in the
amounts of:
Deposit liabilities
Manager’s checks
Accrued interest and other
expenses
Other liabilities
Net cash generated from (used in)
operations
Income taxes paid
Net cash provided by (used in) operating
activities
CASH FLOWS FROM INVESTING
ACTIVITIES
Additions to bank premises, furniture,
fixtures and equipment (Note 11)
Proceeds from disposal of bank
premises, furniture, fixtures and
equipment (Note 11)
Proceeds from sale of investment
properties
Acquisition through business
combination - net of cash
acquired (Note 10)
Additions to equity investments
(Note 10)
Purchases of:
Held-to-maturity financial assets
Available-for-sale financial assets
Proceeds from sale/maturity of:
Held-to-maturity financial assets
Available-for-sale financial assets
Net cash provided by investing activities
(Forward)
76
Parent Company
December 31
2011
(As restated Note 2)
2013
2012
(As restated Notes 2 and 10)
P5,774,983,937
P5,425,298,315
P5,623,079,035
(2,006,391,602)
(2,701,942,417)
(1,649,670,999)
(1,716,314,402)
(2,572,816,115)
(1,634,157,490)
752,886,033
(462,742,999)
–
825,295,807
(291,424,782)
(165,885,493)
716,104,851
(247,787,229)
–
595,746,442
(467,216,863)
–
620,913,478
(291,630,417)
–
665,727,176
(228,756,708)
–
414,335,872
236,756,182
155,097,500
278,540,863
200,181,569
155,097,500
(877,329,828)
202,790,964
(906,927,956)
(877,329,828)
202,790,964
(906,927,956)
(219,470,577)
(50,538,556)
(310,677,828)
(191,126,297)
(51,837,658)
(304,776,902)
2,206,817,562
(31,031,274,375)
192,306,235
(9,499,445,508)
(44,314,185,546)
72,384,299
4,401,756,875
(28,445,295,808)
(1,558,417,329)
2,206,817,562
(25,818,525,642)
172,768,019
(9,499,445,508)
(41,675,493,491)
(140,730,057)
4,401,756,875
(27,579,649,432)
(1,522,728,725)
82,290,962,810
58,683,683
54,863,508,126
314,150,719
3,092,103,848
146,541,782
76,757,744,130
(31,600,585)
51,101,255,066
290,148,203
986,349,779
141,502,533
(120,307,629)
288,882,095
163,071,186
(206,093,129)
(527,061,348)
(315,087,930)
(111,216,744)
205,798,361
139,242,414
(266,807,347)
(529,300,096)
(362,167,682)
57,262,341,217
(495,207,289)
4,873,740,167
(397,890,351)
(19,826,242,536)
(518,041,465)
56,838,499,262
(477,121,886)
3,605,274,661
(370,560,842)
(21,058,205,688)
(497,381,297)
56,767,133,928
4,475,849,816
(20,344,284,001)
56,361,377,376
3,234,713,819
(21,555,586,985)
(672,250,956)
(705,749,909)
(559,705,134)
(675,277,043)
10,528,796
173,162,335
50,759,378
3,715,622
34,464,243
46,263,014
1,183,655,279
894,822,219
632,372,288
1,138,047,387
903,152,520
556,996,574
–
285,009,741
–
–
–
–
–
–
(3,750,000)
–
(401,365,643)
(5,434,350)
–
(54,203,924,571)
(919,066,409)
(67,188,900,188)
–
(60,773,830,107)
–
(51,487,632,563)
(919,066,409)
(62,145,836,118)
–
(59,575,774,559)
542,686,584
51,992,306,306
(1,639,988,682)
1,214,677,836
73,472,915,046
7,260,369,624
5,588,815,569
67,828,091,113
12,616,708,332
542,736,566
49,266,834,500
(1,530,834,517)
1,131,497,835
68,186,241,260
6,229,382,554
5,588,815,569
67,091,191,720
13,026,780,925
(1,165,241,076)
2013
2012
(As restated Note 2)
2011
(As restated Note 2)
P5,834,414,246
P5,549,503,560
P5,659,825,440
(994,536,029)
Consolidated
2013
CASH FLOWS FROM FINANCING
ACTIVITIES
Payments of bills payable
(P44,688,753,580)
Availments of bills payable
49,461,140,132
Acquisitions of non-controlling interest
(Note 10)
(203,274)
Payments of cash dividends (Note 22)
(1,557,449,076)
Payment of subscription payable
–
Net cash provided by (used in) financing
activities
3,214,734,202
NET INCREASE (DECREASE) IN CASH
AND CASH EQUIVALENTS
58,341,879,448
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR
Cash and other cash items
P6,160,371,861
Due from Bangko Sentral ng Pilipinas
40,659,682,959
Due from other banks
4,527,376,998
Securities purchased under resale
agreements
446,000,000
51,793,431,818
CASH AND CASH EQUIVALENTS AT
END OF YEAR
Cash and other cash items
7,281,640,616
Due from Bangko Sentral ng Pilipinas
78,968,132,522
Due from other banks
23,885,538,128
Securities purchased under resale
agreements
–
P110,135,311,266
2012
(As restated Notes 2 and 10)
(P4,190,278,412)
6,075,613,038
Parent Company
December 31
2011
(As restated Note 2)
2012
(As restated Note 2)
2011
(As restated Note 2)
(P1,465,762,235) (P44,688,753,580)
48,992,420
49,461,140,132
(P4,190,278,412)
6,075,613,038
(P1,465,762,235)
48,992,420
–
(1,415,852,016)
(252,464,431)
–
(1,287,127,404)
–
2013
(1,365,643)
(1,415,852,016)
–
(1,684,350)
(1,287,127,404)
–
(203,274)
(1,557,449,076)
–
468,116,967
(2,705,581,569)
3,214,734,202
217,018,179
(2,703,897,219)
12,204,336,407
(10,433,157,238)
58,045,277,061
9,681,114,552
(11,232,703,279)
P6,050,366,433
30,122,324,047
2,745,404,931
P6,436,427,163
37,124,917,961
5,918,907,525
P5,996,785,687
37,597,455,540
4,289,620,222
P5,902,040,106
29,571,232,355
2,729,474,436
P6,362,296,658
37,053,152,975
5,970,000,543
671,000,000
39,589,095,411
542,000,000
50,022,252,649
−
47,883,861,449
–
38,202,746,897
50,000,000
49,435,450,176
6,160,371,861
40,659,682,959
4,527,376,998
6,050,366,433
30,122,324,047
2,745,404,931
7,035,251,105
75,678,312,048
23,215,575,357
5,996,785,687
37,597,455,540
4,289,620,222
5,902,040,106
29,571,232,355
2,729,474,436
671,000,000
–
P39,589,095,411 P105,929,138,510
–
P47,883,861,449
–
P38,202,746,897
446,000,000
P51,793,431,818
OPERATING CASH FLOWS FROM INTEREST
Consolidated
2013
Interest paid
Interest received
P4,314,899,682
14,016,511,091
2012
P4,923,244,739
13,087,624,009
December 31
2011
2013
P4,240,779,972 P4,007,533,566
12,611,580,103 13,283,813,369
Parent Company
2012
2011
P4,704,185,908
P4,129,661,850
12,679,491,185
12,596,074,030
See accompanying Notes to Financial Statements.
Annual Report 2013
77
NOTES TO FINANCIAL STATEMENTS
1.
CORPORATE INFORMATION
China Banking Corporation (the Parent Company) is a publicly listed commercial bank incorporated in the Philippines. The Parent
Company acquired its universal banking license in 1991. It provides expanded commercial banking products and services such as
deposit products, loans and trade finance, domestic and foreign fund transfers, treasury products, trust products, foreign exchange,
corporate finance and other investment banking services through a network of 295 and 283 local branches as of December 31, 2013
and 2012, respectively.
The Parent Company has the following subsidiaries:
Subsidiary
Chinabank Insurance Brokers, Inc. (CIBI)
CBC Properties and Computer Center, Inc.
(CBC-PCCI)
CBC Forex Corporation
China Bank Savings, Inc. (CBSI)
Unity Bank, A Rural Bank, Inc. (Unity Bank)
Effective Percentages of
Ownership
2012
2013
100.00%
100.00%
100.00%
100.00%
Country of
Incorporation
Philippines
Philippines
Principal Activities
Insurance brokerage
Computer services
100.00%
95.25%
99.95%
Philippines
Philippines
Philippines
Foreign exchange
Retail and consumer banking
Rural banking
100.00%
95.24%
99.95%
The Parent Company has no ultimate parent company. SM Investments Corporation, its significant investor, has effective ownership
in the Parent Company of 19.54% and 20.63% as of December 31, 2013 and 2012.
The Parent Company’s principal place of business is at 8745 Paseo de Roxas corner Villar Streets, Makati City.
Merger of CBSI with Unity Bank
The Board of Directors (BOD) of CBSI, in its meeting held last June 6, 2013, approved the proposed merger with Unity Bank. The
terms of the Plan of Merger of CBSI with Unity Bank were approved by CBSI’s stockholders in their meeting held on July 18, 2013.
On November 22, 2013, the Monetary Board (MB), in its Resolution No. 1949, approved the Plan of Merger and Articles of Merger
of CBSI and Unity Bank subject to certain conditions.
Acquisition of Planters Development Bank
On September 18, 2013, the BOD of the Parent Company approved the Parent Company’s acquisition of at least 66.67% of the
outstanding subscribed capital stock of Planters Development Bank (PDB). On the same date, the Parent Company, the PDB
Shareholders, and PDB entered into a memorandum of agreement (MOA) wherein the PDB Shareholders agreed to sell their shares
in PDB representing at least 66.67% of the total outstanding capital stock of PDB to the Parent Company at an estimated price of
P15.54 per share.
On December 4, 2013, the BOD of the Parent Company approved the amendments to the P2.00 Billion Local Currency Money
Market Line sub-limit approved for PDB by the BOD on November 6, 2013. The amendments include the increase in the sublimit of the clean credit line from P1.00 billion to P1.30 billion and the option to convert availments from the clean credit line to
equity, if warranted, subject to and at any time following the financial closing of the Share Purchase Agreement (SPA) to be
executed pursuant to the MOA. As of December 31, 2013, outstanding availments of PDB from the clean credit line amounted to
P500.0 million which is reported under ‘Due from other banks’. This availment matured on January 3, 2014.
On December 18, 2013, the Parent Company and the selling PDB Shareholders executed the SPA for the acquisition of the latter’s
84.77% equity interest in PDB in exchange for cash consideration. The SPA includes closing conditions and activities to be fulfilled
by both the Parent Company and the selling PDB Shareholders on or before the Closing Date defined under the SPA. These closing
conditions and activities include (a) the execution of the deed of absolute sale of the shares of all the Sale Shares belonging to the
PDB Shareholders in favor of the Parent Company; (b) settlement of the Closing Amount for the shares purchased; (c) resignation
of the incumbent PDB BOD; (d) the approval of the BSP’s MB of the transfer of the Sale Shares from the PDB Shareholders to the
Parent Company; (e) compliance of both Parent Company and PDB Shareholders with the agreed covenants, representations and
warranties; and (f) filing and submission of the necessary documentary requirements.
Also on December 18, 2013, the Parent Company obtained the MB’s approval-in-principle of the merger between PDB with either
the Parent Company or CBSI within three years from December 13, 2013 (the date of MB approval), the first stage of which is
the acquisition by the Parent Company of 84.77% of the outstanding subscribed capital stock of PDB. Such approval-in-principle
is subject to submission of the necessary requirements. Further, the MB granted the Parent Company with certain incentives
and reliefs as allowed under the Strengthening Program for Rural Bank (SPRB) Plus Framework but subject to compliance with
regulatory requirements.
On January 15, 2014, both the Parent Company and majority of the selling PDB Shareholders complied with most of the closing
conditions pursuant to the SPA (see Note 35).
The acquisition is considered a strategic move consistent with the Parent Company’s business plan, which calls for the most rapid
geographical expansion and a faster expansion of its consumer and middle market/SME portfolio.
78
2.
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Preparation
The accompanying consolidated financial statements include the financial statements of the Parent Company and its subsidiaries
(collectively referred to as “the Group”).
The accompanying financial statements have been prepared on a historical cost basis except for financial assets at fair value through
profit or loss (FVPL), available-for-sale (AFS) financial assets, and derivative financial instruments that have been measured at fair
value. The financial statements are presented in Philippine peso, and all values are rounded to the nearest peso except when
otherwise indicated.
The financial statements provide comparative information in respect of the previous period. In addition, the Group presents
an additional balance sheet at the beginning of the earliest period presented when there is a retrospective application of an
accounting policy, a retrospective restatement, or a reclassification of items in financial statements. An additional balance sheet
as at January 1, 2012 is presented in these financial statements due to retrospective application of certain accounting policies as
discussed in the ‘Changes in Accounting Policies and Disclosures’ section of this note.
The financial statements of the Parent Company reflect the accounts maintained in the Regular Banking Unit (RBU) and Foreign
Currency Deposit Unit (FCDU). The financial statements of these units are combined after eliminating inter-unit accounts.
Statement of Compliance
The financial statements of the Group and the Parent Company have been prepared in compliance with Philippine Financial Reporting
Standards (PFRS).
Presentation of Financial Statements
The Group and the Parent Company present its balance sheets in order of liquidity. An analysis regarding recovery of assets or
settlement of liabilities within 12 months after the reporting date (current) and more than 12 months after the reporting date (noncurrent) is presented in Note 21.
Financial assets and financial liabilities are offset and the net amount reported in the balance sheets only when there is a legally
enforceable right to offset the recognized amounts and there is an intention to settle on a net basis, or to realize the assets and settle
the liability simultaneously. Income and expenses are not offset in the statement of income unless required or permitted by any
accounting standard or interpretation, and as specifically disclosed in the accounting policies of the Group and the Parent Company.
Basis of Consolidation and Investments in Subsidiaries
The consolidated financial statements of the Group are prepared for the same reporting year as the Parent Company, using
consistent accounting policies. All significant intra-group balances, transactions and income and expenses resulting from intra-group
transactions are eliminated in full.
Subsidiaries are consolidated from the date on which control is transferred to the Parent Company. Control is achieved when the
Group is exposed, or has rights, to variable returns from its involvement with the investee and has the ability to affect those returns
through its power over the investee. Specifically, the Group controls an investee if and only if the Group has:
•
•
•
power over the investee (i.e. existing rights that give it the current ability to direct the relevant activities of the investee)
exposure, or rights, to variable returns from its involvement with the investee, and
the ability to use its power over the investee to affect its returns.
When the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee, including:
•
•
•
the contractual arrangement with the other vote holders of the investee
rights arising from other contractual arrangements
the Group’s voting rights and potential voting rights.
The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or
more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and
ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed
of during the year are included in the statement of comprehensive income from the date the Group gains control until the date the
Group ceases to control the subsidiary. Profit or loss and each component of other comprehensive income (OCI) are attributed
to the equity holders of the Group and to the non-controlling interests, even if this results in the non-controlling interests having a
deficit balance. When necessary, adjustments are made to the financial statements of the subsidiary to bring its accounting policies
into line with the Group’s accounting policies. All intra-group assets and liabilities, equity, income, expenses and cash flows relating
to transactions between members of the Group are eliminated in full on consolidation.
Annual Report 2013
79
NOTES TO FINANCIAL STATEMENTS
A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group
loses control over a subsidiary, it:
•
•
•
•
•
•
•
Derecognizes the assets (including goodwill) and liabilities of the subsidiary
Derecognizes the carrying amount of any non-controlling interest
Derecognizes the related OCI recorded in equity and recycle the same to profit or loss or surplus
Recognizes the fair value of the consideration received
Recognizes the fair value of any investment retained
Recognizes the remaining difference in profit or loss
Reclassifies the parent’s share of components previously recognized in OCI to profit or loss or retained earnings, as appropriate,
as would be recognized if the Group had directly disposed of the related assets or liabilities
Non-Controlling Interest
Non-controlling interest represents the portion of profit or loss and net assets not owned, directly or indirectly, by the Parent
Company.
Non-controlling interest is presented separately in the consolidated statement of income, consolidated statement of comprehensive
income, and within equity in the consolidated balance sheet, separately from parent shareholders’ equity. Any losses applicable to
the non-controlling interest are allocated against the interests of the non-controlling interest even if this results in the non-controlling
interest having a deficit balance.
Changes in Accounting Policies and Disclosures
The accounting policies adopted are consistent with those of the previous financial year except for the following new, amendments
and improvements to PFRS which became effective as of January 1, 2013. Except as otherwise indicated, these changes in the
accounting policies did not have any significant impact on the financial position or performance of the Group:
New and Amended Standards and Interpretations
•
PFRS 11, Joint Arrangements
•
Philippine Accounting Standard (PAS) 27, Separate Financial Statements (as revised in 2011)
•
PAS 28, Investments in Associates and Joint Ventures (as revised in 2011)
Improvements to PFRSs (2009-2011 cycle)
•
PFRS 1, First-time Adoption of PFRS - Borrowing Costs
•
PAS 1, Presentation of Financial Statements - Clarification of the requirements for comparative information
•
PAS 16, Property, Plant and Equipment - Classification of servicing equipment
•
PAS 32, Financial Instruments: Presentation - Tax effect of distribution to holders of equity instruments
•
PAS 34, Interim Financial Reporting - Interim financial reporting and segment information for total assets and liabilities
Standards that have been adopted and are deemed to have an impact on the financial statements or performance of the Group are
described below:
PFRS 7, Financial instruments: Disclosures - Offsetting Financial Assets and Financial Liabilities
These amendments require an entity to disclose information about rights of set-off and related arrangements (such as collateral
agreements). The new disclosures are required for all recognized financial instruments that are set off in accordance with PAS 32.
These disclosures also apply to recognized financial instruments that are subject to an enforceable master netting arrangement
or ‘similar agreement’, irrespective of whether they are set-off in accordance with PAS 32. The amendments require entities to
disclose, in a tabular format, unless another format is more appropriate, the following minimum quantitative information. This is
presented separately for financial assets and financial liabilities recognized at the end of the reporting period:
a) The gross amounts of those recognized financial assets and recognized financial liabilities;
b) The amounts that are set off in accordance with the criteria in PAS 32 when determining the net amounts presented in the
balance sheet;
c) The net amounts presented in the balance sheet;
d) The amounts subject to an enforceable master netting arrangement or similar agreement that are not otherwise included in
(b) above, including:
i. Amounts related to recognized financial instruments that do not meet some or all of the offsetting criteria in PAS 32; and
ii. Amounts related to financial collateral (including cash collateral); and
e) The net amount after deducting the amounts in (d) from the amounts in (c) above.
The amendments affect disclosures only and have no impact on the Group’s financial position or performance. The additional
disclosures required by the amendments are presented in Note 34 to the financial statements.
PFRS 10, Consolidated Financial Statements
The Group adopted PFRS 10 in the current year. PFRS 10 replaced the portion of PAS 27, Consolidated and Separate Financial
Statements, that addressed the accounting for consolidated financial statements. It also included the issues raised in Standing
Interpretations Committee (SIC) 12, Consolidation - Special Purpose Entities. PFRS 10 established a single control model that applied
to all entities including special purpose entities. The changes introduced by PFRS 10 require management to exercise significant
judgment to determine which entities are controlled, and therefore, are required to be consolidated by a parent, compared with the
requirements that were in PAS 27. Refer to Note 3 for the significant judgment made by management in identifying entities for
consolidation. The Parent Company assessed that it remains to control all of its subsidiaries under the control principle of PFRS 10.
80
PFRS 12, Disclosure of Interests in Other Entities
PFRS 12 sets out the requirements for disclosures relating to an entity’s interests in subsidiaries, joint arrangements, associates and
structured entities. The requirements in PFRS 12 are more comprehensive than the previously existing disclosure requirements
for subsidiaries (for example, where a subsidiary is controlled with less than a majority of voting rights). None of the majority
owned subsidiaries are held by non-controlling interests that are considered material to the Group and which will require additional
disclosures by PFRS 12. Refer to Note 10 for the disclosure on the Parent Company’s equity investments.
PFRS 13, Fair Value Measurement
PFRS 13 establishes a single source of guidance under PFRSs for all fair value measurements. PFRS 13 does not change when
an entity is required to use fair value, but rather provides guidance on how to measure fair value under PFRS. PFRS 13 defines fair
value as an exit price. PFRS 13 also requires additional disclosures.
As a result of the guidance in PFRS 13, the Group re-assessed its policies for measuring fair values, in particular, its valuation inputs
such as non-performance risk for fair value measurement of liabilities. The Group has assessed that the application of PFRS 13
has not materially impacted the fair value measurements of the Group. Additional disclosures, where required, are provided in the
individual notes relating to the assets and liabilities whose fair values were determined. Fair value hierarchy is provided in Note 5.
PAS 1, Presentation of Financial Statements - Presentation of Items of Other Comprehensive Income or OCI (Amendments)
The Group applied the amendments to PAS 1 which introduced groupings of items in OCI as follows:
•
•
items that can be reclassified (or “recycled”) to profit or loss at a future point in time (for example, upon derecognition
or settlement). These include ‘Cumulative Translation Adjustment’ or ‘Net Unrealized Gains (Losses) on Available-for-Sale
Financial Assets’; or
items that will never be recycled to profit or loss. These include ‘Remeasurement gain on defined benefit asset or liability’.
The amendments affect presentation only and have no impact on the Group’s financial position or performance.
PAS 19, Employee Benefits (Revised)
Amendments to PAS 19 range from fundamental changes such as removing the corridor mechanism and the concept of expected
returns on plan assets to simple clarifications and rewording. The revised standard also requires new disclosures such as, among
others, a sensitivity analysis for each significant actuarial assumption, information on asset-liability matching strategies, duration of
the defined benefit obligation, and disaggregation of plan assets by nature and risk.
The adoption of the revised standard, which required retrospective application, resulted in the restatement of previously reported
retirement plan of the Group. The adjustment amounts were determined by the Group with an assistance of an external actuary.
The Group closed to ‘Surplus’ the net effect of all transition adjustments as at January 1, 2011 (the transition date) upon retrospective
application of PAS 19 (Revised). The Group will retain the remeasurements recognized in OCI and will not transfer these to other
items in equity.
The effects of adoption of PAS 19 (Revised) are detailed below:
Increase (decrease) in:
Balance sheet
Other asset
Deferred tax asset
Other liabilities
OCI
Surplus
Non-controlling interest
31 December 2013
P1,229,779,265
(202,977,895)
46,535,741
604,715,114
375,344,714
205,801
Consolidated
31 December 2012
1 January 2012
P652,840,642
(84,815,603)
17,314,333
177,480,174
373,606,157
(375,625)
Consolidated
2013
P355,915,475
(16,176,339)
7,265,882
31,808,630
300,720,061
(55,437)
2012
Statement of income
Compensation and fringe benefits
(P2,538,982)
(P72,909,474)
Statement of comprehensive income
Remeasurement gain of defined benefit obligation
Income tax effects
601,645,956
(173,440,767)
213,967,242
(68,639,264)
Other comprehensive income for the year, net of tax
Total comprehensive income for the year
Attributable to:
Equity holders of the parent
Non-controlling interests
428,205,189
P430,744,171
145,327,978
P218,237,452
P430,574,347
169,824
P218,557,640
(320,188)
Annual Report 2013
81
NOTES TO FINANCIAL STATEMENTS
Increase (decrease) in:
Balance sheet
Other asset
Deferred tax asset
OCI
Surplus
Statement of income
Compensation and fringe benefits
Statement of comprehensive income
Remeasurement gain of defined benefit obligation
Income tax effects
OCI for the year, net of tax
Total comprehensive income for the year
31 December 2013
Parent Company
31 December 2012
1 January 2012
P1,224,575,034
(255,704,157)
596,643,032
372,227,845
P652,840,642
(84,183,839)
196,428,958
372,227,845
P355,915,475
(16,489,172)
38,474,734
300,951,569
Parent Company
2013
P−
571,734,392
(171,520,318)
400,214,074
P400,214,074
2012
(P71,276,276)
225,648,891
(67,694,667)
157,954,224
P229,230,500
Significant Accounting Policies
Foreign Currency Translation
The consolidated financial statements are presented in Philippine peso, which is the Parent Company’s functional currency. Each
entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured
using that functional currency. The functional currency of the Parent Company’s subsidiaries is the Philippine peso.
Transactions and balances
The books of accounts of the RBU are maintained in Philippine peso, the RBU’s functional currency, while those of the FCDU are
maintained in United States (US) dollars (USD), the FCDU’s functional currency. For financial reporting purposes, the foreign currencydenominated monetary assets and liabilities in the RBU are translated in Philippine peso based on the Philippine Dealing System
(PDS) closing rate prevailing at end of the year, and foreign currency-denominated income and expenses, at the PDS weighted
average rate (PDSWAR) for the year. Foreign exchange differences arising from restatements of foreign currency-denominated
assets and liabilities are credited to or charged against operations in the period in which the rates change. Non-monetary items that
are measured in terms of historical cost in a foreign currency are translated using the exchange rates as at the dates of the initial
transactions. Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date
when the fair value was determined.
FCDU
As at the reporting date, the assets and liabilities of the FCDU are translated into the Parent Company’s presentation currency (the
Philippine Peso) at the PDS closing rate prevailing at the balance sheet date, and its income and expenses are translated at the
PDSWAR for the year. Exchange differences arising on translation are taken directly to the statement of comprehensive income
under ‘Cumulative translation adjustment’.
Fair Value Measurement
The Group measures financial instruments such as financial assets at FVPL and AFS investments at fair value at each balance sheet
date. Also, fair values of financial instruments measured at amortized cost are disclosed in Note 5.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market
participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset
or transfer the liability takes place either:
•
•
in the principal market for the asset or liability, or
in the absence of a principal market, in the most advantageous market for the asset or liability.
The principal or the most advantageous market must be accessible to by the Group. The fair value of an asset or a liability is
measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market
participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market
participant’s ability to generate economic benefits by using the asset in its highest and best use or by selling it to another market
participant that would use the asset in its highest and best use.
The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure
fair value, maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.
82
All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorized within the fair value
hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole:
•
•
•
Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or
indirectly observable
Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable
For assets and liabilities that are recognized in the financial statements on a recurring basis, the Group determines whether transfers
have occurred between Levels in the hierarchy by re-assessing categorization (based on the lowest level input that is significant to
the fair value measurement as a whole) at the end of each reporting period.
Cash and Cash Equivalents
For purposes of reporting cash flows, cash and cash equivalents include cash and other cash items, due from Bangko Sentral ng
Pilipinas (BSP) and other banks, and securities purchased under resale agreements (SPURA) which have original maturities of three
months or less from dates of placements and that are subject to insignificant risk of changes in value.
SPURA
The Group enters into short-term purchases of securities under resale agreements of identical securities with the BSP. Resale
agreements are contracts under which a party purchases securities and resells such securities to the same selling party at a
specified future date at a fixed price. The amounts advanced under resale agreements are carried as ‘Cash and cash equivalents’
in the balance sheet. SPURA are carried at cost. Interest earned on resale agreements is reported as ‘Interest income’ in the
statement of income.
Financial Instruments - Initial Recognition and Subsequent Measurement
Date of recognition
Purchases or sales of financial assets, except for derivatives, that require delivery of assets within the time frame established by
regulation or convention in the marketplace are recognized on the settlement date. Settlement date accounting refers to (a) the
recognition of an asset on the day it is received by the Group, and (b) the derecognition of an asset and recognition of any gain or
loss on disposal on the day that such asset is delivered by the Group. Any change in fair value of unrecognized financial asset is
recognized in the statement of income for assets classified as financial assets at FVPL, and in equity for assets classified as AFS
investments. Derivatives are recognized on a trade date basis. Deposits, amounts due to banks and customers and loans are
recognized when cash is received by the Group or advanced to the borrowers.
Initial recognition of financial instruments
All financial instruments are initially recognized at fair value. Except for financial assets and financial liabilities at FVPL, the initial
measurement of financial instruments includes transaction costs. The Group classifies its financial assets in the following categories:
financial assets at FVPL, held-to-maturity (HTM) financial assets, AFS financial assets, and loans and receivables while financial
liabilities are classified as financial liabilities at FVPL and financial liabilities carried at amortized cost. The classification depends on
the purpose for which the investments were acquired and whether they are quoted in an active market. Management determines
the classification of its investments at initial recognition and, where allowed and appropriate, re-evaluates such designation at every
reporting date.
Financial assets and financial liabilities at FVPL
Financial assets and financial liabilities at FVPL include financial assets and liabilities held for trading purposes, financial assets and
financial liabilities designated upon initial recognition as at FVPL, and derivative instruments.
Financial instruments held for trading
Financial instruments held for trading (HFT) include government debt securities and quoted equity securities purchased and held
principally with the intention of selling them in the near term. These securities are carried at fair value; realized and unrealized gains
and losses on these instruments are recognized as ‘Trading and securities gain - net’ in the statement of income. Interest earned
or incurred on financial instruments held for trading is reported under ‘Interest income’ (for financial assets) and ‘Interest expense’
(for financial liabilities).
Financial instruments designated at FVPL
Financial assets and financial liabilities are designated as at FVPL by management on initial recognition when any of the following
criteria is met:
•
•
•
the designation eliminates or significantly reduces the inconsistent treatment that would otherwise arise from measuring the
assets or liabilities or recognizing gains or losses on them on a different basis; or
the assets and liabilities are part of a group of financial assets, financial liabilities or both which are managed and their
performance evaluated on a fair value basis, in accordance with a documented risk management or investment strategy; or
the financial instrument contains an embedded derivative, unless the embedded derivative does not significantly modify the
cash flows or it is clear, with little or no analysis, that it would not be separately recorded.
Annual Report 2013
83
NOTES TO FINANCIAL STATEMENTS
Financial assets and financial liabilities at FVPL are recorded in the balance sheet at fair value. Changes in fair value are recognized
in ‘Trading and securities gain - net’ in the statement of income. Interest earned or incurred is recorded in ‘Interest income’ or
‘Interest expense’, respectively, while dividend income is recorded in ‘Miscellaneous income’ when the right to receive payment
has been established.
Derivatives recorded at FVPL
The Parent Company is a party to derivative instruments, particularly, forward exchange contracts, interest rate swaps (IRS) and
warrants. These contracts are entered into as a service to customers and as a means of reducing and managing the Parent
Company’s foreign exchange risk, and interest rate risk as well as for trading purposes, but are not designated as hedges. Such
derivative financial instruments are stated at fair value through profit or loss.
Any gains or losses arising from changes in fair value of derivative instruments that do not qualify for hedge accounting are taken
directly to the statement of income under ‘ Foreign exchange gain - net’ for forward exchange contracts and ‘Trading and securities
gain-net’ for IRS, warrants and embedded credit derivatives.
Embedded derivatives that are bifurcated from the host financial and non-financial contracts are also accounted for at FVPL.
An embedded derivative is separated from the host contract and accounted for as a derivative if all of the following conditions are
met: a) the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristic
of the host contract; b) a separate instrument with the same terms as the embedded derivative would meet the definition of a
derivative; and c) the hybrid or combined instrument is not recognized at fair value through profit or loss.
The Group assesses whether embedded derivatives are required to be separated from the host contracts when the Group first
becomes a party to the contract. Reassessment of embedded derivatives is only done when there are changes in the contract that
significantly modifies the contractual cash flows that would otherwise be required.
Held-to-maturity financial assets
HTM financial assets are quoted non-derivative financial assets with fixed or determinable payments and fixed maturities for which
the Group’s management has the positive intention and ability to hold to maturity. Where the Group would sell other than an
insignificant amount of HTM financial assets, the entire category would be tainted and reclassified as AFS financial assets.
After initial measurement, these investments are subsequently measured at amortized cost using the effective interest method,
less any impairment in value. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees
that are an integral part of the effective interest rate (EIR). The amortization is included in ‘Interest income’ in the statement of
income. Gains and losses are recognized in income when the HTM financial assets are derecognized and impaired, as well as
through the amortization process. The losses arising from impairment of such investments are recognized in the statement of
income under ‘Provision for impairment and credit losses’. The effects of translation of foreign currency-denominated HTM financial
assets are recognized in the statement of income.
Loans and receivable
This accounting policy relates to the balance sheet captions ‘Due from BSP’, ‘Due from other banks’, ‘SPURA’, ‘Loans and
receivables’, and ‘Accrued interest receivable’. It also applies to accounts receivable and other financial instruments shown under
‘Other assets’. These are financial assets with fixed or determinable payments that are not quoted in an active market, other than:
•
•
•
those that the Group intends to sell immediately or in the near term and those that the Group, upon initial recognition, designates
as FVPL;
those that the Group, upon initial recognition, designates as AFS; and
those for which the Group may not cover substantially all of its initial investment, other than because of credit deterioration.
After initial measurement, these are subsequently measured at amortized cost using the effective interest method, less allowance
for impairment. Amortized cost is calculated by taking into account any discount or premium on acquisition and fees and costs that
are an integral part of the EIR. The amortization is included under ‘Interest income’ in the statement of income. The losses arising
from impairment are recognized under ‘Provision for impairment and credit losses’ in the statement of income.
Available-for-sale financial assets
AFS financial assets are those which are designated as such or do not qualify to be classified as financial assets at FVPL, HTM
financial assets, or loans and receivables. They are purchased and held indefinitely, and may be sold in response to liquidity
requirements or changes in market conditions. They include equity investments, money market papers and other debt instruments.
After initial measurement, AFS financial assets are subsequently measured at fair value. The effective yield component of AFS debt
securities, as well as the impact of translation of foreign currency-denominated AFS debt securities, is reported in the statement of
income. The unrealized gains and losses arising from the fair valuation of AFS financial assets are excluded, net of tax, from reported
earnings and are reported as ‘Net unrealized gain (loss) on AFS financial assets’ under OCI.
When the security is disposed of, the cumulative gain or loss previously recognized in OCI is recognized as ‘Trading and securities
gain - net’ in the statement of income. Interest earned on holding AFS debt securities are reported as ‘Interest income’ using the
EIR. Dividends earned on holding AFS equity instruments are recognized in the statement of income as ‘Miscellaneous income’
when the right to the payment has been established. The losses arising from impairment of such investments are recognized as
‘Provision for impairment and credit losses’ in the statement of income.
84
Other financial liabilities
These are issued financial instruments or their components which are not designated as at FVPL and where the substance of the
contractual arrangement results in the Group having an obligation either to deliver cash or another financial asset to the holder, or to
satisfy the obligation other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of its own
equity shares. The components of issued financial instruments that contain both liability and equity elements are accounted for
separately, with the equity component being assigned the residual amount after deducting from the instrument as a whole the
amount separately determined as the fair value of the liability component on the date of issue.
After initial measurement, other financial liabilities not qualified and not designated as at FVPL are subsequently measured at
amortized cost using the effective interest method. Amortized cost is calculated by taking into account any discount or premium on
the issue and fees that are an integral part of the EIR.
This accounting policy relates to the balance sheet captions ‘Deposit liabilities’, ‘Bills payable’, ‘Manager’s checks’, and financial
liabilities presented under ‘Accrued interest and other expenses’ and ‘Other liabilities’.
Reclassification of Financial Assets
The Group may reclassify, in certain circumstances, non-derivative financial assets out of the HFT investments category and into the
AFS investments, Loans and Receivables or HTM investments categories. The Group may also reclassify, in certain circumstances,
financial instruments out of the AFS investment to Loans and Receivables category. Reclassifications are recorded at fair value at
the date of reclassification, which becomes the new amortized cost.
The Group may reclassify a non-derivative trading asset out of HFT investments and into the Loans and Receivable category if it
meets the definition of loans and receivables, the Group has the intention and ability to hold the financial assets for the foreseeable
future or until maturity and only in rare circumstances. If a financial asset is reclassified, and if the Group subsequently increases
its estimates of future cash receipts as a result of increased recoverability of those cash receipts, the effect of that increase is
recognized as an adjustment to the EIR from the date of the change in estimate.
For a financial asset reclassified out of the AFS investments category, any previous gain or loss on that asset that has been
recognized in OCI is amortized to profit or loss over the remaining life of the investment using the effective interest method. Any
difference between the new amortized cost and the expected cash flows is also amortized over the remaining life of the asset
using the effective interest method. If the asset is subsequently determined to be impaired then the amount recorded in OCI is
recycled to the statement of income. Reclassification is at the election of management, and is determined on an instrument by
instrument basis. The Group does not reclassify any financial instrument into the FVPL category after initial recognition. An analysis
of reclassified financial assets is disclosed in Note 8.
Derecognition of Financial Assets and Liabilities
Financial assets
A financial asset (or, where applicable a part of a financial asset or part of a group of financial assets) is derecognized when:
•
•
•
the rights to receive cash flows from the asset have expired; or
the Group retains the right to receive cash flows from the asset, but has assumed an obligation to pay them in full without
material delay to a third party under a “pass-through” arrangement; or
the Group has transferred its rights to receive cash flows from the asset and either (a) has transferred substantially all the risks
and rewards of the asset, or (b) has neither transferred nor retained the risks and rewards of the asset but has transferred
control of the asset.
Where the Group has transferred its rights to receive cash flows from an asset or has entered into a pass-through arrangement,
and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred control of the asset, the
asset is recognized to the extent of the Group’s continuing involvement in the asset. Continuing involvement that takes the form
of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum
amount of consideration that the Group could be required to repay.
Financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged, cancelled or has expired. Where an existing
financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are
substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of a
new liability, and the difference in the respective carrying amounts is recognized in the statement of income.
Repurchase and Reverse Repurchase Agreements
Securities sold under agreements to repurchase at a specified future date (‘repos’) are not derecognized from the balance sheet.
The corresponding cash received, including accrued interest, is recognized in the balance sheet as a loan to the Group, reflecting the
economic substance of such transaction.
Conversely, securities purchased under agreements to resell at a specified future date (‘reverse repos’) are not recognized in the
balance sheet. The corresponding cash paid, including accrued interest, is recognized in the balance sheet as SPURA, and is
considered a loan to the counterparty.
Annual Report 2013
85
NOTES TO FINANCIAL STATEMENTS
The difference between the purchase price and resale price is treated as interest income and is accrued over the life of the
agreement using the effective interest method.
Impairment of Financial Assets
The Group assesses at each balance sheet date whether there is objective evidence that a financial asset or group of financial assets
is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is objective evidence of
impairment as a result of one or more events that has occurred after the initial recognition of the asset (an incurred ‘loss event’) and
that loss event (or events) has an impact on the estimated future cash flows of the financial asset or the group of financial assets that
can be reliably estimated. Evidence of impairment may include indications that the borrower or a group of borrowers is experiencing
significant financial difficulty, default or delinquency in interest or principal payments, the probability that they will enter bankruptcy
or other financial reorganization and where observable data indicate that there is measurable decrease in the estimated future cash
flows, such as changes in arrears or economic conditions that correlate with defaults.
Financial assets carried at amortized cost
For financial assets carried at amortized cost, the Group first assesses whether objective evidence of impairment exists individually
for financial assets that are individually significant, or collectively for financial assets that are not individually significant.
If there is objective evidence that an impairment loss has been incurred, the amount of loss is measured as the difference between
the asset’s carrying amount and the present value of the estimated future cash flows (excluding future credit losses that have not
been incurred). The present value of the estimated future cash flows is discounted at the financial asset’s original EIR.
If a loan has a variable interest rate, the discount rate for measuring any impairment loss is the current EIR, adjusted for the original
credit risk premium. The calculation of the present value of the estimated future cash flows of a collateralized financial asset reflects
the cash flows that may result from foreclosure less costs for obtaining and selling the collateral, whether or not foreclosure is
probable. The carrying amount of the asset is reduced through use of an allowance account and the amount of loss is charged to
the statement of income. Interest income continues to be recognized based on the original EIR of the asset. The financial assets,
together with the associated allowance accounts, are written off when there is no realistic prospect of future recovery and all
collateral has been realized.
If the Group determines that no objective evidence of impairment exists for individually assessed financial asset, whether significant
or not, it includes the asset in a group of financial assets with similar credit risk characteristics and collectively assesses for
impairment. Those characteristics are relevant to the estimation of future cash flows for groups of such assets by being indicative
of the debtors’ ability to pay all amounts due according to the contractual terms of the assets being evaluated. Assets that are
individually assessed for impairment and for which an impairment loss is, or continues to be, recognized are not included in a
collective assessment for impairment.
For the purpose of a collective evaluation of impairment, financial assets are grouped on the basis of such credit risk characteristics
as industry, collateral type and past-due status.
Future cash flows in a group of financial assets that are collectively evaluated for impairment are estimated on the basis of historical
loss experience for assets with credit risk characteristics similar to those in the group. Historical loss experience is adjusted on the
basis of current observable data to reflect the effects of current conditions that did not affect the period on which the historical loss
experience is based and to remove the effects of conditions in the historical period that do not exist currently. Estimates of changes
in future cash flows reflect, and are directionally consistent with changes in related observable data from period to period (such as
changes in unemployment rates, property prices, commodity prices, payment status, or other factors that are indicative of incurred
losses in the Group and their magnitude). The methodology and assumptions used for estimating future cash flows are reviewed
regularly by the Group to reduce any differences between loss estimates and actual loss experience.
If, in a subsequent year, the amount of the estimated impairment loss decreases because of an event occurring after the impairment
was recognized, the previously recognized impairment loss is reduced by adjusting the allowance account. If a future write-off is
later recovered, any amounts formerly charged are credited to ‘Provision for impairment and credit losses’.
Financial assets carried at cost
If there is objective evidence that an impairment loss on an unquoted equity instrument that is not carried at fair value because its
fair value cannot be reliably measured, or on a derivative asset that is linked to and must be settled by delivery of such an unquoted
equity instrument has been incurred, the amount of loss is measured as the difference between the asset’s carrying amount and the
present value of estimated future cash flows discounted at the current market rate of return for a similar financial asset.
Available-for-sale financial assets
For AFS financial assets, the Group assesses at each balance sheet date whether there is objective evidence that a financial asset
or group of financial assets is impaired.
In the case of equity investments classified as AFS financial assets, this would include a significant or prolonged decline in the fair
value of the investments below its cost. Where there is evidence of impairment, the cumulative loss - measured as the difference
between the acquisition cost and the current fair value, less any impairment loss on that financial asset previously recognized in the
statement of income - is removed from OCI and recognized in the statement of income. Impairment losses on equity investments
are not reversed through the statement of income. Increases in fair value after impairment are recognized directly in OCI.
86
In the case of debt instruments classified as AFS financial assets, impairment is assessed based on the same criteria as financial
assets carried at amortized cost. However, the amount recorded for impairment is the cumulative loss measured as the difference
between the amortized cost and the current fair value, less any impairment loss on that investment previously recognized in profit
or loss. Future interest income is based on the reduced carrying amount and is accrued based on the rate of interest used to
discount future cash flows for the purpose of measuring impairment loss. Such accrual is recorded as part of ‘Interest income’ in
the statement of income. If, in subsequent year, the fair value of a debt instrument increased and the increase can be objectively
related to an event occurring after the impairment loss was recognized in the statement of income, the impairment loss is reversed
through the statement of income.
Restructured loans
Where possible, the Group seeks to restructure loans rather than to take possession of collateral. This may involve extending the
payment arrangements and the agreement of new loan conditions. Once the terms have been renegotiated, the loan is no longer
considered past due. Management continuously reviews restructured loans to ensure that all criteria are met and that future
payments are likely to occur. The loans continue to be subject to an individual or collective impairment assessment, calculated using
the loan’s original EIR. The difference between the recorded value of the original loan and the present value of the restructured
cash flows, discounted at the original EIR, is recognized in ‘Provision for impairment and credit losses’ in the statement of income.
Investment in Subsidiaries
In the separate or parent company financial statements, investment in a subsidiary is carried at cost, less accumulated impairment
in value. Dividends earned on this investment is recognized in the Parent Company’s statement of income as declared by the
respective BOD of the investee.
Investment in Associates
Associates pertain to all entities over which the Group has significant influence but not control, generally accompanying a shareholding
of between 20.00% and 50.00% of the voting rights. In the consolidated financial statements, investments in associates are
accounted for under the equity method of accounting.
Under the equity method, an investment in an associate is carried in the balance sheet at cost plus post-acquisition changes in
the Group’s share of the net assets of the associate. Goodwill relating to an associate is included in the carrying value of the
investments and is not amortized. The statement of income reflects the share of the results of operations of the associate. Where
there has been a change recognized directly in the equity of the associate, the Group recognizes its share of any changes and
discloses this, when applicable, in the statement of changes in equity.
When the Group’s share of losses in an associate equals or exceeds its interest in the associate, including any other unsecured
receivables, the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the
associate. Profits or losses resulting from transactions between the Group and an associate are eliminated to the extent of the
interest in the associate.
The financial statements of the associate are prepared for the same reporting period as the Parent Company. Where necessary,
adjustments are made to bring the accounting policies in line with those of the Group.
In the separate or parent company financial statements, investments in associates are carried at cost, less accumulated impairment
in value. Dividends earned on these investments are recognized in the Parent Company’s statement of income as declared by the
respective BOD of the investees.
Upon loss of significant influence over the associate, the Group measures and recognizes any retained investment at its fair value.
Any difference between the carrying amount of the associate upon loss of significant influence and the fair value of the retained
investment and proceeds from disposal is recognized in profit or loss.
Business Combinations and Goodwill
Business combinations are accounted for using the acquisition method. The cost of an acquisition is measured as the aggregate of
the consideration transferred, measured at acquisition date fair value and the amount of any non-controlling interest in the acquiree.
For each business combination, the acquirer measures the non-controlling interest in the acquiree either at fair value or at the
proportionate share of the acquiree’s identifiable net assets. Acquisition costs incurred are charged to profit or loss.
When the Group acquires a business, it assesses the financial assets and liabilities assumed for appropriate classification and
designation in accordance with the contractual terms, economic circumstances and pertinent conditions as at the acquisition date.
This includes the separation of embedded derivatives in host contracts by the acquiree.
If the business combination is achieved in stages, the acquisition date fair value of the acquirer’s previously held equity interest in
the acquiree is remeasured to fair value at the acquisition date through profit or loss.
Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Subsequent
changes to the fair value of the contingent consideration which is deemed to be an asset or liability, will be recognized in accordance
with PAS 39, Financial Instruments: Recognition and Measurement, either in profit or loss or as a charge to OCI. If the contingent
consideration is classified as equity, it should not be remeasured until it is finally settled within equity.
Annual Report 2013
87
NOTES TO FINANCIAL STATEMENTS
Goodwill is initially measured at cost being the excess of the aggregate of fair value of the consideration transferred and the amount
recognized for non-controlling interest over the net identifiable assets acquired and liabilities assumed. If this consideration is lower
than the fair value of the net assets of the subsidiary acquired, the difference is recognized in profit or loss.
After initial recognition, goodwill is measured at cost less any accumulated impairment losses.
Goodwill is tested for impairment annually. For the purpose of impairment testing, goodwill acquired in a business combination
is, from the date of acquisition, allocated to each of the Group’s cash-generating units, or groups of cash-generating units, that are
expected to benefit from the synergies of the combination, irrespective of whether other assets or liabilities of the acquiree are
assigned to those units or group of units. Each unit or group of units to which the goodwill is allocated:
•
•
represents the lowest level within the Group at which the goodwill is monitored for internal management purposes; and
is not larger than an operating segment identified for segment reporting purposes.
Where goodwill forms part of a cash-generating unit (or group of cash-generating units) and part of the operation within that unit
is disposed of, the goodwill associated with the operation disposed of is included in the carrying amount of the operation when
determining the gain or loss on disposal of the operation. Goodwill disposed of in this circumstance is measured based on the
relative values of the operation disposed of and the portion of the cash-generating unit retained.
Bank Premises, Furniture, Fixtures and Equipment
Land is stated at cost less any impairment in value while depreciable properties including buildings, leasehold improvements, and
furniture, fixtures and equipment are stated at cost less accumulated depreciation and amortization, and any impairment in value.
Such cost includes the cost of replacing part of the bank premises, furniture, fixtures and equipment when that cost is incurred and
if the recognition criteria are met, but excluding repairs and maintenance costs.
Depreciation and amortization is calculated on the straight-line method over the estimated useful life (EUL) of the depreciable assets
as follows:
Buildings
Furniture, fixtures and equipment
Leasehold improvements
EUL
50 years
3 to 5 years
Shorter of 6 years or the related lease terms
The depreciation and amortization method and useful life are reviewed periodically to ensure that the method and period of
depreciation and amortization are consistent with the expected pattern of economic benefits from items of bank premises, furniture,
fixtures and equipment and leasehold improvements.
An item of bank premises, furniture, fixtures and equipment is derecognized upon disposal or when no future economic benefits
are expected from its use or disposal. Any gain or loss arising on derecognition of the asset (calculated as the difference between
the net disposal proceeds and the carrying amount of the asset) is included in the statement of income in the year the asset is
derecognized.
Investment Properties
Investment properties include real properties acquired in settlement of loans and receivables which are measured initially at cost
including certain transaction costs. Investment properties acquired through a nonmonetary asset exchange is measured initially at
fair value unless (a) the exchange lacks commercial substance or (b) the fair value of neither the asset received nor the asset given
up is reliably measurable. Subsequent to initial recognition, investment properties are stated at cost less accumulated depreciation
and any accumulated impairment in value.
Expenditures incurred after the investment properties have been put into operation, such as repairs and maintenance costs, are
normally charged to income in the period in which the costs are incurred.
Depreciation is calculated on a straight-line basis using the EUL of the building and improvement components of investment
properties which ranged from 10 to 20 years from the time of acquisition of the investment properties.
Investment properties are derecognized when they have either been disposed of or when the investment properties are permanently
withdrawn from use and no future benefit is expected from their disposal. Any gain or loss on the derecognition of an investment
property is recognized as ‘Gain on sale of investment properties’ in the statement of income in the year of derecognition.
Transfers are made to investment properties when, and only when, there is a change in use evidenced by ending of owner
occupation, commencement of an operating lease to another party or ending of construction or development. Transfers are made
from investment properties when, and only when, there is a change in use evidenced by commencement of owner occupation or
commencement of development with a view to sale.
Intangible Assets
Intangible assets include branch licenses resulting from the Parent Company’s acquisition of CBSI and Unity Bank (see Notes 10
and 13).
88
The branch licenses are initially measured at fair value as of the date of acquisition and are deemed to have an indefinite useful life
as there is no foreseeable limit to the period over which they are expected to generate net cash inflows for the Group.
Such intangible assets are not amortized, instead they are tested for impairment annually either individually or at the cash generating
unit (CGU) level. Impairment is determined by assessing the recoverable amount of each cash-generating unit (or group of cashgenerating units) to which the intangible asset relates. Recoverable amount is the higher of the cash-generating unit’s fair value
less costs to sell and its value in use. Where the recoverable amount of the cash-generating units is less than its carrying amount,
an impairment loss is recognized.
Gains and losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds
and the carrying amount of the asset and are recognized in earnings when the asset is derecognized.
Impairment of Nonfinancial Assets
At each reporting date, the Group assesses whether there is any indication that its nonfinancial assets (e.g., investment in
associates, investment properties, bank premises, furniture, fixtures and equipment and intangible assets) may be impaired. When
an indicator of impairment exists or when an annual impairment testing for an asset is required, the Group makes a formal estimate
of recoverable amount.
Recoverable amount is the higher of an asset’s (or cash-generating unit’s) fair value less costs to sell and its value in use and is
determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other
assets or groups of assets, in which case the recoverable amount is assessed as part of the CGU to which it belongs. Where the
carrying amount of an asset (or CGU) exceeds its recoverable amount, the asset (or CGU) is considered impaired and is written
down to its recoverable amount. In assessing value in use, the estimated future cash flows are discounted to their present value
using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset
(or CGU).
An impairment loss is charged to operations in the year in which it arises.
For nonfinancial assets, excluding goodwill and branch licenses, an assessment is made at each reporting date as to whether there
is any indication that previously recognized impairment losses may no longer exist or may have decreased. If such indication exists,
the recoverable amount is estimated. A previously recognized impairment loss is reversed, except for goodwill, only if there has
been a change in the estimates used to determine the asset’s recoverable amount since the last impairment loss was recognized.
If that is the case, the carrying amount of the asset is increased to its recoverable amount. That increased amount cannot exceed
the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognized for the asset
in prior years. Such reversal is recognized in the statement of income. After such a reversal, the depreciation expense is adjusted
in future years to allocate the asset’s revised carrying amount, less any residual value, on a systematic basis over its remaining life.
Leases
The determination of whether an arrangement is, or contains a lease is based on the substance of the arrangement and requires an
assessment of whether the fulfillment of the arrangement is dependent on the use of a specific asset or assets and the arrangement
conveys a right to use the asset. A reassessment is made after inception of the lease only if one of the following applies:
(a)
(b)
(c)
(d)
There is a change in contractual terms, other than a renewal or extension of the arrangement;
A renewal option is exercised or extension granted, unless that term of the renewal or extension was initially included in the
lease term;
There is a change in the determination of whether fulfillment is dependent on a specified asset; or
There is a substantial change to the asset.
Where a reassessment is made, lease accounting shall commence or cease from the date when the change in circumstances gave
rise to the reassessment for scenarios (a), (c), or (d) above, and at the date of renewal or extension period for scenario (b).
Group as lessee
Leases where the lessor retains substantially all the risks and benefits of ownership of the asset are classified as operating leases.
Operating lease payments are recognized as an expense in the statement of income on a straight-line basis over the lease term.
Group as lessor
Leases where the Group does not transfer substantially all the risks and benefits of ownership of the assets are classified as
operating leases. Initial direct costs incurred in negotiating operating leases are added to the carrying amount of the leased asset
and recognized over the lease term on the same basis as the rental income. Contingent rents are recognized as revenue in the
period in which they are earned.
Non-current Assets Held for Sale
Non-current assets held for sale include repossessed vehicles acquired in settlement of loans and receivable. The Group classifies
non-current assets as held for sale if their carrying amounts will be recovered principally through a sale transaction rather than
through continuing use. Non-current assets classified as held for sale are measured at the lower of their carrying amount and fair
value less cost to sell (FVCTS).
Annual Report 2013
89
NOTES TO FINANCIAL STATEMENTS
The criteria for held for sale classification is regarded as met only when the sale is highly probable and the asset or disposal group
is available for immediate sale in its present condition. Management must be committed to the sale, which should be expected to
qualify for recognition as a completed sale within one year from the date of classification.
After initial measurement, non-current assets held for sale are tested for impairment quarterly. Any impairment loss shall be
recognized for any subsequent write-down of the asset to its FVCTS.
Gain for any subsequent increase in FVCTS of the asset shall be recognized, but not in excess of the cumulative impairment loss
that has been recognized had it not been impaired in prior reporting periods.
Capital Stock
Capital stocks are recorded at par. Proceeds in excess of par value are recognized under equity as ‘Capital paid in excess of par
value’ in the balance sheets. Incremental costs incurred which is directly attributable to the issuance of new shares are shown in
equity as a deduction from proceeds, net of tax.
Surplus
Surplus represents the net accumulated profit of the Parent Company less cumulative dividends declared.
Revenue Recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue can be
reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the consideration
received or receivable, taking into account contractually defined terms of payment and excluding taxes or duty. The Group assesses
its revenue arrangements against specific criteria in order to determine if it is acting as principal or agent. The Group has concluded
that it is acting as a principal in all of its revenue arrangements. The following specific recognition criteria must also be met before
revenue is recognized:
Interest income
For all financial instruments measured at amortized cost and interest-bearing financial instruments classified as FVPL and AFS
financial assets, interest income is recorded at the EIR, which is the rate that exactly discounts estimated future cash payments
or receipts through the expected life of the financial instrument or a shorter period, where appropriate, to the net carrying amount
of the financial asset or financial liability. The calculation takes into account all contractual terms of the financial instrument (for
example, prepayment options), includes any fees or incremental costs that are directly attributable to the instrument and are an
integral part of the EIR, as applicable, but not future credit losses. The adjusted carrying amount is calculated based on the original
EIR. The change in carrying amount is recorded as ‘Interest income’.
Once the recorded value of a financial asset or group of similar financial assets has been reduced due to an impairment loss, interest
income continues to be recognized using the original EIR applied to the new carrying amount.
Loan fees and service charges
Loan commitment fees are recognized as earned over the terms of the credit lines granted to each borrower. Loan syndication fees
are recognized upon completion of all syndication activities and where the Group does not have further obligations to perform under
the syndication agreement.
Service charges and penalties are recognized only upon collection or accrued where there is a reasonable degree of certainty as to
their collectability.
Dividend income
Dividend income is recognized when the Group’s right to receive payment is established.
Trading and securities gain
This represents results arising from trading activities including all gains and losses from changes in fair value of financial assets held
for trading and designated at FVPL. It also includes gains and losses realized from sale of AFS financial assets.
Other income
Income from sale of service is recognized upon rendition of the service. Income from sale of properties is recognized upon
completion of the earning process and when the collectability of the sales price is reasonably assured.
Rental income
Rental income arising on leased properties is accounted for on a straight-line basis over the lease terms on ongoing leases and is
recorded in the statement of income under ‘Miscellaneous income’.
Expense Recognition
Expense is recognized when it is probable that a decrease in future economic benefit related to a decrease in an asset or an increase
in liability has occurred and the decrease in economic benefits can be measured reliably. Revenues and expenses that relate to the
same transaction or other event are recognized simultaneously.
Interest Expense
Interest expense for all interest-bearing financial liabilities are recognized in ‘Interest expense’ in the statement of income using the
EIR of the financial liabilities to which they relate.
90
Other Expenses
Expenses encompass losses as well as those expenses that arise in the ordinary course of business of the Group. Expenses are
recognized when incurred.
Retirement Benefits
Defined benefit plan
The net defined benefit liability or asset is the aggregate of the present value of the defined benefit obligation at the end of the
reporting period reduced by the fair value of plan assets and adjusted for any effect of limiting a net defined benefit asset to the
asset ceiling. The defined benefit obligation is calculated annually by an independent actuary. The present value of the defined
benefit obligation is determined by discounting the estimated future cash outflows using interest rates on government bonds that
have terms to maturity approximating the terms of the related retirement liability. The asset ceiling is the present value of any
economic benefits available in the form of refunds from the plan or reductions in future contributions to the plan.
The cost of providing benefits under the defined benefit plans is actuarially determined using the projected unit credit method.
Defined benefit costs comprise the following:
(a) service cost;
(b) net interest on the net defined benefit liability or asset; and
(c) remeasurements of net defined benefit liability or asset.
Service costs which include current service costs, past service costs and gains or losses on non-routine settlements are recognized
as expense in profit or loss. Past service costs are recognized when plan amendment or curtailment occurs.
Net interest on the net defined benefit liability or asset is the change during the period in the net defined benefit liability or asset
that arises from the passage of time which is determined by applying the discount rate based on high quality corporate bonds to the
net defined benefit liability or asset. Net interest on the net defined benefit liability or asset is recognized as expense or income in
profit or loss.
Remeasurements comprising actuarial gains and losses, return on plan assets and any change in the effect of the asset
ceiling (excluding net interest on defined benefit liability) are recognized immediately in OCI in the period in which they arise.
Remeasurements are not reclassified to profit or loss in subsequent periods.
Plan assets are assets that are held by a long-term employee benefit fund or qualifying insurance policies. Plan assets are not
available to the creditors of the Parent Company, nor can they be paid directly to the Parent Company. The fair value of plan assets
is based on market price information. When no market price is available, the fair value of plan assets is estimated by discounting
expected future cash flows using a discount rate that reflects both the risk associated with the plan assets and the maturity
or expected disposal date of those assets (or, if they have no maturity, the expected period until the settlement of the related
obligations).
The Parent Company’s right to be reimbursed of some or all of the expenditure required to settle a defined benefit obligation is
recognized as a separate asset at fair value when and only when reimbursement is virtually certain. If the fair value of the plan
assets is higher than the present value of the defined benefit obligation, the measurement of the resulting defined benefit asset is
limited to the present value of economic benefits available in the form of refunds from the plan or reductions in future contributions
to the plan.
Employee leave entitlement
Employee entitlements to annual leave are recognized as a liability when they are accrued to the employees. The undiscounted
liability for leave expected to be settled after the end of the annual reporting period is recognized for services rendered by employees
up to the end of the reporting period.
Provisions and Contingencies
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a past event and it is probable
that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be
made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example, under
an insurance contract, the reimbursement is recognized as a separate asset but only when the reimbursement is virtually certain.
The expense relating to any provision is presented in the statement of income, net of any reimbursement. If the effect of the time
value of money is material, provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and, where appropriate, the risks specific to the liability. Where discounting
is used, the increase in the provision due to the passage of time is recognized as an interest expense.
Contingent liabilities are not recognized in the financial statements but are disclosed unless the possibility of an outflow of resources
embodying economic benefits is remote. Contingent assets are not recognized but are disclosed in the financial statements when
an inflow of economic benefits is probable.
Income Taxes
Current Tax
Current tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or
paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively
enacted as of the balance sheet date.
Annual Report 2013
91
NOTES TO FINANCIAL STATEMENTS
Deferred Tax
Deferred tax is provided, using the balance sheet liability method, on all temporary differences at the balance sheet date between
the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.
Deferred tax liabilities are recognized for all taxable temporary differences. Deferred tax assets are recognized for all deductible
temporary differences, carry forward of unused tax credits from the excess of minimum corporate income tax (MCIT) over the
regular corporate income tax (RCIT), and unused net operating loss carryover (NOLCO), to the extent that it is probable that sufficient
taxable profit will be available against which the deductible temporary differences and carry forward of unused tax credits from
MCIT and unused NOLCO can be utilized. Deferred tax, however, is not recognized on temporary differences that arise from the
initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects
neither the accounting income nor taxable income.
Deferred tax liabilities are not provided on non-taxable temporary differences associated with investments in domestic subsidiaries
and associates.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to the extent that it is no longer
probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilized. Unrecognized
deferred tax assets are reassessed at each balance sheet date and are recognized to the extent that it has become probable that
future taxable profit will allow the deferred tax asset to be recovered.
Deferred tax assets and liabilities are measured at the tax rates that are applicable to the period when the asset is realized or the
liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the balance sheet date.
Current tax and deferred tax relating to items recognized directly in equity is also recognized in equity and not in the statement of
income.
Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off current tax assets against
current tax liabilities and deferred taxes relate to the same taxable entity and the same taxation authority.
Earnings per Share
Basic earnings per share (EPS) is computed by dividing net income for the year by the weighted average number of common shares
outstanding during the year after giving retroactive effect to stock splits, stock dividends declared and stock rights exercised during
the year, if any.
The Parent Company has no outstanding dilutive potential common shares.
Dividends on Common Shares
Dividends on common shares are recognized as a liability and deducted from equity when approved by the respective shareholders
of the Parent Company and its subsidiaries. Dividends declared during the year that are approved after the balance sheet date are
dealt with as an event after the balance sheet date.
Segment Reporting
The Group’s operating businesses are organized and managed separately according to the nature of the products and services
provided, with each segment representing a strategic business unit that offers different products and serves different markets.
Financial information on business segments is presented in Note 30. The Group’s revenue producing assets are located in the
Philippines (i.e., one geographical location). Therefore, geographical segment information is no longer presented.
Fiduciary Activities
Assets and income arising from fiduciary activities together with related undertakings to return such assets to customers are
excluded from the financial statements where the Parent Company acts in a fiduciary capacity such as nominee, trustee or agent.
Events after the Reporting Period
Post-year-end events that provide additional information about the Group’s position at the balance sheet date (adjusting event) are
reflected in the financial statements. Post-year-end events that are not adjusting events, if any, are disclosed when material to the
financial statements.
Future Changes in Accounting Policies
The Group will adopt the Standards and Interpretations enumerated below when these become effective. Except as otherwise
indicated, the Group does not expect the adoption of these new and amended PFRS and Philippine Interpretations to have significant
impact on its financial statements.
Effective 2014
Investment Entities (Amendments to PFRS 10, PFRS 12 and PAS 27)
These amendments are effective for annual periods beginning on or after January 1, 2014. They provide an exception to the
consolidation requirement for entities that meet the definition of an investment entity under PFRS 10. The exception to consolidation
requires investment entities to account for subsidiaries at fair value through profit or loss. It is not expected that this amendment
would be relevant to the Group since none of the entities in the Group would qualify to be an investment entity under PFRS 10.
92
PAS 32, Financial Instruments: Presentation - Offsetting Financial Assets and Financial Liabilities (Amendments)
The amendments clarify the meaning of “currently has a legally enforceable right to set-off” and also clarify the application of the
PAS 32 offsetting criteria to settlement systems (such as central clearing house systems) which apply gross settlement mechanisms
that are not simultaneous. The amendments affect presentation only and have no impact on the Group’s financial position or
performance. The amendments to PAS 32 are to be retrospectively applied for annual periods beginning on or after January 1, 2014.
PAS 36, Impairment of Assets - Recoverable Amount Disclosures for Non-Financial Assets (Amendments)
These amendments remove the unintended consequences of PFRS 13 on the disclosures required under PAS 36. In addition, these
amendments require disclosure of the recoverable amounts for the assets or cash-generating units (CGUs) for which impairment
loss has been recognized or reversed during the period. These amendments are effective retrospectively for annual periods
beginning on or after January 1, 2014 with earlier application permitted, provided PFRS 13 is also applied. The amendments affect
disclosures only and have no impact on the Group’s financial position or performance.
PAS 39, Financial Instruments: Recognition and Measurement - Novation of Derivatives and Continuation of Hedge Accounting
(Amendments)
These amendments provide relief from discontinuing hedge accounting when novation of a derivative designated as a hedging
instrument meets certain criteria. These amendments are effective for annual periods beginning on or after January 1, 2014.
Philippine Interpretation IFRIC 21, Levies
IFRIC 21 clarifies that an entity recognizes a liability for a levy when the activity that triggers payment, as identified by the relevant
legislation, occurs. For a levy that is triggered upon reaching a minimum threshold, the interpretation clarifies that no liability should
be anticipated before the specified minimum threshold is reached. IFRIC 21 is effective for annual periods beginning on or after
January 1, 2014. The Group does not expect that IFRIC 21 will have material financial impact in future financial statements.
Effective 2015 onwards
PAS 19, Employee Benefits - Defined Benefit Plans: Employee Contributions (Amendments)
The amendments apply to contributions from employees or third parties to defined benefit plans. Contributions that are set out in
the formal terms of the plan shall be accounted for as reductions to current service costs if they are linked to service or as part of
the remeasurements of the net defined benefit asset or liability if they are not linked to service. Contributions that are discretionary
shall be accounted for as reductions of current service cost upon payment of these contributions to the plans. The amendments to
PAS 19 are to be applied retrospectively. The Group does not expect that the Amendments to PAS 19 will have material financial
impact on the financial statements.
PFRS 9, Financial Instruments: Classification and Measurement
PFRS 9, as issued, reflects the first phase on the replacement of PAS 39 and applies to the classification and measurement of
financial assets and liabilities as defined in PAS 39, Financial Instruments: Recognition and Measurement. Work on impairment
of financial instruments and hedge accounting is still ongoing, with a view to replacing PAS 39 in its entirety. PFRS 9 requires all
financial assets to be measured at fair value at initial recognition. A debt financial asset may, if the fair value option (FVO) is not
invoked, be subsequently measured at amortized cost if it is held within a business model that has the objective to hold the assets
to collect the contractual cash flows and its contractual terms give rise, on specified dates, to cash flows that are solely payments
of principal and interest on the principal outstanding. All other debt instruments are subsequently measured at fair value through
profit or loss. All equity financial assets are measured at fair value either through OCI or profit or loss. Equity financial assets held for
trading must be measured at fair value through profit or loss. For FVO liabilities, the amount of change in the fair value of a liability
that is attributable to changes in credit risk must be presented in OCI.
The remainder of the change in fair value is presented in profit or loss, unless presentation of the fair value change in respect of
the liability’s credit risk in OCI would create or enlarge an accounting mismatch in profit or loss. All other PAS 39 classification
and measurement requirements for financial liabilities have been carried forward into PFRS 9, including the embedded derivative
separation rules and the criteria for using the FVO. The adoption of the first phase of PFRS 9 will have an effect on the classification
and measurement of the Group’s financial assets, but will potentially have no impact on the classification and measurement of
financial liabilities.
PFRS 9 currently has no mandatory effective date. PFRS 9 may be applied before the completion of the limited amendments to the
classification and measurement model and impairment methodology.
An evaluation was conducted to determine the impact of early adoption of PFRS and the accounts affected are ‘Available-for-sale
investments’ and ‘Loans and receivables’. As at December 31, 2013, the Group opted not to early adopt PFRS 9.
Philippine Interpretation IFRIC 15, Agreement for Construction of Real Estate
This interpretation covers accounting for revenue and associated expenses by entities that undertake the construction of real estate
directly or through subcontractors. The SEC and the Financial Reporting Standards Council have deferred the effectivity of this
interpretation until the final Revenue standard is issued by the International Accounting Standards Board and an evaluation of the
requirements of the final Revenue standard against the practices of the Philippine real estate industry is completed. Adoption of the
interpretation when it becomes effective will not have any impact on the financial statements of the Group.
Annual Report 2013
93
NOTES TO FINANCIAL STATEMENTS
Annual Improvements to PFRSs (2010-2012 cycle)
The Annual Improvements to PFRSs (2010-2012 cycle) contain non-urgent but necessary amendments to the following standards:
PFRS 2, Share-based Payment - Definition of Vesting Condition
The amendment revised the definitions of vesting condition and market condition and added the definitions of performance condition
and service condition to clarify various issues. This amendment shall be prospectively applied to share-based payment transactions
for which the grant date is on or after July 1, 2014. This amendment does not apply to the Group as it has no share-based payments.
PFRS 3, Business Combinations - Accounting for Contingent Consideration in a Business Combination
The amendment clarifies that a contingent consideration that meets the definition of a financial instrument should be classified as a
financial liability or as equity in accordance with PAS 32.
Contingent consideration that is not classified as equity is subsequently measured at fair value through profit or loss whether or
not it falls within the scope of PFRS 9 (or PAS 39, if PFRS 9 is not yet adopted). The amendment shall be prospectively applied to
business combinations for which the acquisition date is on or after July 1, 2014. The Group shall consider this amendment for future
business combinations.
PFRS 8, Operating Segments - Aggregation of Operating Segments and Reconciliation of the Total of the Reportable Segments’
Assets to the Entity’s Assets
The amendments require entities to disclose the judgment made by management in aggregating two or more operating segments.
This disclosure should include a brief description of the operating segments that have been aggregated in this way and the economic
indicators that have been assessed in determining that the aggregated operating segments share similar economic characteristics.
The amendments also clarify that an entity shall provide reconciliations of the total of the reportable segments’ assets to the entity’s
assets if such amounts are regularly provided to the chief operating decision maker. These amendments are applied retrospectively.
The amendments affect disclosures only and have no impact on the Group’s financial position or performance.
PFRS 13, Fair Value Measurement - Short-term Receivables and Payables
The amendment clarifies that short-term receivables and payables with no stated interest rates can be held at invoice amounts when
the effect of discounting is immaterial.
PAS 16, Property, Plant and Equipment - Revaluation Method - Proportionate Restatement of Accumulated Depreciation
The amendment clarifies that, upon revaluation of an item of property, plant and equipment, the carrying amount of the asset shall
be adjusted to the revalued amount, and the asset shall be treated in one of the following ways:
a.
b.
The gross carrying amount is adjusted in a manner that is consistent with the revaluation of the carrying amount of the asset.
The accumulated depreciation at the date of revaluation is adjusted to equal the difference between the gross carrying amount
and the carrying amount of the asset after taking into account any accumulated impairment losses.
The accumulated depreciation is eliminated against the gross carrying amount of the asset.
The amendment shall apply to all revaluations recognized in annual periods beginning on or after the date of initial application of this
amendment and in the immediately preceding annual period. The Group does not expect that the Improvements to PAS 16 will have
material financial impact on the financial statements.
PAS 24, Related Party Disclosures - Key Management Personnel
The amendments clarify that an entity is a related party of the reporting entity if the said entity, or any member of a group for which
it is a part of, provides key management personnel services to the reporting entity or to the parent company of the reporting entity.
The amendments also clarify that a reporting entity that obtains management personnel services from another entity (also referred
to as management entity) is not required to disclose the compensation paid or payable by the management entity to its employees
or directors. The reporting entity is required to disclose the amounts incurred for the key management personnel services provided
by a separate management entity. The amendments are applied retrospectively. The amendments affect disclosures only and have
no impact on the Group’s financial position or performance.
PAS 38, Intangible Assets - Revaluation Method - Proportionate Restatement of Accumulated Amortization
The amendments clarify that, upon revaluation of an intangible asset, the carrying amount of the asset shall be adjusted to the
revalued amount, and the asset shall be treated in one of the following ways:
a.
b.
The gross carrying amount is adjusted in a manner that is consistent with the revaluation of the carrying amount of the asset.
The accumulated amortization at the date of revaluation is adjusted to equal the difference between the gross carrying amount
and the carrying amount of the asset after taking into account any accumulated impairment losses.
The accumulated amortization is eliminated against the gross carrying amount of the asset.
The amendments also clarify that the amount of the adjustment of the accumulated amortization should form part of the increase
or decrease in the carrying amount accounted for in accordance with the Standard.
The amendments shall apply to all revaluations recognized in annual periods beginning on or after the date of initial application of
this amendment and in the immediately preceding annual period. The amendments have no impact on the Group’s financial position
or performance.
94
Annual Improvements to PFRSs (2011-2013 cycle)
The Annual Improvements to PFRSs (2011-2013 cycle) contain non-urgent but necessary amendments to the following standards:
PFRS 1, First-time Adoption of Philippine Financial Reporting Standards - Meaning of ‘Effective PFRSs’
The amendment clarifies that an entity may choose to apply either a current standard or a new standard that is not yet mandatory,
but that permits early application, provided either standard is applied consistently throughout the periods presented in the entity’s
first PFRS financial statements. This amendment is not applicable to the Group as it is not a first-time adopter of PFRS.
PFRS 3, Business Combinations - Scope Exceptions for Joint Arrangements
The amendment clarifies that PFRS 3 does not apply to the accounting for the formation of a joint arrangement in the financial
statements of the joint arrangement itself. The amendment is applied prospectively.
PFRS 13, Fair Value Measurement - Portfolio Exception
The amendment clarifies that the portfolio exception in PFRS 13 can be applied to financial assets, financial liabilities and other
contracts. The amendment is applied prospectively. The amendment has no significant impact on the Group’s financial position or
performance.
PAS 40, Investment Property
The amendment clarifies the interrelationship between PFRS 3 and PAS 40 when classifying property as investment property or
owner-occupied property. The amendment stated that judgment is needed when determining whether the acquisition of investment
property is the acquisition of an asset or a group of assets or a business combination within the scope of PFRS 3. This judgment
is based on the guidance of PFRS 3. This amendment is applied prospectively. The amendment has no significant impact on the
Group’s financial position or performance.
3.
SIGNIFICANT ACCOUNTING JUDGMENTS AND ESTIMATES
The preparation of the financial statements in accordance with PFRS requires the Group to make judgments and estimates that
affect the reported amounts of assets, liabilities, income and expenses and disclosure of contingent assets and contingent liabilities.
Future events may occur which will cause the judgments and assumptions used in arriving at the estimates to change. The effects
of any change in judgments and estimates are reflected in the financial statements as they become reasonably determinable.
Judgments and estimates are continually evaluated and are based on historical experience and other factors, including expectations
of future events that are believed to be reasonable under the circumstances.
Judgments
a. Assessment of control over the entities for consolidation
The Group has majority owned subsidiaries discussed in Note 2. Management concluded that the Group controls these wholly
owned and majority owned subsidiaries through its voting rights and, therefore, consolidates these entities in its consolidated
financial statements.
Management also assessed that it has not yet obtained control over PDB as of December 31, 2013 because the substantive
closing conditions pursuant to the SPA with the PDB Shareholders have not yet been satisfied as at year-end.
b.
Assessment of significant influence over an associate
Management concluded that the Parent Company has significant influence over an associate even though it holds less than
20.00% of the voting rights because of the arrangement entered into with the associate’s majority owner that grants the
Parent Company with a representation in the associate’s BOD which allows it to participate in the policy-making process of the
associate (see Note 10).
c.
Functional currency
PAS 21, The Effects of Changes in Foreign Exchange Rates, requires management to use its judgment in determining the
entity’s functional currency such that it most faithfully represents the economic effects of the underlying transactions, events
and conditions that are relevant to the entity. In making this judgment, the Group considers the following:
•
•
•
d.
the currency that mainly influences sales prices for financial instruments and services (this will often be the currency in
which sales prices for its financial instruments and services are denominated and settled);
the currency in which funds from financing activities are generated; and
the currency in which receipts from operating activities are usually retained.
Fair value of financial instruments
The Group classifies financial assets by evaluating, among others, whether the asset is quoted or not in an active market.
Included in the evaluation on whether a financial asset is quoted in an active market is the determination of whether quoted
prices are readily and regularly available, and whether those prices represent actual and regularly occurring market transactions
conducted on an arm’s length basis.
Where the fair values of financial assets and financial liabilities recorded on the balance sheet or disclosed in the notes cannot
be derived from active markets, they are determined using a variety of valuation techniques acceptable to the market as
alternative valuation approaches that include the use of mathematical models. The inputs to these models are taken from
observable markets where possible, but where this is not feasible, a degree of judgment is required in establishing fair values.
The judgments include considerations of liquidity and model inputs such as correlation and volatility for longer dated derivatives.
Annual Report 2013
95
NOTES TO FINANCIAL STATEMENTS
e.
HTM financial assets
The classification to HTM financial assets requires significant judgment. In making this judgment, the Group evaluates its
intention and ability to hold such investments to maturity. If the Group fails to keep these investments to maturity other than
in certain specific circumstances - for example, selling an insignificant amount close to maturity - it will be required to reclassify
the entire portfolio as part of AFS financial assets. The investments would therefore be measured at fair value and not at
amortized cost.
f.
Embedded derivatives
The Group assesses the existence of an embedded derivative when it first becomes a party to the contract and performs
reassessment if there is a change in the terms of the contract that significantly modifies the cash flows that would otherwise
be required.
An embedded derivative is separated from the host financial or nonfinancial contract and accounted for as a derivative if all of
the following conditions are met:
•
•
•
the economic characteristics and risks of the embedded derivative are not closely related to the economic characteristic
of the host contract;
a separate instrument with the same terms as the embedded derivative would meet the definition of a derivative; and
the hybrid or combined instrument is not recognized at FVPL.
The Group determines whether a modification to cash flows is significant by considering the extent to which the expected
future cash flows associated with the embedded derivative, the host contract or both have changed and whether the change
is significant relative to the previously expected cash flows on the contract.
Embedded derivatives that are bifurcated from the host contracts are accounted for as financial assets or liabilities at FVPL.
Changes in fair values of embedded derivatives are included in the statement of income. Derivatives are carried as assets
when the fair value is positive and as liabilities when the fair value is negative.
As of December 31, 2013, the Group’s investment in preferred shares contains embedded derivatives in the form of an optional
redemption feature. The embedded option together with the preferred shares have been designated by management as at
FVPL (Note 8).
g.
Operating leases
The Group has entered into commercial property leases on its investment property portfolio. The Group has determined based
on the evaluation of the terms and conditions of the arrangements (i.e., the lease does not transfer the ownership of the asset
to the lessee by the end of the lease term, the lessee has no option to purchase the asset at a price that is expected to be
sufficiently lower than the fair value at the date the option is exercisable and the lease term is not for the major part of the
asset’s economic life), that it retains all the significant risks and rewards of ownership of these properties which are leased out
under operating leases.
The Group has also entered into leases on premises it uses for its operations. The Group has determined, based on the
evaluation of the lease agreement, that all significant risks and rewards of ownership of the properties it leases are not
transferrable to the Group.
h.
Contingencies
The Group is currently involved in various legal proceedings. The estimate of the probable costs for the resolution of these
claims has been developed in consultation with outside counsel handling the Group’s defense in these matters and is based
upon an analysis of potential results. The Group currently does not believe that these proceedings will have a material adverse
effect on the financial statements. It is possible, however, that future results of operations could be materially affected by
changes in the estimates or in the effectiveness of the strategies relating to these proceedings.
Estimates
a. Going concern
The Group’s management has made an assessment of its ability to continue as a going concern and is satisfied that it has
the resources to continue in business for the foreseeable future. Furthermore, management is not aware of any material
uncertainties that may cast significant doubt upon the Group’s ability to continue as going concern. Therefore, the financial
statements continue to be prepared on a going concern basis.
b.
96
Fair value of financial instruments
The fair values of financial instruments that are not quoted in active markets are determined by using valuation techniques.
Where valuation techniques (e.g., financial models) are used to determine fair values, they are validated and periodically
reviewed by qualified personnel independent of the area that created them. All financial models are certified before they
are used and are calibrated to ensure that outputs reflect actual data and comparative market prices. To the extent practical,
the financial models use only observable data, however, areas such as credit risk (both own and counterparty), volatilities and
correlations require management to make estimates. Changes in assumptions about these factors could affect reported fair
value of financial instruments (see Note 5).
c.
Credit losses on loans and receivables
The Group reviews its loans and receivables at each reporting date to assess whether an allowance for credit losses should be
recorded in the balance sheet and any changes thereto in the statement of income. In particular, judgment by management
is required in the estimation of the amount and timing of future cash flows when determining the level of allowance required.
Such estimates are based on assumptions about a number of factors. Actual results may also differ, resulting in future changes
to the allowance.
In addition to specific allowance against individually significant loans and receivables, the Group also makes a collective
impairment assessment on exposures which, although not specifically identified as requiring a specific allowance, have a
greater risk of default than when originally granted. The resulting collective allowance is based on any deterioration in the
internal rating of the loan or investment since it was granted or acquired. These internal ratings take into consideration factors
such as any deterioration in country risk, industry, and technological obsolescence, as well as identified structural weaknesses
or deterioration in cash flows.
The carrying values of loans and receivables and the related allowance for credit losses of the Group and the Parent Company
are disclosed in Notes 9 and 15.
d.
Impairment of AFS equity investments
The Group treats AFS equity investments as impaired when there has been a significant or prolonged decline in the fair
values below their costs or where other objective evidence of impairment exists. The determination of what is ‘significant’ or
‘prolonged’ requires judgment. The Group treats ‘significant’ generally as 20.00% or more of the original cost of investment,
and ‘prolonged’ as greater than 12 months. In addition, the Group evaluates other factors, including normal volatility in share
price for quoted equities and future cash flows and discount factors for unquoted equities.
The carrying values of AFS equity investments and the related allowance for impairment of the Group and the Parent Company
are disclosed in Notes 8 and 15.
e.
Impairment of HTM and AFS debt investments
The Group determines that AFS debt investments are impaired based on the same criteria as loans and receivables.
As of December 31, 2013 and 2012, HTM and AFS debt investments were unimpaired. The carrying values of HTM and AFS
debt investments are disclosed in Note 8.
f.
Estimated useful lives of bank premises, furniture, fixture and equipment, and investment properties
The Group estimates the useful lives of its bank premises, furniture, fixture and equipment, and investment properties. These
estimates are reviewed periodically to ensure that the period of depreciation and amortization are consistent with the expected
pattern of economic benefits from the items of bank premises, furniture, fixture and equipment, and investment properties.
A reduction in the estimated useful lives of bank premises, furniture, fixture and equipment, and investment properties would
increase the recorded depreciation and amortization expense and decrease noncurrent assets. The estimated useful lives of
bank premises, furniture, fixture and equipment, and investment properties are disclosed in Note 2.
g.
Impairment on investments in subsidiaries and associates and other nonfinancial assets
The Parent Company assesses impairment on its investments in subsidiaries and associate whenever events or changes in
circumstances indicate that the carrying amount of the asset may not be recoverable. Among others, the factors that the
Parent Company considers important which could trigger an impairment review on its investments in subsidiaries and associate
include the following:
•
•
•
deteriorating or poor financial condition;
recurring net losses; and
significant changes on the technological, market, economic, or legal environment which had an adverse effect on the
subsidiary or associate during the period or in the near future, in which the subsidiary operates.
The Group also assesses impairment on its nonfinancial assets (e.g., investment properties and bank premises, furniture,
fixtures and equipment) and considers the following impairment indicators:
•
•
•
significant underperformance relative to expected historical or projected future operating results;
significant changes in the manner of use of the acquired assets or the strategy for overall business; and
significant negative industry or economic trends.
An impairment loss is recognized whenever the carrying amount of an asset exceeds its recoverable amount. Except for
investment properties where recoverable amount is determined based on fair value less cost to sell, the recoverable amount
of all other nonfinancial assets is determined based on the asset’s value in use computation which considers the present value
of estimated future cash flows expected to be generated from the continued use of the asset. The Group is required to make
estimates and assumptions that can materially affect the carrying amount of the asset being assessed.
The carrying values of the Group’s investments in subsidiaries and associate and other nonfinancial assets are disclosed in
Notes 10, 11 and 12, respectively.
Annual Report 2013
97
NOTES TO FINANCIAL STATEMENTS
h.
Impairment of goodwill and branch licenses
The Group conducts an annual review for any impairment in the value of goodwill and branch licenses. Goodwill and branch
licenses are written down for impairment where the net present value of the forecasted future cash flows from the business is
insufficient to support their carrying value. The Group estimates the discount rate used for the computation of the net present
value by reference to industry cost of capital. Future cash flows from the business are estimated based on the theoretical
annual income of the CGUs. Average growth rate is derived from the average increase in annual income of the CGUs during the
last 5 years. The recoverable amount of the CGU is determined based on a value-in-use calculation using cash flow projections
from financial budgets approved by senior management covering a five-year period. The pre-tax discount rate applied to cash
flow projections is 12.05% and 11.89% in 2013 and 2012, respectively. Key assumptions in value-in-use calculation of CGUs
are most sensitive to discount rates and growth rates used to project cash flows.
The carrying values of the Group’s goodwill and branch licenses are disclosed in Notes 10 and 13.
i.
Net plan assets and retirement expense
The determination of the Group’s net plan assets and annual retirement expense is dependent on the selection of certain
assumptions used in calculating such amounts. These assumptions include, among others, discount rates, and salary increase.
The assumed discount rates were determined using the market yields on Philippine government bonds with terms consistent
with the expected employee benefit payout as of the balance sheets date. Refer to Note 23 for the details on the assumptions
used in the calculation.
The present value of the retirement obligation and fair value of plan assets are disclosed in Note 23.
j.
Recognition of deferred income taxes
Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that taxable profit will be available
against which the losses can be utilized. Management discretion is required to determine the amount of deferred tax assets
that can be recognized, based on the forecasted level of future taxable profits and the related future tax planning strategies.
The Group believes it will be able to generate sufficient taxable income in the future to utilize its recorded deferred tax
assets. Taxable income is sourced mainly from interest income from lending activities and earnings from service charge, fees,
commissions and trust activities.
The recognized and unrecognized deferred tax assets are disclosed in Note 26.
4.
FINANCIAL INSTRUMENT CATEGORIES
The following table presents the total carrying amount of the Group’s and Parent Company’s financial instruments per category:
Consolidated
P7,281,640,616
10,421,423,053
44,349,256,775
12,150,546,829
P6,160,371,861
12,166,678,192
41,571,441,141
12,693,233,413
Parent Company
2013
2012
P7,035,251,105
10,421,423,053
43,196,190,593
12,122,589,213
P5,996,785,687
12,166,678,192
40,676,728,810
12,665,325,779
78,968,132,522
40,659,682,959
75,678,312,048
23,885,538,128
4,527,376,998
23,215,575,357
–
446,000,000
–
220,540,902,915
190,100,306,325
210,762,269,411
1,899,408,789
1,834,766,400
1,801,594,853
2,605,330,259
3,161,061,297
2,355,729,934
240,729,193,979
327,899,312,613
313,813,481,603
Total financial assets
P402,102,179,886
P313,320,918,586
P386,588,935,567
* Other assets exclude net plan assets and creditable withholding taxes (see Note 14).
37,597,455,540
4,289,620,222
–
185,361,754,668
1,789,455,915
2,851,211,793
231,889,498,138
P303,395,016,606
Financial assets
Cash and other cash items
Financial assets at FVPL
AFS financial assets
HTM financial assets
Loans and receivables:
Due from BSP
Due from other banks
SPURA
Loans and receivables - net
Accrued interest receivable
Other assets*
98
2013
2012
(As restated Note 10)
Consolidated
Financial liabilities
Other financial liabilities:
Deposit liabilities
Bills payable
Manager’s checks
Accrued interest and
other expenses*
Other liabilities**
2013
2012
(As restated Note 10)
P354,268,202,680
8,299,194,525
859,892,248
548,272,803
3,054,871,530
367,030,433,786
Parent Company
2013
2012
P271,977,239,870
3,526,807,973
801,208,565
P339,831,853,487
8,299,194,525
704,488,259
P263,074,109,357
3,526,807,973
736,088,844
846,790,299
2,735,017,951
279,887,064,658
498,286,297
2,722,643,351
352,056,465,919
781,450,883
2,489,648,909
270,608,105,966
Financial liabilities at FVPL:
Derivative liabilities
154,808,366
570,575,771
154,808,366
570,575,771
Total financial liabilities
P367,185,242,152
P280,457,640,429
P352,211,274,285
P271,178,681,737
* Accrued interest and other expenses exclude accrued payable for employee benefits, accrued taxes and other licenses, and
accrued lease payable.
** Other liabilities exclude withholding taxes payable and retirement liabilities (see Note 19).
5.
FAIR VALUE MEASUREMENT
The Group has assets and liabilities in the consolidated balance sheets that are measured at fair value on a recurring and nonrecurring basis after initial recognition. Recurring fair value measurements are those that another PFRS requires or permits to
be recognized in the consolidated balance sheet at the end of each financial reporting period. These include financial assets and
liabilities at FVPL and AFS financial assets. Non-recurring fair value measurements are those that another PFRS requires or permits
to be recognized in the consolidated balance sheet in particular circumstances. For example, PFRS 5 requires an entity to measure
an asset held for sale at the lower of its carrying amount and fair value less costs to sell. Since the asset’s fair value less costs to
sell is only recognized in the balance sheet when it is lower than its carrying amount, that fair value measurement is non-recurring.
As of December 31, 2013 and 2012, except for the following financial instruments, the carrying values of the Group’s financial assets
and liabilities as reflected in the balance sheets and related notes approximate their respective fair values:
Financial Assets
HTM financial assets:
Government bonds
Private bonds
Loans and receivables:
Corporate and commercial loans
Consumer loans
Trade-related loans
Others
Sales contracts receivable
Financial Liabilities
Deposit liabilities
Bills payable
Financial Assets
HTM financial assets:
Government bonds
Private bonds
Loans and receivables:
Corporate and commercial loans
Consumer loans
Trade-related loans
Others
Sales contracts receivable
Financial Liabilities
Deposit liabilities
Bills payable
Consolidated
2013
Carrying Value
Fair Value
P11,800,868,261
349,678,568
P13,777,054,471
403,498,491
P12,372,496,675
320,736,738
P15,063,146,651
392,250,692
180,258,652,458
29,139,864,050
11,042,645,985
99,740,422
474,299,468
181,699,876,526
31,178,193,986
11,447,877,620
103,584,257
488,640,974
157,348,768,095
21,887,420,910
10,762,158,498
101,958,822
481,866,255
162,082,056,112
23,325,194,973
11,396,294,324
103,218,919
508,129,730
354,268,202,680
8,299,194,525
349,841,938,319
8,086,926,720
271,977,239,870
3,526,807,973
265,067,286,621
3,795,770,851
2012 (As restated - Note 10)
Carrying Value
Fair Value
Parent Company
2013
Carrying Value
Fair Value
2012
Carrying Value
Fair Value
P11,772,910,645
349,678,568
P13,749,096,855
403,498,491
P12,344,589,041
320,736,738
P15,032,793,188
391,250,692
176,863,844,062
22,765,855,816
11,042,645,985
89,923,548
403,784,273
177,900,721,066
23,148,845,237
11,447,877,620
93,496,275
415,948,066
155,255,349,771
19,251,841,266
10,762,158,498
92,405,133
394,826,052
159,914,081,512
21,136,973,623
11,396,294,324
93,676,338
411,364,781
339,831,853,487
8,299,194,525
334,990,850,792
8,086,926,720
263,074,109,357
3,526,807,973
256,169,281,721
3,795,770,851
Annual Report 2013
99
NOTES TO FINANCIAL STATEMENTS
The methods and assumptions used by the Group and Parent Company in estimating the fair values of the financial instruments
follow:
Cash and other cash items, due from BSP and other banks, SPURA and accrued interest receivable - The carrying amounts
approximate their fair values in view of the relatively short-term maturities of these instruments.
Debt securities - Fair values are generally based on quoted market prices. If the market prices are not readily available, fair values
are estimated using either values obtained from independent parties offering pricing services or adjusted quoted market prices of
comparable investments or using the discounted cash flow methodology.
Equity securities - For publicly traded equity securities, fair values are based on quoted prices published in the Philippine equity
markets. For unquoted equity securities for which no reliable basis for fair value measurement is available, these are carried at cost
net of impairment, if any.
Loans and receivables and sales contract receivable (SCR) included in other assets - Fair values of loans and receivables and SCR
are estimated using the discounted cash flow methodology, where future cash flows are discounted using the Group’s current
incremental lending rates for similar types of loans and receivables.
Accounts receivable, returned checks and other cash items (RCOCI) and other financial assets included in other assets - Quoted
market prices are not readily available for these assets. These are reported at cost and are not significant in relation to the Group’s
total portfolio of securities.
Derivative instruments (included under FVPL) - Fair values are estimated based on quoted market prices provided by independent
parties or accepted valuation models (either based on discounted cash flow techniques or option pricing models, as applicable).
Derivative assets and liabilities - Fair values are calculated by reference to the prevailing interest differential and spot exchange rate
as of the balance sheet date, taking into account the remaining term to maturity of the derivative assets and liabilities.
Bifurcated embedded derivatives (included under Derivative assets) - Fair values are estimated based on a valuation model from
Bloomberg using inputs provided by counterparty banks.
Deposit liabilities (time, demand and savings deposits) - Fair values of time deposits are estimated using the discounted cash flow
methodology, where future cash flows are discounted using the Group’s current incremental borrowing rates for similar borrowings
and with maturities consistent with those remaining for the liability being valued. For demand and savings deposits, carrying
amounts approximate fair values considering that these are currently due and demandable.
Bills payable - Fair values are estimated using the discounted cash flow methodology, where future cash flows are discounted using
the current incremental borrowing rates for similar borrowings and with maturities consistent with those remaining for the liability
being valued.
Manager’s checks and accrued interest and other expenses - Carrying amounts approximate fair values due to the short-term nature
of the accounts.
Other liabilities - Quoted market prices are not readily available for these liabilities. These are reported at cost and are not significant
in relation to the Group’s total portfolio.
Fair Value Hierarchy
The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique:
Level 1: quoted prices in active markets for identical assets or liabilities;
Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly (as prices) or
indirectly (derived from prices); and
Level 3: inputs that are not based on observable market data or unobservable inputs.
100
As of December 31, 2013 and 2012, the fair value hierarchy of the Group’s and Parent Company’s assets and liabilities are presented
below:
Recurring fair value measurements(a)
Financial assets at FVPL (Note 8)
Held-for-trading:
Government bonds
Treasury notes
Private bonds and commercial papers
Financial assets designated at FVPL
Derivative assets
AFS financial assets (Note 8)
Government bonds
Private bonds and commercial papers
Quoted equity shares
Financial liabilities at FVPL
Derivative liabilities
Fair values of assets carried at
amortized cost/cost(a)
HTM financial assets
Government bonds
Private bonds
Loans and receivables
Corporate and commercial loans
Consumer loans
Trade-related loans
Others
Sales contracts receivable
Investment properties(b)
Land
Buildings and improvements
Fair values of liabilities carried at
amortized cost(a)
Deposit liabilities
Bills payable
(a)
(b)
valued as of December 31, 2013
valued at various dates in 2013
Level 1
Financial Liabilities
Financial liabilities at FVPL
Derivative liabilities
Level 3
Total
P2,289,626,987
651,643,244
893,905,336
4,856,408,376
−
P−
1,234,324,938
−
−
495,514,172
P−
−
−
−
−
P2,289,626,987
1,885,968,182
893,905,336
4,856,408,376
495,514,172
2,473,338,078
3,555,275,367
150,459,385
14,870,656,773
37,161,774,934
979,626,875
–
39,871,240,919
−
−
−
−
39,635,113,012
4,534,902,242
150,459,385
54,741,897,692
−
−
154,808,366
154,808,366
−
−
154,808,366
154,808,366
13,777,054,471
403,498,491
−
−
−
−
13,777,054,471
403,498,491
−
−
−
−
−
−
−
−
−
−
181,699,876,526
31,178,193,986
11,447,877,620
103,584,257
488,640,974
181,699,876,526
31,178,193,986
11,447,877,620
103,584,257
488,640,974
−
−
14,180,552,962
−
−
−
5,083,109,886
1,475,952,133
231,477,235,382
5,083,109,886
1,475,952,133
245,657,788,344
−
−
−
−
−
−
349,841,938,319
8,086,926,720
357,928,865,039
349,841,938,319
8,086,926,720
357,928,865,039
Consolidated
2012 (As restated - Note 10)
Level 2
Level 3
Total
Level 1
Financial Assets
Financial assets at FVPL (Note 8)
Held-for-trading:
Treasury notes
Government bonds
Treasury bills
Private bonds and commercial papers
Financial assets designated at FVPL
Derivative assets
AFS financial assets (Note 8)
Government bonds
Credit-linked notes (host)
Private bonds and commercial papers
Quoted equity shares
Consolidated
2013
Level 2
P3,361,146,996
2,486,034,631
107,585
484,724,705
4,999,995,000
–
P582,329,443
–
–
–
–
252,339,832
P–
–
–
–
–
–
P3,943,476,439
2,486,034,631
107,585
484,724,705
4,999,995,000
252,339,832
1,330,816,977
–
432,554,427
121,751,295
13,217,131,616
34,330,455,570
4,130,600,504
1,198,372,269
–
40,494,097,618
–
–
–
–
–
35,661,272,547
4,130,600,504
1,630,926,696
121,751,295
53,711,229,234
–
–
570,575,771
570,575,771
–
–
570,575,771
570,575,771
Annual Report 2013
101
NOTES TO FINANCIAL STATEMENTS
Recurring fair value measurements(a)
Financial assets at FVPL (Note 8)
Held-for-trading:
Government bonds
Treasury notes
Private bonds and commercial papers
Financial assets designated at FVPL
Derivative assets
AFS financial assets (Note 8):
Government bonds
Private bonds and commercial papers
Quoted equity shares
Financial liabilities at FVPL
Derivative liabilities
Fair values of assets carried at
amortized cost/cost(a)
Held-to-maturity financial assets
Government bonds
Private bonds
Loans and receivables
Corporate and commercial loans
Consumer loans
Trade-related loans
Others
Sales contracts receivable
Investment properties(b)
Land
Buildings and improvements
Fair values of liabilities carried at
amortized cost
Deposit liabilities
Bills payable
(a)
(b)
valued as of December 31, 2012
valued at various dates in 2012
Level 1
Financial Liabilities
Financial liabilities at FVPL
Derivative liabilities
Level 3
Total
P2,289,626,987
651,643,244
893,905,336
4,856,408,376
–
P−
1,234,324,938
–
–
495,514,172
P−
−
–
–
–
P2,289,626,987
1,885,968,182
893,905,336
4,856,408,376
495,514,172
1,497,096,370
3,394,861,168
143,418,541
13,726,960,022
37,161,774,934
979,626,875
–
39,871,240,919
–
–
–
–
38,658,871,304
4,374,488,043
143,418,541
53,598,200,941
−
−
154,808,366
154,808,366
–
–
154,808,366
154,808,366
13,749,096,855
403,498,491
–
–
–
–
13,749,096,855
403,498,491
–
–
–
–
–
–
–
–
–
–
177,900,721,066
23,148,845,237
11,447,877,620
93,496,275
415,948,066
177,900,721,066
23,148,845,237
11,447,877,620
93,496,275
415,948,066
–
–
14,152,595,346
–
–
–
4,894,397,892
1,288,677,139
219,189,963,295
4,894,397,892
1,288,677,139
233,342,558,641
–
–
–
–
–
–
334,990,850,792
8,086,926,720
343,077,777,512
334,990,850,792
8,086,926,720
343,077,777,512
Level 1
Financial Assets
Financial assets at FVPL
Held-for-trading (Note 8):
Treasury notes
Government bonds
Treasury bills
Private bonds and commercial papers
Derivative assets
Financial assets designated at FVPL
AFS financial assets
Government bonds
Credit-linked notes (host)
Private bonds and commercial papers
Quoted equity shares
Parent Company
2013
Level 2
Parent Company
2012
Level 2
Level 3
Total
P3,361,146,996
2,486,034,631
107,585
484,724,705
–
4,999,995,000
P582,329,443
–
–
–
252,339,832
–
P–
–
–
–
–
–
P3,943,476,439
2,486,034,631
107,585
484,724,705
252,339,832
4,999,995,000
590,638,611
–
286,588,166
120,660,984
12,329,896,678
34,330,455,571
4,130,600,504
1,198,372,269
–
40,494,097,619
–
–
–
–
–
34,921,094,182
4,130,600,504
1,484,960,435
120,660,984
52,823,994,297
–
–
570,575,771
570,575,771
–
–
570,575,771
570,575,771
There were no transfers between Level 1 and Level 2 fair value measurements and no transfers into and out of Level 3 fair value
measurements in 2013 and 2012.
102
The inputs used in the fair value measurement based on Level 2 are as follows:
Government securities - interpolated rates based on market rates of benchmark securities as of reporting date.
Derivative assets and liabilities - fair values are calculated by reference to the prevailing interest differential and spot exchange
rate as of the balance sheet date, taking into account the remaining term to maturity of the derivative assets and liabilities.
Inputs used in estimating fair values of financial instruments carried at cost and categorized under level 3 include risk-free rates and
applicable risk premium.
The fair values of the Group’s and Parent Company’s investment properties have been determined by the appraisal method by
independent external and in-house appraisers based on highest and best use of property being appraised. Valuations were derived
on the basis of recent sales of similar properties in the same areas as the investment properties and taking into account the
economic conditions prevailing at the time the valuations were made and comparability of similar properties sold with the property
being valued.
The table below summarizes the valuation techniques used and the significant unobservable inputs valuation for each type of
investment properties held by the Group and the Parent Company:
Land
Valuation Techniques
Market Data Approach
Land and Building
Market Data Approach and Cost Approach
Significant Unobservable Inputs
Price per square meter, size, location, shape, time
element and corner influence
Reproduction Cost New
Description of the valuation techniques and significant unobservable inputs used in the valuation of the Group and the Parent
Company’s investment properties are as follows:
Valuation Techniques
Market Data Approach
Cost Approach
A process of comparing the subject property being appraised to similar comparable properties
recently sold or being offered for sale.
It is an estimate of the investment required to duplicate the property in its present condition. It is
reached by estimating the value of the building “as if new” and then deducting the depreciated
cost. Fundamental to the Cost Approach is the estimate of Reproduction Cost New of the
improvements.
Significant Unobservable Inputs
Reproduction Cost New
The cost to create a virtual replica of the existing structure, employing the same design and similar
building materials.
Size
Size of lot in terms of area. Evaluate if the lot size of property or comparable conforms to the
average cut of the lots in the area and estimate the impact of lot size differences on land value.
Shape
Particular form or configuration of the lot. A highly irregular shape limits the usable area whereas
an ideal lot configuration maximizes the usable area of the lot which is associated in designing an
improvement which conforms with the highest and best use of the property.
Location
Location of comparative properties whether on a Main Road, or secondary road. Road width could
also be a consideration if data is available. As a rule, properties located along a Main Road are
superior to properties located along a secondary road.
Time Element
“An adjustment for market conditions is made if general property values have appreciated or
depreciated since the transaction dates due to inflation or deflation or a change in investors’
perceptions of the market over time”. In which case, the current data is superior to historic data.
Discount
Generally, asking prices in ads posted for sale are negotiable. Discount is the amount the seller
or developer is willing to deduct from the posted selling price if the transaction will be in cash or
equivalent.
Corner influence
Bounded by two (2) roads.
Annual Report 2013
103
NOTES TO FINANCIAL STATEMENTS
6.
FINANCIAL RISK MANAGEMENT OBJECTIVES AND POLICIES
The Group’s activities are principally related to the profitable use of financial instruments. Risks are inherent in these activities but
are managed by the Group through a rigorous, comprehensive and continuous process of identification, measurement, monitoring
and mitigation of these risks, partly through the effective use of risk and authority limits and thresholds, process controls and
monitoring, and independent controls. As reflected in its corporate actions and organizational improvements, the Group has placed
due importance on expanding and strengthening its risk management process and considers it as a vital component to the Group’s
continuing profitability and financial stability. Central to the Group’s risk management process is its adoption of a risk management
program intended to avoid unnecessary risks, manage and mitigate unavoidable risks and maximize returns from taking acceptable
risks necessary to sustain its business viability and good financial position in the market.
The key financial risks that the Group faces are: credit risk, market risk (i.e. interest rate risk, foreign currency risk and equity price
risk) and liquidity risk. The Group’s risk management objective is primarily focused on controlling and mitigating these risks. The
Parent Company and its subsidiaries manage their respective financial risks separately. The subsidiaries, particularly CBSI, have
their own risk management processes but are structured similar to that of the Parent Company. To a certain extent, the respective
risk management programs and objectives are the same across the Group. The gravity of the risks, the magnitude of the financial
instruments involved, and regulatory requirements are primary considerations to the scope and extent of the risk management
processes put in place for the subsidiaries.
Risk Management Structure
The BOD of the Parent Company is ultimately responsible for the oversight of the Parent Company’s risk management process. On
the other hand, the risk management processes of the subsidiaries are the separate responsibilities of their respective BODs. The
BOD of the Parent Company created a separate board-level independent committee with explicit authority and responsibility for
managing and monitoring risks.
The BOD has delegated to the Risk Management Committee (RMC) the implementation of the risk management process which
includes, among others, the development of various risk strategies and principles, control guidelines policies and procedures,
implementation of risk measurement tools, monitoring of key risk indicators, and the imposition and monitoring of risk limits and
thresholds. The RMC is composed of four members of the BOD.
The Risk Management Group (RMG) is the direct support of the RMC in the day-to-day risk management and the implementation of
the risk management strategies approved by the RMC. The implementation cuts across all departments of the Parent Company and
involves all of the Parent Company’s financial instruments, whether “on-books” or “off-books.” The RMG is likewise responsible
for monitoring the implementation of specific risk control procedures and enforcing compliance thereto. The RMG is also directly
involved in the day-to-day risk measurement and monitoring to make sure that the Parent Company, in its transactions and dealings,
engages only in acceptable and manageable financial risks. The RMG also ensures that risk measurements are accurately and
completely captured on a timely basis in the management reporting system of the Parent Company. The RMG regularly reports the
results of the risk measurements to the RMC. The RMG is headed by the Chief Risk Officer (CRO).
Apart from RMG, each business unit has created and put in place various process controls which ensure that all the external and
internal transactions and dealings of the unit are in compliance with the unit’s risk management objectives.
The Internal Audit Division also plays a crucial role in risk management primarily because it is independent of the business units
and reports exclusively to the Audit Committee which, in turn, is comprised of independent directors. The Internal Audit Division
focuses on ensuring that adequate controls are in place and on monitoring compliance to controls. The regular audit covers all
processes and controls, including those under the risk management framework handled by the RMG. The audit of these processes
and controls is undertaken at least annually. The audit results and exceptions, including recommendations for their resolution or
improvement, are discussed initially with the business units concerned before these are presented to the Audit Committee.
Risk Management Reporting
The CRO and other members of the RMG report to the RMC and are a resource to the Management Committee (ManCom) on a
monthly and a weekly basis, respectively. The CRO reports on key risk indicators and specific risk management issues that would
need resolution from top management. This is undertaken after the risk issues and key risk indicators have been discussed with
the business units concerned.
The key risk indicators were formulated on the basis of the financial risks faced by the Parent Company. The key risk indicators
contain information from all business units that provide measurements on the level of the risks taken by the Parent Company
in its products, transactions and financial structure. Among others, the report on key risk indicators includes information on the
Parent Company’s aggregate credit exposure, credit metric forecasts, hold limit exceptions, Value-at-Risk (VaR) analysis, utilization
of market and credit limits, liquidity ratios, overall loan loss provisioning and risk profile changes. Loan loss provisioning and credit
limit utilization are, however, discussed in more detail in the Credit Committee. On a monthly basis, detailed reporting of singlename and sectoral concentration is included in the discussion with the RMC. On the other hand, the Chief Internal Auditor reports
to the Audit Committee on a monthly basis on the results of branch or business unit audits and for the resolution of pending but
important internal audit issues.
The Parent Company has acquired a new risk management system which, for market and liquidity risk, will greatly improve its risk
measurement and reporting, particularly those related to treasury products. In 2013, the Parent Company implemented the Asset
and Liability Management system for liquidity risk and interest rate risk.
104
Risk Mitigation
The Parent Company uses derivatives to manage exposures in its financial instruments resulting from changes in interest rates and
foreign currencies exposures. However, the nature and extent of use of these financial instruments to mitigate risks are limited to
those allowed by the BSP for the Parent Company and its subsidiaries.
To further mitigate risks throughout its different business units, the Parent Company created new risk management policies and
improved existing policies. These policies further serve as the framework and set of guidelines in the creation or revisions of
operating policies and manuals for each business unit. In the process design and implementation, preventive controls are preferred
over detection controls. Clear delineation of responsibilities and separation of incompatible duties among officers and staff, as
well as, among business units are reiterated in these policies. To the extent possible, reporting and accounting responsibilities are
segregated from units directly involved in operations and front line activities (i.e., players must not be scorers). This is to improve
the credibility and accuracy of management information. Any inconsistencies in the operating policies and manuals with the risk
framework created by the RMG are taken up and resolved in the RMC and ManCom.
Based on the approved Operational Risk Assessment Program, RMG spearheaded the bankwide (all Head Office units and branches)
risk identification and self-assessment process. This would enable determination of priority risk areas, assessment of mitigating
controls in place, and institutionalization of additional measures to ensure a controlled operating environment. RMG was also
mandated to maintain and update the Parent Company’s Centralized Loss Database wherein all reported incidents of losses shall
be encoded to enable assessment of weaknesses in the processes and come up with viable improvements to avoid recurrence.
Monitoring and controlling risks are primarily performed based on various limits and thresholds established by the top management
covering the Group’s transactions and dealings. These limits and thresholds reflect the Group’s business strategies and market
environment, as well as, the levels of risks that the Group is willing to tolerate, with additional emphasis on selected industries. In
addition, the Parent Company monitors and measures the overall risk-bearing capacity in relation to the aggregate risk exposure
across all risk types and activities.
The Group’s Management identified the need for an asset-liability management (ALM) application to strategically manage risks
arising from mismatches between the Parent Company’s assets and liabilities, particularly in the areas of interest rate risk and
liquidity risk. An ALM would support high-level decisions with regard to funds pricing and resource allocation.
The ALM system project began in 2011. User Acceptance Testing (UAT) of the Static (phase 1) and Liquidity (phase 2) modules were
completed in 2013. After conducting parallel-runs of the manual risk reports and Static ALM reports, the system was implemented
in September 2013 for automated generation of Maximum Cumulative Outflow (MCO) and Earnings-at-Risk (EAR) reports. The
automation of liquidity stress reports to maximize the use of the Liquidity module in ALM is targeted for 2014. The Dynamic (phase
3) and Funds Transfer Pricing modules (phase 4) of Treasury and Corporate Planning are handled by the respective groups.
The Group’s Management identified the need to accurately measure market risk exposures of its derivative instruments and
standard products with non-normal returns by the implementation of Historical Simulation VaR approach for all trading products. In
2013, pending implementation of the Kondor Global Risk (KGR) Market Risk Module, the Parent Company has begun using Historical
Simulation VaR delta approximation approach for its financial derivatives (IRS) and foreign exchange instruments (FX Swaps/
Forwards). Standard financial instruments (Fixed Income Securities) remain under Parametric VaR. Compared to the Parametric VaR
approach where portfolio returns are assumed to be normally distributed and changes in returns assumed to be linear in relation to
market factors, the Historical Simulation VaR approach uses the actual daily fluctuation of portfolio returns, and thus captures actual
distribution of returns. Thus, historical simulation is the preferred methodology for trading derivatives which may not be linear.
The Parent Company is still testing and implementing a new market risk system module to support its trading and derivative
activities. The module had been independently validated by a qualified third-party reviewer in 2013.
BSP issued Circular No. 639 dated January 15, 2009 which mandated the use of the Internal Capital Adequacy Assessment Process
(ICAAP) by all universal and commercials banks to determine their minimum required capital relative to their business risk exposures.
In this regard, the Board approved the engagement of the services of a consultant to assist in the bank-wide implementation and
embedding of the ICAAP, as provided for under Pillar 2 of Basel II and BSP Circular No. 639.
On January 9, 2013, the BOD affirmed that the priority risks set in the 2009 Risk Self-assessment Survey and voting conducted
among selected members of the BOD and Senior Management remain the same.
The Parent Company had submitted its ICAAP document, in compliance with BSP requirements on January 30, 2013. The document
disclosed that the Parent Company has an appropriate level of internal capital relative to the Group’s risk profile.
For the ICAAP document submitted on January 30, 2014, the Parent Company retained the Pillar 1 Plus approach using the Pillar 1
capital as the baseline. The process of allocating capital for all types of risks above the Pillar 1 capital levels is now primarily based on
the results of the Integrated Stress Test (IST). The adoption of the IST allows the Parent Company to quantify its overall vulnerability
to market shocks and operational losses in a collective manner driven by events rather than in silo. The capital assessment in the
document discloses that the Group and the Parent Company has appropriate and sufficient level of internal capital.
Annual Report 2013
105
NOTES TO FINANCIAL STATEMENTS
Credit Risk
Credit Risk and Concentration of Assets and Liabilities and Off-Balance Sheet Items
Credit risk is the risk of financial loss on account of a counterparty to a financial product failing to honor its obligation. The Group
faces potential credit risks every time it extends funds to borrowers, commits funds to counterparties, guarantees the paying
performance of its clients, invests funds to issuers (i.e., investment securities issued by either sovereign or corporate entities) or
enters into either market-traded or over-the-counter derivatives, through implied or actual contractual agreements (i.e., on or offbalance sheet exposures). The Group manages its credit risk at various levels (i.e., strategic level, portfolio level down to individual
credit or transaction).
The Group established risk limits and thresholds for purposes of monitoring and managing credit risk from individual counterparties
and/or groups of counterparties, as well as industry divisions. It also conducts periodical assessment of the creditworthiness of its
counterparties. In addition, the Group obtains collateral where appropriate, enters into master netting agreements and collateral
arrangements with counterparties, and limits the duration of exposures.
In compliance with BSP requirements, the Group established an internal Credit Risk Rating System (CRRS) for the purpose of
measuring credit risk for corporate borrowers in a consistent manner, as accurately as possible, and thereafter uses the risk
information for business and financial decision making. The CRRS covers corporate borrowers with total assets, total facilities, or
total credit exposures amounting to 15.00 million and above.
Further, the CRRS was designed within the technical requirements defined under BSP Circular No. 439. It has two components,
namely: a) Borrower Risk Rating (BRR) which provides an assessment of the creditworthiness of the borrower, without considering
the proposed facility and security arrangements, and b) Loan Exposure Rating (LER) which provides an assessment of the proposed
facilities as mitigated or enhanced by security arrangements. The CRRS rating scale consists of ten grades, six of which fall under
unclassified accounts, with the remaining four falling under classified accounts in accordance with regulatory provisioning guidelines.
In 2011, the Parent Company launched the Borrower Credit Score (BCS), a credit scoring system designed for retail small and
medium entities and individual loan accounts. The BCS is currently implemented on a test run basis.
Excessive Risk Concentration
Concentrations arise when a number of counterparties are engaged in similar business activities, or activities in the same geographic
region, or have similar economic features that would cause their ability to meet contractual obligations to be similarly affected
by changes in economic, political or other conditions. Concentrations indicate the relative sensitivity of the Parent Company’s
performance to developments affecting a particular industry or geographical location.
In order to avoid excessive concentrations of risk, the Parent Company’s policies and procedures include specific guidelines focusing
on maintaining a diversified portfolio. Identified concentrations of credit risks are controlled and managed accordingly.
The distribution of the Group’s and Parent Company’s assets, liabilities, and credit commitment items (see Note 30) by geographic
region as of December 31, 2013 and 2012 (in millions) follows:
2013
Geographic Region:
Philippines
Asia
Europe
United States
Others
Assets
P372,203
4,132
1,430
23,521
816
P402,102
Geographic Region:
Philippines
Asia
Europe
United States
Others
106
P356,690
4,132
1,430
23,521
816
P386,589
2012 (As restated - Note 10)
Credit
Liabilities Commitments
P359,930
183
6,123
943
6
P367,185
2013
Assets
Consolidated
P147,608
3,951
659
592
27
P152,837
Liabilities
Credit
Commitments
P296,669
7,041
533
8,293
785
P313,321
P279,796
226
72
360
4
P280,458
P189,416
3,212
490
621
64
P193,803
Parent Company
Credit
Liabilities Commitments
P344,956
183
6,123
943
6
P352,211
Assets
P143,633
3,951
659
592
27
P148,862
2012
Assets
Liabilities
Credit
Commitments
P286,746
7,041
533
8,290
785
P303,395
P270,517
226
72
360
4
P271,179
P184,030
3,212
490
621
64
P188,417
Information on credit concentration as to industry of loans and receivables is presented in Note 9 to the financial statements.
Maximum exposure to credit risk
The table below provides the analysis of the maximum exposure to credit risk of the Parent Company’s financial instruments
(the maximum exposure to credit risk of subsidiaries were no longer disclosed as they are not material to the Group), excluding
those where the carrying values as reflected in the balance sheets and related notes already represent the financial instrument’s
maximum exposure to credit risk, before and after taking into account collateral held or other credit enhancements:
Parent Company
2013
Credit risk exposure relating to on-balance sheet items
are as follows:
Loans and receivables
Corporate and commercial lending
Consumer lending
Trade-related lending
Others
Sales contracts receivable
Gross maximum
exposure
Net exposure
Financial effect
of collateral or
credit
enhancement
P176,863,670,106
22,765,855,816
11,042,819,940
89,923,549
210,762,269,411
403,784,273
P211,166,053,684
P159,448,468,418
21,834,315,464
10,367,988,874
86,847,493
191,737,620,249
–
P191,737,620,249
P22,311,199,404
1,808,162,237
1,369,386,028
–
25,488,747,669
403,784,273
P25,892,531,942
Parent Company
2012
Credit risk exposure relating to on-balance sheet items
are as follows:
Loans and receivables
Corporate and commercial lending
Consumer lending
Trade-related lending
Others
Sales contracts receivable
Gross maximum
exposure
Net exposure
Financial effect
of collateral or credit
enhancement
P155,255,349,771
19,251,841,266
10,762,158,498
92,405,133
185,361,754,668
394,826,052
P185,756,580,720
P133,905,287,543
12,155,413,201
10,162,599,881
89,309,365
156,312,609,990
–
P156,312,609,990
P23,701,198,502
8,208,663,977
1,141,624,131
70,888,401
33,122,375,011
394,826,052
P33,517,201,063
Credit risk, in respect of derivative financial products, is limited to those with positive fair values, which are included under Financial
Assets at FVPL (see Note 8). As a result, the maximum credit risk, without taking into account the fair value of any collateral and
netting agreements, is limited to the amounts on the balance sheet plus commitments to customers such as unused commercial
letters of credit, outstanding guarantees and others as disclosed in Note 29 to the financial statements.
Collateral and other credit enhancements
The amount and type of collateral required depends on an assessment of the credit risk of the counterparty. Guidelines are
implemented with regard to the acceptability of types of collateral and valuation parameters.
The main types of collateral obtained are as follows:
•
For securities lending and reverse repurchase transactions - cash or securities
•
For consumer lending - real estate and chattel over vehicle
•
For corporate lending and commercial lending- real estate, chattel over properties, assignment of deposits, shares of stocks,
bonds, and guarantees
Management requests additional collateral in accordance with the underlying agreement and takes into consideration the market
value of collateral during its review of the adequacy of allowance for credit losses.
It is the Group’s policy to dispose of repossessed properties in an orderly fashion. The proceeds are used to reduce or repay the
outstanding claim. In most cases, the Parent Company does not occupy repossessed properties for business use.
Collaterals foreclosed in 2013 and 2012 and are still held by the Group as of December 31, 2013 and 2012 amounted to
P362.38 million and P119.14 million, respectively. These collaterals comprised of real estate properties and stock securities.
Annual Report 2013
107
NOTES TO FINANCIAL STATEMENTS
Credit quality per class of financial assets
The credit quality of financial assets is managed by the Group using an internal credit rating system for the purpose of measuring
credit risk in a consistent manner as accurately as possible. The model on risk ratings is assessed and updated regularly because
the Group uses this information as a tool for business and financial decision making.
It is the Parent Company’s policy to maintain accurate and consistent risk ratings across the credit portfolio. This facilitates focused
management of the applicable risks and the comparison of credit exposures across all lines of business, geographic regions and
products. The rating system is supported by a variety of financial analytics, combined with processed market information to provide
the main inputs for the measurement of counterparty risk. All internal risk ratings are tailored to the various categories and are
derived in accordance with the Parent Company’s rating policy. The attributable risk ratings are assessed and monitored regularly.
The standard credit rating equivalent grades are relevant only for certain exposures in each risk rating class.
The following table shows the description of the internal CRRS grade:
CRRS Grade
Description
1
Excellent
2
Strong
3
Good
4
Satisfactory
5
Acceptable
6
Watchlist
7
Especially Mentioned
8
Substandard
9
Doubtful
10
Loss
The credit grades are defined as follows:
Excellent - This category applies to a borrower with a very low probability of going into default in the coming year. The borrower has
a high degree of stability, substance, and diversity. It has access to raise substantial amounts of funds through the public markets at
any time. The borrower has a very strong debt service capacity and a conservative use of balance sheet leverage. The track record
in profit terms is very good. The borrower is of highest quality under virtually all economic conditions.
Strong - This category applies to a borrower with a low probability of going into default in the coming year. The borrower normally
has a comfortable degree of stability, substance, and diversity. Under normal market conditions, the borrower in this category has
good access to public markets to raise funds. The borrower has a strong market and financial position with a history of successful
performance. The overall debt service capacity as measured by cash flow to total debt service is deemed very strong; the critical
balance sheet ratios (vis-à-vis industry) are conservative.
Good - This category covers the smaller corporations with limited access to public capital markets or access to alternative financial
markets. This access is however limited to favorable economic and/or market conditions. Typical for this type of borrower is the
combination of comfortable asset protection and acceptable balance sheet structure (vis-à-vis industry). The debt service capacity,
as measured based on cash flows, is strong.
Satisfactory - This category represents the borrower where clear risk elements exist and the probability of default is somewhat
greater. This probability is reflected in volatility of earnings and overall performance. The borrower in this category normally has
limited access to public financial markets. The borrower should be able to withstand normal business cycles, but any prolonged
unfavorable economic period would create deterioration beyond acceptable levels. Typical for this kind of borrower is the combination
of reasonably sound asset and cash flow protection. The debt service capacity as measured by cash flow is deemed adequate. The
borrower has reported profits for the past fiscal year and is expected to report a profit in the current year.
Acceptable - The risk elements for the Parent Company are sufficiently pronounced, although the borrower should still be able
to withstand normal business cycles. Any prolonged unfavorable economic and/or market period would create an immediate
deterioration beyond acceptable levels.
Watchlist - This category represents the borrower for which unfavorable industry or company-specific risk factors represent a
concern. Operating performance and financial strength may be marginal and it is uncertain whether the borrower can attract
alternative sources of financing. The borrower will find it very hard to cope with any significant economic downturn and a default in
such a case is more than a possibility. It includes the borrower where the credit exposure is not a risk of loss at the moment, but
the performance of the borrower has weakened, and unless present trends are reversed, could lead to losses.
108
Especially Mentioned - This category applies to the borrower that is characterized by a reasonable probability of default, manifested
by some or all the following: (a) evidence of weakness in the borrower’s financial condition or creditworthiness; (b) unacceptable
risk is generated by potential or emerging weaknesses as far as asset protection and/or cash flow is concerned; (c) the borrower
has reached a point where there is a real risk that the borrower’s ability to pay the interest and repay the principal timely could be
jeopardized; (d) the borrower is expected to have financial difficulties and exposure may be at risk. Closer account management
attention is warranted.
Concerted efforts should be made to improve lender’s position (e.g., demanding additional collateral or reduction of account
exposure). These potential weaknesses, if left uncorrected or unmitigated, would affect the repayment of the loan and, thus,
increase credit risk to the Parent Company.
Substandard - This category represents the borrower where one or more of the following factors apply: (a) the collection of principal
or interest becomes questionable regardless of scheduled payment date, by reason of adverse developments on account of a
financial, managerial, economic, or political nature, or by important weaknesses in cover; (b) the probability of default is assessed at
up to 50.00%. Substandard loans are loans or portions thereof which appear to involve a substantial and unreasonable degree of risk
to the Parent Company because of unfavorable record or unsatisfactory characteristics. There exists in such loans the possibility of
future loss to the Parent Company unless given closer supervision.
Doubtful - This category includes the borrower with “non-performing loan” status or with any portion of interest and/or principal
payment is in arrears for more than ninety (90) days. The borrower is unable or unwilling to service debt over an extended period
of time and near future prospects of orderly debt service is doubtful. Doubtful loans are loans or portions thereof which have the
weaknesses inherent in those classified as “Substandard”, with the added characteristics that existing facts, conditions, and values
make collection or liquidation in full highly improbable and in which substantial loss is probable.
Loss - This category represents the borrower whose prospect for re-establishment of creditworthiness and debt service is remote.
It also applies where the Parent Company will take or has taken title to the assets of the borrower and is preparing a foreclosure
and/or liquidation of the borrower’s business. These loans or portions thereof which are considered uncollectible or worthless and
of such little value that their continuance as bankable assets is not warranted although the loans may have some recovery or salvage
value.
The Group’s loans and receivables from customers were classified according to credit quality as follows:
Credit Quality Rating
Neither Past Due Nor Impaired
High
Standard
Sub-Standard
Past Due or Impaired
Past Due but not Impaired
Impaired
Criteria
Loans with risk rating of 1 and 2
Loans with risk rating of 3 to 5
Generally, loans with risk rating of 6 to 8
Those that were classified as Past Due per BSP guidelines or those that
are still in current status but have objective evidence of impairment;
Generally, loans with risk rating of 9 to 10
The table below shows the Group’s loans and receivables, excluding other receivables (gross allowance for credit losses and
unearned discount) as of December 31, 2013 and 2012 classified according to credit quality:
Consolidated
2013
High Grade
Corporate and commercial
lending
Consumer lending
Trade-related lending
Others
Total
Neither Past Due nor Impaired
Standard
Substandard
Grade
Grade
P39,523,396,520 P89,964,099,619
5,221,711,739
3,226,505,935
386,106,248
9,267,251,497
10,125,096
–
P45,141,339,603 P102,457,857,051
P37,855,162,641
4,034,221,523
1,331,651,319
–
P43,221,035,483
Unrated
Past Due But
Not Impaired
P14,976,848,430
15,841,163,745
72,260,053
87,888,834
P30,978,161,062
P224,291,228
884,539,272
23,296,240
2,035,163
P1,134,161,903
Past Due
or Impaired
Total
P3,352,973,774 P185,896,772,212
674,808,197
29,882,950,411
697,799,879
11,778,365,236
246,772
100,295,865
P4,725,828,622 P227,658,383,724
Consolidated
2012 (As restated - Note 10)
High Grade
Corporate and commercial
lending
Consumer lending
Trade-related lending
Others
Total
Neither Past Due nor Impaired
Standard
Substandard
Grade
Grade
P30,292,483,624 P94,399,189,831
2,026,708,257
6,210,743,263
376,886,724
8,951,140,910
9,487,772
–
P32,705,566,377 P109,561,074,004
P17,930,372,729
2,017,819,612
1,108,573,430
–
P21,056,765,771
Unrated
Past Due But
Not Impaired
Past Due
or Impaired
Total
P15,038,363,209
11,525,168,922
53,340,362
91,113,885
P26,707,986,378
P667,780,662
812,508,719
235,150,764
1,452,837
P1,716,892,982
P4,746,911,364
645,523,425
633,121,963
65,917
P6,025,622,669
P163,075,101,419
23,238,472,198
11,358,214,153
102,120,411
P197,773,908,181
Annual Report 2013
109
NOTES TO FINANCIAL STATEMENTS
Parent Company
2013
High Grade
Corporate and commercial
lending
Consumer lending
Trade-related lending
Others
Total
P36,379,935,883
1,827,836,514
386,106,248
–
P38,593,878,645
Neither Past Due nor Impaired
Standard
Substandard
Grade
Grade
P89,541,599,619
3,164,536,698
9,267,251,497
–
P101,973,387,814
P37,855,162,641
1,350,769,025
1,331,651,319
–
P40,537,582,985
Unrated
Past Due But
Not Impaired
Past Due
or Impaired
Total
P14,886,805,641
15,878,205,587
72,260,053
87,888,832
P30,925,160,113
P117,387,056
883,909,047
23,296,240
2,035,163
P1,026,627,506
P3,185,828,949
517,484,186
697,799,879
180,857
P4,401,293,871
P181,966,719,789
23,622,741,057
11,778,365,236
90,104,852
P217,457,930,934
Unrated
Past Due But
Not Impaired
Past Due
or Impaired
Total
P14,545,792,934
11,525,168,922
53,340,362
91,113,885
P26,215,416,103
P667,533,159
787,562,858
235,150,764
1,452,837
P1,691,699,618
Parent Company
2012
High Grade
Corporate and commercial
lending
Consumer lending
Trade-related lending
Others
Total
Neither Past Due nor Impaired
Standard
Substandard
Grade
Grade
P28,750,194,152 P94,214,740,697
40,474,402
5,924,610,742
376,886,724
8,951,140,910
–
–
P29,167,555,278 P109,090,492,349
P17,885,020,075
1,514,427,522
1,108,573,430
–
P20,508,021,027
P4,741,776,051 P160,805,057,068
552,096,088
20,344,340,534
633,121,963
11,358,214,153
–
92,566,722
P5,926,994,102 P192,600,178,477
Depository accounts with the BSP and counterparty banks, Trading and Investment Securities
For these financial assets, outstanding exposure is rated primarily based on external risk rating (i.e. Standard and Poor’s (S&P)),
otherwise, rating is based on risk grades by a local rating agency or included under “Unrated”, when the counterparty has no
available risk grade.
The external risk rating of the Group’s depository accounts with the BSP and counterparty banks, trading and investment securities,
is grouped as follows:
Credit Quality Rating
High grade
External Credit Risk Rating
AAA, AA+, AA, AAAaa, Aa1, Aa2, Aa3
AAA, AA+, AA, AA-
Credit Rating Agency
S&P
Moody’s
Fitch
Standard grade
A+, A, A-, BBB+, BBB, BBBA1, A2, A3, Baa1, Baa2, Baa3
A+, A, A-, BBB+, BBB, BBB-
S&P
Moody’s
Fitch
Substandard grade
BB+, BB, BB-, B/B+, CCC, R, SD & D
Ba1, Ba2, Ba3, B1, B2, R, SD & D
BB+, BB, BB-, B/B+, CCC, R, SD & D
S&P
Moody’s
Fitch
Following is the credit rating scale applicable for foreign banks, and government securities (aligned with S&P ratings):
AAA - An obligor has extremely strong capacity to meet its financial commitments.
AA - An obligor has very strong capacity to meet its financial commitments. It differs from the highest-rated obligors at a minimal
degree.
A - An obligor has strong capacity to meet its financial commitments but is somewhat more susceptible to the adverse effects of
changes in circumstances and economic conditions than obligors in higher-rated categories.
BBB and below:
BBB - An obligor has adequate capacity to meet its financial commitments. However, adverse economic conditions or changing
circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitments.
BB - An obligor is less vulnerable in the near term than other lower-rated obligors. However, it faces major ongoing uncertainties
and exposure to adverse business, financial, or economic conditions which could lead to the obligor’s inadequate capacity to meet
its financial commitments.
B - An obligor is more vulnerable than the obligors rated ‘BB’, but the obligor currently has the capacity to meet its financial
commitments. Adverse business, financial, or economic conditions will likely impair the obligor’s capacity or willingness to meet its
financial commitments.
CCC - An obligor is currently vulnerable and is dependent upon favorable business, financial, and economic conditions for the obligor
to meet its financial commitments.
110
CC - An obligor is currently vulnerable. The rating is used when a default has not yet occurred, but expects default to be a virtual
certainty, regardless of the anticipated time to default.
R - An obligor is under regulatory supervision owing to its financial condition. During the pendency of the regulatory supervision, the
regulators may have the power to favor one class of obligations over others or pay some obligations and not others.
SD and D - An obligor is in default on one or more of its financial obligations including rated and unrated financial obligations but
excluding hybrid instruments classified as regulatory capital or in non-payment according to terms.
The table below shows the credit quality of deposits and investments as of December 31, 2013 and 2012, based on external risk
ratings (gross of allowance for credit losses).
Consolidated
2013
Due from BSP
Due from other banks
SPURA
Financial assets at FVPL
AFS financial assets
HTM financial assets
Due from BSP
Due from other banks
SPURA
Financial assets at FVPL
AFS financial assets
HTM financial assets
Due from BSP
Due from other banks
Financial assets at FVPL
AFS financial assets
HTM financial assets
Substandard
Grade
P−
239,930,517
−
58,547,169
−
−
P298,477,686
Total
P78,968,132,522
23,165,397,126
−
4,585,994,364
43,451,102,045
12,150,546,829
P162,321,172,886
High Grade
P–
1,363,768,111
–
50,084,415
4,523,766,552
–
P5,937,619,078
Consolidated
2012 (As restated - Note 10)
Substandard
Standard Grade
Grade
P–
P40,659,682,959
2,367,754,420
738,166,151
–
446,000,000
6,342,764,487
295,139,332
7,665,548,627
28,910,656,034
–
12,693,233,413
P16,376,067,534
P83,742,877,889
Total
P40,659,682,959
4,469,688,682
446,000,000
6,687,988,234
41,099,971,213
12,693,233,413
P106,056,564,501
High Grade
P–
2,109,105,336
945,686,067
3,295,269,202
–
P6,350,060,605
Parent Company
2013
Substandard
Standard Grade
Grade
P75,678,312,048
P–
20,573,174,805
31,294,886
3,581,761,128
58,547,169
39,169,591,135
–
12,122,589,213
–
P151,125,428,329
P89,842,055
Total
P75,678,312,048
22,713,575,027
4,585,994,364
42,464,860,337
12,122,589,213
P157,565,330,989
High Grade
P−
2,159,986,516
−
945,686,067
3,295,269,202
−
P6,400,941,785
Standard Grade
P78,968,132,522
20,765,480,093
−
3,581,761,128
40,155,832,843
12,150,546,829
P155,621,753,415
Parent Company
2012
Due from BSP
Due from other banks
Financial assets at FVPL
AFS financial assets
HTM financial assets
High Grade
P–
1,338,324,970
50,084,415
4,523,766,552
–
P5,912,175,937
Standard Grade
P–
2,330,241,902
6,342,764,487
7,665,548,627
–
P16,338,555,016
Substandard
Grade
P37,597,455,540
614,751,992
295,139,332
28,169,378,169
12,665,325,779
P79,342,050,812
Total
P37,597,455,540
4,283,318,864
6,687,988,234
40,358,693,348
12,665,325,779
P101,592,781,765
Annual Report 2013
111
NOTES TO FINANCIAL STATEMENTS
Due from other banks and government securities
The external risk rating of the Group’s depository accounts with counterparty banks, trading and investment securities, is grouped
as follows (aligned with the Philippine Ratings System):
Credit Quality Rating
High grade
Standard grade
Substandard grade
External Credit Risk Rating
PRSAAA, PRSAa+, PRSAa, PRSAaPRSA+, PRSA, PRSA-, PRSBaa+, PRSBaa, PRSBaaPRSBa+, PRSBa, PRSBa-, PRSB+, PRSB, PRSB-, PRSCaa+, PRSCaa, PRSCaa-,
PRSCa+, PRSCa, PRSCa-, PRSC+, PRSC, PRSC-
PRSAaa - The obligor’s capacity to meet its financial commitment on the obligation is extremely strong.
PRSAa - The obligor’s capacity to meet its financial commitment on the obligation is very strong.
PRSA - With favorable investment attributes and are considered as upper-medium grade obligations. Although obligations rated
‘PRSA’ are somewhat more susceptible to the adverse effects of changes in economic conditions, the obligor’s capacity to meet its
financial commitments on the obligation is still strong.
PRSBaa - An obligation rated ‘PRS Baa’ exhibits adequate protection parameters. However, adverse economic conditions and
changing circumstances are more likely to lead to a weakened capacity of the obligor to meet its financial commitment on the
obligation. PRSBaa-rated issues may possess certain speculative characteristics.
PRSBa - An obligation rated ‘PRSBa’ is less vulnerable to nonpayment than other speculative issues. However, it faces major
ongoing uncertainties relating to business, financial or economic conditions, which could lead to the obligor’s inadequate capacity to
meet its financial commitment on the obligation.
PRSB - An obligation rated ‘PRSB’ is more vulnerable to nonpayment than obligations rated ‘PRSBa’, but the obligor currently has
the capacity to meet its financial commitment on the obligation. Adverse economic conditions will likely impair the obligor’s capacity
to meet its financial commitment on the obligation. The issue is characterized by high credit risk.
PRSCaa - An obligation rated ‘PRSCaa’ is presently vulnerable to nonpayment and is dependent upon favorable business, financial
and economic conditions for the obligor to meet its financial commitments on the obligation. In the event of adverse economic
conditions, the obligor is not likely to have the capacity to meet its financial commitment on the obligation. The issue is considered
to be of poor standing and is subject to very high credit risk.
PRSCa - An obligation rated “PRSCa” is presently highly vulnerable to nonpayment. Likely already in or very near default with some
prospect for partial recovery of principal or interest.
PRSC - An obligation is already in default with very little prospect for any recovery of principal or interest.
The table below shows the credit quality of deposits and investments, by class, as of December 31, 2013 and 2012, based on risk
grades of a local rating agency (gross of allowance for credit losses).
Due from other banks
Financial assets at FVPL
AFS financial assets
HTM financial asset
Total
Due from other banks
Financial assets at FVPL
AFS financial assets
Total
112
High Grade
P134,390,575
5,735,439,184
545,170,185
–
P6,414,999,944
Consolidated
2013
Standard Grade Substandard Grade
P583,750,097
P–
–
–
–
–
–
–
P583,750,097
P–
Total
P718,140,672
5,735,439,184
545,170,185
–
P6,998,750,041
High Grade
P–
5,219,385,422
438,474,268
P5,657,859,690
Consolidated
2012 (As restated – Note 10)
Standard Grade Substandard Grade
P50,906,947
P–
–
–
–
–
P50,906,947
P–
Total
P50,906,947
5,219,385,422
438,474,268
P5,708,766,637
Due from other banks
Financial assets at FVPL
AFS financial assets
Total
Financial assets at FVPL
AFS financial assets
Total
Parent Company
2013
Substandard
Standard Grade
Grade
P500,000,000
P–
–
–
–
–
P500,000,000
P–
High Grade
P–
5,735,439,184
387,715,142
P6,123,154,326
High Grade
P5,219,385,422
292,508,007
P5,511,893,429
Parent Company
2012
Standard Grade Substandard Grade
P–
P–
–
–
P–
P–
Total
P500,000,000
5,735,439,184
387,715,142
P6,623,154,326
Total
P5,219,385,422
292,508,007
P5,511,893,429
The table below shows the breakdown of unrated deposits and investments as of December 31, 2013 and 2012 (gross of allowance):
Consolidated
2012
(As restated 2013
Note 10)
Due from other banks
P2,000,330
P6,781,369
Financial assets at FVPL
99,989,505
259,304,536
AFS financial assets
392,600,039
72,621,581
Other assets*
3,366,965,189
3,792,582,848
P4,131,290,334
Total
P3,861,555,063
* Other assets exclude net plan assets and creditable withholding taxes (see Note 14).
Parent Company
2013
P2,000,330
99,989,505
349,938,085
3,098,778,718
P3,550,706,638
2012
P6,301,358
259,304,536
31,860,853
3,464,946,062
P3,762,412,809
The table below shows the aging analysis of gross past due but not impaired loans and receivables that the Group and Parent
Company held as of December 31, 2013 and December 31, 2012. Under PFRS 7, a financial asset is past due when a counterparty
has failed to make a payment when contractually due.
December 31, 2013
Loans and receivables
Corporate and commercial lending
Consumer lending
Trade-related lending
Others
Total
Consolidated
Less than
30 days
31 to 60 days
61 to 90 days
P25,504,398
406,178,102
15,743,516
697,633
P448,123,649
P24,856,611
57,496,191
−
−
P82,352,802
P305,645
41,735,167
−
11,182
P42,051,994
More than
91 days
Total
P173,624,574
P224,291,228
379,129,812
884,539,272
7,552,724
23,296,240
1,326,348
2,035,163
P561,633,458 P1,134,161,903
Consolidated
December 31, 2012
Loans and receivables
Corporate and commercial lending
Consumer lending
Trade-related lending
Others
Total
December 31, 2013
Loans and receivables
Corporate and commercial lending
Consumer lending
Trade-related lending
Others
Total
Less than
30 days
31 to 60 days
61 to 90 days
P447,557,769
301,060,084
113,711,843
970,409
P863,300,105
P12,954,892
46,249,032
–
42,904
P59,246,828
P3,581,478
49,420,003
–
172,364
P53,173,845
Parent Company
Less than
30 days
31 to 60 days
61 to 90 days
P25,504,398
405,578,102
15,743,516
697,633
P447,523,649
P24,529,294
57,496,191
–
–
P82,025,485
P−
41,734,733
−
11,182
P41,745,915
More than
91 days
Total
P203,686,523
P667,780,662
415,779,600
812,508,719
121,438,921
235,150,764
267,160
1,452,837
P741,172,204 P1,716,892,982
More than
91 days
Total
P67,353,364
P117,387,056
379,100,021
883,909,047
7,552,724
23,296,240
1,326,348
2,035,163
P455,332,457 P1,026,627,506
Annual Report 2013
113
NOTES TO FINANCIAL STATEMENTS
Parent Company
December 31, 2012
Loans and receivables
Corporate and commercial lending
Consumer lending
Trade-related lending
Others
Total
Less than
30 days
31 to 60 days
61 to 90 days
P447,557,769
299,844,540
113,711,843
970,409
P862,084,561
P12,954,892
45,852,940
–
42,904
P58,850,736
P3,333,975
38,756,938
–
172,364
P42,263,277
More than
91 days
Total
P203,686,523
P667,533,159
403,108,440
787,562,858
121,438,921
235,150,764
267,160
1,452,837
P728,501,044 P1,691,699,618
The following table presents the carrying amount of financial assets of the Group and Parent Company as of December 31, 2013
and 2012 that would have been considered past due or impaired if not renegotiated:
Loans and advances to customers:
Corporate and commercial lending
Consumer lending
Total renegotiated financial assets
Consolidated
2013
P690,027,946
11,790,809
P701,818,755
2012
P862,159,498
227,852
P862,387,350
Parent Company
2013
P668,959,232
11,790,809
P680,750,041
2012
P862,159,498
227,852
P862,387,350
Impairment assessment
The main considerations for the loan impairment assessment include whether any payment of principal or interest is overdue by
more than 90 days, or there are known difficulties in the cash flows of counterparties, credit rating downgrades, or infringement of
the original terms of the contract. The Group addresses impairment assessment in two areas: individually assessed allowances and
collectively assessed allowances.
Individually assessed allowances
The Group determines the allowances appropriate for each individually significant loan or advance on an individual basis. Items
considered when determining allowance amounts include the sustainability of the counterparty’s business plan, its ability to improve
performance once a financial difficulty has arisen, projected receipts and the expected dividend payout should bankruptcy ensue, the
availability of other financial support and the realizable value of collateral, and the timing of the expected cash flows. The impairment
losses are evaluated at each reporting date, unless unforeseen circumstances require more careful attention.
Collectively assessed allowances
Allowances are assessed collectively for losses on loans and advances that are not individually significant (including residential
mortgages and unsecured consumer lending) and for individually significant loans and advances where there is no objective evidence
of individual impairment yet. Allowances are evaluated on each reporting date with each portfolio receiving a separate review.
The collective assessment takes account of impairment that is likely to be present in the portfolio even though there is no objective
evidence of the impairment yet per an individual assessment. Impairment losses are estimated by taking into consideration the
following information: historical losses on the portfolio, current economic conditions, the approximate delay between the time a
loss is likely to have been incurred and the time it will be identified as requiring an individually assessed impairment allowance, and
expected receipts and recoveries once impaired.
Management is responsible for deciding the length of this period which can extend for as long as one year. The impairment
allowance is then reviewed by credit management to ensure alignment with the Group’s overall policy.
Market Risk
Market risk is the risk of loss that may result from changes in the value of a financial product. The Parent Company’s market risk
originates from its holdings of domestic and foreign-denominated debt securities, foreign exchange instruments, equities, foreign
exchange derivatives and interest rate derivatives.
The RMG of the Parent Company is responsible for assisting the RMC with its responsibility for identifying, measuring, managing
and controlling market risk. Market risk management measures the Parent Company market risk exposures through the use of
VaR. VaR is a statistical measure that estimates the maximum potential loss from a portfolio over a holding period, within a given
confidence level.
VaR assumptions
The Parent Company calculates the Bankwide VaR in certain trading activities. The Parent Company uses the Parametric VarianceCovariance and Duration-Based approach to VaR for domestic- and foreign- denominated debt securities and Delta Approximation
Historical Simulation approach to VaR for foreign exchange instruments, equities, foreign exchange derivatives and interest rate
derivatives, using a 99.00% confidence level and a 1-day holding period.
The use of a 99.00% confidence level means that, within a one day horizon, losses exceeding the VaR figure should occur, on
average, not more than once every hundred days. The validity of the VaR model is verified through back testing, which examines
how frequently actual and hypothetical daily losses exceeds daily VaR. The Parent Company measures and monitors the VaR and
profit and loss on a daily basis.
114
Since VaR is an integral part of the Parent Company’s market risk management, VaR limits have been established for all trading
positions and exposures are reviewed daily against the limits by management. Further, stress testing is performed in monitoring
extreme events.
Limitations of the VaR Methodology
The VaR models are designed to measure market risk in a normal market environment using equally weighted historical data. The
use of VaR has limitations because it is based on historical correlations and volatilities in market prices and assumes that future
price movements will follow the same distribution. Due to the fact that VaR relies heavily on historical data to provide information
and may not clearly predict the future changes and modifications of the risk factors, the probability of large market moves may be
underestimated if changes in risk factors fail to align with the assumptions. VaR may also be under- or over-estimated due to the
assumptions placed on risk factors and the relationship between such factors for specific instruments. Even though positions may
change throughout the day, the VaR only represents the risk of the portfolios at the close of each business day, and it does not
account for any losses that may occur beyond the 99% confidence level.
In practice, the actual trading results will differ from the VaR calculation and, in particular, the calculation does not provide a meaningful
indication of profits and losses in stressed market conditions. To determine the reliability of the VaR models, actual outcomes are
monitored regularly to test the validity of the assumptions and the parameters used in the VaR calculation. Market risk positions are
also subject to regular stress tests to ensure that the Group would withstand an extreme market event.
A summary of the VaR position of the trading portfolio of the Parent Company is as follows:
2013
31 December
Average daily
Highest
Lowest
Interest Rate1
Foreign
Exchange2
P68.69
80.03
132.29
42.28
P13.70
14.82
37.37
5.70
Equity
(In Millions)
Interest Rate3
Interest Rate4
P62.09
105.59
131.56
62.09
P15.90
12.36
39.21
4.90
P11.40
6.60
14.54
0.39
Equity
(In Millions)
Interest Rate3
Interest Rate4
P86.57
90.88
95.04
86.57
P–
–
–
–
P–
–
–
–
1 Interest rate VaR for debt securities (Interest rate VaR for foreign currency denominated debt securities are translated to PHP using prior month’s closing rate)
2 FX VaR is the bankwide foreign exchange risk
3 Interest rate VaR for FX swaps and FX forwards
4 Interest rate VaR for IRS
2012
31 December
Average daily
Highest
Lowest
Interest Rate1
Foreign
Exchange2
P66.21
41.50
80.93
18.71
P8.44
12.15
26.70
3.42
1 Interest rate VaR for debt securities (Interest rate VaR for foreign currency denominated debt securities are translated to PHP using prior month’s closing rate)
2 FX VaR is the bankwide foreign exchange risk
3 Interest rate VaR for FX swaps and FX forwards
4 Interest rate VaR for IRS
Interest Rate Risk
The Group’s interest rate risk originates from its holdings of interest rate sensitive assets and interest rate sensitive liabilities. The
Parent Company follows prudent policies in managing its exposures to interest rate fluctuations, and constantly monitors its assets
and liabilities.
As of December 31, 2013 and 2012, 72.82% and 77.12% of the Group’s total loan portfolio, respectively, comprised of floating
rate loans which are repriced periodically by reference to the transfer pool rate which reflects the Group’s internal cost of funds. In
keeping with banking industry practice, the Group aims to achieve stability and lengthen the term structure of its deposit base, while
providing adequate liquidity to cover transactional banking requirements of customers.
Interest is paid on demand accounts, which constituted 22.26% and 22.77% of total deposits of the Parent Company as of
December 31, 2013 and 2012, respectively.
Interest is paid on savings accounts and time deposits accounts, which constitute 58.11% and 57.15%, respectively, of total
deposits of the Parent Company as of December 31, 2013, and 19.63% and 20.08%, respectively, as of December 31, 2012.
Savings account interest rates are set by reference to prevailing market rates, while interest rates on time deposits and special
savings accounts are usually priced by reference to prevailing rates of short-term government bonds and other money market
instruments, or, in the case of foreign currency deposits, inter-bank deposit rates and other benchmark deposit rates in international
money markets with similar maturities.
Annual Report 2013
115
NOTES TO FINANCIAL STATEMENTS
The Group is likewise exposed to fair value interest rate risk due to its holdings of fixed rate government bonds as part of its AFS
and FVPL portfolios. Market values of these investments are sensitive to fluctuations in interest rates.
The following table provides for the average effective interest rates by period of repricing of the Group and of the Parent Company
as of December 31, 2013 and 2012:
Peso
Assets
Due from BSP
Due from banks
Investment securities*
Loans and receivables
Liabilities
Deposit liabilities
Bills payable
USD
Assets
Investment securities*
Loans and receivables
Consolidated
Less than
3 months
2013
3 months
to 1 year
Greater
than 1 year
Less than 3
months
2012
3 months
to 1 year
Greater
than 1 year
0.75%
0.28%
0.88%
5.28%
–
–
4.70%
7.04%
–
–
5.43%
9.80%
0.63%
0.40%
4.91%
5.34%
–
–
5.59%
6.54%
–
–
7.28%
6.97%
1.18%
3.76%
2.05%
3.76%
6.12%
4.15%
2.00%
4.35%
4.85%
5.06%
4.93%
5.86%
2.77%
2.51%
–
2.08%
4.78%
5.65%
3.11%
3.02%
3.85%
3.03%
4.74%
3.00%
1.13%
0.09%
1.47%
–
–
–
Liabilities
Deposit liabilities
1.34%
1.70%
–
Bills payable
0.52%
–
1.12%
* Consisting of financial assets at FVPL, AFS financial assets and HTM financial assets.
Peso
Assets
Due from BSP
Due from banks
Investment securities*
Loans and receivables
Liabilities
Deposit liabilities
Bills payable
USD
Assets
Investment securities*
Loans and receivables
Parent Company
Less than
3 months
2013
3 months
to 1 year
Greater
than 1 year
Less than 3
months
2012
3 months
to 1 year
Greater
than 1 year
0.70%
0.29%
0.88%
5.24%
–
–
4.71%
6.33%
–
–
5.47%
9.07%
0.52%
0.41%
4.89%
5.34%
–
–
5.94%
6.39%
–
–
7.39%
6.78%
1.15%
3.76%
1.96%
3.76%
6.59%
4.15%
2.01%
4.35%
5.11%
5.06%
4.64%
5.86%
2.77%
2.51%
–
2.08%
4.78%
5.65%
3.11%
3.02%
3.85%
3.03%
4.78%
3.00%
1.13%
0.09%
1.45%
–
–
–
Liabilities
Deposit liabilities
1.34%
1.71%
–
Bills payable
0.52%
–
1.12%
* Consisting of financial assets at FVPL, AFS financial assets and HTM financial assets.
The asset-liability gap analysis method is used by the Group to measure the sensitivity of its assets and liabilities to interest rate
fluctuations. This analysis measures the Group’s susceptibility to changes in interest rates. The repricing gap is calculated by first
distributing the assets and liabilities contained in the Group’s balance sheet into tenor buckets according to the time remaining to the
next repricing date (or the time remaining to maturity if there is no repricing), and then obtaining the difference between the total of
the repricing (interest rate sensitive) assets and the total of repricing (interest rate sensitive) liabilities.
116
A gap is considered negative when the amount of interest rate sensitive liabilities exceeds the amount of interest rate sensitive
assets. A gap is considered positive when the amount of interest rate sensitive assets exceeds the amount of interest rate sensitive
liabilities.
Accordingly, during a period of rising interest rates, a bank with a positive gap would be in a position to invest in higher yielding
assets earlier than it would need to refinance its interest rate sensitive liabilities. During a period of falling interest rates, a bank with
a positive gap would tend to see its interest rate sensitive assets repricing earlier than its interest rate sensitive liabilities, restraining
the growth of its net income or resulting in a decline in net interest income.
The following table sets forth the repricing gap position of the Group and Parent Company as of December 31, 2013 and 2012
(in millions):
Financial Assets
Due from BSP
Due from banks
Investment securities
Loans and receivables
Total financial assets
Financial Liabilities
Deposit liabilities
Bills payable
Total financial liabilities
Repricing gap
Financial Assets
Due from BSP
Due from banks
Investment securities
Loans and receivables
Total financial assets
Financial Liabilities
Deposit liabilities
Bills payable
Total financial liabilities
Repricing gap
Financial Assets
Due from BSP
Due from banks
Investment securities
Loans and receivables
Total financial assets
Financial Liabilities
Deposit liabilities
Bills payable
Total financial liabilities
Repricing gap
Up to 3
Month
Consolidated
2013
>3 to 12
Months
P78,968
23,886
1,376
173,849
278,079
P–
–
431
25,710
26,141
187,147
4,028
191,175
P86,904
8,875
1
8,876
P17,265
Up to 3
Month
Consolidated
2012
>3 to 12
Months
>12
Months
Total
P–
–
65,114
20,982
86,096
P78,968
23,886
66,921
220,541
390,316
158,246
4,270
162,516
(P76,420)
354,268
8,299
362,567
P27,749
>12
Months
Total
P40,226
4,342
6,667
161,654
212,889
P–
–
2,457
21,704
24,161
P–
–
44,911
6,311
51,222
P40,226
4,342
54,035
189,669
288,272
149,872
1,380
151,252
P61,637
16,976
718
17,694
P6,467
104,644
1,429
106,073
(P54,851)
271,492
3,527
275,019
P13,253
Up to 3
Month
Parent Company
2013
>3 to 12
Months
P75,678
23,216
1,376
172,065
272,335
P–
–
430
22,123
22,553
179,377
4,028
183,405
P88,930
8,694
1
8,695
P13,858
>12
Months
Total
P–
–
63,934
16,574
80,508
P75,678
23,216
65,740
210,762
375,396
151,761
4,270
156,031
(P75,523)
339,832
8,299
348,131
P27,265
Annual Report 2013
117
NOTES TO FINANCIAL STATEMENTS
Financial Assets
Due from BSP
Due from banks
Investment securities
Loans and receivables
Total financial assets
Financial Liabilities
Deposit liabilities
Bills payable
Total financial liabilities
Repricing gap
Up to 3
Month
Parent Company
2012
>3 to 12
Months
>12
Months
Total
P37,565
4,151
6,652
160,360
208,728
P–
–
2,428
20,134
22,562
P–
–
44,266
4,205
48,471
P37,565
4,151
53,346
184,699
279,761
143,500
1,380
144,880
P63,848
16,789
718
17,507
P5,055
102,786
1,429
104,215
(P55,744)
263,075
3,527
266,602
P13,159
The Group also monitors its exposure to fluctuations in interest rates by using scenario analysis to estimate the impact of interest
rate movements on its interest income. This is done by modeling the impact to the Group’s interest income and interest expenses
to parallel changes in the interest rate curve in a given 12-month period.
The following table sets forth the estimated change in the Group’s and Parent Company’s annualized net interest income due to a
parallel change in the interest rate curve as of December 31, 2013 and 2012:
Change in annualized net interest
income
As a percentage of the Group’s net
interest income for the year ended
December 31, 2013
Change in annualized net interest income
As a percentage of the Group’s net
interest income for the year ended
December 31, 2012
Change in annualized net interest income
As a percentage of the Group’s net
interest income for the year ended
December 31, 2013
Change in annualized net interest income
As a percentage of the Group’s net
interest income for the year ended
December 31, 2012
118
Consolidated
2013
Change in interest rates (in basis points)
100bp rise
50bp rise
50bp fall
100bp fall
P998,533,038
P499,266,519
(P499,266,519)
(P998,533,038)
10.05%
5.02%
(5.02%)
(10.05%)
Consolidated
2012
Change in interest rates (in basis points)
100bp rise
50bp rise
50bp fall
P332,437,969
(P332,437,969)
P664,875,937
100bp fall
(P664,875,937)
8.25%
(4.12%)
(8.25%)
Parent Company
2013
Change in interest rates (in basis points)
100bp rise
50bp rise
50bp fall
P993,241,986
P496,620,993
(P496,620,993)
100bp fall
(P993,241,986)
10.50%
4.12%
(5.25%)
(10.50%)
Parent Company
2012
Change in interest rates (in basis points)
100bp rise
50bp rise
50bp fall
P676,394,648
P338,197,324
(P338,197,324)
100bp fall
(P676,394,648)
8.59%
5.25%
4.29%
(4.29%)
(8.59%)
The following table sets forth the estimated change in the Group’s and Parent Company’s income before tax and equity due to a
reasonably possible change in the market prices of quoted bonds classified under financial assets at FVPL and AFS financial assets,
brought about by movement in the interest rate curve as of December 31, 2013 and 2012:
Change in income before tax
Change in equity
Change in income before tax
Change in equity
Change in income before tax
Change in equity
Change in income before tax
Change in equity
Consolidated
2013
Change in interest rates (in basis points)
25bp rise
10bp rise
10bp fall
(P86,819,142)
(P34,977,851)
P35,316,047
(862,447,259)
(347,649,561)
351,263,124
Consolidated
2012
Change in interest rates (in basis points)
25bp rise
10bp rise
10bp fall
(P134,352,828)
(P54,333,122)
P54,860,292
(685,402,798)
(276,973,633)
280,755,683
Parent Company
2013
Change in interest rates (in basis points)
25bp rise
10bp rise
10bp fall
(P86,819,142)
(P34,977,851)
P35,316,047
(848,828,466)
(342,166,905)
345,733,011
Parent Company
2012
Change in interest rates (in basis points)
25bp rise
10bp rise
10bp fall
(P54,333,122)
P54,860,292
(P134,352,828)
(683,578,810)
(276,236,636)
277,796,178
25bp fall
P88,933,009
885,033,833
25bp fall
P138,681,509
709,139,680
25bp fall
P88,933,009
871,118,409
25bp fall
P138,681,509
701,700,847
Foreign Currency Risk
The Group’s foreign exchange risk originates from its holdings of foreign currency-denominated assets (foreign exchange assets)
and foreign currency-denominated liabilities (foreign exchange liabilities).
Foreign exchange liabilities generally consist of foreign currency-denominated deposits in the Group’s FCDU account made in the
Philippines or generated from remittances to the Philippines by persons overseas who retain for their own benefit or for the benefit
of a third party, foreign currency deposit accounts with the Group.
Foreign currency liabilities are generally used to fund the Group’s foreign exchange assets which generally consist of foreign currencydenominated loans and investments in the FCDU. Banks are required by the BSP to match the foreign currency-denominated assets
with liabilities held in the FCDU that are denominated in the same foreign currency. In addition, the BSP requires a 30% liquidity
reserve on all foreign currency-denominated liabilities held in the FCDU.
The Group’s policy is to maintain foreign currency exposure within existing regulations, and within acceptable risk limits. The Group
believes in ensuring its foreign currency is at all times within limits prescribed for financial institutions who are engaged in the same
types of businesses in which the Group and its subsidiaries are engaged.
The table below summarizes the Group’s and Parent Company’s exposure to foreign exchange risk. Included in the table are
the Group’s and Parent Company’s assets and liabilities at carrying amounts (stated in US Dollars), categorized by currency (in
thousands):
Consolidated
2013
2012
Other
Other
USD Currencies
Total
PHP
USD Currencies
Total
PHP
Assets
Cash and other cash items
$9,674
$2,978
$12,652 P561,692
$11,465
$2,885
$14,350 P589,051
Due from other banks
482,367
17,507
499,874 22,191,914
71,650
18,663
90,313 3,707,348
Financial assets at FVPL
50,347
1,422
51,769 2,298,297
44,911
2,059
46,970 1,928,136
AFS financial assets
352,368
1,497
353,865 15,676,194
470,575
1,508
472,083 19,379,019
HTM financial assets
269,465
3,597
273,062 12,122,589
404,123
3,397
407,520 16,728,710
Loans and receivables
917,188
4,271
921,459 40,908,151
588,936
–
588,936 24,175,822
Accrued interest receivable
17,852
322
18,174
806,848
19,585
335
19,920
817,702
Other assets
233
2
235
10,436
21,472
–
21,472
850,859
$28,847 $1,661,564 P68,176,647
$2,099,494
$31,596 $2,131,090 P94,576,121 $1,632,717
(Forward)
Annual Report 2013
119
NOTES TO FINANCIAL STATEMENTS
Liabilities
Deposit liabilities
Bills payables
Accrued interest and other
expenses
Other liabilities
Currency spot
Currency forwards
Net Exposure
2013
Other
USD Currencies
$1,586,248
186,293
17,852
233
1,790,626
16,876
(337,720)
($11,976)
Consolidated
Total
2012
Other
USD Currencies
PHP
Total
PHP
$12,133 $1,598,381P70,960,118 $1,302,189
−
186,293 8,270,476
6,312
$13,530 $1,315,719 P54,010,287
–
6,312
259,102
9
2,142
14,284
(1,376)
−
$15,936
11
539
14,080
–
–
$14,767
17,861
112,118
2,375 1,105,154
1,804,910 80,447,866
15,500
688,258
(337,720)(15,338,006)
$3,960 (P521,493)
1,722
28,219
1,338,442
13,500
(321,127)
($13,352)
1,733
71,138
28,758 1,180,568
1,352,522 55,521,095
13,500
554,055
(321,127) (12,793,583)
$1,415 P416,024
Parent Company
USD
Assets
Cash and other cash items
Due from other banks
Financial assets at FVPL
AFS financial assets
HTM financial assets
Loans and receivables
Accrued interest receivable
Other assets
Liabilities
Deposit liabilities
Bills payables
Accrued interest and other
expenses
Other liabilities
Currency spot
Currency forwards
Net Exposure
2013
Other
Currencies
Total
PHP
USD
2012
Other
Currencies
Total
PHP
$9,631
477,207
50,347
344,757
269,465
917,188
17,651
233
2,086,479
$2,978
17,507
1,422
1,497
3,597
4,271
322
2
31,596
$12,609
494,714
51,769
346,254
273,062
921,459
17,973
235
2,118,075
P559,788
21,962,833
2,298,297
15,338,314
12,122,589
40,908,151
797,932
10,436
93,998,340
$11,275
67,691
44,911
455,765
404,123
588,936
19,180
21,471
1,613,352
$2,885
18,663
2,059
1,508
3,397
–
335
–
28,847
$14,160
86,354
46,970
457,273
407,520
588,936
19,515
21,471
1,642,199
P581,251
3,544,843
1,928,136
18,771,054
16,728,710
24,175,822
801,089
850,831
67,381,736
1,575,121
186,293
12,133
−
1,587,254
186,293
70,466,129
8,270,476
1,284,351
6,312
13,530
–
1,297,881
6,312
53,278,029
259,102
2,498
22,757
1,786,669
16,876
(337,720)
($21,034)
9
2,142
14,284
(1,376)
–
$15,936
1,677
27,020
1,319,360
13,500
(321,127)
($13,635)
11
539
14,080
–
–
$14,767
2,507
111,301
24,899
1,105,113
1,800,953
79,953,019
15,500
688,258
(337,720) (15,338,006)
($5,098)
(P604,427)
1,688
69,273
27,559
1,131,351
1,333,440
54,737,755
13,500
554,055
(321,127) (12,793,583)
$1,132
P404,453
The following table sets forth, for the period indicated, the impact of the range of reasonably possible changes in the US$ exchange
rate and other currencies per Philippine peso on the pre-tax income and equity (in millions).
2013
USD
Other
USD
Other
2012
USD
Other
USD
Other
120
Change in
Foreign
Exchange Rate
2%
1%
(2%)
(1%)
Change in
Foreign
Exchange Rate
2%
1%
(2%)
(1%)
Consolidated
Sensitivity of
Pretax Income
P49
1
(49)
(1)
Sensitivity of
Equity
P361
1
(361)
(1)
Consolidated
Sensitivity of
Pretax Income
Sensitivity of
Equity
P36
1
(36)
(1)
P422
1
(422)
(1)
2013
USD
Other
USD
Other
2012
USD
Other
USD
Other
Change in
Foreign
Exchange Rate
Parent Company
Sensitivity of
Pretax Income
Sensitivity of
Equity
2%
1%
(2%)
(1%)
P49
1
(49)
(1)
P354
1
(354)
(1)
2%
1%
(2%)
(1%)
P36
1
(36)
(1)
P410
1
(410)
(1)
The impact in pre-tax income and equity is due to the effect of foreign currency behaviour to Philippine peso.
Equity Price Risk
Equity price risk is the risk that the fair values of equities change as a result of movements in both the level of equity indices and the
value of individual stocks. The non-trading equity price risk exposure arises from the Group’s investment portfolio.
The effect on the Group and Parent Company’s equity as a result of a change in the fair value of equity instruments held as availablefor-sale due to a reasonably possible change in equity indices, with all other variables held constant, is as follows (in millions):
2013
2012
2013
2012
Consolidated
Change in
equity index
+10%
-10%
+10%
-10%
Effect on
Equity
P11.1
(6.9)
9.0
(9.0)
Parent Company
Change in
equity index
+10%
-10%
+10%
-10%
Effect on
Equity
P11.1
(6.9)
9.0
(9.0)
Liquidity Risk and Funding Management
Liquidity risk is generally defined as the current and prospective risk to earnings or capital arising from the Parent Company’s inability
to meet its obligations when they become due without incurring unacceptable losses or costs.
The Parent Company’s liquidity management involves maintaining funding capacity to accommodate fluctuations in asset and liability
levels due to changes in the Parent Company’s business operations or unanticipated events created by customer behavior or capital
market conditions. The Parent Company seeks to ensure liquidity through a combination of active management of liabilities, a liquid
asset portfolio composed substantially of deposits in primary and secondary reserves, the securing of money market lines, and the
maintenance of repurchase facilities to address any unexpected liquidity situations.
Liquidity risk is monitored and controlled primarily by a gap analysis of maturities of relevant assets and liabilities reflected in the
maximum cumulative outflow (MCO) report, as well as, an analysis of available liquid assets. Furthermore, internal liquidity ratios
and monitoring of large funds providers have been set to determine sufficiency of liquid assets over deposit liabilities.
Annual Report 2013
121
NOTES TO FINANCIAL STATEMENTS
Liquidity is managed by the Parent and subsidiaries on a daily basis, while scenario stress tests are conducted periodically. The
table below shows the maturity profile of the Parent Company’s assets and liabilities, based on contractual undiscounted cash flows:
On demand
Financial Assets
Cash and other cash items
Due from BSP
Due from other banks
Financial assets at FVPL
AFS financial assets
Loans and receivables
Financial Liabilities
Deposit liabilities
Demand
Savings
Time
Bills payable
Manager’s checks
Accrued interest and other expenses
Derivative liabilities
Other liabilities
Accounts payable
Acceptances payable
Due to PDIC
Margin deposits
Miscellaneous
Total liabilities
Net Position
Less than
1 year
December 31, 2013
1 to 2 years 2 to 3 years 3 to 5 years
(In Millions)
Total
P7,035
75,678
23,216
–
–
–
105,929
P–
–
–
369
2,623
107,116
110,108
P–
–
–
282
2,598
18,441
21,321
P–
–
–
546
3,728
13,947
18,221
P–
–
–
10,516
50,387
90,351
151,254
P7,035
75,678
23,216
11,713
59,336
229,855
406,833
75,633
–
–
–
–
–
–
–
197,466
60,378
4,019
704
1,446
155
–
−
303
2,108
–
–
–
–
−
3,129
2,337
–
–
–
–
−
4,591
8,475
–
–
–
75,633
197,466
68,401
16,939
704
1,446
155
–
–
–
–
–
2,411
P18,910
–
–
–
–
–
5,466
P12,755
–
–
–
–
–
13,066
P138,188
618
955
317
1
979
363,614
P43,219
3 to 5 years
Total
–
–
–
–
–
75,633
P30,296
618
955
317
1
979
267,038
(P156,930)
December 31, 2012
Financial Assets
Cash and other cash items
Due from BSP
Due from other banks
Financial assets at FVPL
AFS financial assets
Loans and receivables
Financial Liabilities
Deposit liabilities
Demand
Savings
Time
Bills payable
Manager’s checks
Accrued interest and other expenses
Derivative liabilities
Other liabilities
Accounts payable
Acceptances payable
Due to PDIC
Margin deposits
Miscellaneous
Total liabilities
Net Position
122
On demand
Less than
1 year
P5,997
37,597
4,290
–
–
–
47,884
P–
–
–
7,542
5,546
110,031
123,119
P–
–
–
375
5,410
14,862
20,647
P–
–
–
375
3,865
9,708
13,948
–
–
–
5,375
42,857
76,327
124,559
P5,997
37,597
4,290
13,667
57,678
210,928
330,157
60,084
–
–
–
–
–
–
–
113,539
49,445
2,696
736
1,557
571
–
164
512
54
–
–
–
–
37,986
410
46
–
–
–
–
4,432
1,294
–
–
–
60,084
151,689
54,799
4,090
736
1,557
571
–
–
–
–
–
60,084
(P12,200)
805
271
234
3
1,176
171,033
(P47,914)
–
–
–
–
–
730
P19,917
–
–
–
–
–
38,442
(P24,494)
–
–
–
–
–
5,726
118,833
805
271
234
3
1,176
276,015
P54,142
1 to 2 years 2 to 3 years
(In Millions)
Starting mid-2011, the Parent Company revised its liquidity risk management policies, methodologies, assumptions, stress scenarios
limits structure, monitoring and reporting process to Behavioral MCO to strengthen the management of liquidity risk.
7.
DUE FROM BSP AND OTHER BANKS AND SPURA
Due from BSP
This account consists of:
Demand deposit account
Special deposit account
Others
Consolidated
2013
2012
P49,018,604,183
P38,427,320,508
29,851,000,000
2,200,000,000
98,528,339
32,362,451
P78,968,132,522
P40,659,682,959
Parent Company
2013
2012
P48,179,783,709
P 37,565,093,089
27,400,000,000
–
98,528,339
32,362,451
P75,678,312,048
P37,597,455,540
Consolidated
2013
2012
P15,159,212,398
P2,163,786,372
8,726,325,730
2,363,590,626
P23,885,538,128
P4,527,376,998
Parent Company
2013
2012
P14,718,331,172
P2,088,534,969
8,497,244,185
2,201,085,253
P23,215,575,357
P4,289,620,222
Due from Other Banks
This account consists of:
Foreign banks
Local banks
SPURA
This account bears nominal annual interest rates ranging from 3.50% to 4.41% in 2012 and from 4.00% to 4.70% in 2011.
Interest Income on Due from BSP and Other Banks
This account consists of:
Due from BSP
Due from other banks
8.
2013
P450,734,237
31,002,663
P481,736,900
Consolidated
2012
P221,122,736
33,888,463
P255,011,199
2011
P555,943,966
49,176,403
P605,120,369
2013
P396,819,129
11,330,829
P408,149,958
Parent Company
2011
2012
P173,411,222 P545,213,923
15,141,468
28,910,322
P188,552,690 P574,124,245
DERIVATIVES, TRADING AND INVESTMENT SECURITIES
Financial assets at FVPL
This account consists of:
Held-for-trading:
Government bonds
Treasury notes
Private bonds and commercial papers
Treasury bills
Financial assets designated at FVPL (Note 20)
Derivative assets (Note 24)
2013
2012
P2,289,626,987
1,885,968,182
893,905,336
–
5,069,500,505
4,856,408,376
495,514,172
P10,421,423,053
P2,486,034,631
3,943,476,439
484,724,705
107,585
6,914,343,360
4,999,995,000
252,339,832
P12,166,678,192
Financial assets designated at FVPL pertain to the Parent Company’s investments in preferred shares. The preferred shares are
redeemable at the option of the issuer, at a price equivalent to the issue price of 75.00 per share plus cumulative and unpaid
dividend, starting on the third anniversary from the listing date (September 28, 2012) or any dividend payment date thereafter.
The preferred shares also contain dividend rate step-up which is the higher of the dividend rate of 7.50% or the 10-year PDST-F
plus 300 bps. The dividend rate step-up will apply if the issuer does not redeem the preferred shares on the fifth year of issuance.
The preferred shares have an embedded derivative in the form of an optional redemption feature, which is deemed not clearly and
closely related to its equity host. In this regard, PAS 39 provides that if a contract contains one or more embedded derivatives,
an entity may designate the entire hybrid contract at FVPL unless the embedded derivative does not significantly modify the cash
flows that otherwise would be required by the contract, or it is clear with little or no analysis when a similar hybrid instrument is first
considered that separation of the embedded derivative is prohibited. On this basis, management has determined that the preferred
shares shall be designated as at FVPL.
Annual Report 2013
123
NOTES TO FINANCIAL STATEMENTS
As of December 31, 2013 and 2012, HFT securities include fair value loss of P39.92 million and of P56.91 million, respectively. Both
realized and unrealized gains and losses on HFT and financial assets designated at FVPL are included under ‘Trading and securities
gain - net’ (see Note 20).
AFS financial assets
This account consists of:
Consolidated
Quoted:
Government bonds (Note 27)
Private bonds
Equities
2013
2012
(As restated Note 10)
P39,635,113,012
3,555,275,367
150,459,385
43,340,847,764
P35,661,272,547
432,554,427
121,751,295
36,215,578,269
Parent Company
2013
2012
P38,658,871,304
3,394,861,168
143,418,541
42,197,151,013
P34,921,094,182
286,588,166
120,660,984
35,328,343,332
Unquoted:
Credit-linked notes (host)
Private bonds and commercial papers - net
Equities - net *
–
4,130,600,504
–
4,130,600,504
979,626,875
1,198,372,269
979,626,875
1,198,372,269
28,782,136
26,890,099
19,412,705
19,412,705
1,008,409,011
5,355,862,872
999,039,580
5,348,385,478
Total
P44,349,256,775 P41,571,441,141 P43,196,190,593
40,676,728,810
* Includes fully impaired equity investments with acquisition cost of P 39.62 million for the Group and P 6.32 million for the Parent
Company in 2013 and P 39.63 million for the Group and P 6.33 million for the Parent Company in 2012.
Credit-linked notes (CLN)
As approved by the BOD on August 6, 2008, the Parent Company invested US$100,000,000, in five separate CLNs of US$20,000,000
each. The CLNs are linked to the performance of a specific Republic of the Philippines (ROP) bond, the underlying bond collateral,
and London Interbank Offer Rate (LIBOR). In the event of a credit event or a default event on the specific ROP bond or the bond
collateral, the investment will unwind and the Parent Company will receive the deliverable obligation as defined under the contract.
If no credit event or default event occurs, the Parent Company will receive the maturity value of the CLNs, which is the face amount.
The CLNs bear floating interest based on 6-month USD LIBOR plus an agreed spread, payable semi-annually, and with tenor of five
years. All CLNs matured in 2013.
The embedded credit derivatives on the above CLNs have been bifurcated (see Note 24) and the host contracts were classified
under AFS financial assets.
Unquoted equity securities
This account comprises of shares of stocks of private corporations that are carried at cost since fair value cannot be reliably
estimated due to lack of reliable estimates of future cash flows and discount rates necessary to calculate the fair value. There is
currently no market for these investments and the Group intends to hold them for the long term.
Net unrealized gains (losses)
AFS financial assets include fair value loss of P79.26 million and P73.86 million for the Group and Parent Company, respectively,
as of December 31, 2013, and fair value gains of P1.36 billion and P1.34 billion for the Group and Parent Company, respectively,
as of December 31, 2012. The fair value gains or losses are recognized under OCI. The deferred tax liabilities recognized on net
unrealized gains amounted to P1.17 million and P1.84 million as of December 31, 2013 and 2012, respectively, for both the Group
and Parent Company. Impairment loss on AFS financial assets which was charged to operations amounted to 5.13 million in 2012.
No impairment loss was recognized in 2013 and 2011.
HTM financial assets
This account consists of:
Consolidated
Government bonds
Private bonds
Unamortized premium – net
2013
P11,713,844,329
358,933,575
12,072,777,904
77,768,925
P12,150,546,829
2012
(As restated Note 10)
P12,274,025,013
331,889,250
12,605,914,263
87,319,150
P12,693,233,413
Parent Company
2013
P11,685,809,329
358,933,575
12,044,742,904
77,846,309
P12,122,589,213
2012
P12,245,970,013
331,889,250
12,577,859,263
87,466,516
P12,665,325,779
Reclassification of Financial Assets
In 2008, as approved by its BOD, the Parent Company identified assets for which it had a clear change of intent to hold the
investments to maturity rather than to exit or trade these investments in the foreseeable future and reclassified those investments
from AFS financial assets to HTM financial assets effective October 2, 2008.
124
As of October 2, 2008, the total carrying value of AFS financial assets reclassified to HTM financial assets amounted to P9.04 billion,
with unrealized losses of P47.44 million deferred under ‘Net unrealized gains (losses) on AFS financial assets’ under OCI.
HTM financial assets reclassified from AFS financial assets with total face amount of P30.41 million matured in 2013.
As of December 31, 2013 and 2012, HTM financial assets reclassified from AFS financial assets have the following balances:
2013
Government bonds*
Private bonds**
2012
Government bonds*
Private bonds**
Face Value
Original
Cost
P2,513,659
356,936
P2,870,595
P2,826,638
356,918
P3,183,556
Carrying
Value
(In Thousands)
P2,652,572
347,865
P3,000,437
Unamortized
Net Unrealized
Fair Loss Deferred
Value
in Equity
P3,020,586
401,253
P3,421,839
Amortization
P6,800
(9,064)
(P2,264)
(P22,886)
12,335
(P10,551)
P2,637,471
P2,509,729
P3,020,900
P9,388
(P18,654)
P2,346,064
330,042
330,026
319,108
389,073
(10,925)
8,861
P2,676,106
P2,967,497
P2,828,837
P3,409,973
(P1,537)
(P9,793)
* Consist of US dollar-denominated bonds with face value of $52.89 million and $53.58 million as of December 31, 2013 and
2012, respectively, and euro-denominated bonds with face value of P2.71 million as of December 31, 2013
** Consist of US dollar-denominated bonds with face value of $8.04 million
Had these securities not been reclassified to HTM financial assets, additional mark-to-market gain that would have been credited
to the statement of comprehensive income amounted to P421.40 million, P581.14 million and P542.60 million in 2013, 2012 and
2011, respectively.
Effective interest rates on the reclassified securities range from 5.51% to 8.99%. The Parent Company expects to recover 100.00%
of the principal and interest due on the reclassified investments totaling P3.72 billion and P3.69 billion, as of December 31, 2013 and
2012, respectively. No impairment loss was recognized on these securities in 2013, 2012 and 2011.
Interest Income on Trading and Investment Securities
This account consists of:
Financial assets at FVPL
AFS financial assets
HTM financial assets
9.
Consolidated
Parent Company
2013
2012
2011
2013
2012
2011
P352,133,595 P298,948,370 P326,059,117 P352,133,595 P298,948,370 P326,059,117
1,811,974,578 2,078,764,841 2,341,486,771 1,744,705,222 1,818,703,205 2,292,266,252
1,063,232,965
996,120,825 1,245,703,384 1,061,457,141 1,179,913,311 1,238,841,033
P3,227,341,138 P3,373,834,036 P3,913,249,272 P3,158,295,958 P3,297,564,886 P3,857,166,402
LOANS AND RECEIVABLES
This account consists of:
Consolidated
2013
Loans and discounts
Corporate and commercial lending
Consumer lending
Trade-related lending
Others
Unearned discounts
Allowance for impairment and credit losses
(Note 15)
2012
(As restated Note 10)
Parent Company
2013
2012
P185,896,772,212
29,882,950,411
11,778,365,236
100,295,865
227,658,383,724
(484,400,529)
227,173,983,195
P163,075,101,419
23,238,472,198
11,358,214,153
102,120,411
197,773,908,181
(894,151,834)
196,879,756,347
P181,966,719,789
23,622,741,057
11,778,365,236
90,104,852
217,457,930,934
(378,681,663)
217,079,249,271
P160,805,057,068
20,344,340,534
11,358,214,153
92,566,722
192,600,178,477
(671,973,994)
191,928,204,483
(6,633,080,280)
P220,540,902,915
(6,779,450,022)
P190,100,306,325
(6,316,979,860)
P210,762,269,411
(6,566,449,815)
P185,361,754,668
The Group’s and Parent Company’s loans and discounts under corporate lending include unquoted debt securities with carrying
amount of P2.38 billion and P2.04 billion as of December 31, 2013, respectively, and P2.77 billion and P2.43 billion as of December
31, 2012, respectively.
Annual Report 2013
125
NOTES TO FINANCIAL STATEMENTS
BSP Reporting
Information on the amounts of secured and unsecured loans and receivables (gross of unearned discounts and allowance for
impairment and credit losses) of the Group and Parent Company are as follows:
Consolidated
2013
2012 (As restated - Note 10)
Amounts
%
Amounts
%
Loans secured by:
Real estate
Chattel mortgage
Deposit hold out
Shares of stock of other
banks (Note 28)
Others
Unsecured loans
P34,238,716,703
20,072,559,602
3,173,880,795
15.04 P33,306,153,339
8.82
6,000,801,794
1.39
13,482,758,223
2,942,000,000
46,891,567,995
107,318,725,095
120,339,658,629
P227,658,383,724
1.29
640,965,000
20.60
39,467,176,399
47.14
92,897,854,755
52.86 104,876,053,426
100.00 P197,773,908,181
16.84
3.03
6.82
Parent Company
2013
Amounts
%
P31,636,943,961
17,924,950,148
3,137,272,126
0.32
2,942,000,000
19.96
46,891,567,995
46.97
102,532,734,230
53.03
114,925,196,704
100.00 P217,457,930,934
2012
Amounts
%
P31,772,993,920
4,317,209,252
13,432,382,805
16.50
2.24
6.98
1.35
640,965,000
21.57
38,679,273,894
47.15
88,842,824,871
52.85
103,757,353,606
100.00 P192,600,178,477
0.33
20.08
46.13
53.87
100.00
14.55
8.24
1.44
Loans and receivables of the Group amounting to nil and P2.06 billion as of December 31, 2013 and 2012, respectively, are pledged
to secure certain bills payable to the BSP under the Parent Company’s rediscounting privileges (see Note 17).
Information on the concentration of credit as to industry of the Group and Parent Company follows:
Real estate, renting and business services
Wholesale and retail trade
Manufacturing
Financial intermediaries
Transportation, storage and communication
Electricity, gas and water
Construction
Agriculture
Mining and quarrying
Others
Real estate, renting and business services
Wholesale and retail trade
Manufacturing
Financial intermediaries
Transportation, storage and communication
Electricity, gas and water
Construction
Agriculture
Mining and quarrying
Others
2013
Amounts
P60,230,149,588
34,434,621,617
32,723,302,187
19,509,696,732
18,728,510,372
13,361,046,785
6,074,279,567
4,174,326,839
803,749,446
37,618,700,591
P227,658,383,724
Consolidated
2012 (As restated - Note 10)
%
Amounts
%
26.46
P51,420,258,996
26.00
15.13
29,062,114,156
14.69
14.37
34,101,622,193
17.24
8.57
24,740,818,791
12.51
8.23
14,888,821,275
7.53
5.87
11,246,076,837
5.69
2.67
3,945,972,540
1.99
1.83
4,965,847,953
2.51
0.35
1,534,003,882
0.78
16.52
21,868,371,558
11.06
100.00 P197,773,908,181
100.00
Parent Company
2013
2012
Amounts
%
Amounts
%
P56,569,557,306
26.01
P50,067,613,011
26.00
33,660,321,224
15.48
28,282,448,431
14.68
32,678,273,990
15.03
33,981,574,046
17.64
18,716,522,416
8.61
24,671,627,406
12.81
18,424,306,894
8.47
14,518,224,558
7.54
13,360,581,687
6.14
11,245,143,731
5.84
5,962,632,897
2.74
3,751,352,625
1.95
4,163,167,175
1.92
4,945,980,599
2.57
802,688,379
0.37
1,534,003,882
0.80
33,119,878,966
15.23
19,602,210,188
10.17
P217,457,930,934
100.00 P192,600,178,477
100.00
The BSP considers that loan concentration exists when the total loan exposure to a particular industry or economic sector exceeds
30.00% of total loan portfolio. As of December 31, 2013 and 2012, the Group does not have credit concentration in any particular
industry.
As of December 31, 2013 and 2012, secured and unsecured NPLs of the Group and Parent Company follow:
Secured
Unsecured
Consolidated
2013
2012
P2,370,944,220
P3,253,879,192
2,152,985,178
1,772,360,572
P4,523,929,398
P5,026,239,764
Parent Company
2013
2012
P2,055,920,376
P3,085,572,847
2,062,015,314
1,717,059,011
P4,117,935,690
P4,802,631,858
Generally, NPLs refer to loans whose principal and/or interest is unpaid for thirty (30) days or more after due date or after they have become
past due in accordance with existing BSP rules and regulations. This shall apply to loans payable in lump sum and loans payable in quarterly,
semi-annual, or annual installments, in which case, the total outstanding balance thereof shall be considered nonperforming.
126
In the case of loans that are payable in monthly installments, the total outstanding balance thereof shall be considered nonperforming
when three (3) or more installments are in arrears.
In the case of loans that are payable in daily, weekly, or semi-monthly installments, the total outstanding balance thereof shall be
considered nonperforming at the same time that they become past due in accordance with existing BSP regulations, i.e., the entire
outstanding balance of the receivable shall be considered as past due when the total amount of arrearages reaches ten percent
(10.00%) of the total loan balance.
Loans are classified as nonperforming in accordance with BSP regulations, or when, in the opinion of management, collection of
interest or principal is doubtful. Loans are not reclassified as performing until interest and principal payments are brought current or
the loans are restructured in accordance with existing BSP regulations, and future payments appear assured.
Loans which do not meet the requirements to be treated as performing loans shall also be considered as NPLs. Effective
January 1, 2013, the exclusion of NPLs classified as loss but are fully covered by allowance was removed by the BSP through
Circular No. 772. Previous banking regulations allow banks that have no unbooked valuation reserves and capital adjustments
to exclude from nonperforming classification those loans classified as Loss in the latest examination of the BSP which are fully
covered by allowance for credit losses, provided that interest on said receivables shall not be accrued.
As of December 31, 2012, under previous banking regulations, NPLs of the Group and Parent Company net of those which are fully
provided with allowance for credit losses of amounted to P4.06 billion and P3.84 billion, respectively.
As of December 31, 2013, based on the revised definition of NPL under Circular No. 772, gross and net NPLs of the Parent Company
as reported to BSP amounted to P4.12 billion and P0.25 billion, respectively. As of December 31, 2013, gross and net NPL ratios of
the Parent Company are 1.92% and 0.12%, respectively.
Interest Income on Impaired Loans
Accretion of individually impaired loans and receivables of the Parent Company included as part of interest income amounted to
P63.18 million in 2011. There were no interest income accreted on individually impaired loans in 2013 and 2012.
10.
EQUITY INVESTMENTS
The Parent Company’s investments consist of:
Subsidiaries:
CBSI (Note 13)
Unity Bank
CBC Forex Corporation
CBC-PCCI
CIBI
Associate:
Manulife China Bank Life Assurance Corporation (MCB Life)
2013
2012
P1,473,810,787
400,000,000
50,000,000
2,439,000
1,500,000
1,927,749,787
P1,473,607,513
400,000,000
50,000,000
2,439,000
1,500,000
1,927,546,513
21,245,838
P1,948,995,625
21,245,838
P1,948,792,351
The foregoing balances represent the acquisition cost of the Parent Company’s subsidiaries and associate.
CBSI
Cost of investment includes the original amount incurred by the Parent Company from its acquisition of CBSI in 2007 amounting
to P1.07 billion (net of goodwill and branch licenses transferred to the Parent Company amounting to P0.66 million) and additional
acquisition of non- controlling interest in 2013 and 2012 of P0.20 million and P1.37 million, respectively. Additional acquisitions
brought up the Parent Company’s interest in CBSI to 95.25% and 95.24% as of December 31, 2013 and 2012, respectively.
CBC Forex
On May 5, 2009 the BOD approved to dissolve the operations of the Company by shortening its corporate life until
December 31, 2009. The Company is still in the process of liquidation and awaiting clearance from regulatory bodies to effect
dissolution.
Unity Bank
On September 7, 2012, in line with the BSP’s SPRB Plus, the Parent Company and the majority shareholders of Unity Bank (the
Parties) entered into a MOA, whereby the Parent Company agreed to buy and the majority shareholders agreed to sell 2,998,454
shares representing the latter’s 99.949% ownership in Unity Bank.
The purchase price of the acquisition of Unity Bank, net of the unpaid subscription, amounted to P30.00 million which is payable as
follows:
a.
P20.00 million - within 24 hours from receipt of the approval by the BSP of the sale/purchase for incentives under the BSP’s
SPRB Plus;
b.
P10.00 million - upon the execution of Deed of Assignment of Shares but no earlier than the approval required of the BSP,
which amount shall be earmarked to pay off all Unity Bank employee’s separation pay.
Annual Report 2013
127
NOTES TO FINANCIAL STATEMENTS
In accordance with the MOA, the Parties entered into an Escrow Agreement with CBSI on September 20, 2012. As escrow agent,
CBSI held in trust the purchase price in favor of the Parties pending the approval of the BSP of the acquisition of Unity Bank. Under
the Escrow Agreement, the Parties further agreed for an additional purchase price of 10.00 million which will be contingent on the
outcome of the valuation of the investment properties of Unity Bank. The investment properties subject of valuation is enumerated
in the List of Foreclosed & Acquired Properties as of July 17, 2012 (“Contingent Accounts”), which Unity Bank provided to the
Parent Company. The contingent amount will be released to the majority shareholders ninety (90) calendar days from the approval
of the BSP of the acquisition of Unity Bank and when the appraised values of the investment properties, which are determined by
appraisers mutually agreed upon by the Parties, shall be at least 60.00% of the investment properties’ book value of P261.00 million.
The book value is based on the June 30, 2012 unaudited balance sheet and income statement of Unity Bank.
If the appraised value of the investment properties fall below 60.00% of the book value, no additional purchase price shall be paid
to the majority shareholders and the contingent amount will be released to the Parent Company. As of December 31, 2013, the
remaining balance under escrow amounted to P1.70 million.
On November 20, 2012, the BSP approved the acquisition by the Parent Company of the 99.949% outstanding shares of Unity Bank.
As of this date, the Parent Company effectively obtained control of Unity Bank.
The Parent Company accounted for the transaction under the acquisition method of PFRS 3. In accordance with PFRS 3, the
Parent Company determined the cost of the acquisition to be P30.00 million, which excludes the 10.00 million purchase price that
is earmarked as payment for the separation pay of Unity Bank’s employees. The Parent Company accounted for such amount as
additional capital infusion to Unity Bank.
The fair value of the identifiable assets and liabilities of Unity Bank as at November 20, 2012 follows:
Fair Value
Recognized on
Acquisition
(As restated)
Assets
Cash and other cash items
Due from BSP
Due from other banks
Available for sale investments
HTM financial assets
Loans and receivables
Bank premises, furniture, fixtures and equipment
Investment properties
Branch licenses
Sales contracts receivable
Other assets
Total
Liabilities
Deposit liabilities
Accrued expenses
Deferred tax liabilities (Note 26)
Other liabilities
Total
Net Assets
Share in the fair value of the net assets acquired (99.949%)
P23,233,626
24,535,196
267,240,919
1,090,311
27,907,634
349,069,402
31,556,252
277,550,900
20,846,202
360,000,000
9,894,395
P1,392,924,837
P980,018,443
12,628,741
133,326,974
70,965,233
1,196,939,391
P195,985,446
P195,885,493
Part of the identifiable assets the Parent Company recognized from the acquisition are the 24 branch licenses on restricted areas
which the BSP provided as incentive under the SPRB Plus. The branch licenses are granted under the SPRB Plus to make up for
the expected shortfall in the net assets of acquiree banks.
The net assets recognized in the 2012 financial statements were based on a provisional assessment of their fair value while post
due diligence of the assets and liabilities of Unity Bank, including appraisal of all of its real properties by an external appraiser, is
completed by the Parent Company.
After completion of the post due diligence review, the fair value acquired from Unity Bank and the gain on bargain purchase
recognized by the Parent Company decreased by P103.85 million.
The decrease primarily resulted from the identification of additional nonperforming loans, provisions, tax and rental liabilities. The
2012 comparative information was restated to reflect the adjustment to the provisional amounts.
The resulting gain on bargain purchase based on the final fair values of the net assets acquired from Unity Bank amounted to
P165.89 million. This amount is included under ‘Miscellaneous income’ in the statements of income.
128
The impact on 2012 financial statement accounts as a result of restatement to effect the final fair values of the assets acquired and
liabilities assumed from Unity Bank follows:
Increase (decrease) in:
Balance sheet
Assets
AFS financial assets
HTM financial assets
Loans and receivables
Accrued interest receivable
Bank premises, furniture, fixtures and equipment
Investment properties
Deferred tax assets
Other assets
Liabilities
Income tax payable
Accrued interest and other expenses
Other liabilities
December 31, 2012
P1,090,311
(1,019,028)
(45,029,437)
2,625,219
(5,150,263)
3,453,000
3,055,915
(12,468,402)
334,900
6,685,452
43,437,045
Equity
Equity attributable to equity holders of the Parent Company
Surplus
Non-controlling interest
(103,847,093)
(52,989)
Statement of income
Miscellaneous income
(103,847,093)
Cash flow on acquisition follows:
Cash and cash equivalents acquired from Unity Bank*
Cash paid
Net cash inflow
* Includes Cash and other cash items, Due from BSP and Due from other banks.
P315,009,741
(30,000,000)
P285,009,741
On December 12, 2012, the Parent Company made additional capital infusion to Unity Bank of P360.00 million to maintain
the latter’s capital adequacy ratio (CAR) at a minimum of 10.00% in light of recording additional loan loss provisioning required by
the BSP.
Investment in associates
Investment in associates in the consolidated financial statements pertain to the Parent Company’s investment in MCB Life and
CBC-PCCI’s investment in Urban Shelters (accounted for by CBC-PCCI in its financial statements as an investment in an associate)
which is carried at nil amount as of December 31, 2013 and 2012. The equity in net earnings of these investments is not significant
to the Group.
MCB Life
On August 2, 2006, the BOD approved the joint project proposal of the Parent Company with Manufacturers Life Insurance Company
(Manulife). Under the proposal, the Parent Company will invest in a life insurance company owned by Manulife, and such company
will be offering innovative insurance and financial products for health, wealth and education through the Parent Company’s branches
nationwide. The life insurance company was incorporated as The Pramerica Life Insurance Company Inc. in 1998 but the name was
changed to Manulife China Bank Life Assurance Corporation on March 23, 2007. The Parent Company acquired 5.00% interest of
MCB Life on August 8, 2007. This investment is accounted for as an investment in an associate by virtue of the Bancassurance
Alliance Agreement which provides the Parent Company to be represented in MCB Life’s BOD and, thus, exercise significant
influence over the latter.
The BSP requires the Parent Company to maintain a minimum of 5% ownership over MCB Life in order for MCB Life to be allowed
to continue distributing its insurance products through the Parent Company’s branches.
Commission income earned by the Parent Company from its bancassurance agreement amounting to P294.80 million,
P214.57 million and P178.27 million in 2013, 2012 and 2011, respectively, is included under ‘Miscellaneous income’ in the
statements of income (Note 20).
Annual Report 2013
129
NOTES TO FINANCIAL STATEMENTS
11.
BANK PREMISES, FURNITURE, FIXTURES AND EQUIPMENT
The composition of and movements in this account follow:
Consolidated
Land
Furniture,
Fixtures and
Equipment
Buildings
Cost
Balance at beginning of year
P2,464,639,930 P4,615,682,659 P1,526,411,978
Additions
−
632,080,470
15,392,179
Disposals/transfers*
7,195,289
(138,238,786)
2,479,146
Balance at end of year
2,471,835,219
5,109,524,343
1,544,283,303
Accumulated Depreciation
and Amortization
Balance at beginning of year
−
3,583,863,946
651,028,573
Depreciation and amortization
−
458,386,423
98,452,429
Disposals/transfers*
−
(137,237,727)
(7,646)
Balance at end of year
−
3,905,012,642
749,473,356
Accumulated Impairment
(Note 15)
Balance at beginning of year
−
−
−
Reclassification
−
4,628,835
−
Balance at end of year
−
4,628,835
−
P794,809,947
Net Book Value at End of Year
P2,471,835,219 P1,199,882,866
*Includes transfers from investment properties amounting to P15.44 million.
Leasehold
Improvements
Constructionin-Progress
2013
Total
P853,865,207
129,742,485
(10,363,988)
973,243,704
P−
388,025,941
−
388,025,941
P9,460,599,774
1,165,241,075
(138,928,339)
10,486,912,510
470,390,884
88,688,560
(11,222,171)
547,857,273
−
−
−
−
4,705,283,403
645,527,412
(148,467,544)
5,202,343,271
−
−
−
P425,386,431
−
−
−
P388,025,941
−
4,628,835
4,628,835
P5,279,940,404
Consolidated (As restated - Note 10)
Cost
Balance at beginning of year
Additions
Acquisition of Unity Bank
Disposals/reclassification
Balance at end of year
Accumulated Depreciation and
Amortization
Balance at beginning of year
Depreciation and amortization
Disposals/reclassification
Balance at end of year
Accumulated Impairment
(Note 15)
Balance at beginning of year
Reclassification
Balance at end of year
Net Book Value at End of Year
Land
Furniture,
Fixtures and
Equipment
Buildings
Leasehold
Improvements
Constructionin-Progress
2012
Total
P2,450,749,930
–
13,890,000
–
2,464,639,930
P4,235,059,123
516,247,974
2,066,774
(137,691,212)
4,615,682,659
P1,564,868,018
43,778,146
11,203,470
(93,437,656)
1,526,411,978
P763,255,613
112,224,836
4,396,008
(26,011,250)
853,865,207
P–
–
–
–
–
P9,013,932,684
672,250,956
31,556,252
(257,140,118)
9,460,599,774
–
–
–
–
3,262,664,839
431,391,533
(110,192,426)
3,583,863,946
422,562,028
174,796,525
53,670,020
651,028,573
391,294,477
91,348,836
(12,252,429)
470,390,884
–
–
–
–
4,076,521,344
697,536,894
(68,774,835)
4,705,283,403
–
–
–
P2,464,639,930
–
–
–
P1,031,818,713
15,202,948
(15,202,948)
–
P875,383,405
–
–
–
P383,474,323
–
–
–
P–
15,202,948
(15,202,948)
–
P4,755,316,371
Land
Furniture,
Fixtures and
Equipment
2013
Total
Parent Company
Cost
Balance at beginning of year
Additions
Disposals/reclassification
Balance at end of year
Accumulated Depreciation
and Amortization
Balance at beginning of year
Depreciation and amortization
Disposals/reclassification
Balance at end of year
Net Book Value at End of Year
130
P2,321,830,036
–
–
2,321,830,036
P4,343,050,069
514,451,997
(99,600,692)
4,757,901,374
–
–
–
–
P2,321,830,036
3,423,135,745
405,742,449
(95,142,021)
3,733,736,173
P1,024,165,201
Buildings
Leasehold
Improvements
Constructionin-Progress
P1,099,864,750
5,625,935
–
1,105,490,685
P739,962,496
86,432,155
1,469,841
827,864,492
P–
388,025,941
−
388,025,941
P8,504,707,351
994,536,028
(98,130,851)
9,401,112,528
455,588,421
67,523,136
734,437
523,845,994
P304,018,498
–
–
–
–
P388,025,941
4,263,847,667
506,032,386
(94,415,230)
4,675,464,823
P4,725,647,705
385,123,501
32,766,801
(7,646)
417,882,656
P687,608,029
Parent Company
Cost
Balance at beginning of year
Additions
Disposals/reclassification
Balance at end of year
Accumulated Depreciation
and Amortization
Balance at beginning of year
Depreciation and amortization
Disposals/reclassification
Balance at end of year
Net Book Value at End of Year
Land
Furniture,
Fixtures and
Equipment
Buildings
Leasehold
Improvements
Constructionin-Progress
2012
Total
P2,321,830,036
–
–
2,321,830,036
P4,007,963,944
465,308,732
(130,222,607)
4,343,050,069
P1,090,509,612
21,596,345
(12,241,207)
1,099,864,750
P673,579,473
72,800,057
(6,417,034)
739,962,496
P–
–
–
–
P8,093,883,065
559,705,134
(148,880,848)
8,504,707,351
–
–
–
–
P2,321,830,036
3,136,651,713
395,981,040
(109,497,008)
3,423,135,745
P919,914,324
353,201,165
36,841,933
(4,919,597)
385,123,501
P714,741,249
377,215,989
78,372,432
–
455,588,421
P284,374,075
–
–
–
–
P–
3,867,068,867
511,195,405
(114,416,605)
4,263,847,667
P4,240,859,684
The Group adopted the deemed cost model as of January 1, 2004 and considered the carrying value of the land determined under its
previous accounting method (revaluation method) as the deemed cost of the asset as of January 1, 2005. Accordingly, revaluation
increment amounting to P1.28 billion was closed to surplus (Note 22) in 2011.
In 2011, depreciation and amortization amounting to P555.16 million and P509.81 million for the Group and Parent Company,
respectively, are included in the statements of income under ‘Depreciation and amortization’ account.
On August 26, 2011, the Parent Company was registered as an Economic Zone Information Technology (IT) Facilities Enterprise with
the Philippine Economic Zone Authority (PEZA) to operate and maintain a proposed 17-storey building located inside the CBP-IT Park
in Barangays Mabolo, Luz, Hipodromo, Carreta, and Kamputhaw, Cebu City, for lease to PEZA-registered IT enterprises, and to be
known as China Bank Tower. This registration is under PEZA Registration Certificate No. 11-03-F.
Under this registration, the Bank is entitled to five percent (5%) final tax on gross income earned from locator IT enterprises and
related operations in accordance with existing PEZA rules. The Bank shall also be exempted from the payment of all national and
local taxes in relation to this registered activity.
As of December 31, 2013, China Bank Tower has not commenced commercial operations. The building is still under construction
and projected to be operational by 2014.
12.
INVESTMENT PROPERTIES
The composition of and movements in this account follow:
Land
Cost
Balance at beginning of year
P3,534,381,180
Additions
372,157,950
Disposals/write-off/transfers*
(631,380,624)
Balance at end of year
3,275,158,506
Accumulated Depreciation and Amortization
Balance at beginning of year
−
Depreciation and amortization
−
Disposals/write-off/transfers*
−
Balance at end of year
P−
(Forward)
Accumulated Impairment Loss (Note 15)
Balance at beginning of year
P1,306,987,244
Provisions during the year
−
Reclassification
(73,828,444)
Balance at end of year
1,233,158,800
Net Book Value at End of Year
P2,041,999,706
*Includes transfers to bank premises amounting to P15.44 million.
Consolidated
Buildings and
Improvements
2013
Total
P1,384,739,653
65,350,797
(208,749,601)
1,241,340,849
P4,919,120,833
437,508,747
(840,130,225)
4,516,499,355
660,649,571
107,358,622
(102,365,322)
P665,642,871
660,649,571
107,358,622
(102,365,322)
P665,642,871
P132,172,378
2,580,829
72,414,985
207,168,192
P368,529,786
P1,439,159,622
2,580,829
(1,413,459)
1,440,326,992
P2,410,529,492
Annual Report 2013
131
NOTES TO FINANCIAL STATEMENTS
Cost
Balance at beginning of year
Additions
Acquisition of Unity Bank
Disposals/write-off
Balance at end of year
Accumulated Depreciation and Amortization
Balance at beginning of year
Depreciation and amortization
Disposals/write-off
Balance at end of year
Accumulated Impairment Loss (Note 15)
Balance at beginning of year
Disposals/write-off
Reclassification
Balance at end of year
Net Book Value at End of Year
Cost
Balance at beginning of year
Additions
Disposals/write-off
Balance at end of year
Accumulated Depreciation and Amortization
Balance at beginning of year
Depreciation and amortization
Disposals/write-off
Balance at end of year
Accumulated Impairment Loss (Note 15)
Balance at beginning and end of year
Net Book Value at End of Year
Cost
Balance at beginning of year
Additions
Disposals/write-off
Balance at end of year
Accumulated Depreciation and Amortization
Balance at beginning of year
Depreciation and amortization
Disposals/write-off
Balance at end of year
Accumulated Impairment Loss (Note 15)
Balance at beginning of year
Disposals/write-off
Transfer
Balance at end of year
Net Book Value at End of Year
Consolidated (As restated - Note 10)
Buildings and
Land
Improvements
2012
Total
P3,801,810,369
49,106,437
219,547,433
(536,083,059)
3,534,381,180
P1,417,489,369
85,784,051
58,003,467
(176,537,234)
1,384,739,653
P5,219,299,738
134,890,488
277,550,900
(712,620,293)
4,919,120,833
–
–
–
–
637,719,163
127,758,913
(104,828,505)
660,649,571
637,719,163
127,758,913
(104,828,505)
660,649,571
1,098,256,241
(4,110,750)
212,841,753
1,306,987,244
P2,227,393,936
68,428,112
(283,601)
64,027,867
132,172,378
P591,917,704
1,166,684,353
(4,394,351)
276,869,620
1,439,159,622
P2,819,311,640
Land
Parent Company
Buildings and
Improvements
2013
Total
P3,255,787,462
359,613,722
(597,960,384)
3,017,440,800
–
–
–
–
P1,232,341,127
60,015,237
(161,821,126)
1,130,535,238
P4,488,128,589
419,628,959
(759,781,510)
4,147,976,038
636,022,201
89,714,056
(88,950,986)
636,785,271
636,022,201
89,714,056
(88,950,986)
636,785,271
1,230,710,193
P1,786,730,607
202,388,566
P291,361,401
1,433,098,759
P2,078,092,008
Land
Parent Company
Buildings and
Improvements
2012
Total
P3,741,717,431
48,826,192
(534,756,161)
3,255,787,462
P1,330,504,819
73,842,200
(172,005,892)
1,232,341,127
P5,072,222,250
122,668,392
(706,762,053)
4,488,128,589
–
–
–
P–
617,149,727
109,718,073
(90,845,599)
P636,022,201
617,149,727
109,718,073
(90,845,599)
P636,022,201
P1,026,121,765
(4,110,750)
208,699,178
1,230,710,193
P2,025,077,269
P123,677,893
(283,601)
78,994,274
202,388,566
P393,930,360
P1,149,799,658
(4,394,351)
287,693,452
1,433,098,759
P2,419,007,629
The Group’s investment properties consist entirely of real estate properties acquired in settlement of loans and receivables. The
difference between the fair value of the investment property upon foreclosure and the carrying value of the loan is recognized under
‘Gain on asset foreclosure and dacion transactions’ in the statements of income.
In 2011, depreciation and amortization amounting to P160.95 million and P155.92 million for the Group and Parent Company,
respectively, are included in the statements of income under ‘Depreciation and amortization’ account.
132
Details of rent income earned and direct operating expenses incurred on investment properties follow:
Rent income on investment properties
Direct operating expenses on investment properties
generating rent income
Direct operating expenses on investment properties not
generating rent income
Rent income on investment properties
Direct operating expenses on investment properties
generating rent income
Direct operating expenses on investment properties not
generating rent income
2013
P13,392,985
Consolidated
2012
P36,590,737
2011
P60,901,894
6,733,827
5,298,199
9,290,776
74,096,497
47,874,641
33,765,717
2013
P8,833,767
Parent Company
2012
P16,058,824
2011
P34,305,415
6,733,827
5,298,199
9,290,776
71,791,484
41,107,203
32,084,887
Rent income earned from leasing out investment properties is included under ‘Miscellaneous income’ in the statements of income.
As of December 31, 2013 and 2012, fair values of investment properties amounted to P6.56 billion and P7.16 billion, respectively,
for the Group and P6.18 billion and P6.38 billion, respectively, for the Parent Company.
13.
GOODWILL AND BRANCH LICENSES
Branch licenses and goodwill in the Parent Company’s balance sheet amounting to P455.00 million and P222.84 million, respectively,
arose from the Parent Company’s acquisition of CBSI in 2007.
On June 21, 2007, the Parent Company and the majority shareholders of CBSI entered into a MOA whereby the former agreed to
buy and the latter agreed to sell 87.52% of their equity interest in CBSI for P1.65 billion.
On September 3, 2007, the Parent Company’s officers were appointed as members of CBSI’s BOD. As of this date, the Parent
Company effectively obtained control of CBSI. Subsequent thereto, a tender offer was made to all remaining shareholders of CBSI
at the price of 214.65 per share. A total of 4.30% of CBSI’s common shares were subsequently acquired through a tender offer,
which expired on January 15, 2008.
The acquisition resulted in recognition of goodwill determined as follows:
Total cost of acquisition:
Cost to acquire 87.52%
Cost to acquire 4.30%
Less: Fair value of net assets acquired
Goodwill
P1,650,283,292
84,689,943
1,734,973,235
1,512,132,034
P222,841,201
The Parent Company attributed the goodwill to factors such as increase in geographical presence and customer base due to
the branches acquired. On November 21, 2007, the BOD approved the transfer of certain assets and liabilities (including certain
branches) of CBSI to the Parent Company. As the economic value of goodwill arising from the CBSI acquisition can be attributed to
the branches transferred, such goodwill was transferred to the books of the Parent Company.
The branch licenses pertaining to the branches transferred were also transferred to the Parent Company. The transfers resulted in
a reduction of the investment account of the Parent Company by P0.66 billion as of December 31, 2007.
Since goodwill is attributed to the branches transferred, the Parent Company’s Branch Banking Group (BBG) has been identified as
the CGU for impairment testing of the goodwill. The BBG has also been identified as the CGU for impairment testing of the branch
licenses.
The recoverable amount of the CGU has been determined based on a value-in-use calculation using cash flow projections from
financial budgets approved by senior management covering a five-year period, which do not include restructuring activities that the
Group is not yet committed to or significant future investments that will enhance the asset base of the CGU being tested. The
discount rate applied to cash flow projections is 12.05% in 2013 and 11.89% in 2012 and cash flows beyond the five year-period are
extrapolated using a steady growth rate of 1.00% and 3.00% in 2013 and 2012, respectively, which does not exceed the long-term
average growth rate for the industry.
Annual Report 2013
133
NOTES TO FINANCIAL STATEMENTS
The calculation of the value-in-use of the CGU is most sensitive to the following assumptions:
•
•
•
•
•
Interest margin
Discount rates
Market share during the budget period
Steady growth rate used to extrapolate cash flows beyond the budget period
Local inflation rates
With regard to the assessment of value-in-use of the CGU, management believes that no reasonably possible change in any of the
above key assumptions would cause the carrying value of the goodwill and branch licenses to materially exceed its recoverable
amount as of December 31, 2013 and 2012.
14.
OTHER ASSETS
This account consists of:
Consolidated
Financial Assets
Accounts receivable
SCR
RCOCI
Miscellaneous
Sundry debit
Prepaid expenses
Others
Total
Nonfinancial Assets
Net plan assets (Note 23)
Creditable withholding taxes (CWT)
Total
Allowance for impairment and credit losses
(Note 15)
2013
2012
(As restated Notes 2 and 10)
Parent Company
2013
2012
(As restated Note 2)
P2,246,848,092
496,495,246
74,677,585
P2,316,561,783
496,644,756
110,891,261
P2,050,625,476
425,543,982
74,677,585
P2,145,561,124
409,168,484
108,656,681
80,689,768
55,472,738
412,781,760
548,944,266
3,366,965,189
287,510,298
56,203,903
524,770,847
868,485,048
3,792,582,848
80,689,768
53,293,366
413,948,541
547,931,675
3,098,778,718
287,287,949
53,486,464
460,785,360
801,559,773
3,464,946,062
1,504,128,446
691,661,831
2,195,790,277
5,562,755,466
930,707,083
614,680,146
1,545,387,229
5,337,970,077
1,502,441,475
540,295,445
2,042,736,920
5,141,515,638
930,707,083
507,585,142
1,438,292,225
4,903,238,287
(761,634,930)
P4,801,120,536
(631,521,551)
P4,706,448,526
(743,048,784)
P4,398,466,854
(613,734,269)
P4,289,504,018
Accounts Receivable
As of December 31, 2013 and 2012, about 76% and 79%, respectively, of the Parent Company’s accounts receivable represents
final withholding taxes (FWT) imposed by the Bureau of Internal Revenue (BIR) and withheld by the Bureau of Treasury from the
proceeds collected by the Parent Company upon maturity of the Poverty Eradication and Alleviation Certificates (PEACe) bonds on
October 18, 2011.
On October 17, 2011, the Parent Company together with seven other banks filed a joint petition against the BIR’s decision to
impose 20% FWT on PEACe bonds. The high court issued a temporary restraining order in favor of these banks on the same day
and ordered these banks to place in escrow an amount equivalent to the disputed withholding tax until final decision is rendered.
However, the government withheld the 20% FWT from the proceeds of the PEACe bonds and held it in an escrow account with
the Land Bank of the Philippines.
As discussed in more detail in Note 2, the Parent Company considers several factors in determining whether a financial asset is
impaired, including the present value of the expected future cash flows discounted at the asset’s original contractual effective
rate. As of December 31, 2013 and 2012, the Parent Company, in consultation with its legal counsel has determined that the said
accounts receivable is collectible.
Accounts receivable also includes noninterest bearing advances to officers and employees, with terms ranging from 1 to 30 days
and receivables of the Parent Company from ATM transactions of clients of other banks through any of the Parent Company’s ATM
terminals.
Miscellaneous Assets
Miscellaneous assets - others consist mainly of documentary stamps, unissued stationary and supplies, inter-office float items,
security deposits and deposits for various services.
In the consolidated financial statements, miscellaneous assets - others include non-current assets held for sale which comprised
of foreclosed vehicles amounting to P4.28 million and P9.40 million as of December 31, 2013 and 2012, respectively, for which
management assessed that sale of such asset to be highly probable.
134
The following tables present the reconciliation of the movement of the allowance for impairment and credit losses on other assets:
At January 1, 2013
Provisions during the year (Note 15)
Transfers/others
At December 31, 2013
At January 1, 2012
Provisions (reversals) of impairment losses
(Note 15)
Transfers/others
At December 31, 2012
15.
Consolidated
Accounts
Receivable
P422,083,499
99,450,446
9,964,908
P531,498,853
SCR
P14,778,501
2,786,601
4,630,676
P22,195,778
Miscellaneous
P194,659,551
1,520,770
11,759,978
P207,940,299
Total
P631,521,551
103,757,817
26,355,562
P761,634,930
P134,029,733
P14,222,891
P201,459,741
P349,712,365
27,026,356
261,027,410
P422,083,499
119,541
436,069
P14,778,501
(26,587)
(6,773,603)
P194,659,551
27,119,310
254,689,876
P631,521,551
Parent Company
At January 1, 2013
Provisions during the year (Note 15)
Transfers/others
At December 31, 2013
Accounts
Receivable
P410,412,520
97,463,494
11,752,295
P519,628,309
SCR
P14,342,432
2,786,601
4,630,676
P21,759,709
Miscellaneous
P188,979,317
921,469
11,759,980
P201,660,766
Total
P613,734,269
101,171,564
28,142,951
P743,048,784
At January 1, 2012
Provisions during the year (Note 15)
Transfers/others
At December 31, 2012
P133,849,332
16,054,584
260,508,604
P410,412,520
P14,222,891
119,541
–
P14,342,432
189,053,933
–
(74,616)
P188,979,317
P337,126,156
16,174,125
260,433,988
P613,734,269
ALLOWANCE FOR IMPAIRMENT AND CREDIT LOSSES
Changes in the allowance for impairment and credit losses are as follows:
Consolidated
2013
Balances at beginning of year:
Loans and receivables
Investment properties
Accrued interest receivable
AFS financial assets
Bank premises, furniture, fixtures and
equipment
Other assets
Provisions charged to operations
Accounts charged off and others
(Forward)
Balances at end of year:
Loans and receivables (Note 9)
Investment properties (Note 12)
Accrued interest receivable
AFS financial assets
Bank premises, furniture, fixtures and
equipment (Note 11)
Other assets (Note 14)
P6,779,450,022
1,439,159,622
81,113,369
39,625,921
–
631,521,551
8,970,870,485
414,335,872
(407,945,587)
P6,390,285
2012
P7,569,243,302
1,166,684,353
84,282,814
33,397,735
15,202,948
349,712,365
9,218,523,517
236,756,182
(484,409,214)
(P247,653,032)
Parent Company
2013
P6,566,449,815
1,433,098,759
80,567,819
6,333,398
–
613,734,269
8,700,184,060
278,540,863
(381,845,861)
(P103,304,998)
2012
P7,403,118,580
1,149,799,658
83,737,263
1,204,678
–
337,126,156
8,974,986,335
200,181,569
(474,983,844)
(P274,802,275)
P6,633,080,280
1,440,326,992
97,974,239
39,615,494
P6,779,450,022
1,439,159,622
81,113,369
39,625,921
P6,316,979,860
1,433,098,759
97,428,688
6,322,971
P6,566,449,815
1,433,098,759
80,567,819
6,333,398
4,628,835
761,634,930
P8,977,260,770
–
631,521,551
P8,970,870,485
–
743,048,784
P8,596,879,062
–
613,734,269
P8,700,184,060
At the current level of allowance for impairment and credit losses, management believes that the Group has sufficient allowance to
cover any losses that may be incurred from the non-collection or non-realization of its loans and receivables and other risk assets.
Annual Report 2013
135
NOTES TO FINANCIAL STATEMENTS
A reconciliation of the allowance for credit losses on loans and receivables from customers, AFS financial assets and accrued
interest receivable follows:
Consolidated
2013
At January 1, 2013
Provisions (recoveries) during
the year
Transfers/others
At December 31, 2013
Individual impairment
Collective impairment
Corporate
Lending
P5,724,591,365
Loans and Receivables
Consumer Trade-related
Lending
Lending
P458,641,413 P596,055,655
192,318,066
95,180,719
(739,100,069)
165,722,186
P5,177,809,362 P719,544,318
P3,076,957,279 P532,039,333
2,100,852,083
187,504,985
P5,177,809,362 P719,544,318
20,673,784
118,815,858
P735,545,297
P699,866,436
35,678,861
P735,545,297
Accrued
Interest
Receivable
AFS Financial
Assets
Unquoted
Others
Total
Securities
P161,589 P6,779,450,022
P39,625,921
P81,113,369
5,096
308,177,665
14,618
(454,547,407)
P181,303 P6,633,080,280
P177,704 4,309,040,752
3,599 2,324,039,528
P181,303 P6,633,080,280
(180,439)
17,041,309
P97,974,239
P97,974,239
–
P97,974,239
–
(10,427)
P39,615,494
P39,615,494
–
P39,615,494
Consolidated
2012
At January 1, 2012
Provisions (recoveries) during
the year
Transfers/others
At December 31, 2012
Individual impairment
Collective impairment
Corporate
Lending
P6,300,241,913
Loans and Receivables
Consumer
Trade-related
Lending
Lending
Others
Total
P353,900,062 P913,920,953
P1,180,374 P7,569,243,302
193,164,620
12,256,608
(915,413)
(768,815,168)
92,484,743
(316,949,885)
P5,724,591,365 P458,641,413 P596,055,655
P3,237,518,009 P501,127,048 P490,509,517
2,487,073,356
(42,485,635)
105,546,138
P5,724,591,365 P458,641,413 P596,055,655
–
204,505,815
(1,018,785) (994,299,095)
P161,589 P6,779,450,022
P161,589 4,229,316,163
– 2,550,133,859
P161,589 P6,779,450,022
Accrued
Interest
Receivable
AFS Financial
Assets
Unquoted
Securities
P33,397,735
P84,282,814
5,128,720
1,099,466
P39,625,921
P39,625,921
–
P39,625,921
2,337
(3,171,782)
P81,113,369
P81,113,369
–
P81,113,369
Parent Company
2013
At January 1, 2013
Provisions (recoveries) during
the year
Transfers/others
At December 31, 2013
Individual impairment
Collective impairment
Corporate
Lending
P5,549,707,297
AFS Financial
Loans and Receivables
Assets
Consumer
Trade-related
Unquoted
Lending
Lending
Others
Total
Securities
P420,525,274 P596,055,655
P161,589 P6,566,449,815
P6,333,398
139,452,126
17,418,732
(727,641,130)
181,790,961
P4,961,518,293 P619,734,967
P3,039,928,029 P490,384,594
1,922,220,264
129,350,373
P4,962,148,293 P619,734,967
20,673,784
118,815,858
P735,545,297
P699,866,436
35,678,861
P735,545,297
5,096
177,549,738
14,618
(427,019,693)
P181,303 P6,316,979,860
P177,704 P4,230,356,763
3,599 2,087,253,097
P181,303 P6,317,609,860
Accrued
Interest
Receivable
P80,567,819
–
(10,427)
P6,322,971
P6,322,971
–
P6,322,971
(180,439)
17,041,308
P97,428,688
P97,428,688
–
P97,428,688
AFS Financial
Assets
Unquoted
Securities
P1,204,678
Accrued
Interest
Receivable
P83,737,263
5,128,720
–
P6,333,398
P6,333,398
–
P6,333,398
2,336
(3,171,780)
P80,567,819
P80,567,819
–
P80,567,819
Parent Company
2012
At January 1, 2012
Provisions (recoveries) during
the year
Transfers/others
At December 31, 2012
Individual impairment
Collective impairment
136
Corporate
Lending
P6,136,549,012
Loans and Receivables
Consumer Trade-related
Lending
Lending
Others
Total
P351,468,241 P913,920,953
P1,180,374 P7,403,118,580
180,018,358
(226,557)
(915,413)
(766,860,073)
69,283,590
(316,949,885)
P5,549,707,297 P420,525,274 P596,055,655
P3,077,670,385 P479,271,213 P490,509,517
2,472,036,912
(58,745,939)
105,546,138
P5,549,707,297 P420,525,274 P596,055,655
–
178,876,388
(1,018,785) (1,015,545,153)
P161,589 P6,566,449,815
P161,589 P4,047,612,704
– 2,518,837,111
P161,589 P6,566,449,815
16.
DEPOSIT LIABILITIES
As of December 31, 2013 and 2012, 56.50% and 60.54% respectively, of the total deposit liabilities of the Group are subject to
periodic interest repricing. The remaining deposit liabilities bear annual fixed interest rates ranging from 0.13% to 8.25% in 2013
and 2012, and 0.25% to 8.25% in 2011.
On April 2, 2008, the Parent Company’s BOD authorized the issuance of Long-Term Negotiable Certificates of Deposit (LTNCDs)
to expand its asset base. On August 8, 2008, the Parent Company issued 5-year LTNCDs with aggregate principal amount of 5.00
billion at par, which matured on August 9, 2013. As of December 31, 2012, the LTNCDs were included under the ‘Time deposit
liabilities’ account. The LTNCDs bear a coupon rate of 8.25% per annum, payable quarterly at the end of each 3-month period. The
statutory reserve for LTNCD is 2.00%. It is not subject to liquidity reserve in accordance with the Deposit Substitutes section of
the MORB.
On March 29, 2012, BSP Circular No. 753 was issued providing unification of the statutory and liquidity reserve requirement,
non-remuneration of the unified reserve requirement, exclusion of cash in vault and demand deposits as eligible forms of reserve
requirement compliance, and reduction in the unified reserve requirement ratios.
As of December 31, 2013 and 2012, Due from BSP amounting to P48.04 billion and P37.57 billion, respectively, were set aside as
reserves for deposit liabilities per latest report submitted by the Parent Company to the BSP.
17.
BILLS PAYABLE
The Group’s and the Parent Company’s bills payable consist of:
2013
P8,240,891,256
28,718,441
−
29,584,828
P8,299,194,525
Interbank loans payable
Government lending programs
BSP - rediscounting (Note 9)
Others
2012
P−
1,207,178,185
2,060,527,961
259,101,827
P3,526,807,973
Interbank loans payable consist of the following dollar-denominated borrowings:
Counterparty
JP Morgan Chase London
Citibank N.A. Manila
Barclays Bank London
Average term
3 months
3 years
2 years
Interest rate
0.65% to 0.75%
1.69%
1.40%
Amount
P4,000,891,273
2,219,750,014
2,020,249,969
P8,240,891,256
As of December 31, 2013, the carrying amount of HTM and AFS financial assets pledged by the Parent Company as collateral for
its interbank borrowings amounted to P6.81 billion and P2.54 billion, respectively. The fair value of HTM financial assets pledged as
collateral amounted to P8.20 million as of December 31, 2013.
Details of the government lending programs follow:
Counterparty
Development Bank of the Philippines
Land Bank of the Philippines
Social Security Services
18.
Average term
6 years
5 years
3 years
Rates
4.00% to 8.25%
5.13%
4.00%
2013
P27,646,333
1,072,108
−
P28,718,441
2012
P781,349,950
425,819,366
8,869
P1,207,178,185
ACCRUED INTEREST AND OTHER EXPENSES
This account consists of:
Consolidated
Accrued payable for employee benefits
Accrued interest payable
Accrued taxes and other licenses
Accrued lease payable
Accrued other expenses payable
2013
P752,231,486
388,391,903
134,295,387
67,125,802
159,880,900
P1,501,925,478
2012
(As restated Note 10)
P642,125,261
558,128,732
72,402,968
60,914,579
288,661,567
P1,622,233,107
Parent Company
2013
P752,231,486
362,063,310
134,188,984
60,914,579
136,222,987
P1,445,621,346
2012
P642,125,261
534,128,856
72,347,367
60,914,579
247,322,027
P1,556,838,090
Annual Report 2013
137
NOTES TO FINANCIAL STATEMENTS
19.
OTHER LIABILITIES
This account consists of:
Consolidated
Financial liabilities
Accounts payable
Acceptances payable
Due to the Treasurer of the Philippines
Due to PDIC*
Other credits-dormant
Margin deposits
Miscellaneous
Total
Nonfinancial liabilities
Withholding taxes payable
Retirement liabilities (Note 23)
Total
2013
2012
(As restated Notes 2 and 10)
P862,260,400
954,605,687
450,277,877
316,812,241
188,616,465
922,346
281,376,514
3,054,871,530
106,024,639
46,535,741
152,560,380
P3,207,431,910
Parent Company
2013
2012
P977,638,028
271,316,801
659,049,344
234,442,155
98,400,409
3,015,493
491,155,721
2,735,017,951
P618,051,235
954,605,687
450,277,877
316,812,241
188,616,465
922,346
193,357,500
2,722,643,351
P804,649,279
271,316,801
659,049,344
234,442,155
98,400,409
3,015,493
418,775,428
2,489,648,909
128,664,585
54,867,279
183,531,864
P2,918,549,815
93,734,234
–
93,734,234
P2,816,377,585
120,930,315
–
120,930,315
P2,610,579,224
*Philippine Deposit Insurance Corporation
Accounts payable includes payables to suppliers and service providers, and loan payments and other charges received from
customers in advance.
Miscellaneous liabilities mainly include sundry credits, inter-office float items, and dormant deposit accounts.
20.
OTHER OPERATING INCOME AND MISCELLANEOUS EXPENSES
Trading and Securities Gain
This account consists of:
2013
Financial assets at FVPL:
Held-for-trading
Designated at FVPL
Derivatives assets (Note 24)
AFS financial assets
Consolidated
2012
2011
2013
Parent Company
2012
2011
(P93,904,356) P247,651,111
(P94,145,027) (P93,904,356) P247,651,111
(P94,145,027)
73,749,921
–
–
73,749,921
–
–
(81,352,004)
(33,294,321)
(86,888,762)
(81,352,004)
(33,294,321)
(86,888,763)
2,006,391,602 2,701,942,417 1,649,670,999 1,716,314,402 2,572,816,115 1,634,157,490
P1,904,885,163 P2,916,299,207 P1,468,637,210 P1,614,807,963 P2,787,172,905 P1,453,123,700
Service Charges, Fees and Commissions
Details of this account are as follows:
Service and collection charges
Deposits
Loans
Others
Fees and commissions
2013
Consolidated
2012
2011
2013
P505,554,168
85,299,409
197,757,214
367,849,071
P1,156,459,862
P591,106,429
23,839,053
43,193,556
388,213,255
P1,046,352,293
P620,201,649
101,647,865
65,975,502
197,432,292
P985,257,308
P485,209,813
35,839,305
108,482,813
374,542,144
P1,004,074,075
Parent Company
2012
P578,003,661
23,527,821
42,294,399
305,341,215
P949,167,096
2011
P610,997,297
100,969,628
478,694
136,682,214
P849,127,833
Miscellaneous Income
Details of this account are as follows:
Parent Company
Dividends (Note 8)
Bancassurance (Note 10)
Fund transfer fees
Participation fee
Rental on bank premises
Late fees
Rental safety deposit boxes
Recovery of charged off assets
Miscellaneous income
138
2013
P486,381,921
294,797,215
104,613,783
32,778,522
28,693,424
18,842,213
14,479,453
293,043
105,095,313
P1,085,974,887
2012
(As restated Note 10)
P9,516,508
214,571,987
46,389,926
32,317,059
27,795,805
34,928,226
13,783,285
2,518,353
292,122,955
P673,944,104
2011
P27,664,086
178,271,487
67,989,808
50,122,489
25,042,745
23,492,035
13,896,467
14,259,993
154,347,985
P555,087,095
2013
P486,381,921
294,797,215
104,613,783
32,778,522
28,693,424
18,842,213
14,479,453
293,043
101,953,156
P1,082,832,730
2012
P9,516,508
214,571,987
46,389,926
32,317,059
27,795,805
34,928,225
13,783,285
2,518,353
117,992,510
P499,813,658
2011
P27,664,086
178,271,487
67,989,808
50,122,489
25,042,745
23,492,035
13,896,467
14,259,993
109,553,165
P510,292,275
Dividends earned by the Parent Company from its investment in preferred shares designated at FVPL amount to P478.25 million in
2013 and nil in 2012.
Miscellaneous Expenses
Details of this account are as follows:
Information technology
Litigations
Broker’s fee
Freight
Clearing and processing fee
Membership fees and dues
Miscellaneous expense
21.
2013
P208,503,155
119,596,154
61,272,891
48,446,195
18,354,364
15,435,837
218,130,013
P689,738,609
Consolidated
2012
P214,630,676
29,061,855
31,795,328
46,067,749
20,605,749
16,388,146
245,968,277
P604,517,780
2011
P144,722,221
65,488,608
29,477,653
40,683,834
19,618,802
13,000,309
220,351,422
P533,342,849
2013
P206,865,179
114,607,943
61,272,891
48,446,195
18,354,364
15,435,837
215,395,594
P680,378,003
Parent Company
2012
2011
P212,599,285
P142,551,712
28,716,149
64,611,129
31,795,328
29,477,653
45,306,771
39,683,719
20,605,749
19,618,802
16,388,146
13,000,309
256,104,395
188,706,648
P611,515,823
P497,649,972
MATURITY ANALYSIS OF ASSETS AND LIABILITIES
The following tables present both the Group’s and Parent Company’s assets and liabilities as of December 31, 2013 and 2012
analyzed according to when they are expected to be recovered or settled within one year and beyond one year from the respective
balance sheet date:
Consolidated
2013
Less than
Over
Twelve Months
Twelve Months
Financial assets
Cash and other cash items
Due from BSP
Due from other banks
SPURA
Financial assets at FVPL
AFS financial assets - gross
HTM financial assets
Loans and receivables - gross
Accrued interest receivable – gross
Other assets - gross
Nonfinancial assets
Bank premises, furniture, fixtures
and equipment - gross
Investment properties - gross
Deferred tax assets
Investments in associates
Branch licenses
Goodwill
Other assets - gross
Nonfinancial liabilities
Accrued payable for employee benefits
Accrued taxes and other licenses
Accrued lease payable
Withholding taxes payable
Accrued income tax payable
Retirement liabilities (Note 23)
Total
P7,281,640,616
P–
P7,281,640,616
P6,160,371,861
P–
P6,160,371,861
78,968,132,522
–
78,968,132,522
40,659,682,959
–
40,659,682,959
23,885,538,128
–
23,885,538,128
4,527,376,998
–
4,527,376,998
–
–
–
446,000,000
–
446,000,000
5,556,344,777
4,865,078,276
10,421,423,053
7,158,666,538
5,008,011,654
12,166,678,192
854,830,732
43,534,041,537
44,388,872,269
7,912,111,248
33,698,955,814
41,611,067,062
802,043,787
11,348,503,042
12,150,546,829
1,414,017,682
11,279,215,731
12,693,233,413
106,494,552,162
121,163,831,562
227,658,383,724
97,820,097,072
99,953,811,109
197,773,908,181
1,997,383,028
−
1,997,383,028
1,915,879,769
−
1,915,879,769
2,969,480,219
397,484,970
3,366,965,189
3,295,938,094
496,644,754
3,792,582,848
P228,809,945,971 P181,308,939,387 P410,118,885,358 P171,310,142,221 P150,436,639,062 P321,746,781,283
P−
−
–
–
–
–
691,661,831
P691,661,831
Less:
Allowances for impairment and credit
losses (Note 15)
Unearned interest and discounts
(Note 9)
Financial liabilities
Deposit liabilities
Bills payable
Manager’s checks
Accrued interest and other expenses
Derivative liabilities
Other liabilities
Total
2012 (As restated - Notes 2 and 10)
Less than
Over
Twelve Months
Twelve Months
P5,284,569,239
3,850,856,484
627,795,898
21,245,838
837,600,000
222,841,201
1,504,128,446
P12,349,037,106
P5,284,569,239
3,850,856,484
627,795,898
21,245,838
837,600,000
222,841,201
2,195,790,277
P13,040,698,937
P–
–
–
–
–
–
614,680,146
P614,680,146
P4,755,316,371
4,258,471,262
637,425,891
21,245,838
837,600,000
222,841,201
930,707,083
P11,663,607,646
P4,755,316,371
4,258,471,262
637,425,891
21,245,838
837,600,000
222,841,201
1,545,387,229
P12,278,287,792
(P8,977,260,770)
(P8,970,870,485)
(484,400,529)
(9,461,661,299)
P413,697,922,996
(894,151,834)
(9,865,022,319)
P324,160,046,756
P343,800,398,152
4,014,507,046
859,892,248
548,272,803
154,808,366
3,054,871,530
P352,432,750,145
P10,467,804,528 P354,268,202,680 P166,838,787,926 P105,138,451,944 P271,977,239,870
1,795,806,439
1,731,001,534
3,526,807,973
4,284,687,479
8,299,194,525
801,208,565
–
801,208,565
−
859,892,248
846,790,299
–
846,790,299
−
548,272,803
570,575,771
–
570,575,771
−
154,808,366
2,735,017,951
–
2,735,017,951
−
3,054,871,530
P14,752,492,007 P367,185,242,152 P173,588,186,951 P106,869,453,478 P280,457,640,429
–
134,295,387
–
106,024,639
6,768,350
−
P352,679,838,521
–
642,125,261
642,125,261
752,231,486
752,231,486
72,402,968
–
72,402,968
–
134,295,387
–
60,914,579
60,914,579
67,125,802
67,125,802
128,664,585
–
128,664,585
−
106,024,639
5,226,599
–
5,226,599
−
6,768,350
–
54,867,279
54,867,279
46,535,741
46,535,741
P15,618,385,036 P368,298,223,557 P173,794,481,103 P107,627,360,597 P281,421,841,700
Annual Report 2013
139
NOTES TO FINANCIAL STATEMENTS
Parent Company
2013
Less than
Twelve Months
Financial assets
Cash and other cash items
Due from BSP
Due from other banks
Financial assets at FVPL
AFS financial assets - gross
HTM financial assets
Loans and receivables - gross
Accrued interest receivable - gross
Other assets - gross
Nonfinancial assets
Bank premises, furniture, fixtures
and equipment
Investment properties - gross
Deferred tax assets
Investments in subsidiaries
and associates
Branch licenses
Goodwill
Other assets - gross
Nonfinancial liabilities
Accrued payable for employee benefits
Accrued taxes and other licenses
Accrued lease payable
Withholding taxes payable
22.
2012 (As restated - Note 2)
Less than
Over
Twelve Months
Twelve Months
Total
Total
P7,035,251,105
P–
P7,035,251,105
P5,996,785,687
P–
P5,996,785,687
75,678,312,048
–
75,678,312,048
37,597,455,540
–
37,597,455,540
23,215,575,357
–
23,215,575,357
4,289,620,222
–
4,289,620,222
5,556,344,777
4,865,078,276
10,421,423,053
7,158,666,537
5,008,011,655
12,166,678,192
854,830,733
42,347,682,831
43,202,513,564
7,737,825,872
32,945,236,336
40,683,062,208
802,043,787
11,320,545,426
12,122,589,213
1,414,017,682
11,251,308,097
12,665,325,779
103,235,987,057
114,221,943,877
217,457,930,934
95,538,146,118
97,062,032,359
192,600,178,477
1,899,023,541
–
1,899,023,541
1,870,023,734
–
1,870,023,734
2,701,293,748
397,484,970
3,098,778,718
3,055,777,579
409,168,483
3,464,946,062
P220,978,662,153 P173,152,735,380 P394,131,397,533 P164,658,318,971 P146,675,756,930 P311,334,075,901
–
–
–
4,725,647,705
3,511,190,767
763,461,954
4,725,647,705
3,511,190,767
763,461,954
–
–
–
4,240,859,684
3,852,106,388
788,268,395
4,240,859,684
3,852,106,388
788,268,395
–
–
–
540,295,445
P540,295,445
1,948,995,625
455,000,000
222,841,201
1,502,441,475
P13,129,578,727
1,948,995,625
455,000,000
222,841,201
2,042,736,920
P13,669,874,172
–
–
–
507,585,142
P507,585,142
1,948,792,351
455,000,000
222,841,201
930,707,083
P12,438,575,102
1,948,792,351
455,000,000
222,841,201
1,438,292,225
P12,946,160,244
Less:
Allowances for impairment and credit
losses (Note 15)
Unearned interest and discounts
(Note 9)
(Forward)
Financial liabilities
Deposit liabilities
Bills payable
Manager’s checks
Accrued interest and other expenses
Derivative liabilities
Other liabilities
Over
Twelve Months
(8,596,879,062)
(8,700,184,060)
(378,681,663)
(8,975,560,725)
P398,825,710,980
(671,973,994)
(9,372,158,054)
P314,908,078,091
P332,583,633,864
4,014,507,046
704,488,259
498,286,297
154,808,366
2,722,643,351
340,678,367,183
P7,248,219,623 P339,831,853,487 P160,285,441,660 P102,788,667,697 P263,074,109,357
4,284,687,479
8,299,194,525
1,795,806,439
1,731,001,534
3,526,807,973
–
704,488,259
736,088,844
–
736,088,844
–
498,286,297
781,450,883
–
781,450,883
–
154,808,366
570,575,771
–
570,575,771
–
2,722,643,351
2,489,648,909
–
2,489,648,909
11,532,907,102
352,211,274,285
166,659,012,506
104,519,669,231
271,178,681,737
–
134,188,984
–
93,734,234
P340,906,290,401
752,231,486
752,231,486
–
642,125,261
642,125,261
–
134,188,984
72,347,367
–
72,347,367
60,914,579
60,914,579
–
60,914,579
60,914,579
–
93,734,234
120,930,315
–
120,930,315
P12,346,053,167 P353,252,343,568 P166,852,290,188 P105,222,709,071 P272,074,999,259
EQUITY
The Parent Company’s capital stock consists of:
2013
Shares
Common stock - 10 par value
Authorized - shares
Issued and outstanding
Balance at beginning of year
Stock dividends*
2,000,000,000
Amount
2012
Shares
Amount
2,000,000,000
1,297,874,230 P12,978,742,300
1,179,876,680 P11,798,766,800
129,787,428
1,297,874,280
117,997,550
1,179,975,500
1,427,661,658 P14,276,616,580
1,297,874,230 P12,978,742,300
*The stock dividends declared include fractional shares equivalent to 5 shares in 2013 and 9,882 shares in 2012.
The Parent Company shares are listed in the Philippine Stock Exchange.
140
The SEC approved the increase in the capital stock of the Parent Company. The summarized information on the Company’s
registration of securities under the Securities Regulation Code follows:
Date of SEC Approval
April 12, 1991
October 7, 1993
August 30, 1994
July 26, 1995
September 12, 1997
September 5, 2005
September 14, 2007
September 5, 2008
Authorized Shares
10,000,000
15,000,000
20,000,000
25,000,000
50,000,000
100,000,000
160,000,000
200,000,000
As reported by the Parent Company’s transfer agent, Stock Transfer Service, Inc., the total number of stockholders is 1,998 and
2,002 as of December 31, 2013 and 2012, respectively.
On April 4, 2012 and May 3, 2012, the BOD and the stockholders owning or representing at least two-thirds of the outstanding
capital stock, respectively, approved the amendment of Article Sixth (a) of the Parent Company’s Articles of Incorporation to effect
a ten-for-one stock split of the Parent Company’s common shares which resulted in an increase in the number of authorized shares
from P0.20 million to P2.00 billion shares and a reduction in par value of the shares from P100.00 to P10.00 per share, without
affecting the authorized capital stock of the Parent Company of 20.00 billion. The SEC approved the amendment of Articles of
Incorporation on August 24, 2012.
Dividends
On May 2, 2013, the BOD approved the declaration of 10.00% stock and P12 per share cash dividends to stockholders of record as
of July 19, 2013. The BSP and SEC approved the dividend declaration on June 21, 2013.
On May 3, 2012, the BOD approved the declaration of 10.00% stock and P12 per share cash dividends to stockholders of record as
of July 18, 2012. The BSP and SEC approved the dividend declaration on May 30, 2012.
On May 4, 2011, the BOD approved the declaration of 10.00% stock and P12 per share cash dividends to stockholders of record as
of July 1, 2011. The BSP and SEC approved the dividend declaration on June 10, 2011.
The computation of surplus available for dividend declaration in accordance with SEC Memorandum Circular No. 11 issued in
December 2008 differs to a certain extent from the computation following BSP guidelines.
As of December 31, 2013 and 2012, surplus includes the amount of P1.28 billion, net of deferred tax liability of P547.40 million,
representing transfer of revaluation increment on land which was carried at deemed cost when the Group transitioned to PFRS in
2005 (Note 11). This amount will be available to be declared as dividends upon sale of the underlying land.
In the consolidated financial statements, a portion of the Group’s surplus corresponding to the net earnings of the subsidiaries
amounting to P211.67 million and P170.99 million as of December 31, 2013 and 2012, respectively, is not available for dividend
declaration. The accumulated equity in net earnings becomes available for dividends upon declaration and receipt of cash dividends
from the investees.
Reserves
In compliance with BSP regulations, 10.00% of the Parent Company’s profit from trust business is appropriated to surplus reserve.
This annual appropriation is required until the surplus reserves for trust business equals 20.00% of the Parent Company’s authorized
capital stock.
Capital Management
The primary objectives of the Group’s capital management are to ensure that it complies with externally imposed capital requirements
and that it maintains strong credit ratings and healthy capital ratios in order to support its business and to maximize shareholders’
value.
The Group manages its capital structure and makes adjustments to it in light of changes in economic conditions and the risk
characteristics of its activities. In order to maintain or adjust the capital structure, the Group may adjust the amount of dividend
payment to shareholders, return capital to shareholders or issue capital securities. No changes were made in the objectives, policies
and processes as of December 31, 2013 and 2012.
Regulatory Qualifying Capital
Under existing BSP regulations, the determination of the Parent Company’s compliance with regulatory requirements and ratios is
based on the amount of the Parent Company’s unimpaired capital (regulatory capital) as reported to the BSP. This is determined on
the basis of regulatory accounting policies which differ from PFRS in some respects.
In addition, the risk-based capital ratio of a bank, expressed as a percentage of qualifying capital to risk-weighted assets, should
not be less than 10.00% for both solo basis (head office and branches) and consolidated basis (Parent Company and subsidiaries
engaged in financial allied undertakings but excluding insurance companies). Qualifying capital and risk-weighted assets are
computed based on BSP regulations. Risk-weighted assets consist of total assets less cash on hand, due from BSP, loans covered
by hold-out on or assignment of deposits, loans or acceptances under letters of credit to the extent covered by margin deposits and
other non-risk items determined by the Monetary Board of the BSP.
Annual Report 2013
141
NOTES TO FINANCIAL STATEMENTS
On August 4, 2006, the BSP, under BSP Circular No. 538, issued the prescribed guidelines implementing the revised risk-based
capital adequacy framework for the Philippine banking system to conform to Basel II capital adequacy framework. The new BSP
guidelines took effect on July 1, 2007. Thereafter, banks were required to compute their CAR using these guidelines. As of
December 31, 2013 and 2012, the Group’s CAR under BSP Circular No. 538 is 15.39% and 16.00%, respectively.
The CAR of the Group and the Parent Company as of December 31, 2013 and December 31, 2012 as reported to the BSP are shown
in the table below.
Consolidated
2013
Parent Company
2012
2013
2012
(Amounts in Million Pesos)
Tier 1 capital
P41,592
P37,605
P41,272
P37,562
Less required deductions
2,597
2,370
3,236
3,061
Sub-total
38,995
35,235
38,036
34,501
Excess from Tier 2 deducted to Tier 1 Capital*
−
−
−
−
Net Tier 1 Capital
38,995
35,235
38,036
34,501
Tier 2 Capital
2,492
2,085
2,381
2,016
Less: Required deductions
121
102
768
823
Sub-total
2,371
1,983
1,613
1,193
Excess from Tier 2 deducted to Tier 1 Capital*
−
−
−
−
Net Tier 2 Capital
2,371
1,983
1,613
1,193
Total qualifying capital
P41,366
P37,218
P39,649
P35,694
*Deductions to Tier 2 Capital are capped at its total gross amount and any excess shall be deducted from Tier 1 Capital.
Consolidated
2013
Credit RWA
Market RWA
Operational RWA
Total RWA
P244,727
3,724
20,400
268,851
Tier 1 capital ratio
Total capital ratio
14.50%
15.39%
Parent Company
2012
2013
(Amounts in Million Pesos)
P204,879
P233,605
6,933
3,725
20,741
19,910
232,553
257,240
15.15%
16.00%
14.79%
15.41%
2012
P197,878
6,933
20,334
225,145
15.32%
15.85%
The regulatory qualifying capital of the Group consists of Tier 1 (core) capital, which comprises paid-up common stock, additional paidin capital, surplus including current year profit, surplus reserves and minority interest less required deductions such as unsecured
credit accommodations to directors, officers, stockholders, and other related interests (DOSRI), deferred income tax, and goodwill.
The other component of regulatory capital is Tier 2 (supplementary) capital, which includes general loan loss provision, and net
unrealized gains on AFS equity securities.
Standardized credit risk weights were used in the credit assessment of asset exposures. Third party credit assessments were based
on ratings by Standard & Poor’s, Moody’s and Fitch, while PhilRatings were used on peso-denominated exposures to Sovereigns,
MDBs, Banks, LGUs, Government Corporations, Corporates.
The Group and its individually regulated operations have complied with all externally imposed capital requirements throughout the
period.
The issuance of BSP Circular No. 639 covering the ICAAP in 2009 supplements the BSP’s risk-based capital adequacy framework
under Circular No. 538. In compliance with this new circular, the Parent Company has adopted and developed its ICAAP framework
to ensure that appropriate level and quality of capital are maintained by the Group. Under this framework, the assessment of risks
extends beyond the Pillar 1 set of credit, market and operational risks and onto other risks deemed material by the Parent Company.
The level and structure of capital are assessed and determined in light of the Parent Company’s business environment, plans,
performance, risks and budget; as well as regulatory edicts. BSP requires submission of an ICAAP document every January 31. The
Group has complied with this requirement.
On January 15, 2013, the BSP issued Circular No. 781, Basel III Implementing Guidelines on Minimum Capital Requirements, which
provides the implementing guidelines on the revised risk-based capital adequacy framework particularly on the minimum capital and
disclosure requirements for universal banks and commercial banks, as well as their subsidiary banks and quasi-banks, in accordance
with the Basel III standards. The circular took effect on January 1, 2014.
The Circular sets out a minimum Common Equity Tier 1 (CET1) ratio of 6.0% and Tier 1 capital ratio of 7.5%. It also introduces a
capital conservation buffer of 2.5% comprised of CET1 capital. The BSP’s existing requirement for Total CAR remains unchanged
at 10% and this ratio shall be maintained at all times.
Further, existing capital instruments as of December 31, 2010 which do not meet the eligibility criteria for capital instruments
under the revised capital framework shall no longer be recognized as capital upon the effectivity of Basel III. Capital instruments
issued under BSP Circular Nos. 709 and 716 (the circulars amending the definition of qualifying capital particularly on Hybrid
142
Tier 1 and Lower Tier 2 capitals), starting January 1, 2011 and before the effectivity of BSP Circular No. 781, shall be recognized
as qualifying capital until December 31, 2015. In addition to changes in minimum capital requirements, this Circular also requires
various regulatory adjustments in the calculation of qualifying capital.
The Group has taken into consideration the impact of the foregoing requirements to ensure that the appropriate level and quality of
capital are maintained on an ongoing basis.
23.
RETIREMENT PLAN
The Group has separate funded noncontributory defined benefit retirement plans covering substantially all its officers and regular
employees. Under these retirement plans, all covered officers and employees are entitled to cash benefits after satisfying certain
age and service requirements. The latest actuarial valuation studies of the retirement plans were made as of December 31, 2013.
The Group’s annual contribution to the retirement plan consists of a payment covering the current service cost, unfunded actuarial
accrued liability and interest on such unfunded actuarial liability.
The amounts of net defined benefit asset (liability) in the balance sheets follow:
Net plan assets (included in ‘Other assets’)
Retirement liabilities (included in ‘Other
liabilities’)
Consolidated
December 31,
2012
December 31,
(As restated 2013*
Note 2)*
P1,504,128,446
P930,707,083
Parent Company
December 31,
2012
December 31,
(As restated 2013
Note 2)
P1,502,441,475
P930,707,083
(46,535,741)
(54,867,279)
–
–
P1,457,592,705
P875,839,804
P1,502,441,475
P930,707,083
*CIBI has net defined benefit asset as of December 31, 2013 amounting to P1.69 million and net defined liability as of
December 31, 2012 amounting to P2.34 million.
The movements in the defined benefit asset (liability), present value of defined benefit obligation and fair value of plan assets follow:
Consolidated
2013
Net benefit cost
January 1,
2013
Current
service cost
Net interest
Net pension
expense*
Return on
plan assets
(excluding
amount
Benefits
included
paid in net interest)
(a)
(b)
(c)
(d) = b + c
(e)
(f)
Fair value of
plan assets P4,001,777,872
P− P228,605,350 P228,605,350 (P135,133,484) P246,949,468
Present value
of defined
benefit
obligation
3,125,938,068
305,968,258
150,831,551
456,799,809 (135,133,484)
−
Net defined
benefit
asset
P875,839,804 (P305,968,258) P77,773,799 (P228,194,459)
P− P246,949,468
*Presented under Compensation and fringe benefits in the statements of income.
Remeasurements in other comprehensive income
Actuarial
Actuarial
changes
changes
arising
arising
from from changes
Changes in
experience
in financial remeasurement Contribution December 31,
adjustments assumptions
gains by employer
2013
(k) = a + d + e
(g)
(h)
(i) = f + g + h
(j)
+i+j
P−
P−
P246,949,468 P207,401,404 P4,549,600,610
(50,452,099) (305,144,389)
(355,596,488)
− 3,092,007,905
P50,452,099 P305,144,389
P602,545,956 P207,401,404 P1,457,592,705
Parent
2013
Net benefit cost
January 1,
2013
Current
service cost
Net interest
Net pension
expense*
Return on
plan assets
(excluding
amount
Benefits
included
paid in net interest)
(a)
(b)
(c)
(d) = b + c
(e)
(f)
Fair value of
plan assets P3,956,363,063
P− P225,908,331 P225,908,331 (P135,133,484) P247,129,316
Present value
of defined
benefit
obligation
3,025,655,980
283,488,056
144,821,679
428,309,735 (135,133,484)
−
Net defined
benefit
asset
P930,707,083 (P283,488,056) P81,086,652 (P202,401,404)
P− P247,129,316
*Presented under Compensation and fringe benefits in the statements of income.
Remeasurements in other comprehensive income
Actuarial
Actuarial
changes
changes
arising
arising
from from changes
Changes in
experience
in financial remeasurement Contribution December 31,
gains by employer
2013
adjustments assumptions
(k) = a + d + e
(g)
(h)
(i) = f + g + h
(j)
+i+j
P−
P−
P247,129,316 P202,401,404 P4,496,668,630
(27,162,029) (297,443,047)
(324,605,076)
− 2,994,227,155
P27,162,029 P297,443,047
P571,734,392 P202,401,404 P1,502,441,475
Annual Report 2013
143
NOTES TO FINANCIAL STATEMENTS
Consolidated
2012 (As restated - Note 2)
Net benefit cost
January 1,
2012
Current
service cost
Net interest
Net pension
expense*
Remeasurements in other comprehensive income
Return on
plan assets
Actuarial
Actuarial
(excluding changes arising changes arising
amount
from from changes
Changes in
Benefits
included
experience
in financial remeasurement
Contribution December 31,
paid in net interest)
adjustments assumptions
gains
by employer
2012
(k) = a + d + e
(e)
(f)
(g)
(h) (i) = f + g + h
(j)
+i+j
(a)
(b)
(c)
(d) = b + c
Fair value of
P− P200,535,279 P200,535,279 (P106,637,938) P550,479,931
plan assets P3,118,706,700
Present value
of defined
benefit
obligation
2,547,868,858
217,591,435
130,603,024
348,194,459 (106,637,938)
−
Net defined
benefit
asset
P570,837,842 (P217,591,435) P69,932,255 (P147,659,180)
P− P550,479,931
*Presented under Compensation and fringe benefits in the statements of income.
Net benefit cost
January 1,
2012
Current
service cost
Net interest
Net pension
expense*
P−
P−
(86,085,754)
422,598,443
550,479,931 P238,693,900 P4,001,777,872
336,512,689
P86,085,754 (P422,598,443) P213,967,242 P238,693,900 P875,839,804
Parent
2012 (As restated - Note 2)
Remeasurements in other comprehensive income
Return on
plan assets
Actuarial
Actuarial
(excluding changes arising changes arising
amount
from from changes
Changes in
Benefits
included
experience
in financial remeasurement
paid in net interest)
adjustments assumptions
gains
(a)
(b)
(c)
(d) = b + c
(e)
(f)
Fair value of
P− P197,910,149 P197,910,149 (P106,472,875) P550,786,789
plan assets P3,080,345,100
Present value
of defined
benefit
obligation
2,477,977,600
203,076,176
125,937,181
329,013,357 (106,472,875)
−
Net defined
benefit
P− P550,786,789
asset
P602,367,500 (P203,076,176) P71,972,968 (P131,103,208)
*Presented under Compensation and fringe benefits in the statements of income.
− 3,125,938,068
(g)
(h)
P−
(86,543,602)
(i) = f + g + h
Contribution December 31,
by employer
2012
(k) = a + d + e
(j)
+i+j
P− P550,786,789 P233,793,900 P3,956,363,063
411,681,500
325,137,898
− 3,025,655,980
P86,543,602 (P411,681,500) P225,648,891 P233,793,900 P930,707,083
The Parent Company does not expect to contribute to its defined benefit pension plan in 2014.
In 2013 and 2012, the major categories of plan assets as a percentage of the fair value of total plan assets are as follows:
Parent Company shares
Debt instruments
Cash and cash equivalents
Equity instruments
Other assets
Consolidated
2013
41.78%
28.64%
21.43%
4.89%
3.26%
100.00%
2012
39.93%
26.21%
25.34%
1.61%
6.91%
100.00%
Parent Company
2013
42.27%
28.29%
21.31%
4.84%
3.29%
100.00%
2012
40.41%
25.76%
25.37%
1.63%
6.83%
100.00%
The following table shows the breakdown of fair value of the plan assets:
Due from BSP
Deposits in banks
Financial assets at FVPL
AFS financial assets
Quoted debt securities
Quoted equity securities
Parent Company shares
Investments in unit investment trust fund
Corporate bonds
Loans and receivables
Investment properties*
Other assets
Consolidated
2013
2012
P589,400,000
P856,773,500
425,326,309
118,866,676
49,602,480
204,229,514
739,157,245
18,414,208
1,902,084,657
122,927,004
441,979,075
572,664
136,568,000
11,057,589
P4,552,630,132
* Investment properties comprise properties located in Manila.
144
658,712,424
14,987,663
1,598,747,582
106,666,297
390,858,000
17,650,842
136,568,001
15,658,274
P4,004,177,872
Parent Company
2013
2012
P588,630,000
P856,773,500
415,138,437
101,887,968
49,602,480
204,229,514
711,143,662
13,598,062
1,902,084,657
122,927,004
438,820,000
572,664
136,568,000
11,093,610
P4,499,698,641
634,037,155
14,987,663
1,598,747,582
101,916,845
384,958,000
17,650,842
136,568,000
14,126,059
P3,956,363,063
The carrying value of the plan assets of the Group and Parent Company amounted to P4.55 billion and P4.50 billion as of December
31, 2013, respectively, and P4.00 billion and P3.96 billion, as of December 31, 2012, respectively.
The principal actuarial assumptions used in 2013 and 2012 in determining the retirement liability for the Group’s and
Company’s retirement plans are shown below:
2013
Parent
CBSI
CBC-PCCI
CIBI
Discount rate:
January 1
5.71%
6.11%
5.94%
December 31
5.08%
5.77%
5.76%
Salary increase rate
6.00%
6.00%
6.00%
Parent
5.92%
5.88%
6.00%
2012
Parent
Discount rate:
January 1
December 31
Future salary increases
CBSI
6.35%
5.71%
7.50%
CBC-PCCI
6.86%
6.11%
6.50%
6.59%
5.94%
6.50%
CIBI
6.59%
5.92%
7.50%
The sensitivity analysis below has been determined based on the impact of reasonably possible changes of each significant
assumption on the defined benefit liability as of the end of the reporting period, assuming all other assumptions were held constant:
December 31, 2013
Discount rate
6.08% (+1%)
4.08% (-1%)
Salary increase rate
7.00% (+1%)
5.00% (-1%)
24.
Parent
CBS
PCCI
CIBI
(P235,683,452)
276,137,776
(P2,285,262)
8,622,146
(P6,168,476)
7,590,054
(P767,206)
965,468
257,517,466
(224,938,940)
8,392,825
(2,210,724)
7,189,382
(5,959,120)
930,943
(756,844)
DERIVATIVE FINANCIAL INSTRUMENTS
Occasionally, the Parent Company enters into forward exchange contracts as an accommodation to its clients. These derivatives
are not designated as accounting hedges. The aggregate notional amounts of the outstanding buy US dollar currency forwards as of
December 31, 2013 and 2012 amounted to US$478.66 million and US$362.14 million, respectively, while the sell US dollar forward
contracts amounted to US$816.38 million and US$683.27 million, respectively. Weighted average buy US dollar forward rates as
of December 31, 2013 and 2012 are P43.41 and P42.52, respectively, while the weighted average sell US dollar forward rates are
P44.24 and P41.26, respectively.
As of December 31, 2013 and 2012, the fair values of derivatives follow:
Currency forwards
IRS
Warrants
Embedded credit derivatives
2013
Derivative
Asset
P475,864,396
10,979,876
8,669,900
–
P495,514,172
Derivative
Liability
P119,315,938
35,492,428
–
–
P154,808,366
2012
Derivative
Asset
P187,483,726
–
8,016,654
56,839,452
P252,339,832
Derivative
Liability
P570,575,771
–
–
–
P570,575,771
Fair Value Changes of Derivatives
The net movements in fair value changes of derivative instruments are as follows:
2013
(P318,235,939)
877,329,828
(218,388,083)
P340,705,806
Balance at beginning of year
Fair value changes during the year
Settled transactions
Balance at end of year
2012
P71,407,720
(202,790,964)
(186,852,695)
(P318,235,939)
The net movements in the value of the derivatives are presented in the statements of income under the following accounts:
Foreign exchange gain (loss)
2013
P740,293,749
(81,352,004)
P658,941,745
*Net movements in the value related to embedded credit derivatives and IRS.
Trading and securities gains (loss)*
2012
(P356,349,338)
2011
P1,005,847,116
(33,294,321)
(P389,643,659)
(86,888,763)
P918,958,353
Annual Report 2013
145
NOTES TO FINANCIAL STATEMENTS
25.
LEASE CONTRACTS
The lease contracts are for periods ranging from one to 25 years from the dates of contracts and are renewable under certain terms
and conditions. Various lease contracts include escalation clauses, most of which bear an annual rent increase of 5.00% to 10.00%.
Annual rentals on these lease contracts included in ‘Occupancy cost’ in the statements of income in 2013, 2012 and 2011 amounted
to P296.00 million, P212.69 million and P215.63 million, respectively, for the Group, and P229.00 million, P181.00 million and
P195.57 million, respectively, for the Parent Company.
Future minimum rentals payable of the Group and the Parent Company under non-cancellable operating leases follow:
Within one year
After one year but not more than five years
After more than five years
Consolidated
2013
2012
P325,934,096
P206,827,312
976,665,074
677,554,792
312,086,414
250,667,618
P1,614,685,584 P1,135,049,722
Parent Company
2013
2012
P244,684,361
P175,138,323
684,530,837
546,089,725
225,696,367
164,381,871
P1,154,911,565
P885,609,919
The Group and the Parent Company also has entered into commercial property leases on its investment properties (Note 12). These
noncancellable leases have remaining noncancellable lease terms of between one and five years for the Group and one and five
months for the Parent Company.
Future minimum rentals receivable under noncancellable operating leases follow:
Within one year
After one year but not more than five years
After more than five years
26.
Consolidated
2013
2012
P3,033,924
P11,404,342
88,032,366
14,063,996
342,119,090
−
P433,185,380
P25,468,338
Parent Company
2013
2012
P2,523,860
P113,400
−
−
−
−
P113,400
P2,523,860
INCOME AND OTHER TAXES
Income taxes include corporate income tax and FCDU final taxes, as discussed below, and final tax paid at the rate of 20.00% on
gross interest income from government securities and other deposit substitutes. These income taxes, as well as the deferred tax
benefits and provisions, are presented as ‘Provision for income tax’ in the statements of income.
Republic Act (RA) No. 9337, An Act Amending National Internal Revenue Code, provides that RCIT rate shall be 30.00% while
interest expense allowed as a deductible expense is reduced to 33.00% of interest income subject to final tax.
An MCIT of 2.00% on modified gross income is computed and compared with the RCIT. Any excess MCIT over RCIT is deferred
and can be used as a tax credit against future income tax liability for the next three years. In addition, the NOLCO is allowed as a
deduction from taxable income in the next three years from the year of inception.
Effective in May 2004, RA No. 9294 restored the tax exemption of FCDUs and OBUs. Under such law, the income derived by the
FCDU from foreign currency transactions with nonresidents, OBUs, local commercial banks including branches of foreign banks is
tax-exempt while interest income on foreign currency loans from residents other than OBUs or other depository banks under the
expanded system is subject to 10.00% gross income tax.
Interest income on deposit placements with other FCDU and offshore banking units (OBUs) is taxed at 7.50%, while all other
income of the FCDU is subject to the 30.00% corporate tax.
On March 15, 2011, the BIR issued Revenue Regulation (RR) No. 4-2011 which prescribes the attribution and allocation of expenses
between FCDUs/EFCDUs or OBU and RBU and within RBU. Pursuant to the regulations, the Parent Company made an allocation
of its expenses in calculating income taxes due for RBU and FCDU.
Current tax regulations also provide for the ceiling on the amount of entertainment, amusement and recreation (EAR) expense that
can be claimed as a deduction against taxable income. Under the regulations, EAR expense allowed as a deductible expense is
limited to the actual EAR paid or incurred but not to exceed 1.00% of the Parent Company’s net revenue.
146
The provision for income tax consists of:
2013
Current:
Final tax
RCIT
MCIT
Deferred
Consolidated
2012
2013
2011
Parent Company
2012
2011
P474,708,084 P397,890,351 P449,467,074 P474,690,027 P370,560,842 P448,394,727
367,639,848
94,057,428
65,071,858
345,598,892
100,531,347
56,152,927
–
9,293,831
20,650,380
–
8,580,008
2,459,886
842,347,932
501,241,610
535,189,312
820,288,919
479,672,197
507,007,540
(167,811,495) (78,952,994)
12,218,902 (170,360,659) (67,115,057)
12,218,902
P674,536,437 P422,288,616 P547,408,214 P649,928,260 P412,557,140 P519,226,442
The details of net deferred tax assets follow:
Deferred tax assets (liabilities) on:
Allowance for impairment and credit losses
Revaluation increment on land
Remeasurement gain on defined benefit asset
or liability
Fair value adjustment on asset foreclosures
and dacion transactions - net of depreciated
portion
Fair value adjustments on net assets of Unity
Bank
Unrealized gain on FVPL and AFS
Accrued rent
Unamortized past service cost
Others
2013
Consolidated
Parent Company
2013
2012
2012
P1,777,532,312
(547,404,615)
P1,686,099,103
(547,404,615)
P1,751,407,360
(547,404,615)
P1,660,046,108
(547,404,615)
(255,154,157)
(165,626,371)
(255,704,157)
(167,543,772)
(144,695,215)
(173,934,310)
(102,636,766)
(131,875,860)
(133,326,974)
(101,140,186)
22,733,929
1,001,930
8,248,874
P627,795,898
(133,326,974)
(44,214,522)
22,733,929
1,467,738
(8,368,087)
P637,425,891
–
(100,783,603)
18,274,374
309,361
–
P763,461,954
–
(43,905,157)
18,274,374
677,317
–
P788,268,395
The Group did not set up deferred tax assets on the following temporary differences as it believes that it is highly probable that these
temporary differences will not be realized in the near foreseeable future:
Allowance for impairment and credit losses
NOLCO
Accrued compensated absences
Excess of MCIT over RCIT
Others
Consolidated
2013
2012
P3,052,153,063
P3,350,540,142
170,663,471
251,026,680
75,453,795
81,464,190
13,435,356
39,545,759
−
75,262,444
P3,311,705,685
P3,797,839,215
Parent Company
2013
2012
P2,758,854,529
P3,166,697,035
−
–
75,453,795
81,464,190
−
24,316,874
−
–
P2,834,308,324
P3,272,478,099
Details of the Group’s NOLCO are as follows:
Inception Year
2010
2011
2012
2013
Original
Amount
P47,604,000
18,744,851
136,431,306
48,246,523
P251,026,680
Used
Amount
P35,073,293
−
−
−
P35,073,293
Expired Amount
P12,530,707
−
−
−
P12,530,707
Remaining
Balance
P−
18,744,851
136,431,306
48,246,523
P203,422,680
Expiry
Year
2013
2014
2015
2016
As of December 31, 2013, details of the excess of MCIT over RCIT of the Group follow:
Inception Year
2010
2011
2012
2013
Original
Amount
P15,070,509
14,306,296
1,943,794
8,225,160
P39,545,759
Used
Amount
P13,276,980
11,039,894
−
−
P24,316,874
Expired Amount
P1,793,529
−
−
−
P1,793,529
Remaining
Balance
P−
3,266,402
1,943,794
8,225,160
P13,435,356
Expiry
Year
2013
2014
2015
2016
The Parent Company applied its excess MCIT over RCIT amounting to P24.32 million to defray its income tax liability in 2013.
Annual Report 2013
147
NOTES TO FINANCIAL STATEMENTS
The reconciliation of the statutory income tax to the provision for income tax follows:
Statutory income tax
Tax effects of:
FCDU income
Interest income subjected
to final tax
Non-taxable income
Nondeductible expenses
Others
Provision for income tax
27.
Consolidated
Parent Company
2012
2011
2012
2011
(As restated - (As restated (As restated - (As restated 2013 Notes 2 and 10)
Note 2)
2013
Note 2)
Note 2)
P1,732,495,181 P1,627,589,495 P1,686,923,711 P1,750,324,274 P1,664,851,068 P1,697,947,632
(407,003,965)
(833,055,070)
(608,508,935)
(407,253,711)
(832,008,105)
(607,661,996)
(246,573,693) (201,204,070) (197,666,087) (234,210,635) (188,738,968) (189,303,497)
(730,180,246) (556,142,627) (607,236,269) (715,563,632) (553,638,681) (607,045,968)
596,864,488
464,122,693
394,557,925
501,389,235
446,220,023
385,297,127
(271,065,328)
(79,021,805) (120,662,131) (244,757,271) (124,128,197) (160,006,856)
P674,536,437 P422,288,616 P547,408,214 P649,928,260 P412,557,140 P519,226,442
TRUST OPERATIONS
Securities and other properties (other than deposits) held by the Parent Company in fiduciary or agency capacities for clients and
beneficiaries are not included in the accompanying balance sheets since these are not assets of the Parent Company (see Note 29).
In compliance with the requirements of current banking regulations relative to the Parent Company’s trust functions: (a) government
securities included under AFS financial assets in the balance sheets with a total face value of P1.12 billion and P1.40 billion as of
December 31, 2013 and 2012, respectively, are deposited with the BSP as security for the Parent Company’s faithful compliance
with its fiduciary obligations; and (b) a certain percentage of the Parent Company’s trust fee income is transferred to surplus
reserve. This yearly transfer is required until the surplus reserve for trust function equals 20.00% of the Parent Company’s
authorized capital stock.
28.
RELATED PARTY TRANSACTIONS
Parties are considered to be related if one party has the ability, directly or indirectly, to control the other party or exercise significant
influence over the other party in making financial and operating decisions. The Group’s related parties include:
•
key management personnel, close family members of key management personnel and entities which are controlled, significantly
influenced by or for which significant voting power is held by key management personnel or their close family members,
•
significant investors
•
subsidiaries, joint ventures and associates and their respective subsidiaries, and
•
post-employment benefit plans for the benefit of the Group’s employees.
The Group has several business relationships with related parties. Transactions with such parties are made in the ordinary course
of business and on substantially same terms, including interest and collateral, as those prevailing at the time for comparable
transactions with other parties. These transactions also did not involve more than the normal risk of collectability or present other
unfavorable conditions.
Transactions with retirement plans
Under PFRS, certain post-employment benefit plans are considered as related parties. The Group has business relationships with
a number of its retirement plans pursuant to which it provides trust and management services to these plans. Income earned
by the Group and Parent Company from such services amounted to P42.67 million and P42.39 million, respectively, in 2013,
P36.11 million and P35.87 million, respectively, in 2012, and P30.37 million and P30.14 million, respectively, in 2011. The Group’s
retirement funds may hold or trade the Parent Company’s shares or securities. Significant transactions of the retirement fund,
particularly with related parties, are approved by the Trust Investment Committee (TIC) of the Parent Company. The members of
the TIC are directors and key management personnel of the Parent Company.
A summary of transactions with related party retirement plans follows:
Deposit in banks
Equity investment
Dividend income
Interest income
Number of shares held
Total market value
148
Consolidated
2013
2012
P118,866,676
P425,326,309
1,902,084,657
1,598,747,582
35,169,516
31,972,284
5,014,496
12,421,404
Parent Company
2013
2012
P101,887,968
P415,138,437
1,902,084,657
1,598,747,582
35,169,516
31,972,284
4,787,801
12,177,530
32,238,723
29,307,930
P1,902,084,657
P1,598,747,582
In 2011, dividend income and interest income of the retirement plan from investments and placements in the Parent Company
amounted to P29.07 million and P9.43 million, respectively, for the Group, and P29.07 million and P9.17 million, respectively, for
the Parent Company.
Voting rights over the Parent Company’s shares are exercised by an authorized trust officer.
Remunerations of Directors and other Key Management Personnel
Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities
of the Group, directly or indirectly. The Group considers the members of the Management Committee to constitute key management
personnel for purposes of PAS 24.
Total remunerations of key management personnel are as follows:
Short-term employee benefits
Post-employment benefits
Consolidated
Parent Company
2013
2012
2011
2013
2012
2011
P344,566,502 P338,425,670 P337,171,905 P311,417,108 P313,589,717 P320,453,500
3,736,499
2,572,668
1,970,724
2,499,378
1,410,741
537,327
P348,303,001 P340,998,338 P339,142,629 P313,916,486 P315,000,458 P320,990,827
Members of the BOD are entitled to a per diem of 500.00 for attendance at each meeting of the Board or of any committees and to
four percent of the Parent Company’s net earnings. Non-executive directors do not receive any performance-related compensation.
Directors’ remuneration covers all China Bank Board activities and membership of committees and subsidiary companies.
The Group also provides banking services to directors and other key management personnel and persons connected to them. These
transactions are presented in the tables below.
Other related party transactions
Transactions between the Parent Company and its subsidiaries meet the definition of related party transactions. Transactions
between the Group and its associated companies also qualify as related party transactions. Details of the Parent Company’s
subsidiaries and associate are disclosed in Notes 1 and 10.
Group
Related party transactions of the Group by category of related party are presented below.
Category
Significant Investor
Loans
Issuances
Repayments
Deposit liabilities
Deposits
Withdrawals
Associate
Deposit liabilities
Deposits
Withdrawals
Key Management Personnel
Loans
Issuances
Repayments
Deposit liabilities
Deposits
Withdrawals
Other Related Parties
Loans
Issuances
Repayments
Deposit liabilities
Deposits
Withdrawals
December 31, 2013
Amount / Volume Outstanding Balance
P2,400,000,000
(4,883,400,000)
4,174,084,667
(4,182,512,264)
7,591,722,279
(7,563,467,767)
2,747,722
(731,125)
447,292,410
(375,764,486)
–
(4,991,550,000)
20,719,935,219
(20,617,613,708)
Terms and Conditions
P2,400,000,000 Include secured loans with interest rate of 2.85%
and maturity of two months. Collateral includes
shares of stocks with fair value of P22.15 billion.
60,311 These are checking account with annual average
interest rate of 0.125%.
152,072,841
These are savings account with annual average
interest rates ranging from
0.25% to 1.00%.
4,351,616
Include secured and unsecured loans with
interest rate ranging from 6.00% to 8.00% and
maturity of 15 years. Collaterals include real
estate properties amounting to P8.03 million.
These are savings account with annual average
interest rates ranging from
0.25% to 1.00%.
76,890,073
–
155,743,571
These are checking and savings account with
annual average interest rates ranging from
0.125% to 1.00%.
Annual Report 2013
149
NOTES TO FINANCIAL STATEMENTS
Category
Significant Investor
Loans
Issuances
Repayments
Deposit liabilities
Deposits
Withdrawals
Associate
Deposit liabilities
Deposits
Withdrawals
Key Management Personnel
Loans
Issuances
Repayments
Deposit liabilities
Deposits
Withdrawals
Other Related Parties
Loans
Issuances
Repayments
Deposit liabilities
Deposits
Withdrawals
Amount / Volume
December 31, 2012
Outstanding Balance
Terms and Conditions
P4,883,400,000
P4,883,400,000
(3,000,000,000)
97,690,282
(98,102,934)
Loans with interest rate of 4.50% and maturity
of six months. Collateral includes deposit holdout amounting to P6.90 billion.
8,487,908
These are checking and savings account with
annual interest rates ranging from 0.13% to
0.25%.
123,818,329
3,910,206,691
(3,829,258,176)
This is a checking account earning interest at
an annual rate of 0.13%.
2,335,019
–
(1,341,679)
61,765,332
(59,869,808)
Include secured and unsecured loans with
interest rate of 8.00% and maturity of 15 years.
Collateral includes real estate properties
with value of P8.03 million.
5,362,149
These are checking and savings account
with annual interest rates ranging
from 0.13% to 0.25%.
4,991,550,000
3,841,550,000
(15,541)
22,709,479,598
(22,695,833,424)
Loans with interest rate of 4.50% to 8.14%.
Collaterals include shares of stocks and deposit
hold-out with an aggregate amount
of P14.59 million
53,422,060
These are checking and savings account
with annual interest rates ranging
from 0.13% to 0.25%.
Interest income earned and interest expense incurred from the above loans and deposit liabilities in 2013, 2012, and 2011 follow:
Interest income
Interest expense
Interest income
Interest expense
2013
P20,556,375
3,792
Significant Investor
2012
2011
P163,301,442
P28,125,000
13,271
5,183
Key Management Personnel
2013
2012
2011
P316,051
P244,003
P294,384
107,162
–
–
2013
P–
172,030
Associate
2012
P–
153,315
2011
P–
133,696
Other Related Parties
2013
2012
2011
P– P154,511,645
P86,755,373
120,457
85,887
34,588
Related party transactions of the Group with significant investor, associate and other related parties pertain to transactions of the
Parent Company with these related parties.
Parent Company
Related party transactions of the Parent Company by category of related party, except those already presented in the Group
disclosures, are presented below.
Category
Subsidiaries
Deposit liabilities
Deposits
Withdrawals
Key Management Personnel
Loans
Issuances
Repayments
Deposit liabilities
Deposits
Withdrawals
150
Amount / Volume
P11,080,784,886
(10,969,978,397)
2,747,722
(731,125)
447,371,207
(375,764,486)
December 31, 2013
Outstanding Balance
Nature, Terms and Conditions
P446,574,603
These are checking and savings account
with annual average interest rates ranging
from 0.125% to 1.00%
4,351,616
Loans with interest rate ranging from
6.00% to 8.00% and maturity of 15 years.
76,890,073
These are savings account with annual
average interest rates ranging from 0.25%
to 1.00%
Category
Subsidiaries
Deposit liabilities
Deposits
Withdrawals
Key Management Personnel
Loans
Issuances
Repayments
Amount / Volume
December 31, 2012
Outstanding Balance
P335,768,114
P2,122,405,559
(2,061,239,970)
Nature, Terms and Conditions
These are checking and savings account
with annual interest rates ranging from
0.13% to 0.25%.
2,335,019
Loans with interest rate of 6.00% to
8.00% and maturity of 15 years. Collateral
includes real estate amounting
to P5.25 million.
5,283,352
These are checking and savings account
with annual interest rates ranging
from 0.13% to 0.25%.
–
(1,341,679)
Deposit liabilities
Deposits
Withdrawals
59,789,004
(57,847,152)
Interest income earned and interest expense incurred from the above loans and deposit liabilities in 2013, 2012 and 2011 follow:
2013
P–
223,584
Interest income
Interest expense
Subsidiaries
2012
P–
123,415
2011
P–
258,522
Key Management Personnel
2013
2012
2011
P 316,051
P186,801
P239,808
107,162
9,178
14,228
Outstanding loan balances with related parties are unimpaired as at year-end, thus no impairment allowance was recorded.
Outright purchases and outright sale of debt securities of the Parent Company with its subsidiaries in 2013 and 2012 follow:
Subsidiaries
2013
2012
P 2,000,000,000
P 5,220,518,720
2,435,000,000
4,883,400,000
Outright purchase
Outright sale
The following table shows the amount and outstanding balance of other related party transactions included in the financial statements:
Subsidiaries
2013
2012
Nature, Terms and Conditions
P–
P309,000
This pertains to unpaid subscription payable arising
from the acquisition of CBSI.
2012
Income Statement
Miscellaneous income
2013
P1,800,000
P1,800,000
Occupancy cost
11,342,758
12,843,191
Miscellaneous expense
93,347,801
77,507,889
Balance Sheet
Subscription payable
Subsidiaries
2011
Nature, Terms and Conditions
P1,800,000
Human resources functions provided by the Parent
Company to its subsidiaries (except CBC Forex and
Unity Bank) such as recruitment and placement,
training and development, salary and benefits
development, systems and research, and employee
benefits. Under the MOA between the Parent
Company and its subsidiaries, the subsidiaries shall pay
the Parent Company an annual fee.
24,360,834 Certain units of the condominium owned by CBSI are
being leased to the Parent Company for a term of 5
years, with no escalation clause.
67,948,669
This pertains to the computer and general banking
services provided by CBC-PCCI to the Parent Company
to support its reporting requirements.
Regulatory Reporting
As required by BSP, the Group discloses loan transactions with investees and with certain DOSRI. Existing banking regulations limit
the amount of individual loans to DOSRI, 70.00% of which must be secured, to the total of their respective deposits and book value
of their respective investments in the lending company within the Group. In the aggregate, loans to DOSRI generally should not
exceed total equity or 15.00% of total loan portfolio, whichever is lower.
Annual Report 2013
151
NOTES TO FINANCIAL STATEMENTS
BSP Circular No. 423 dated March 15, 2004 amended the definition of DOSRI accounts. The following table shows information
relating to the loans, other credit accommodations and guarantees classified as DOSRI accounts under regulations existing prior to
said Circular, and new DOSRI loans, other credit accommodations granted under said Circular (amounts in thousands):
Consolidated
Parent Company
2013
2012
2013
2012
Total outstanding DOSRI loans
P6,899,699,448 P17,101,226,688
P6,890,582,635
P17,091,391769
Percent of DOSRI loans granted under
regulations existing prior to BSP Circular
No. 423
−
–
−
−
Percent of DOSRI loans granted under BSP
Circular No. 423
−
–
−
–
Percent of DOSRI loans to total loans
3.08%
8.69%
3.21%
9.02%
Percent of unsecured DOSRI loans to total
DOSRI loans
7.55%
1.51%
7.55%
1.51%
The amounts of loans disclosed for related parties above differ with the amounts disclosed for key management personnel since the
composition of DOSRI is more expansive than that of key management personnel.
BSP Circular No. 560 provides that the total outstanding loans, other credit accommodation and guarantees to each of the bank’s/
quasi-bank’s subsidiaries and affiliates shall not exceed 10.00% of the net worth of the lending bank/quasi-bank, provided that the
unsecured portion of which shall not exceed 5.00% of such net worth. Further, the total outstanding loans, credit accommodations
and guarantees to all subsidiaries and affiliates shall not exceed 20.00% of the net worth of the lending bank/quasi-bank; and the
subsidiaries and affiliates of the lending bank/quasi-bank are not related interest of any director, officer and/or stockholder of the
lending institution, except where such director, officer or stockholder sits in the BOD or is appointed officer of such corporation
as representative of the bank/quasi-bank. As of December 31, 2013 and 2012, the Parent Company is in compliance with these
requirements.
On May 12, 2009, BSP issued Circular No. 654 allowing a separate individual limit of twentyfive (25.00%) of the net worth of the
lending bank/quasi-bank to loans of banks/quasi-banks to their subsidiaries and affiliates engaged in energy and power generation.
As of December 31, 2013 and 2012, the Parent Company is in compliance with these requirements.
29.
COMMITMENTS AND CONTINGENT ASSETS AND LIABILITIES
In the normal course of the Group’s operations, there are various outstanding commitments and contingent liabilities which are
not reflected in the accompanying financial statements. Management does not anticipate any material losses as a result of these
transactions.
The following is a summary of contingencies and commitments of the Group and the Parent Company with the equivalent peso
contractual amounts:
Consolidated
Parent Company
2013
2012
2013
2012
Trust department accounts (Note 27)
P67,447,457,904 P133,990,082,969 P63,479,015,562 P128,608,409,873
Future exchange sold
36,116,560,158
28,193,379,035
36,116,560,158
28,193,379,035
Future exchange bought
20,778,554,007
15,399,796,450
20,778,554,007
15,399,796,450
Unused commercial letters of credit
17,574,202,929
9,296,546,289
17,573,829,122
9,296,546,289
IRS receivable
3,800,000,000
−
3,800,000,000
−
Spot exchange bought
1,770,013,561
1,959,558,702
1,770,013,561
1,959,558,702
Spot exchange sold
1,081,746,061
1,397,070,000
1,081,746,061
1,397,070,000
Late deposits/payments received
506,175,794
363,757,406
502,489,719
360,993,305
Outstanding guarantees issued
327,707,419
347,346,511
327,707,419
347,346,511
Deficiency claims receivable
297,072,923
266,170,084
297,072,923
266,170,084
Inward bills for collection
231,328,492
372,071,503
231,328,492
372,071,503
Outward bills for collection
220,930,542
166,745,683
219,305,915
164,832,966
Others
2,684,834,278
2,050,690,811
2,684,780,321
2,050,660,044
30.
SEGMENT INFORMATION
The Group’s operating businesses are recognized and managed separately according to the nature of services provided and the
markets served, with each segment representing a strategic business unit. The Group’s business segments are as follows:
152
a.
Consumer Banking Group - principally handles housing and auto loans for individual and corporate customers;
b.
Institutional Banking Group (formerly Account Management Group) - principally administers all the lending, trade finance and
corollary banking products and services offered to corporate and institutional customers;
c.
Branch Banking Group - principally handles retail and commercial loans, individual and corporate deposits, overdrafts and funds
transfer facilities, trade facilities and all other services for retail customers;
d.
Treasury Group - principally provides money market, trading and treasury services, as well as the management of the Group’s
funding operations by the use of government securities, placements and acceptances with other banks; and
e.
Others - principally handles other services including but not limited to asset management, insurance brokerage, remittances,
operations and financial control, and other support services.
The Group reports its primary segment information to the Chief Operating Decision Maker (CODM) on the basis of the abovementioned segments. The CODM of the Group is the Chief Operating Officer.
Segment assets are those operating assets that are employed by a segment in its operating activities that are either directly
attributable to the segment or can be allocated to the segment on a reasonable basis.
Segment liabilities are those operating liabilities that result from the operating activities of a segment and that either are directly
attributable to the segment or can be allocated to the segment on a reasonable basis.
Interest income is reported net as management primarily relies on the net interest income as performance measure, not the gross
income and expense.
The segment results include internal transfer pricing adjustments across business units as deemed appropriate by management.
Transactions between segments are conducted at estimated market rates on an arm’s length basis. Interest is charged/credited to
the business units based on a pool rate which approximates the marginal cost of funds.
Other operating income mainly consists of trading and securities gain (loss) - net, service charges, fees and commissions, trust fee
income and foreign exchange gain - net. Other operating expense mainly consists of compensation and fringe benefits, provision
for impairment and credit losses, taxes and licenses, occupancy, depreciation and amortization, stationery, supplies and postage
and insurance. Other operating income and expense are allocated between segments based on equitable sharing arrangements.
The Group has no significant customers which contributes 10% or more of the consolidated revenues.
The Group’s asset producing revenues are located in the Philippines (i.e., one geographical location); therefore, geographical
segment information is no longer presented.
The following tables present relevant financial information regarding business segments measured in accordance with PFRS as of
and for the years ended December 31, 2013, 2012 and 2011 (in thousands):
Institutional Banking
Consumer Banking
(formerly Account Management)
2013
2012
2011
2013
2012
2011
Results of Operations
Net interest income
Third party
P1,422,959
P1,258,111
P1,044,611
P6,033,066
P5,811,273
P4,558,210
Intersegment
(522,995)
(795,294)
(516,529)
(2,773,931)
(3,971,960)
(2,700,568)
899,964
462,817
528,082
3,259,135
1,839,313
1,857,642
Other operating income
63,714
64,575
61,589
497,992
245,117
278,284
Total revenue
963,678
527,392
589,671
3,757,127
2,084,430
2,135,926
Other operating expense
(405,082)
(237,536)
(189,591)
(517,812)
(612,499)
(546,730)
Income before income tax
558,596
289,856
400,080
3,239,315
1,471,931
1,589,196
Income tax provision
−
–
–
−
–
–
Net income
P558,596
P289,856
P400,080
P3,239,315
P1,471,931
P1,589,196
Total assets
P22,903,039 P19,618,617 P15,495,942 P145,369,828 P126,520,656 P98,182,533
Total liabilities
P111,769
P207,159
P104,225
P784,801
P1,783,490
P2,158,825
Depreciation and amortization
P4,429
P5,374
P6,201
P5,163
P5,067
P4,597
Provision for impairment and credit
losses
169,868
P42,955
P22,529
P242,599
P265,794
P263,502
Capital expenditures
P7,465
P6,075
P17,735
P4,275
P11,370
P21,579
Annual Report 2013
153
NOTES TO FINANCIAL STATEMENTS
Results of Operations
Net interest income
Third party
Intersegment
Other operating income
Total revenue
Other operating expense
Income before income tax
Income tax provision
Net income
Total assets
Total liabilities
Depreciation and amortization
Provision for impairment and
credit losses
Capital expenditures
Results of Operations
Net interest income
Third party
Intersegment
Other operating income
Total revenue
Other operating expense
Income before income tax
Income tax provision
Net income
Total assets
Total liabilities
Depreciation and amortization
Provision for impairment and credit
losses
Capital expenditures
31.
2013
Branch Banking
2012
2011
2013
Treasury
2012
2011
(P544,700) (P1,083,972) (P1,482,725) P2,408,163
P1,627,403
P2,966,299
4,150,825
5,329,492
5,440,319
(977,468)
(320,445)
(1,313,183)
3,606,125
4,245,520
3,957,594
1,430,695
1,306,958
1,653,116
1,186,744
1,150,101
1,113,488
1,963,049
3,016,280
1,609,319
4,792,869
5,395,621
5,071,082
3,393,744
4,323,238
3,262,435
(4,770,170)
(4,374,814)
(3,998,324)
(600,707)
(628,332)
(427,521)
22,699
1,020,807
1,072,758
2,793,037
3,694,906
2,834,914
(4,650)
–
–
(445,260)
(352,701)
(446,431)
P18,049
P1,020,807
P1,072,758
P2,347,777
P3,342,205
P2,388,483
P229,840,578 P164,497,356 P137,667,024 P101,327,433 P69,279,450 P65,791,965
P276,074,955 P211,473,913 P177,898,412 P64,108,438 P46,388,275 P31,094,602
P345,769
P343,375
P331,722
P3,733
P5,975
P9,927
P173,267
P87,630
P265,794
P488,989
P179,307
P147,596
Others
2012
(As restated 2013 Notes 2 and 10)
2011
(As restated Note 2)
P−
P2,583
P–
P17,035
P–
P18,424
Total
2012
(As restated 2013 Notes 2 and 10)
2011
(As restated Note 2)
P616,503
P449,526
P1,465,344
P9,935,991
P8,062,341
P8,551,739
123,569
(241,793)
(910,039)
−
–
–
740,072
207,733
555,305
9,935,991
8,062,341
8,551,739
1,449,092
1,317,541
1,129,118
5,160,591
5,793,614
4,191,798
2,189,164
1,525,274
1,684,423
15,096,582
13,855,955
12,743,537
(3,027,827)
(2,577,476)
(1,958,292)
(9,321,598)
(8,430,657)
(7,120,458)
(838,663)
(1,052,202)
(273,869)
5,774,984
5,425,298
5,623,079
(224,626)
(69,587)
(100,977)
(674,536)
(422,288)
(547,408)
(P1,063,289)
(P1,121,789)
(P374,846)
P5,100,448
P5,003,010
P5,075,671
(P85,742,955) (P55,756,032) (P54,584,039) P413,697,923 P324,160,047 P262,553,425
P27,218,261
P21,569,005
P11,675,563 P368,298,224 P281,421,842 P222,931,627
P393,792
P465,505
P363,658
P752,886
P825,296
P716,105
(P171,398)
P1,063,288
(P337,787)
P148,782
(P310,240)
P500,416
P414,336
P1,165,241
P236,756
P672,251
P155,098
P705,750
EARNINGS PER SHARE (EPS)
Basic EPS amounts are calculated by dividing the net income for the year by the weighted average number of common shares
outstanding during the year (adjusted for stock dividends).
The following reflects the income and share data used in the basic earnings per share computations:
a. Net income attributable to equity holders of the parent
b. Weighted average number of common shares
outstanding* (Note 22)
c. EPS (a/b)
2013
P5,103,258,492
2012
(As restated Notes 2 and 10)
P5,018,197,140
2011
(As restated Note 2)
P5,076,104,662
1,427,661,658
P3.57
1,427,661,658
P3.51
1,427,661,658
P3.56
*Weighted average number of outstanding common shares in 2012 and 2011 was recomputed after giving retroactive effect to
stock dividends declared on May 2, 2013 (see Note 22).
As of December 31, 2013, 2012 and 2011, there were no outstanding dilutive potential common shares.
Before consideration of the 10.00% stock dividends declared in 2013, the EPS for 2012 and 2011 were P3.87 and P3.91, respectively.
154
32.
FINANCIAL PERFORMANCE
The following basic ratios measure the financial performance of the Group and the Parent Company:
2013
11.31%
1.45%
2.98%
Return on average equity
Return on average assets
Net interest margin
33.
Consolidated
2012
(As restated 2011
Notes 2 and (As restated 10)
Note 2)
12.22%
13.81%
1.71%
2.06%
2.90%
3.76%
Parent Company
2013
11.53%
1.53%
2.94%
2012
2011
(As restated - (As restated Note 2)
Note 2)
12.54%
13.99%
1.79%
2.12%
2.91%
3.74%
NON-CASH INVESTING ACTIVITIES
The following is a summary of certain non-cash investing activities that relate to the analysis of the statements of cash flows:
Fair value gain in AFS investment
Addition to investment properties from settlement of loans
Addition to chattel mortgage from settlement of loans
Addition to non-current assets held for sale from settlement
of loan
Cumulative translation adjustment
Fair value gain in AFS investment
Addition to investment properties from settlement of loans
Addition to chattel mortgage from settlement of loans
Cumulative translation adjustment
34.
2013
(P1,441,364,235)
504,757,989
16,391,313
16,013,040
131,858,279
2013
(P1,418,820,683)
419,628,959
9,809,868
131,858,279
Consolidated
2012
(P432,619,037)
204,077,996
12,437,314
2011
P27,185,171
624,772,731
11,686,526
18,704,256
(90,847,759)
–
87,610,861
Parent Company
2012
(P423,504,964)
122,668,392
12,437,314
(90,847,759)
2011
P2,032,030
610,465,821
11,686,526
87,610,861
OFFSETTING OF FINANCIAL ASSETS AND LIABILITIES
The amendments to PFRS 7, which is effective January 1, 2013, require the Group to disclose information about rights of offset
and related arrangements (such as collateral posting requirements) for financial instruments under an enforceable master netting
agreements or similar arrangements. The effects of these arrangements are disclosed in the succeeding table.
December 31, 2013
Gross amounts Net amount
offset in
presented in
Financial instruments Gross carrying
accordance
statements of
recognized at
amounts
with
financial
end of reporting
(before
the offsetting
position
period by type
offsetting)
criteria
[a-b]
[a]
[b]
[c]
Financial assets
Currency forwards
P67,952,065
P−
P67,952,065
IRS
34,423,045
−
34,423,045
P102,375,110
P−
P102,375,110
Financial liabilities
Bills payable
Currency forwards
IRS
P8,240,891,256
23,893,192
10,792,268
P8,275,576,716
P−
−
−
P−
Effect of remaining rights of
set-off (including rights to set
off financial collateral) that
do not meet PAS 32 offsetting
criteria
Fair value of
Financial
financial
instruments
collateral
[d]
Net exposure
[c-d]
[e]
P23,893,192
34,423,045
P58,316,237
−
−
−
P44,058,873
−
P44,058,873
8,240,891,256 P10,740,888,564
23,893,192
−
10,792,268
−
8,275,576,716 P10,740,888,564
P−
−
18,891,048
P18,891,048
P−
23,893,192
−
P23,893,192
Annual Report 2013
155
NOTES TO FINANCIAL STATEMENTS
December 31, 2012
Financial instruments
recognized at
end of reporting
period by type
Financial assets
Currency forwards
Net amount
Gross amounts presented in
offset in
statements of
Gross carrying accordance with
financial
amounts (before the offsetting
position
offsetting)
criteria
[a-b]
[a]
[b]
[c]
P45,814,986
P–
P45,814,986
Effect of remaining rights of
set-off (including rights to set
off financial collateral) that
do not meet PAS 32 offsetting
criteria
Fair value of
Financial
financial
instruments
collateral*
[d]
Net exposure
[c-d]
[e]
P11,100,762
P34,714,224
P–
Financial liabilities
Currency forwards
P180,897,145
P– P180,897,145
P11,100,762 P106,730,000
P63,066,383
*Financial collateral pertains to cash collateral margin with counterparties to cover for certain mark-to-market losses.
The amounts disclosed in column (d) include those rights to set-off amounts that are only enforceable and exercisable in the event
of default, insolvency or bankruptcy. This includes amounts related to financial collateral both received and pledged, whether cash
or non-cash collateral, excluding the extent of over-collateralization.
35.
EVENTS AFTER THE REPORTING PERIOD
Acquisition of PDB
On January 15, 2014, the Parent Company obtained control of PDB upon its acquisition of majority of PDB’s outstanding subscribed
capital stock in exchange for a cash consideration amounting to P1.13 billion (net of a 10.00% amount held under escrow to cover
indemnifications to the Parent Company). The acquisition is pursuant to the SPA signed on December 18, 2013 by the Parent
Company and the selling PDB stockholders representing 84.77% interest in PDB.
Also on January 15, 2014, the following significant closing conditions of the SPA were carried out:
a) Execution of the deeds of absolute sale of shares in favor of the Parent Company, evidencing the sale, assignment, transfer,
and conveyance by majority of the selling PDB shareholders of the relevant sale shares;
b) Resignation of each of the original members of the BOD of PDB;
c) Election/re-election of the new members of the BOD of PDB, majority of which are members of the BOD of the Group.
On January 17, 2014, the Parent Company remitted cash amounting to P1.30 billion to PDB which will be converted to PDB
common shares as an additional capital infusion.
As of the date of the authorization for issue of the financial statements, the MB of the BSP has yet to formally approve the transfer
of the Sale Shares from the PDB Shareholders to the Parent Company. Also, the initial accounting for the business combination
with PDB is incomplete and the P1.30 billion capital infusion has not been converted to PDB common shares. As of March 5, 2014,
PDB has no outstanding availments from the clean credit facility granted by the Parent Company.
Merger of CBSI and Unity Bank
On January 20, 2014, CBSI obtained SEC’s approval of its merger with Unity Bank. The merger was effected via a share-for-share
exchange, with CBSI as the surviving entity.
Other Matters
On March 5, 2014, the BOD of the Parent Company approved the capital infusion to its subsidiary, CBSI, of up to P800.0 million in
tranches as may be considered necessary to support CBSI’s planned business growth and expansion and to enable CBSI to meet
the minimum capital requirement under Basel III. In the said meeting, the BOD authorized the Parent Company to conduct a Rights
Issue, by way of offering common shares to certain eligible shareholders, subject to approval of the regulatory agencies.
The Parent Company expects to raise proceeds of up to P8.0 billion for the Rights Issue. The additional capital will enable the Parent
Company to pursue growth strategies while ensuring that its capital adequacy levels remain above the new Basel III requirements,
particularly in light of the recent acquisition of PDB.
36.
APPROVAL OF THE FINANCIAL STATEMENTS
The accompanying consolidated and parent company financial statements were authorized for issue by the Parent Company’s BOD
on March 5, 2014.
37.
SUPPLEMENTARY INFORMATION UNDER RR NO. 15-2010
In compliance with the requirements set forth by RR 15-2010, hereunder are the details of percentage and other taxes paid or
accrued by the Parent Company in 2013.
156
Gross receipts tax
Local taxes
Fringe benefit tax
Others
Balance at end of year
P674,410,922
42,995,273
4,949,157
560,828,642
P1,283,183,994
Withholding Taxes
Details of total remittances of withholding taxes in 2013 and amounts outstanding as of December 31, 2013 are as follows:
Final withholding taxes
Withholding taxes on compensation and benefits
Expanded withholding taxes
38.
Total
Remittances
P706,773,225
431,338,836
95,939,169
P1,234,051,230
Amounts
outstanding
P67,311,092
25,186,932
5,550,035
P98,048,059
SUPPLEMENTARY INFORMATION UNDER RR 19-2011
In its 2013 filing for income tax return, the Parent Company disclosed the following information on taxable income and deductions
using the revised format as required under RR 19-2011:
Receipts/fees
Other taxable income not subjected to final tax
Cost of services
Ordinary allowable itemized deductions
P9,362,727,396
1,516,252,454
(5,122,057,836)
(4,610,004,834)
P1,146,917,180
Receipts/fees are as follows:
Interest income
Bank commission, fees and other charges
Lease of properties
P8,399,469,307
920,085,212
43,172,877
P9,362,727,396
Other taxable income not subjected to final tax are as follows:
Income from assets acquired
Trust department earnings
Other operating earnings
P660,651,426
416,286,552
439,314,476
P1,516,252,454
Cost of services are as follows:
Salaries and wages
Interest expense
PDIC payments
BSP supervision fee
P2,741,944,847
1,872,857,001
408,797,611
98,458,377
P5,122,057,836
Ordinary allowable itemized deductions are as follows:
Taxes and licenses
Rental
Depreciation
Bad debts
Communication, light and water
Security services
Losses
Transportation and travel
Repairs and maintenance
Fuel and oil
Janitorial and messengerial services
Representation and entertainment
Insurance
Office supplies
Professional fees
Advertising and promotions
Charitable contributions
Miscellaneous
P1,132,058,196
536,842,609
500,514,372
247,988,708
246,025,729
205,452,579
187,211,244
166,955,186
161,838,035
153,663,669
121,610,736
108,789,798
84,250,440
82,443,661
12,205,920
9,580,786
171,670
652,401,496
P4,610,004,834
Annual Report 2013
157
CHINA BANK BRANCHES
MAKATI MAIN BRANCH (HO)
CBC Bldg., 8745 Paseo de Roxas
cor. Villar Sts., Makati City
Trunkline:885-5555
(Private Exchange Connecting All
Departments)
Fax No.:
892-0220;817-1325
Marissa A. Auditor
BINONDO BUSINESS CENTER
CBC Bldg., Dasmariñas
cor. Juan Luna Sts., Binondo, Manila
Trunklines: 247-5388; 8855-222
(Private Exchange Connecting
All Departments)
Fax No.:
241-7058; 242-7225
Rosemarie C. Gan
METRO MANILA
999 MALL BRANCH
Unit 3D-5; 3D-7 999 Shopping Mall
Bldg. 2, Recto-Soler Sts.
Binondo, Manila
Tel. Nos.: 523-1216/ 1217/ 1218/
1219
Fax No.:
523-1215
Arnold S. Castillo
ANTIPOLO CITY BRANCH
G/F BudgetLane Arcade
No. 6, Provincial Road
Brgy. San Jose, Antipolo City, Rizal
Tel. Nos.: 650-3277; 650-2087
695-1509
Fax No.:
650-2640
Judy Kristine N. Achacoso
ARANETA AVE. BRANCH
Philippine Whithasco Bldg.
420 Araneta Avenue, cor. Bayani St.
Quezon City
Tel. Nos.: 731-2252; 731-2261
732-4153; 731-2179
731-2216
Fax No.:
731-2243
Arlene T. Uy
ARRANQUE BRANCH
Don Felipe Building
675 Tomas Mapua St.
Sta. Cruz, Manila
Tel. Nos.: 733-3477; 734-4777
733-7704; 733-8335 to 40
734-4497
734-4501/06
Fax No.:
733-3481
Flora C. Peña
ASUNCION BRANCH
Units G6 & G7 Chinatown Steel
Towers, Asuncion St.
San Nicolas, Manila
Tel. Nos.: 241-2311/52/59/61
Fax No.:
241-2352
Mary Ann E. Tiu
AYALA-ALABANG BRANCH
G/F, CBC-Building, Acacia Ave.
Madrigal Business Park
Ayala Alabang, Muntinlupa City
Tel. Nos.: 807-0673-74
850-3785/9640/8888
Fax No.:
850-8670
Victoria G. Capacio
158
AYALA-COLUMNS BRANCH
G/F The Columns Tower 3
Ayala Avenue, Makati City
Tel. Nos.: 915-3672/3673/3674/3675
Fax No.:
915-3672
Lorela M. Guillermo
BLUMENTRITT BRANCH
1777-1781 Cavite corner Leonor
Rivera St. Blumentritt
Sta. Cruz, Manila
Tel. Nos.: 742-0254;711-8589
Fax No.:
711-8541
Jennet P. Jose
CUBAO-AURORA BRANCH
911 Aurora Boulevard Extension corner
Miami Street, Cubao, Quezon City
Tel. Nos.: 912-5164/57
913-4675/76; 911-3524
Fax No.:
912-5167
Aida D. Cristobal
BO. KAPITOLYO BRANCH
G/F P&E Building, 12 United corner
First Sts., Bo. Kapitolyo, Pasig City
Tel. Nos.: 634-8370/8915/3697
Fax No.:
634-7504
Ana Victorina D. Camacho
D. TUAZON BRANCH
174 A-B D. Tuazon St., Brgy. Maharlika
Sta. Mesa Heights, Quezon City
Tel. Nos.: 731-2516/2508
Fax No.:
731-0592
Ella Jane D. Cortez
BALUT BRANCH
North Bay Shopping Center
Honorio Lopez Boulevard
Balut, Tondo, Manila
Tel. Nos.: 253-9921/29; 253-9620
251-1182/86
Fax No.:
253-9917
Josephine D. Paredes
BONNY SERRANO BRANCH
G/F Greenhills Garden Square
297 Col. Bonny Serrano Ave.
Quezon City
Tel. Nos.: 410-0677; 997-8043
997-8031
Fax No.:
410-0677
Arnold Y. Matutina
DASMARIÑAS VILLAGE BRANCH
2283 Pasong Tamo Ext.
corner Lumbang Street, Makati City
Tel. Nos.: 894-2392/93; 813-2958
Fax No.:
894-2355
Ruth D. Holmes
BANAWE BRANCH
CBC Building, 680 Banawe Avenue
Sta. Mesa Hts., District I, Quezon City
Tel. Nos.: 743-7486/88
416-7028/7030; 711-8694
Fax No.:
743-7487
Rodolfo S. De Lara
CAINTA BRANCH
CBC Bldg (Beside Sta. Lucia East Mall)
Felix Ave. (Imelda Ave.), Cainta, Rizal
Tel. Nos.: 646-0691/93; 645-9974
682-1795
Fax No.:
646-0050
Hidelisa L. Robiñol
BANAWE- MA. CLARA BRANCH
G/F Prosperity Bldg.
Banawe St., Quezon City
Tel. Nos.: 732-1060; 740-4864
743-8967
Fax No.:
740-4864
Raidis M. De Guzman
CAPITOL HILLS BRANCH
G/F 88 Design Pro Building Capitol Hills
Old Balara, Quezon City
Tel. Nos.: 952-7776/7805/7804
Fax No.:
952-7806
Joanna Leigh R. Gojar
BALINTAWAK-BONIFACIO BR.
657 A. Bonifacio Avenue
Balintawak, Quezon City
Tel. Nos.: 361-3449; 361-7825
362-3660; 361-0450
Fax No.:
361-0199
Vivian T. Kho
BEL-AIR BRANCH
G/F Avant Building, 48 Jupiter
cor. Mars Streets Bel-Air Village
Makati City
Tel. Nos.: 897-2212; 899-4186/0685
Fax No.:
890-4062
Glenn R. Narvaez
BETTER LIVING SUBD. BRANCH
128 Doña Soledad Ave.
Parañaque City
Tel. Nos.: 556-3467; 556-3468
556-3470
Fax No.:
556-3470
Flormina B. Jacinto
BF HOMES BRANCH
Aguirre cor. El Grande Aves.
United BF Homes, Parañaque City
Tel. Nos.: 825-6138/6891/6828
Fax No.:
825-5979
Charity N. Santos
BF HOMES- AGUIRRE BRANCH
Margarita Centre, Aguirre Ave.
corner Elsie Gaches Street
BF Homes, Parañaque City
Tel. Nos.: 799-4707/4942
659-3359/3360; 556-5845
Fax No.:
659-3359
Maria Adelfa E. Bolivar
BF RESORT VILLAGE BRANCH
BF Resort Drive cor. Gloria Diaz St.
BF Resort Village Talon Dos
Las Piñas City
Tel. Nos.: 873-4542, 873-4541
873-4540
Fax No.:
873-4543
Heizel P. Bautista
COMMONWEALTH AVENUE
BRANCH
LGF Ever Gotesco Mall
Commonwealth Center
Commonwealth Avenue corner
Don Antonio Road, Quezon City
Tel. Nos.: 932-0818/0820
431-5000/01
Fax No.:
932-0822
Meneleo S. Bernardo
CONGRESSIONAL AVENUE
BRANCH
G/F Unit C The Arete Square
Congressional Ave. Project 8
Quezon City
Tel. Nos.: 351-8648; 351-8645
351-8646
Fax No.:
351-8645
Marlon Darcy A. Mendoza
CORINTHIAN HILLS BRANCH
G/F The Clubhouse, Corinthian Hills
Temple Drive Brgy. Ugong Norte
Quezon City
Tel. Nos.: 637-3170/3180/1915
Fax No.:
637-1905
Ma. Anacleta B. Gloria
CUBAO-ARANETA BRANCH
Shopwise Arcade Building
Times Square St., Araneta Shopping
Center, Cubao, Quezon City
Tel. Nos.: 911-2369/70; 438-3830-32
911-2397
Fax No.:
911-2432
Arnulfo C. Tongson
DIVISORIA-STA. ELENA BRANCH
New Divisoria Condominium Center
632 Sta. Elena St., Binondo, Manila
Tel. Nos.: 247-1435/36/37
Fax No.:
247-1436
Mary Elizabeth Uy
DON ANTONIO BRANCH
G/F Royale Place, Don Antonio Ave.
Brgy. Old Balara, Quezon City
Tel. Nos.: 932-9477; 952-9678/9354
Fax No.:
952-9344
Lilibeth M. David
DEL MONTE AVENUE BRANCH
No. 497 Del Monte Ave.
Bgry. Manresa, Quezon City
Tel. Nos.: 413-2826; 413-2825
916-8828; 871-2745
Fax No.:
361-1101
Wendy C. Tan
DEL MONTE-MATUTUM BRANCH
No. 202 Del Monte Avenue
near corner Matutum St.
Brgy St. Peter, Quezon City
Tel. Nos.: 731-2535; 731-2571
413-2118; 416-7791
Fax No.:
416-7791
Stella A. Lim
E. RODRIGUEZ-HILLCREST BRANCH
No. 402 E. Rodriguez Sr. Blvd.
Cubao, Quezon City
Tel. Nos.: 571-8927; 571-8928
571-8929
Fax No.:
571-8927
Rachel D. Umali
E. RODRIGUEZ SR. BLVD. BRANCH
CBC Bldg., #286 E. Rodriguez Sr. Blvd.
Brgy. Damayang Lagi, Quezon City
Tel. Nos.: 416-3166; 722-5860
722-5893
725-9641 (MCB)
Fax No.:
726-2865
Ana Ma. Raquel Y. Samala
EASTWOOD CITY BRANCH
Unit D, Techno Plaza One, Eastwood
City Cyberpark, E. Rodriguez Jr. Ave.
(C-5) Bagumbayan, Quezon City
Tel. Nos.: 706 3491/3493/1979/
3320/3448
Fax No.:
438-5531
Ramiro A. Amanquiton
EDSA-KALOOKAN BRANCH
No. 531 (Lot 5 Block 30) EDSA
near corner Biglang Awa Street
Kalookan City
Tel. Nos.: 442-4338; 442-4339
442-4340
Fax No.:
442-4339
Carlito W. Macusi
EDSA-TIMOG AVE. BRANCH
G/F Richwell Corporate Center
102 Timog Ave., Brgy. Sacred Heart
Quezon City
Tel. Nos.: 441-5225; 441-5226
441-5227
Fax No.:
441-5228
Antonio J. Tan, Jr.
ELCANO BRANCH
G/F Elcano Tower, Elcano Street
San Nicolas, Manila
Tel. Nos.: 244-6760; 244-6765
244-6779
Fax No.:
244-6760
Gervie Roy S. Mendoza
ERMITA BRANCH
Ground Floor A, Ma. Natividad Bldg.
#470 T. M. Kalaw cor. Cortada Sts.
Ermita, Manila
Tel. Nos.: 525-6477;;536-7794
525-6544;523-0074
523-9862
Fax No.:
525-8137
Gloria G. Mañosca
ESPAÑA BRANCH
España cor. Valencia Sts.
Sampaloc, Manila
Tel. Nos.: 741-9572/6209/6208/9565
Fax No.:
741-6207
Jose Omar S. Yuan
EXAMINER BRANCH
No. 1525 Quezon Ave.
cor. Examiner St., West Triangle
Quezon City
Tel. Nos.: 376-3313/3314/3317/3318
Fax No.:
376-3315
Ma. Salome D. Garcia
EVANGELISTA BRANCH
Evangelista corner Gen. Estrella Sts.
Bangkal, Makati City
Tel. Nos.: 759-5095; 759-5096
856-0434; 856-0433
Fax No.:
759-5096
Sheijan A. Baladji
FAIRVIEW BRANCH
G/F Angelenix House, Fairview Ave.
corner Camaro St., Quezon City
Tel. Nos.: 937-5597; 938-9636
937-8086; 461-3004
Fax No.:
937-8086
Marilyn L. Navarro
FILINVEST CORPORATE CITY
BRANCH
G/F Wilcon Depot, Alabang-Zapote
road cor. Bridgeway Ave., Filinvest
Corporate City, Alabang, Muntinlupa
Tel. Nos.: 775-0097/0126
842-1993/2198
807-2657 (area Office)
Fax No.:
775-0322
Mary Grace D.P. Macaraig
FORT BONIFACIO GLOBAL CITY
BRANCH
G/F Marajo Tower, 26th Street
cor. 4th Avenue, Fort Bonifacio Global
City, Taguig City
Tel. Nos.: 799-9072/9074
856-4416/4891/5196
403-1558 (MCB)
Fax No.:
856-4416
Shellane S. Salgatar
GIL PUYAT AVENUE BRANCH
No. 65 Sen Gil Puyat Ave.
Brgy. Palanan, Makati City
Tel. Nos.: 844-0492/94
844-0688/90
Fax No.:
844-0497
Juvy P. Caguiat
GREENBELT 1 BRANCH
G/F Greenbelt 1, Legaspi Street
near corner Paseo de Roxas
Makati City
Tel. Nos.: 836-1387; 836-1405
836-1406
Fax No.:
836-1406
Evanzueda T. Moran
GREENHILLS BRANCH
G/F Gift Gate Bldg.
Greenhills Shopping Center
San Juan, Metro Manila
Tel. Nos.: 721-0543/56; 721-3189
727-9520;724-5078
724-6173; 727-2798
Fax No.:
726-7661
Maria Marta Theresa S. Suarez
GREENHILLS-ORTIGAS BRANCH
CBC-Building, 14 Ortigas Avenue
Greenhills, San Juan, Metro Manila
Tel. Nos.: 723-0530/01; 723-0502/04
726-1492; 727-4163
(Area Head)
Fax No.:
723-0556; 725-9025
Jose Redentor V. Trinidad
HEROES HILLS BRANCH
Quezon Ave. corner J. Abad Santos
Street, Heroes Hills, Quezon City
Tel. Nos.: 351-4359/5121; 411-3375
412-5697
Fax No.:
351-5121
Mirasol C. Ruiz
ILAYA BRANCH
#947 APL-YSL Bldg.
Ilaya, Tondo, Manila
Tel. Nos.: 245-2416; 245-2548
245-2557
Fax No.:
245-2545
Jefferson G. Ching
INTRAMUROS BRANCH
No. 409 A. Soriano Avenue
Intramuros, Manila
Tel. Nos.: 528-4241; 536-1044
536-5971; 310-5122
Fax No.:
536-1044
Shirley L. Coquinco
J. ABAD SANTOS AVENUE BRANCH
2159 J. Abad Santos Ave.
cor. Batangas St., Tondo, Manila
Tel. Nos.: 255-1201 to 02; 255-1204
Fax No.:
255-1203
Gil P. Navelgas
JUAN LUNA BRANCH
G/F Aclem Building, 501 Juan Luna St.
Binondo, Manila
Tel. Nos.: 247-3570/3795/3786
480-0211
Fax No.:
247-3795
Mary Ann K. Abrigo
KALAYAAN AVE. BRANCH
G/F PPS Building
Kalayaan Avenue, Quezon City
Tel. Nos.: 332-3858; 332-3859
332-3860
Fax No.:
332-3859
Rowena C. Lagman
KALOOKAN BRANCH
CBC Bldg., 167 Rizal Avenue Extension
Grace Park, Kalookan City
Tel. Nos.: 364-0515/35; 364-0717/31
364-0494; 364-9948
366-9457
Fax No.:
364-9864
Danilo T. Sarita
KALOOKAN- CAMARIN BRANCH
Annex Bldg. Space No. 3, Zabarte
Town Center No. 588 Camarin Road
corner Zabarte Road Kalookan City
Tel. Nos.: 442-6830; 442-7541
Fax No.:
442-6825
Albert V. Timbang
KALOOKAN-MONUMENTO
BRANCH
779 Mc Arthur Highway, Kalookan City
Tel. Nos.: 364-2571; 361-3270
921-3043
Fax No.:
361-3271
Mercedez F. Lazaro
KAMIAS BRANCH
G/F CRM Building II, 116 Kamias Road
corner Kasing-Kasing Street
Quezon City
Tel. Nos.: 433-6007; 920-7367
920-8770
Fax No.:
920-5723
Mary Ann P. Arroyo
KARUHATAN BRANCH
No. 248 McArthur Highway
Karuhatan, Valenzuela City
Tel. Nos.: 291-0431/0175; 440-0033
Fax No.:
440-00-33
Rosa C. Arteche
KATIPUNAN AVE.-ST. IGNATIUS
BRANCH
CBC Building, No. 121 Katipunan Ave.
Brgy. St. Ignatius, Quezon City
Tel. Nos.: 913-5532; 912-5003
913-3226
Fax No.:
913-5532
Ramiro Mateo D. Valdivia
LAS PIÑAS BRANCH
CBC- Bldg., Alabang-Zapote Road
cor. Aries St., Pamplona Park Subd.
Las Piñas City
Tel. Nos.: 874-6204; 874-6210
Fax No.:
874-6414
Myra D. Adriano
LAS PIÑAS-MANUELA BRANCH
Alabang-Zapote Road cor.
Philamlife Ave., Pamplona Dos
Las Piñas City
Tel. Nos.: 872-9801/9572/9533
871-0770
Fax No.:
871-0771
Mario D. Dalangin
LEGASPI VILLAGE-AIM BRANCH
G/F Cacho-Gonzales Building
101 Aguirre cor. Trasierra Streets
Legaspi Village, Makati City
Tel. Nos.: 818-8156; 818-0734
818-9649; 894-5882 to 85
Fax No.:
818-0240
Ma. Luisa C. Rivera
LEGASPI VILLAGE-C. PALANCA
BRANCH
Suite A, Basic Petroleum Building
104 C. Palanca Jr. Street
Legaspi Village, Makati City
Tel. Nos.: 894-5915/18; 810-1464
Fax No.:
894-5868
Ma. Rosalie F. Cipriano
LEGASPI VILLAGE-PEREA BRANCH
G/F Greenbelt Mansion, 106 Perea St.
Legaspi Village, Makati City
Tel. Nos.: 893-2273/2272/2827
Fax No.:
893-2272
Paul J. Bugayong
LEGASPI VILLAGE-SALCEDO
BRANCH
G/F Fedman Suites, 199 Salcedo
Street, Legaspi Village, Makati City
Tel. Nos.: 893-7680; 893-2618
759-2462
893-1503; 816-0905
Fax No.:
893-3746
Manuel O. Yap
MAGALLANES VILLAGE BRANCH
G/F DHI Bldg., No. 2 Lapu-Lapu Ave.
corner EDSA, Magallanes Village
Makati City
Tel. Nos.: 757-0272/0240; 852-1290
852-1245
Fax No.:
852-1245
Ma. Monica M. Ela
MAKATI AVENUE BRANCH
G/F CBC Building, Makati Ave.
cor. Hercules St., Makati City
Tel. Nos.: 890-6971 to 74
Fax No.:
890-6975
Ma. Emma Lourdes A. Libas
MALABON-CONCEPCION BRANCH
Gen. Luna corner Paez Streets
Concepcion, Malabon
Tel. Nos.: 281-0102/03/04/05
281-0293
Fax No.:
281-0106
Ma. Elenita M. Baradi
MALABON-GOV. PASCUAL BRANCH
CBC Building, Gov. Pascual Avenue
Malabon City
Tel. Nos.: 352-1816;352-1817
352-1822; 961-2147
Fax No.:
352-1822
Amy A. Go
Annual Report 2013
159
CHINA BANK BRANCHES
MALABON-POTRERO BRANCH
CBC Bldg., McArthur Highway
Potrero, Malabon
Tel. Nos.: 448-0524/25
361-8671/7056
Fax No.:
448-0525
Leslie Y. De Los Angeles
MALANDAY BRANCH
CBC Bldg. McArthur Highway
Malanday, Valenzuela City
Tel. Nos.: 432-9787; 292-6956/57
445-3201; 432-9785
Fax No.:
292-6956
Miguela Gladiola G. Santos
MANDALUYONG-BONI AVE.
BRANCH
G/F VOS Bldg., Boni Avenue corner
San Rafael Street, Mandaluyong City
Tel. Nos.: 746-6283/85; 534-2289
Fax No.:
534-1968
Paul J. Siongco
MAYON BRANCH
561-B. Mayon St.
Brgy. N.S. Amoranto, Quezon City
Tel. Nos.: 731-9054/2766; 741-2409
Fax No.:
731-2766
Teresita G. Sy
ONGPIN BRANCH
G/F Se Jo Tong Building,
808 Ongpin Street, Sta. Cruz, Manila
Tel. Nos.: 733-8962 to 66; 735-5362
Fax No.:
733-8964
Dolly C. Diu
MEZZA RESIDENCES BRANCH
G/F Mezza Residences, Aurora Blvd.
corner Araneta Avenue
Brgy. Doña Imelda, Quezon City
Tel. Nos.: 516-0764; 516-0765
516-0766
Fax No.:
516-0764
Manuel S. Aurora
ORTIGAS-ADB AVE. BRANCH
LGF City & Land Mega Plaza
ADB Ave. cor. Garnet Rd.
Ortigas Center, Pasig City
Tel. Nos.: 687-2457/58
687-2226/3263
Fax No.:
687-2457
Jossef Dennis Z. Timbol
MUNTINLUPA- PUTATAN BRANCH
G/F Teknikos Bldg., National Highway
Brgy. Putatan, Muntinlupa City
Tel. Nos.: 511-0980; 808-1817
Fax No.:
808-1819
Carina A. Cariño
ORTIGAS AVE. EXT.- RIVERSIDE
BRANCH
Unit 2-3 Riverside Arcade
Ortigas Avenue Extension corner
Riverside Drive, Brgy. Sta. Lucia
Pasig City
Tel. Nos.: 748-18-08; 748-4426
655-7403; 655-8350
Fax No.:
655-8350
Tita C. Ibarbia
MANDALUYONG-PIONEER BRANCH
UG-05 Globe Telecom Plaza Tower I
Pioneer Street, Mandaluyong City
Tel. Nos.: 746-6949; 635-4198
632-1399
Fax No.:
746-6948
Marie Jane V. Malig
N. DOMINGO BRANCH
G/F The Main Place, No. 1
Pinaglabanan, cor. N. Domingo Sts.
San Juan City
Tel. Nos.: 470-2915; 470-2916
470-2917
Fax No.:
470-2916
Jocelyn S. Salvador
MARIKINA- STA. ELENA BRANCH
250 J.P. Rizal Street, Sta. Elena
Marikina City
Tel. Nos.: 646-4281; 646-4277
646-4279; 646-1807
Fax No.:
646-1807
Rosalinda R. Yuseco
NAVOTAS BRANCH
No. 500 M. Naval St. near corner
Lacson St., Brgy. North Bay Boulevard
North (NBBN), Navotas City
Tel. Nos.: 283-0752 to 54
Fax No.:
283-0752
Maria Cristina B. Tamayo
MARIKINA- FAIRLANE BRANCH
G/F E & L Patricio Building
No. 809 J.P. Rizal Ave.
Concepcion Uno, Marikina City
Tel. Nos.: 997-0684; 997-0897
998-1817; 948-6120 (MCB)
Fax No.:
997-0897
Homer D. Petallano
NOVALICHES BRANCH
954 Quirino Highway, Novaliches
Proper, Novaliches, Quezon City
Tel. Nos.: 936-3512; 937-1133/35/36
Fax No.:
936-1037
Edwin T. Tamayo
MARIKINA- GIL FERNANDO
BRANCH
Block 9, Lot 14 Gil Fernando Ave.
Marikina City
Tel. Nos.: 646-0780; 646-8032
358-2138
Fax No.:
646-8032
Imelda F. Polenday
MARIKINA- SSS VILLAGE BRANCH
Lilac cor. Rainbow Sts., SSS Village
Concepcion Dos, Marikina City
Tel. Nos.: 948-5135; 941-7709
997-3343
Fax No.:
942-0048
Nerissa J. Ramos
MASANGKAY BRANCH
959-961 G. Masangkay Street
Binondo, Manila
Tel. Nos.: 244-1828/35/48/56/59
Fax No.:
244-1833
Christopher C. Ty
MASANGKAY- LUZON BRANCH
1192 G. Masangkay St.
Sta. Cruz, Manila
Tel. Nos.: 255-0739; 254-9974
254-9335
Fax No.:
254-9974
Gina C. Chua
160
NOVALICHES-SANGANDAAN
BRANCH
CBC Building, Quirino Highway
corner Tandang Sora Ave.
Brgy. Sangandaan Novaliches
Quezon City
Tel. Nos.: 935-3049; 935-3491
Fax No.:
935-2130
Ronaldo T. Uy, Jr.
NOVALICHES-TALIPAPA BRANCH
528 Copengco Bldg., Quirino Highway
Talipapa, Novaliches, Quezon City
Tel. Nos.: 936-2202; 936-3311
936-7765
Fax No.:
936-2202
Joseph Nestor B. Belisario
NOVALICHES- ZABARTE BRANCH
G/F C.I. Bldg 1151 Quirino Highway
corner Zabarte Road, Brgy. Kaligayahan
Novaliches, Quezon City
Tel. Nos.: 461-7691; 461-7694
461-7698
Fax No.:
461-7691
Caroline K. Barcinal
NUEVA BRANCH
Unit Nos. 557 & 559 G/F Ayson
Building Yuchengco St.
Binondo, Manila
Tel. Nos.: 247-6374; 247-6396
247-0493; 480-00-66
Fax No.:
247-6396
Melissa S. Uy
ORTIGAS CENTER BRANCH
Unit 101 Parc Chateau Condominium
Onyx corner Sapphire Streets
Ortigas Center, Pasig City
Tel. Nos.: 633-7960/70/53/54
634-0178
Fax No.:
633-7971
Virginia G. Go
ORTIGAS COMPLEX BRANCH
G/F Padilla Building, F. Ortigas Jr. Road
(formerly Emerald Avenue)
Ortigas Center, Pasig City
Tel. Nos.: 634-3469; 631-2772
Fax No.:
633-9039
Christabel Ethel C. Gabriana
ORTIGAS-JADE DRIVE BRANCH
Unit G-03, Antel Global Corporate
Center, Jade Drive, Ortigas Center
Pasig City
Tel. Nos.: 638-4489; 638-4490
638-4510; 638-4540
Fax No.:
638-4540
Grace N. Soriano
PACO BRANCH
Gen. Luna corner Escoda Street
Paco, Manila
Tel. Nos.: 526-6492; 536-6630/31/72
Fax No.:
536-6657
Susan V. Co
PACO- OTIS BRANCH
G/F Union Motor Corporation Bldg.
1760 Dra. Paz Guazon St.
Paco, Manila
Tel. Nos.: 561-6902; 561-6981
564-2247
Fax No.:
561-6981
Ma. Victoria O. Rondilla
PADRE FAURA BRANCH
G/F Regal Shopping Center
A. Mabini cor. P. Faura Sts.
Ermita, Manila
Tel. Nos.: 526-0586; 527-3202
527-7865
Fax No.:
527-3202
Carmina P. Manimbo
PARAÑAQUE-SUCAT BRANCH
No. 8260 (between AMA Computer
School and PLDT), Dr. A. Santos
Avenue, Brgy. San Isidro
Parañaque City
Tel. Nos.: 820-8951/52; 820-2044
825-2501
Fax No.:
825-9517
Alejandro I. Alvarez, Jr.
PASAY-LIBERTAD BRANCH
CBC-Building, 184 Libertad Street
Antonio Arnaiz Ave., Pasay City
Tel. Nos.: 551-7159; 834-8978
831-0306; 831-0498
Fax No.:
551-7160
Michelle C. Ang
PASAY-ROXAS BLVD. BRANCH
GF Unit G-01 Antel Seaview Towers
2626 Roxas Blvd., Pasay City
Tel. Nos.: 551-9067/68/69; 833-5048
Fax No.:
551-1768
Ronaldo H. Francisco
PASIG- C. RAYMUNDO BRANCH
G/F MicMar Apartments
No. 6353 C. Raymundo Avenue
Brgy. Rosario, Pasig City
Tel. Nos.: 642-3652; 628-3912
628-3922; 628-3922
Fax No.:
576- 4134
Mary Roslyne D. Balatbat
PASIG- MERCEDES BRANCH
Commercial Motors Corp. Compound
Mercedes Ave., Pasig City
Tel. Nos.: 628-0197/0209/0201
Fax No.:
628-0211
Rosanna H. Malavega
PASIG-SANTOLAN BRANCH
G/F Felmarc Business Center
Amang Rodriguez Avenue
Santolan, Pasig City
Tel. Nos.: 646-0635; 682-3474
682-3514; 681-4575
Fax#
646-0514
Joanaru B. Macalagay
PASIG- SM SUPERCENTER BRANCH
G/F SM Supercenter Pasig
Frontera Drive, C-5, Ortigas, Pasig City
Tel. Nos.: 706-3207/3208/3209
Fax No.:
706-3208
Maria Norissa D. Mempin
PASO DE BLAS BRANCH
G/F CYT Bldg., No. 178 Paso de Blas
Valenzuela City
Tel. Nos.: 292-3215/3213/3216
Fax No.:
444-8850
Ma. Letecia G. Milan
PASONG TAMO BAGTIKAN
BRANCH
G/F Trans-Phil House
1177 Chino Roces Ave.
cor. Bagtikan St., Makati City
Tel. Nos.: 403-4820; 403-4821
403-4822; 738-7591
Fax No.:
403-4821
Rose Marie Y. Oquendo
PASONG TAMO-CITYLAND BRANCH
Units UG30-UG32 Cityland Pasong
Tamo Tower, 2210 Pasong Tamo St.
Makati City
Tel. Nos.: 817-9337/47/51/60/82
Fax No.:
817-9351
Arnnie B. Alanano
PHILAM BRANCH
#8 East Lawin Drive
Philam Homes, QC
Tel. Nos.: 927-9841; 924-2872
929-5734
Fax No.:
929-3115
April Jean P. Chiong
QUEZON AVE. BRANCH
No. 18 G & D Bldg., Quezon Ave.
cor. D. Tuazon St., Q.C.
Tel. Nos.: 712-3676; 712-0424
740-7779/80; 712-1105
416-8891; 732-2137 (MCB)
Fax No.:
712-3006
Anita Y. Samala
QUIAPO BRANCH
216-220 Villalobos St.
Quiapo, Manila
Tel. Nos.: 733-2052/59/61
733-6282/86
Fax No.:
733-6282
Leslie C. So
ROOSEVELT AVE. BRANCH
CBC Bldg., #293 Roosevelt Ave.
San Francisco Del Monte, Quezon City
Tel. Nos.: 371-5133 to 35; 410-2160
410-1957; 371-2766
Fax No.:
371-2765
Eileen M. Felipe
SALCEDO VILLAGE-TORDESILLAS
BRANCH
G/F Prince Tower Condominium
14 Tordesillas St., Salcedo Village
Makati City
Tel. Nos.: 813-4901/32/33
813-4944/52
Fax No.:
813-4933
Pamela Joyce E. Gonzalez
SALCEDO VILLAGE-VALERO
BRANCH
G/F Valero Tower, 122 Valero Street
Salcedo Village, Makati City
Tel. Nos.: 892-7768/69; 812-9207
893-8188/96
Fax No.:
892-7769
Nellie S.D. Alar
SALES- RAON BRANCH
611 Sales St., Quiapo, Manila
Tel. Nos.: 734-5806; 734-7427
734-6959
Fax No.:
734-6959
Elizabeth I. Trinidad
SAN JUAN BRANCH
17 (new) F. Blumentritt St.
San Juan, M. M.
Tel. Nos.: 724-8263; 726-4826
744-5616 to 18; 723-7333
Fax No.:
723-4998
Area Office- 725-9025
Joel Kenward Y. Uy
SHAW-HAIG BRANCH
G/F First of Shaw Bldg., Shaw Blvd.
corner Haig St., Mandaluyong City
Tel. Nos.: 534-1073; 534-0744
718-0218; 621-6459
531-0795 (MCB)
Fax No.:
576-3841 (telefax)
Virginia T. Bernabe
SHAW-PASIG BRANCH
G/F RCC Center
No. 104 Shaw Boulevard, Pasig City
Tel. Nos.: 634-5018/19; 634-3343/44
747-7812; 634-3340
638-2751 (MCB)
Fax No.:
634-3344
Hermenegildo G. Cariño
SM CITY NORTH EDSA- ANNEX
BRANCH
UGF New Annex Building
SM City North EDSA
EDSA, Quezon City
Tel. Nos.: 441-1370/1372/1373
Fax No.:
441-1372
Rommel R. Sunga
SHAW-SUMMIT ONE BRANCH
Unit 102 Summit One Office Tower
530 Shaw Boulevard Mandaluyong City
Tel. Nos.: 531-3970; 531-5736
531-4058; 531-1304
533-8723; 533-4948
Fax No.:
531-9469
Lilian B. Orlina
SM CITY SAN LAZARO BRANCH
UGF (Units 164-166) SM City
San Lazaro, Felix Huertas Street
corner A.H. Lacson Extension
Sta. Cruz, Manila
Tel. Nos.: 742-1572; 742-2330
493-7115
Fax No.:
732-7935
Jocelyn E. Tan
SM AURA PREMIER BRANCH
L/G SM Aura Premier, McKinley
Parkway, Fort Bonifacio Global City
Taguig City
Tel. Nos.: 808-9727; 808-9701
(telefax)
Cristina S. Filio
SM CITY BF PARAÑAQUE BRANCH
G/F SM City BF Parañaque
Dr. A. Santos Ave. corner President’s
Avenue, Parañaque City
Tel. Nos.: 825-3201; 825-2990
825-3095; 820-0911
Fax No.:
825-1062
Aldrin S. Parco
SM CITY BICUTAN BRANCH
LGF, Bldg. B, SM City Bicutan
Doña Soledad Ave. cor.
West Service Rd., Parañaque City
Tel. Nos.: 821-0600/0700/0600
777-9347
Fax No.: 821-0500
Kathlyn I. Abalos
SM CITY FAIRVIEW BRANCH
LGF, SM City Fairview
Quirino Avenue corner Regalado
Avenue, Fairview, Quezon City
Tel. Nos.: 417-2878; 939-3105
Fax No.:
418-8228
Ma. Nila B. Dujunco
SM CITY MARIKINA BRANCH
G/F SM City Marikina
Marcos Highway, Brgy. Calumpang
Marikina City
Tel. Nos.: 477-1845/46/47; 799-6105
Fax No.:
477-1847
Donna G. Del Rosario
SM CITY MASINAG BRANCH
SM City Masinag, Marcos Highway
Brgy. Mayamot, Antipolo City
Tel. Nos.: 655-8764; 655-9124
655-8771
Fax No.:
655-9124
Kathleen Joy R. Chupungco
SM CITY NORTH EDSA BRANCH
Cyberzone Carpark Bldg.
SM City North Avenue, corner EDSA
Quezon City
Tel. Nos.: 456-6633; 454-8108/21
925-4273
Fax No.:
927-2234
Edmund R. Vicente
SM CITY TAYTAY BRANCH
Unit 147 Bldg. B, SM City Taytay
Manila East Road Brgy. Dolores
Taytay, Rizal
Tel. Nos.: 286-5844; 286-5979
661-2276; 661-2277
Fax No.:
661-2235
Godofredo B. Ponciano, Jr.
SM MALL OF ASIA BRANCH
G/F Main Mall Arcade, SM Mall of Asia
Bay Blvd., Pasay City
Tel. Nos.: 556-0100/0102/0099
625-2246
Fax No.:
556-0099
Charmaine V. Santos
SM MEGAMALL BRANCH
LGF Building A, SM Megamall
E. delos Santos Avenue corner
J. Vargas St. Mandaluyong City
Tel. Nos.: 633-1611/12; 633-1788/89
638-7213 to15
Fax No.:
633-4971 or 633-1788
Edna A. Torralba
SM SOUTHMALL BRANCH
UGF SM Southmall, Alabang-Zapote
Road, Talon 1, Almanza, Las Piñas City
Tel. Nos.: 806-6116/19; 806-3536
806-3547
Fax No.:
806-3548
Virgilio V. Villarosa
SOLER- 168 BRANCH
G/F R & S Bldg, Soler St., Manila
Tel. Nos.: 242-1041; 242-1674
242-1685
Fax No.:
242-1041
Charles T. Salaya
STO. CRISTO BRANCH
711-715 Sto. Cristo cor.
Commercio Sts., Binondo, Manila
Tel. Nos.: 242-4668/73; 242-5361
241-1243; 242-5449
242-3670
Fax No.:
242-4672; 242-4761
Victoria L. Chua
T. ALONZO BRANCH
Abeleda Business Center
908 T. Alonzo corner Espeleta Streets
Sta. Cruz, Manila
Tel. Nos.: 733-9581/82
734-3231 to 33
Fax No.:
733-9582
Hermenia L. Tan
TAFT AVE. - QUIRINO BRANCH
2178 Taft Avenue near corner
Quirino Avenue, Malate, Manila
Tel. Nos.: 521-7825; 527-3285
527-6747
Fax No.:
527-3285
Jorielyn B. Nuqui
TIMOG AVE. BRANCH
G/F Prince Jun Condominium
42 Timog Ave., Q.C.
Tel. Nos.: 371-4523/24; 371-4522/06
986-3668
Fax No.:
371-4503
Jasmine O. Ty
TRINOMA BRANCH
Unit P002, Level P1, Triangle North of
Manila, North Avenue corner EDSA
Quezon City
Tel. Nos.: 901-5570-5573
Fax No.:
901-5573
Maria Catleya C. Reyes
TUTUBAN PRIME BLOCK BRANCH
Rivera Shophouse, Podium Area
Tutuban Center Prime Block
C.M. Recto Ave. corner Rivera Street
Manila
Tel. Nos.: 255-1414/15
Fax No.:
255-5441
Irene C. Chan
UP TECHNO HUB BRANCH
UP AyalaLand Techno Hub
Commonwealth Ave., Quezon City
Tel. Nos.: 441-1331/1332/1334
Fax No.:
798-4800
Anna Mercedes B. Flores
VALENZUELA BRANCH
CBC-Bldg., Mc Arthur Highway
cor. V. Cordero St., Marulas
Valenzuela City
Tel. Nos.: 293-8920; 293-6160
293-5088 to 90; 293-8919
293-5091
Fax No.:
Rosa L. Chiu
VALENZUELA- GEN. LUIS BRANCH
AGT Building, 425 Gen. Luis Street
Paso de Blas, Valenzuela City
Tel. Nos.: 443-6160/61; 983-3861/62
Fax No.:
443-6161
Alicia S. Gavino
VISAYAS AVE. BRANCH
CBC-Building, Visayas Avenue corner
Congressional Ave. Ext., Quezon City
Tel. Nos.: 454-0189; 925-2173
455-4334/35
Fax No.:
925-2155
Thelma S. Cabanban
WEST AVE. BRANCH
82 West Avenue, Quezon City
Tel. Nos.: 924-3131/3143/6363
920-6258; 411-6010/6011
928-3270
Fax No.:
924-6364
Corina R. Sesdoyro
XAVIERVILLE BRANCH
65 Xavierville Ave.
Loyola Heights, Quezon City
Tel. Nos.: 433-8696; 929-1265
927-9826
Fax No.:
929-3343
Alma A. Sevilla
Annual Report 2013
161
CHINA BANK BRANCHES
LUZON
ANGELES CITY BRANCH
CBC-Building, 949 Henson St.
Angeles City
Tel. Nos.: (045) 887-1549; 323-5343
887-1550/2291
625-8660/61
Fax No.:
(045) 625-8661
Luzviminda Grace M. Santos
ANGELES CITY- BALIBAGO BRANCH
Diamond Square, Service Road
McArthur Highway cor. Charlotte St.
Balibago, Angeles City, Pampanga
Tel. Nos.: (045) 892-5136; 892-5144
Fax No.:
(045) 892-5144
Rean S. Bernarte
ANGELES CITY- MARQUEE MALL
BRANCH
G/F Marquee Mall
Angeles City, Pampanga
Tel. Nos.: (045) 436-4013; 304-0850
889-0975
Fax No.: (045) 304-0850
Joselito M. Datu
ANGELES- MCARTHUR HIGHWAY
BRANCH
CBC Bldg. San Pablo St. corner
Mc Arthur Highway, Angeles City
Tel. Nos.: (045) 323-5793; 887-6028
625-9362
Fax No.:
(045) 887-6029
Maria Josefa R. Nisce
ANGELES CITY- STO. ROSARIO
BRANCH
Angeles Business Center Bldg.
Teresa Avenue Nepo Mart Complex
Angeles City, Pampanga
Tel. Nos.: (045) 888-5175; 322-9596
Fax No.:
(045) 888-5175
Gina K. Reyes
APALIT BRANCH
CBC Building, McArthur Highway
San Vicente, Apalit, Pampanga
Tel. Nos.: (045) 652-1131
Fax No.:
(045) 302-9560
Nancy T. Mensalvas
BAGUIO CITY BRANCH
G/F Juniper Bldg.
A. Bonifacio Rd., Baguio City
Tel. Nos.: (074) 442-9581; 443-5908
443-8659 to 60; 442-9663
Fax No.:
(074) 442-9663
Mary Anne A. Tiwaquen
BAGUIO CITY- ABANAO BRANCH
G/F Paladin Hotel, No. 136 Abanao Ext.
corner Cariño St., Baguio City
Tel. Nos.: (074) 424-4837; 424-4838
Fax No.:
(074) 424-4838
Edward U. Catipon
BALANGA CITY BRANCH
G/F Dilig Building, Don Manuel Banzon
Street, Balanga City, Bataan
Tel. Nos.: (047) 237-9388/89
791-1779
Fax No.:
(047) 791-1779
Michelle Y. Aquino
162
BALER BRANCH
Provincial Road, Barrio Suklayain
Baler, Aurora
Tel. No.:
(02) 703-331 (Manila line)
Renato P. del Rosario, Jr.
BALIWAG BRANCH
Km. 51, Doña Remedios Trinidad (DRT)
Highway Baliwag, Bulacan
Tel. Nos.: (044) 766-1066/5257
673-5338
Fax No.:
(044) 766-5257
Janet R. De Castro
BATANGAS CITY BRANCH
P. Burgos Street, Batangas City
Tel. Nos.: (043) 723-0953; 520-6118
(Mla-direct)
Fax No.:
520-6118 (Mla-direct)
(043) 402-9157
Erlan Antonio B. Olavere
BATANGAS- BAUAN BRANCH
62 Kapitan Ponso St., Bauan, Batangas
Tel. Nos.: (043) 702-4481; 702-5383
Fax No.:
(043) 702-4481
Ruvishella S. Bicol
BATANGAS- LEMERY BRANCH
Miranda Building, Ilustre Avenue
Lemery, Batangas
Tel. No.:
(043) 409-3467
984-0206 (Manila line)
Enrique M. Padua
BULACAN- STA. MARIA BRANCH
J.P Rizal corner C. de Guzman St.
Poblacion, Sta. Maria
Tel. Nos.: (044) 288-2006; 815-2951
913-0334
Fax No.:
(044) 288-2006
Karen S. Mendoza
CABANATUAN CITY BRANCH
Melencio cor. Sanciangco Sts.
Cabanatuan City
Tel. Nos.: (044) 600-4265
463-0935 to 36
Fax No.:
(044) 463-0936
Juanito C. Santiago
CABANATUAN-MAHARLIKA
BRANCH
CBC-Building, Maharlika Highway
Cabanatuan City
Tel. Nos.: (044) 463-8586/87
463-7964; 600-3590
940-2395
Fax No.:
(044) 463-8587
Jocelyn C. Concepcion
CALAPAN CITY BRANCH
J.P. Rizal St., San Vicente
Calapan City, Oriental Mindoro
Tel. Nos.: (043) 288-8978/8508
441-0382
Fax No.:
(043) 441-0382
Ruel A. Añonuevo
CANDON CITY BRANCH
CBC Building, National Road, Poblacion
Candon City, Ilocos Sur
Tel. No.:
(077) 674-0554
Telefax:
(077) 674-0574
Lucia R. Gacula
CARMONA BRANCH
CBC Building, Paseo de Carmona
Brgy. Maduya, Carmona, Cavite
Tel. Nos.: (046) 430-1969/1277/3568
4753941 (Manila line)
Fax No.:
(046)430-1277
Jonathan John H. Zamora
ISABELA-ILAGAN BRANCH
G/F North Star Mall
Maharlika Highway
Brgy. Alibagu, Ilagan, Isabela
Tel. Nos.: (078) 323-0179; 323-0178
Fax No.:
(078) 323-0179
Donnabella D. Castillo
CAUAYAN CITY BRANCH
G/F Prince Christopher Bldg.
Maharlika Highway, Cauayan City
Isabela
Tel. Nos.: (078) 652-1849; 897-1338
652-0061
Fax No.:
(078) 652-1849
Mary Ann S. Gaspar
ISABELA- ROXAS BRANCH
National Road, Brgy. Bantug
Roxas, Isabela
Tel. Nos.: (078) 376-0422
376-0434
Adeluiso L. Cabugos
CAVITE-DASMARIÑAS BRANCH
G/F CBC Bldg.,
Gen. E. Aguinaldo Highway
Dasmariñas, Cavite
Tel. Nos.: (046) 416-5036/39/40
584-40-83 (Manila line)
Fax No.:
(046) 416-5036
Arlyn G. Araña
CAVITE-IMUS BRANCH
G/F CBC Bldg., Nueno Avenue
Tanzang Luma, Imus, Cavite
Tel. Nos.: (046) 970-8726/64
471-2637; 471-7094
Fax No.:
(046) 471-2637
Noreen S. Purificacion
CAVITE- MOLINO BRANCH
Patio Jacinto, Molino Road
Molino 3, Bacoor, Cavite
Tel. Nos.: (046) 431-0632
TelefFax: (046) 431-0901
Mario E. Sayoc II
CAVITE-ROSARIO BRANCH
G/F CBC Building, Gen Trias Drive
Rosario, Cavite
Tel. Nos.: (046) 437-0057 to 59
Fax No.:
(046) 437-0058
Ma. Lorna A. Virata
DAET BRANCH
Vinzons Avenue, Daet
Camarines Norte
Tel. No.:
(054) 440-0067
Telefax:
(054) 440-0066
Sheila F. Dalupang
DAGUPAN - PEREZ BRANCH
Siapno Building, Perez Boulevard
Dagupan City
Tel. Nos.: (075) 522-2562 to 64
Fax No.:
(075) 522-8308
Josephine C. Dee
DAGUPAN- M.H. DEL PILAR
BRANCH
Carried Realty Bldg., No. 28 M.H. del
Pilar Street, Dagupan City
Tel. Nos.: (075) 523-5606; 515-8952
515-8956
Fax No.:
(075) 522-8929
Rommel M. Agacita
DOLORES BRANCH
CBC Bldg., McArthur Highway
Dolores, City of San Fernando
Pampanga
Tel. Nos.: (045) 963-3413 to 15
860-1780/81
Fax No.:
(045) 963-1014
Roberto P. Basilio
GAPAN BRANCH
G/F Waltermart Center - Gapan
Maharlika Highway, Brgy. Bayanihan
Gapan, Nueva Ecija
Tel. Nos.: (044) 486-0217
486-0434; 486-0695
Fax No.:
(044) 486-0434
Medel C. Driz
GUAGUA BRANCH
Yabut Building, Plaza Burgos
Guagua, Pampanga
Tel. Nos.: (045) 458-1045; 458-1046
Telefax:
(045) 458-1043
Nikita D. Masbang
LA TRINIDAD BRANCH
G/F SJV Bulasao Building
Km. 4, La Trinidad, Benguet
Tel. Nos.: (074) 422-2065/2590
309-1663
Fax No.:
(074) 422-2065
Liza L. Serrano
LA UNION BRANCH
Quezon Avenue, National Highway
San Fernando, La Union
Tel. Nos.: (072) 607-8931/8932
8933/8934
Fax No.:
(072) 607-8934
Fenalyn G. Rimando
LAGUNA - CALAMBA BRANCH
CBC-Building, National Highway
Crossing, Calamba, Laguna
Tel. Nos.: (049) 545-7134 to 38
Fax No.:
(049) 545-7138
Estela A. Liamson
LAGUNA- STA. CRUZ BRANCH
A. Regidor St., Sta. Cruz, Laguna
Tel. Nos.: (049) 501-4977
501-4107; 501-4085
Fax No.:
(049) 501-4107
Liza Catalina P. Maglapuz
LAOAG CITY BRANCH
Liberato Abadilla Street, Brgy 17
San Francisco, Laoag City
Tel. Nos.: (077) 772-1024/27
771-4688; 771-4417
Fax No.:
(077) 772-1035
Anna Christie P. Reyes
LEGAZPI CITY BRANCH
G/F Emma Chan Bldg.
F. Imperial St., Legazpi City
Tel. Nos.: (052) 480-6048; 480-6519
214-3077
Fax No.:
429-1813 (Direct-Mla line)
Alex A. Jacob
LUCENA CITY BRANCH
233 Quezon Avenue, Lucena City
Tel. Nos.: (042) 373-2317
373-3872/80/87
660-7861
Fax No.:
(042) 373-3879
Rossana V. Miralles
MABALACAT-DAU BRANCH
R.D. Policarpio Bldg., McArthur
Highway, Dau, Mabalacat, Pampanga
Tel. Nos.: (045) 892-4969; 892-6040
Fax No.:
(045) 892-6040
Emerlita R. Dizon
MALOLOS CITY BRANCH
G/F Graceland Mall, BSU Grounds
McArthur Highway, Guinhawa
Malolos City, Bulacan
Tel. Nos.: (044) 794-5840; 662-2013
Fax No.:
(044) 794-5840
Oscar S. Alhambra, Jr.
MARILAO BRANCH
G/F, SM City Marilao
Km. 21, Brgy. Ibayo, Marilao, Bulacan
Tel. Nos.: (044) 711-1803/1814
815-8956/8957
Fax No.:
(044) 711-1814
Marites B. Go
MASBATE BRANCH
Espinosa Bldg., Zurbito St.
Masbate City, Masbate
Tel. Nos.: (056) 333-2363/65
Fax No.:
(056) 333-2365
Ernie C. Torrevillas
NAGA CITY BRANCH
Peñafrancia corner Panganiban Streets
Naga City
Tel. Nos.: (054) 472-1359; 472-1358
473-7920
Fax No.:
250-8169 (Manila line)
Perfecto S. Real
NUEVA ECIJA- STA. ROSA BRANCH
CBC Building, Maharlika Highway
Poblacion, Sta. Rosa, Nueva Ecija
Tel. No.:
(044) 940-1407
Fax No.:
(044) 333-6215
Teresita P. Esteban
PANGASINAN-ALAMINOS CITY
BRANCH
Marcos Avenue, Brgy. Palamis
Alaminos City, Pangasinan
Tel. Nos.: (075) 551-3859; 654-0286
Fax No.:
(075) 654-0296
Edwin D. Viado
PANGASINAN-URDANETA BRANCH
EF Square Bldg., Mc Arthur Highway
Poblacion Urdaneta City, Pangasinan
Tel. Nos.: (075) 632-2637; 632-0541
656-2022; 656-2618
Fax No.:
(075) 656-2618
Glenda N. Anonas
PASEO DE STA. ROSA BRANCH
Unit 3, Paseo 5, Paseo de Sta. Rosa
Sta. Rosa City, Laguna
Tel. Nos.: (049) 837-1831; 502-3016
502-2859; 827-8178
420-8042 (Manila line)
Fax No.:
420-8042 (Manila line)
Gerald A. Reta
SAN FERNANDO BRANCH
CBC Bldg., V. Tiomico Street
City of San Fernando, Pampanga
Tel. Nos.: (045) 961-3542/49
963-5458 to 60; 961-5651
860-1925; 892-3211
Fax No.:
(045) 961-8352
Yalda Y. Ocampo
SAN FERNANDO- SINDALAN
BRANCH
Jumbo Jenra Sindalan, Brgy. Sindalan
San Fernando City, Pampanga
Tel. Nos.: (045) 866-5464; 455-0569
Fax No.: (045) 861-3081
Armando Arepentido
SAN JOSE CITY BRANCH
Maharlika Highway, Brgy. Malasin
San Jose City, Nueva Ecija
Tel. Nos.: (044) 958-9094; 985-9096
511-2898
Fax No.:
(044) 958-9094
Josephine D. Cariño
SAN PABLO CITY BRANCH
M. Paulino Street
San Pablo City, Laguna
Tel. Nos.: (049) 562-5481 to 84
Fax No.:
(049) 562-5485
Oscar B. Villavicencio
SANTIAGO CITY BRANCH
Navarro Bldg., Maharlika Highway
near corner Bayaua St.
Santiago City, Isabela
Tel. Nos.: (078) 682-7024 to 26
Fax No.:
(078) 305-2445
Helen N. Ng
SM CITY BACOOR BRANCH
LGF SM City Bacoor
Tirona Highway corner Aguinaldo
Highway, Bacoor, Cavite
Tel. Nos.: (046) 417-0572/ 0746/
0623/0645
Fax No.:
(046) 417-0583
Elvira M. Montesa
SM CITY CLARK BRANCH
G/F (Units 172-173) SM City Clark
M. Roxas St., CSEZ, Angeles City
Pampanga
Tel. Nos.: (045) 499-0252 to 54
Fax No.:
(045) 499-0254
Pablito P. Flores
SM CITY DASMARIÑAS BRANCH
LGF SM City Dasmariñas
Governor’s Drive, Pala-pala
Dasmariñas, Cavite
Tel. Nos.: 046) 424-1134
Fax No.:
(046) 424-1133
Evelyn T. Jardiniano
SM CITY OLONGAPO BRANCH
SM City Olongapo, Magsaysay Dr.
cor. Gordon Ave., Brgy. Pag-asa
Olongapo City, Zambales
Tel. Nos.: (047) 602-0039; 602-0040
Fax No.:
(047) 602-0038
Edelmar D. Lee
SM CITY PAMPANGA BRANCH
Unit AX3 102, Building 4, SM City
Pampanga Mexico, Pampanga
Tel. Nos.: (045) 455-0304/0305/
0306/0307
Fax No.:
(045) 455-0307
Roderick R. De Leon
SM CITY SAN PABLO BRANCH
G/F SM City San Pablo National
Highway, Brgy. San Rafael
San Pablo City, Laguna
Tel. Nos.: (049) 521-0071 to 72
Fax No.:
(049) 521-0072
Soliman A. Dela Mar
SM CITY STA. ROSA BRANCH
G/F SM City Sta. Rosa, Bo. Tagapo
Sta. Rosa, Laguna
Tel. Nos.: (049) 534-4640/4813
Fax No.:
901-1632
(Manila Direct Line)
Antonio C. Manilay
SOLANO BRANCH
National Highway, Brgy. Quirino
Solano, Nueva Vizcaya
Tel. Nos.: (078) 326-6559/60/61
Fax No.:
(078) 326-6561
Rafael F. Ilarde
SORSOGON BRANCH
CBC Bldg., Ramon Magsaysay Ave.
Sorsogon City, Sorsogon
Tel. Nos.: (056) 211-1610; 421-5105
Fax No.:
(02) 429-1124
– Manila Line
Arthur B. Falcotelo
SUBIC BAY FREEPORT ZONE
BRANCH
CBC Building., Subic Bay
Gateway Park, Rizal Highway
Subic Bay Freeport Zone
Tel. Nos.: (047) 252-1568; 252-1575
252-1591
Fax No.:
(047) 252-1575
Renato S. Cunanan
TABACO CITY BRANCH
Ziga Ave. corner Berces Street
Tabaco City, Albay
Tel. Nos.: (052) 487-7150; 830-4178
Fax No.:
429-1811 (Manila line)
Katherine Y. Barra
SM CITY LIPA BRANCH
G/F (Units 1111-1113) SM City Lipa
Ayala Highway Brgy. Maraouy, Lipa
City, Batangas
Tel. Nos.: (043) 784-0212; 784-0213
Fax No.:
(043) 784-0212
Jose L. Nario, Jr.
TAGAYTAY CITY BRANCH
Olivarez Plaza Tagaytay
E. Aguinaldo Highway Silang Crossing
Tagaytay City, Cavite
Tel. Nos.: 529-8174 (Manila Line)
(046) 483-0609, 483-0608
Fax No.:
529-8174 (Manila Line)
Mandrake P. Medina
SM CITY NAGA BRANCH
SM City Naga, CBD II, Brgy. Triangulo
Naga City
Tel. Nos.: (054) 472-1366; 472-1367
Fax No.:
250-8183 (Manila Line)
Perfecto S. Real
TALAVERA BRANCH
CBC Building, Marcos District
Talavera, Nueva Ecija
Tel. Nos.: (044) 940-2620; 940-2621
Fax No.:
(044) 940-2620
Edwin Q. Manuel, Jr.
TARLAC BRANCH
CBC Building, Panganiban near corner
F. Tanedo Street, Tarlac City, Tarlac
Tel. Nos.: (045) 982-7771 to 75
Fax No.:
(045) 982-7772
Perla S. Aquino
TARLAC- CAMILING BRANCH
Savewise Super Market, Poblacion
Camiling, Tarlac
Tel. Nos.: (045) 491-6445; 934-5086
Telefax:
(045) 934-5085
Gary V. Eugenio
TRECE MARTIRES BRANCH
G/F Waltermart, Governor’s Drive
corner City Hall Road, Brgy. San
Agustin, Trece Martires City, Cavite
Tel. Nos.: (046) 460-4897
460-4898; 460-4899
Fax No.:
(046) 460-4898
Lhovina A. Delfin
TUGUEGARAO CITY BRANCH
A. Bonifacio Street
Tuguegarao, Cagayan
Tel. Nos.: (078) 844-0175; 844-0831
846-1709
Fax No.:
(078) 844-0836
Shirly Leocel A. Narag
VIGAN CITY BRANCH
Burgos Street near corner Rizal Street
Vigan City, Ilocos Sur
Tel. Nos.: (077) 722-6968, 674-2272
Fax No.:
(077) 722-6948
Maria R. Pelayo
VISAYAS
ANTIQUE- SAN JOSE BRANCH
Felrosa Building, Gen. Fullon St.
corner Cerdena St., San Jose, Antique
Tel. Nos.: (036) 540-7095; 540-7097
Fax No.:
(036) 540-7096
Anna Marie B. Sentina
BACOLOD-ARANETA BRANCH
CBC-Building, Araneta corner
San Sebastian Streets, Bacolod City
Tel. Nos.: (034) 435-0247/48
433-3818/19; 433-7152/53
709-1618
Fax No.:
(034) 435-0247
Michelle Lorei R. Gayoma
BACOLOD- LIBERTAD BRANCH
Libertad Street, Bacolod City
Negros Occidental
Tel. Nos.: (034) 435-1645; 435-1646
Fax No.:
(034) 435-1645
Maria Ruema S. Quimba
BACOLOD- MANDALAGAN BRANCH
Lacson Street, Mandalagan
Bacolod City, Negros Occidental
Tel. Nos.: (034) 441-0500; 441-0388
709-0067
Fax No.:
(034) 709-0067
Olimpia L. Diones
BACOLOD-NORTH DRIVE BRANCH
Anesa Bldg., B.S. Aquino Drive
Bacolod City
Tel. Nos.: (034) 435-0063 to 65
709-1658
Fax No.:
(034) 435-0065
G. Romulo F. Lopez
Annual Report 2013
163
CHINA BANK BRANCHES
BAYBAY BRANCH
Magsaysay Avenue, Baybay, Leyte
Tel. Nos.: (053) 335-2899/98
563-9228
Fax No.:
(053) 563-9228
Jose Alvin P. Sumalinog
CEBU-F. RAMOS BRANCH
F. Ramos Street, Cebu City
Tel. Nos.: (032) 253-9463; 254-4867
412-5858
Fax No.:
(032) 253-9461
Alan Y. Go
BORONGAN BRANCH
Balud II, Poblacion, Borongan
Eastern Samar
Tel. Nos.: (055) 560-9948; 560-9938
261-5888
Fax No.:
(055) 560 9938
Paul C. Oliva
CEBU- GORORDO BRANCH
No 424. Gorordo Ave., Bo. Camputhaw
Lahug District, Cebu City, Cebu
Tel. Nos.: (032) 414-0509; 239-8654
Fax No.:
(032) 239-8654
Richard Alexander T. Lim
CATARMAN BRANCH
Cor. Rizal & Quirino Sts.
Jose P. Rizal St., Catarman
Northern, Samar
Tel. Nos.: (055)251-8802/8821
500-9921
Fax No.:
(055) 500-9921
Victorino T. Caparroso, Jr.
CATBALOGAN BRANCH
CBC Bldg. Del Rosario St. cor.
Taft Avenue, Catbalogan City, Samar
Tel. Nos.: (055) 251-2897/98
543-8121
Fax No.:
(055) 543-8279
Teresita Angelica U. Marquez
CEBU BUSINESS CENTER
CBC Bldg., Samar Loop corner Panay
Road, Cebu Business Park, Cebu City
Tel. Nos.: (032) 239-3760
to 239-3764
Fax No.:
(032) 238-1438
Victor P. Mayol
CEBU-BANILAD BRANCH
CBC Bldg., AS Fortuna St.
Banilad, Cebu City
Tel. Nos.: (032) 346-5870/81
416-1001
Fax No.:
(032) 344-0087
Jouzl Marie C. Roña
CEBU - BOGO BRANCH
P. Rodriguez Street, Bogo City, Cebu
Tel. Nos. (032) 434-7119, 266-3251
Mylen D. Comahig
CEBU- CARCAR BRANCH
Dr. Jose Rizal St., Poblacion I
Carcar, Cebu
Tel. Nos.: (032)487-8103; 487-8209
266-7093
Fax No.:
(032) 487-8103
Mary Ann C. Rio
CEBU- CONSOLACION BRANCH
G/F SM City Consolacion
Brgy. Lamac, Consolacion, Cebu
Tel. Nos.: (032) 260-0024; 260-0025
Fax No.:
(032) 423-9253
Leah Liza L. Lagumbay
CEBU- ESCARIO BRANCH
Units 3 & 5 Escario Central
Escario Road, Cebu City, Cebu
Tel. Nos.: (032) 416-5860; 520-9229
Fax No.:
(032) 520-9229
Edgardo A. Olalo
164
CEBU-GUADALUPE BRANCH
CBC Building, M. Velez Street, cor.
V. Rama Ave., Guadalupe, Cebu City
Tel. Nos.: (032) 254-7964; 254-8495
254-1916
Fax No.:
(032) 032-416-5988
Angie G. Divinagracia
CEBU- IT PARK BRANCH
G/F The Link, Cebu IT Park
Apas, Cebu City, Cebu
Telefax:
(032) 266-2559
Odelon C. Logarta
CEBU – LAHUG BRANCH
JY Square Mall, No. 1 Salinas Dr.
Lahug, Cebu City
Tel. Nos.: (032) 417-2122; 233-0977
234-2062
Fax No.:
(032) 234-2062
Zephyrus C. Celis
CEBU-LAPU LAPU BRANCH
G/F Goldberry Suites
President Quezon National Highway
Pusok, Lapu-Lapu City
Tel. Nos.: (032) 340-2098; 494-0631
340-2099
Fax No.:
(032) 340-2098/ 494-0631
Mary Faith R. Alvez
CEBU- MAGALLANES BRANCH
CBC Bldg., Magallanes
corner Jakosalem Sts., Cebu City
Tel. Nos.: (032) 255-0022/23/25/28
253-0348;255-6093
255-0266; 412-1877
Fax No.:
(032) 255-0026
Susan Y. Tang
CEBU-MANDAUE BRANCH
SV Cabahug Building 155-B SB
Cabahug Street, Brgy. Centro
Mandaue City, Cebu
Tel. Nos.: (032) 346-5636/37
346-2083; 344-4335
422-8188
Fax No.:
(032) 346-2083
Marissa S. Macaraig
CEBU-MANDAUE NORTH ROAD
BRANCH
G/F Units G1-G3, Basak Commercial
Building, (Kel-2) Basak, Mandaue City
Tel. Nos.: (032) 345-8861; 345-8862
420-6767
Fax No.:
(032) 420-6767
Ferdinand R. Sy
CEBU- MINGLANILLA BRANCH
Unit 9, Plaza Margarita Lipata
Minglanilla, Cebu
Tel. Nos.: (032) 239-7234; 490-6025
Fax No.:
(032) 239-7235
Christine T. Obiña
CEBU- NAGA BRANCH
Leah’s Square, National South
Highway, East Poblacion
Naga City, Cebu
Tel. Nos.: (032) 238-7623
Telefax:
(032) 489-8218
Sheila R. Pastor
CEBU-SM CITY BRANCH
Upper G/F, SM City Cebu, Juan Luna
cor. A. Soriano Avenue, Cebu City
Tel. Nos.: (032) 232-0754/55
231-9140; 412-9699
Fax No.:
(032) 232-1448
Alex M. Campilan
CEBU- SUBANGDAKU BRANCH
Unit 1 & 2 G/F Alpa Centrum
Subangdaku, Mandaue City, Cebu
Tel. Nos.: (032) 344-6561; 422-3664
344-6621
Fax No.:
(032) 344-6621
Sharon Rose L. Onrejas
CEBU- TALAMBAN BRANCH
Unit UG-7 Gaisano Grand Mall,
Brgy. Talamban, Cebu City
Tel. Nos.: (032) 236-8944; 418-0796
Fax No.:
(032) 236-8944
Ronnie A. Aguilar
CEBU-TALISAY BRANCH
CBC Bldg., 1055 Cebu South National
Road, Bulacao, Talisay City, Cebu
Tel. Nos.: (032) 272-3342/48
491-8200
Fax No.:
(032) 272-3346
Rosie T. Faytone
DUMAGUETE CITY BRANCH
CBC Bldg., Real Street
Dumaguete City, Negros Oriental
Tel. Nos.: (035) 422-8058; 225-5442
225-5441; 225-4284
225-5460
Fax No.:
(035) 422-5442
Iris Gail C. Pantino
CEBU-MANDAUE-CABANCALAN
BRANCH
M.L. Quezon St., Cabancalan
Mandaue City, Cebu
Tel. Nos.: (032) 421-1364; 505-9908
Fax No.:
(032) 421-1364
Ruel G. Umbay
ILOILO-IZNART BRANCH
G/F John A. Tan Bldg.
Iznart St., Iloilo City
Tel. Nos.: (033) 337-9477; 509-9868
300-0644
Fax No.:
(033) 337-9566
Marjorie C. Mangilin
CEBU- MANDAUE-J CENTRE MALL
BRANCH
LGF J Centre Mall, A.S Fortuna Ave.
Mandaue City, Cebu
Tel. Nos.: (032) 520-2898; 421-1567
Fax No.:
(032) 520-2898
Mariza O. Lim
ILOILO- JARO BRANCH
CBC Building, E. Lopez St.
Jaro, Iloilo City, Iloilo
Tel. Nos.: (033) 320-3738; 320-3791
Fax No.:
(033) 503-2955
Joseph C. Chong
ILOILO-MABINI BRANCH
A. Mabini Street, Iloilo City
Tel. Nos.: (033) 335-0295; 335-0370
509-0599
Fax No.:
(033) 335-037
Sharlan G. Chu
ILOILO- MANDURRIAO BRANCH
Benigno Aquino Ave., Brgy. San Rafael
Mandurriao, Iloilo City, Iloilo
Tel. Nos.: (033) 333-3988; 333-4088
Fax No.:
(033) 501-6078
Severo Y. Pison IV
ILOILO-RIZAL BRANCH
CBC Building, Rizal cor. Gomez Streets
Brgy. Ortiz, Iloilo City
Tel. Nos.: (033) 336-0947; 338-2136
509-8838
Fax No.:
(033) 338-2144
Nilda Marie C. Bautista
KALIBO BRANCH
Waldolf Garcia Building
Osmeña Avenue, Kalibo, Aklan
Tel. Nos.: (036) 500-8088; 500-8188
Fax No.:
(036) 500-8188
Marylen T. Gerardo
MAASIN CITY BRANCH
G/F SJC Bldg., Tomas Oppus St.
Brgy. Tunga-Tunga, Maasin City
Southern Leyte
Tel. Nos.: (053) 381-2287; 381-2288
570-8488
Fax No.:
(053) 570-8488
Maria Luisa V. Gonzales
NEGROS OCC.- SAN CARLOS
BRANCH
Rizal corner Carmona Streets
San Carlos, Negros Occidental
Tel. Nos.: (034) 312-5818; 312-5819
729-3276
(034) 729-3276
Fax No.:
Mercedita C. Cortez
ORMOC CITY BRANCH
CBC Building, Real cor. Lopez Jaena
Sts., Ormoc City, Leyte
Tel. Nos.: (053) 255-3651 to 53
Fax No.:
(053) 561-8348
Warren Noel M. Del Valle
PUERTO PRINCESA CITY BRANCH
Malvar Street near corner Valencia
Street, Puerto Princesa City, Palawan
Tel. Nos.: (048) 434-9891-93
Fax No.:
(048) 434-9892
Joselito V. Cadorna
ROXAS CITY BRANCH
1063 Roxas Ave. cor. Bayot Drive
Roxas City, Capiz
Tel. Nos.: (036) 621-3203; 621-1780
522-5775
Fax No.:
(036) 621-3203
Anthony V. Arguelles
SILAY CITY BRANCH
Rizal St., Silay City, Negros Occidental
Tel. Nos.: (034) 714-6400; 495-5452
495-0480
Fax No.:
(034) 495-0480
Rosemarie G. De La Paz
TACLOBAN CITY BRANCH
Uytingkoc Building, Avenida Veteranos
Tacloban City, Leyte
Tel. Nos.: (053) 325-7706 to 08
523-7700/7800
Fax No.:
(053) 523-7700
Felina G. Reyes
TAGBILARAN CITY BRANCH
G/F Melrose Bldg. Carlos P. Garcia
Avenue Tagbilaran City, Bohol
Tel. Nos.: (038) 501-0688; 501-0677
411-2484
Fax No.:
(038) 501-0677
Karen Jean T. Maslog
MINDANAO
BUTUAN CITY BRANCH
CBC Building J.C. Aquino Avenue
Butuan City
Tel. Nos.: (085) 341-5159; 341-7445
(085) 815-3454/55
225-2081
Fax No.:
(085) 815-3455
Sheelah A. Kho
CAGAYAN DE ORO-BORJA BRANCH
J. R. Borja Street, Cagayan de Oro City
Tel. Nos.: (08822) 724-832/33
726-076; (088) 857-3742
Fax No.:
(088) 857-2212
Janet G. Tan
CAGAYAN DE ORO-CARMEN
BRANCH
G/F GT Realty Building, Max Suniel St.
corner Yakal St., Carmen
Cagayan de Oro City
Tel. Nos.: (08822) 723-091; 724-372
(088) 858-3902/03
Fax No.:
(088) 858-3903/ (08822)
724-372
Cresencio Al C. Co Untian
CAGAYAN DE ORO-DIVISORIA
BRANCH
RN Abejuela St., South Divisoria
Cagayan de Oro City
Tel. Nos.: (08822) 722-641
(088) 857-5759
Fax No.:
(088) 857-4200
Agnes O. Adviento
CAGAYAN DE ORO-LAPASAN
BRANCH
CBC Building, Claro M. Recto Avenue
Lapasan, Cagayan de Oro City
Tel. Nos.: (08822) 722-240; 724-540
726-242
(088) 856-1325/1326
Fax No.:
(088) 856-1325/1326
856-5063 (area office)
James M. Bomediano
CDO-GAISANO CITY MALL BRANCH
G/F Gaisano City Mall, C. M. Recto
corner Corrales Extension
Cagayan de Oro City
Tel. Nos.: (08822)745-877; 745-880
(088) 880-1051; 880-1052
Fax No.:
(08822)745-880
Samuel L. Reymundo
COTABATO CITY BRANCH
No. 76 S.K. Pendatun Avenue
Cotabato City Maguindanao
Tel. Nos.: (064) 421-4685/4653
Fax No.:
(064) 421-4686
Ariel Cesar O. Romero
DAVAO-BAJADA BRANCH
Km. 3, J.P. Laurel Ave.
Bajada, Davao City
Tel. Nos.: (082) 221-0184; 221-0319
Fax No.:
(082) 221-0568
Janice B. Tan
DAVAO-BUHANGIN BRANCH
Buhangin Road, Davao City
Tel. Nos.: (082) 300-8335; 227-9764
221-5970
Fax No.:
(082) 221-5970
Roberto A. Alag
DAVAO-LANANG BRANCH
Insular Village I, Km. 8, Lanang
Davao City
Tel. Nos.: (082)300-1892; 234-7166
234-7165
Fax No.:
(082)300-1892
Joselito S. Crisostomo
DAVAO-MATINA BRANCH
Km. 4 McArthur Highway
Matina, Davao City
Tel. Nos.: (082) 297-4288; 297-4455
297-5880/81
Fax No.:
(082) 297-5880
Petronila G. Narvaez
DAVAO-PANABO CITY BRANCH
PJ Realty, Barangay New Pandan
Panabo City, Davao del Norte
Tel. Nos.: (084)628-4057; 628-4065
Fax No.:
(084)628-4053
Abigail O. Sintos
DAVAO-RECTO BRANCH
CBC Bldg., C.M. Recto Ave.
cor. J. Rizal St., Davao City
Tel. Nos.: (082) 221-4481/7028
6021/6921/4163
226-3851; 226-2103
Fax No.:
(082) 221-8814
Carlos C. Tan
DIPOLOG CITY BRANCH
CBC Building, Gen Luna corner Gonzales
Streets, Dipolog City
Tel. Nos.: (065) 212-6768 to 69
908-2008
Fax No.:
(065) 212-6769
Ma. Jesusa Perpetua F. Recentes
GEN. SANTOS CITY BRANCH
CBC Bldg., I. Santiago Blvd.
Gen. Santos City
Tel. Nos.: (083) 553-1618; 552-8288
Fax No.:
(083) 553-2300
Helen Grace L. Fernandez
ILIGAN CITY BRANCH
Lai Building, Quezon Avenue Extension
Pala-o, Iligan City
Tel. Nos.: (063) 221-5477/79; 492-3009
221-3009
Fax No.:
(063) 492-3010
Ronald O. Lua
KIDAPAWAN CITY BRANCH
G/F EVA Building, Quezon Blvd.
cor. Tomas Claudio Street, National
Highway Kidapawan City
Tel. Nos.: (064) 278-3509; 278-3510
Fax No.:
(064) 278-3509
Wilbert R. Baus
KORONADAL CITY BRANCH
Gen. Santos Drive corner Aquino St.
Koronadal City, South Cotabato
Tel. Nos.: (083) 228-7838; 228-7839
520-1788
Fax No.:
(083) 228-7839
Riskie E. Zaragoza
MALAYBALAY CITY BRANCH
Bethelda Building, Sayre Highway
Malaybalay City, Bukidnon
Tel. No.:
(088) 813-3372
Fax No.:
813-3373
Randolf M. Corrales
DAVAO-SM LANANG BRANCH
G/F SM Lanang Premier
J. P. Laurel Avenue, Davao City
Tel. Nos.: (082) 285-1064; 285 1053
Fax No.:
(082) 285-1520
Marieglis O. Pagaduan
OZAMIZ CITY BRANCH
Gomez corner Burgos Streets
Ozamiz City
Tel. Nos.: (088) 521-2658 to 60
Fax No.:
(088) 521-2659
Ariel F. Ilagan
DAVAO-STA. ANA BRANCH
R. Magsaysay Avenue corner
F. Bangoy Street, Sta. Ana District
Davao City
Tel. Nos.: (082) 227-9501/51
227-9601; 221-1054/55
221-6672
Fax No.:
(082) 226-4902
Felipe D. Lim
PAGADIAN CITY BRANCH
Marasigan Building
F.S. Pajares Avenue, Pagadian City
Tel. Nos.: (062) 215-2781/82
925-1116
Fax No.:
(062) 214-3877
Dennis T. Wong Yat
DAVAO-TAGUM BRANCH
153 Pioneer Avenue, Tagum
Davao del Norte
Tel. Nos.: (084) 655-6307/08
400-2289/90
Fax No.:
(084) 400-2289
Ernesto A. Santiago, Jr.
DAVAO-TORIL BRANCH
McArthur Highway corner
St. Peter Street Crossing Bayabas
Toril, Davao City
Tel. Nos.: (082) 303-3068; 295-2334
295-2332
Fax No.:
(082) 295-2332
Janice S. Laburada
ZAMBOANGA CITY BRANCH
CBC-Building, Gov. Lim Avenue corner
Nuñez Street, Zamboanga City
Tel. Nos.: (062) 991-2978/79
991-1266
Fax No.:
(062) 991-1266 Area Office
Tel. Nos.: 062-955-3710
062-991-1266 (fax)
Jaime G. Asuncion
ZAMBOANGA- GUIWAN BRANCH
G/F Yang’s Tower, M.C. Lobregat
National Highway, Guiwan
Zamboanga City
Tel. Nos.: (062) 984-1751; 984-1754
Fax No.:
(062) 984-1751
Alexander B. Lao
SOON TO OPEN
ANTIPOLO - SUMULONG HIGHWAY
BRANCH
No. 219 Sumulong Highway
Brgy. Mambugan
Anitpolo City, Rizal
KALOOKAN - 8TH AVE. BRANCH
No. 279 Rizal Avenue cor. 8th Ave.
Grace Park, Kalookan City
MEYCAUAYAN BRANCH
CBC Building (for construction)
Malhacan Road, Meycauyan, Bulacan
OCC. MINDORO - SAN JOSE
BRANCH
Liboro cor. Rizal Street
San Jose, Occidental Mindoro
PANGASINAN - BAYAMBANG
BRANCH
CBC Building (for construction)
Poblacion Sur, Bayambang, Pangasinan
TANAUAN CITY BRANCH
J. P. Laurel Highway
Tanauan City, Batangas
TARLAC-CONCEPCION BRANCH
Descanzo Building, Calle Timbol
Concepcion, Tarlac
THE DISTRICT IMUS BRANCH
G/F The District Imus
Anabu II, Imus, Cavite
SURIGAO CITY BRANCH
CBC Building, Amat St.
Barrio Washington, Surigao City
Surigao del Norte
Tel. Nos.: (086) 826-3958, 826-3968
Fax No.:
(086) 826-3958
Domilyn S. Villareal
VALENCIA BRANCH
A. Mabini Street, Valencia, Bukidnon
Tel. Nos.: (088) 828-2048/49
222-2356; 222-2417
Fax No.:
(088) 828-2048
Gilmar L. Villaruel
Annual Report 2013
165
CHINA BANK OFF-BRANCH ATMS
METRO MANILA
168 MALL
3/F Food Court, 168 Mall
Sta. Elena Street, Binondo, Manila
999 MALL 2
Basement, 999 Shopping Mall
Bldg. 2, Recto - Soler Sts.
Binondo, Manila
999 SHOPPING MALL
Basement Lobby, Soler St.
Brgy. 293, Binondo, Manila
AEGIS PEOPLE SUPPORT 2 MAKATI
G/F People Support Center
Ayala Avenue, cor. Sen. Gil Puyat Ave.
Makati City
ALABANG MALL
Alabang Town Center
Alabang - Zapote Road
Muntinlupa City
ALI MALL
ATM Booth # 1 Upper G/F Ali Mall
P. Tuazon Boulevard, Araneta Center
Quezon City
ALI MALL 2
Lower G/F, Times Square Entrance
Ali Mall, P. Tuazon Blvd.
Araneta Center, Quezon City
ATENEO DE MANILA UNIVERSITY
G/F Kostka Hall
Ateneo De Manila University
Katipunan Avenue, Loyola Heights
Quezon City
CALTEX - SLEX 1
South Luzon Expressway - Northbound
Brgy. San Antonio, San Pedro, Laguna
CASH & CARRY
2nd Floor, Cash and Carry Mall
Located bet. South Super Highway &
Filmore near corner Buendia
Makati City
CHIANG-KAI-SHEK
Chiang Kai Shek College
1274 P. Algue, Manila
CHINA BANK ONLINE CENTER
Starbucks, China Bank Building
8745 Paseo de Roxas cor. Villar St.
Makati City
COMEMBO COMMERCIAL
COMPLEX
J.P. Rizal Ext. cor. Sampaguita St.
Comembo, Makati City
DASMARIÑAS VILLAGE
ASSOCIATION OFFICE
1417 Campanilla Street
Dasmariñas Village, Makati City
EASTWOOD CITY WALK 2
G/F ATM 1 (Fronting Adidas)
Eastwood City Walk Phase 2
Eastwood City Cyberpark
188 E. Rodriguez Jr. Ave. (C-5 Road)
Bagumbayan, Quezon City
166
EASTWOOD CYBERMALL
2/F Eastwood CyberMall
Eastwood Avenue, Eastwood City
CyberPark, Bagumbayan, Quezon City
EASTWOOD MALL
Level 1 ATM 2 Phase 2
Eastwood Mall, E. Rodriguez Jr. Ave.
C-5 Bagumbayan, Quezon City
GATEWAY MALL
Booth 4, Level 2 Gateway Mall
Cubao, Quezon City
MEDICAL CITY
Medical City, Ortigas Avenue
Pasig City
ROBINSONS GALLERIA
L1-181 Robinsons Galleria
EDSA cor. Ortigas Ave., Pasig City
METRO POINT MALL
3/F, Metro Point Mall
EDSA cor. Taft Ave., Pasay City
ROBINSONS GALLERIA 2
L1-181 Robinsons Galleria
EDSA cor. Ortigas Ave., Pasig City
METROWALK
ATM 1 Building C, G/F Metrowalk
Commercial Complex, Meralco
Avenue, Pasig City
ROBINSONS GALLERIA 3
L1 West Wing, Robinsons Galleria
EDSA cor. Ortigas Ave., Pasig City
GLORIETTA 4
Glorietta 4, Ayala Center, Makati City
MIDAS HOTEL
previously Hyatt Hotel
2702 Roxas Blvd., Pasay City
ROBINSONS PLACE - MANILA
G/F Padre Faura Entrance
Robinsons Place Manila, Pedro Gil
cor. Adriatico St., Ermita, Manila
GLORIETTA 5
Ground Floor, Glorietta 5
Ayala Center, Makati City
MRT - BONI
MRT - Boni Station
EDSA, Mandaluyong City
ROCKWELL - P1 (CONCOURSE)
Stall No. 060, Ground Level
Power Plant Mall, Makati City
GREENBELT 3
Greenbelt 3, Makati Avenue
Drop-off Area, Makati City
MRT - CUBAO
MRT – Cubao Station
EDSA, Quezon City
GREENHILLS THEATER MALL
Main Entrance
Greenhills Theater Mall
San Juan, Metro Manila
MRT - NORTH AVE.
MRT - North Avenue Station
EDSA, Quezon City
SAVERS CENTER
Ground Floor, Right Side of Main
Entrance, along EDSA near corner
Taft Avenue, Pasay City
JACKMAN EMPORIUM
Jackman Emporium Department
Store Building (beside LRT Station and
Gotesco Grand Central)
Grace Park, Kalookan City
JACKMAN PLAZA - MUÑOZ
along EDSA near corner
Congressional Ave.
Muñoz, Quezon City
JGC ALABANG
JGC PHILS. Building, Prime Street
Madrigal Business Park-Phase III
Ayala Alabang, Muntinlupa City
KIMSTON PLAZA
P. Victor St. cor. P. Burgos St.
Guadalupe, Nuevo, Makati City
LANDMARK - TRINOMA
ATM Slot #4, 3rd floor, Landmark Trinoma EDSA cor. Mindanao Ave.
Extension, Pagasa, Quezon City
LANDMARK MAKATI
The Landmark Building
Makati Avenue, Ayala Center
Makati City
MRT - SHAW
MRT - Shaw Station
EDSA, Mandaluyong City
NORTHEAST SQUARE
#47 Connecticut St.
Northeast Greenhills, San Juan City
NOVA SQUARE
G/F Nova Square, 689 Quirino Highway
cor. P. Dela Cruz Brgy. San Bartolome
Novaliches, Quezon City
ONE E-COM CENTER
G/F One E-Com Center
Harbor Drive, SM Mall of Asia Complex
Pasay City
PEOPLE SUPPORT - ROCKWELL
BUSINESS CENTER
Rockwell Business Center
Ortigas Avenue, Pasig City
PEOPLE SUPPORT CENTER
G/F People Support Center
Ayala Avenue cor. Sen. Gil Puyat Ave.
Makati City
PUREGOLD - BLUMENTRITT
286 Blumentritt St., Sta. Cruz Manila
MALABON CITISQUARE
Malabon Citisquare C4 Road
corner Dagat-Dagatan Avenue
Malabon City
PUREGOLD - E. RODRIGUEZ
ATM # 1 - Cosco Building
E. Rodriguez Avenue cor.
G. Araneta Ave., Quezon City
MARKET! MARKET! 1
Market! Market! Bonifacio Global City
Taguig, Metro Manila
PUREGOLD - LAKEFRONT
Presidio Sudvision, Lakefront
Muntinlupa City
MARKET! MARKET! 2
2/F, Market! Market!
Bonifacio Global City
Taguig, Metro Manila
PUREGOLD - PASO DE BLAS
cor. Gen. Luis St., Malinta Exit.
Valenzuela City
MARKET! MARKET! 3
G/F ATM Center in Fiesta Market
Market! Market! Bonifacio Global City
Taguig, Metro Manila
PUREGOLD JR. - PANDACAN
West J. Zamora St.
Brgy. 851 Zone 093 Pandacan, Manila
SHOP AND RIDE
#248 Gen. Luis Street, Novaliches
Quezon City
SHOP AND RIDE 2
ATM 2, Gen. Luis St.
Brgy. Nova Proper, Novaliches
Quezon City
SHOPWISE - ANTIPOLO
ML. Quezon Street corner
Circumferential Road, San Roque
Antipolo City
SHOPWISE COMMONWEALTH
Blk. 17, Commonwealth Ave.
Don Antonio, Quezon City
SM HYPERMARKET
Ground Floor, SM Hypermarket
SM Mall of Asia, Pasay City
SM HYPERMARKET MANDALUYONG
121 Shaw Boulevard
cor. E. Magalona St., Mandaluyong City
SM MANILA
ATM-3 UG/F Main Entrance
Arroceros Side, SM City Manila
SM MEGAMALL BLDG. B
Level 2, Building B, SM Megamall
EDSA cor. Julia Vargas St.
Mandaluyong City
SM MUNTINLUPA
G/F ATM 2 (beside Rear Entrance)
Bgy. Tunasan, National Road
SM Muntinlupa, Muntinlupa City
SM TAYTAY
2nd Floor Bldg. A, SM City Taytay
Manila East Road, Brgy. Dolores
Taytay, Rizal
SOLAIRE RESORT & CASINO
Entertainment City, Aseana Avenue
Parañaque City
SOUTHGATE MALL
Southgate Mall, EDSA
cor. Pasong Tamo Extension
Makati City
ST. FRANCIS SQUARE
Basement 1, Doña Julia Vargas Avenue
corner Bank Drive, Ortigas Center
Mandaluyong City
ST. JUDE COLLEGE
Dimasalang St. cor Don Quijote St.
Sampaloc, Manila
WACK - WACK GOLF AND
COUNTRY CLUB
Main Lobby Club house, Wack - Wack
Golf and Country Club, Shaw Blvd.
Mandaluyong City
WALTERMART - NORTH EDSA
Waltermart Bldg., EDSA, Quezon City
ST. LUKE’S - QUEZON CITY
St. Luke’s Medical Center
Medical Arts Building, E. Rodriguez Sr.
Boulevard, Quezon City
WALTERMART - MAKATI
G/F Waltermart Makati
(near Mercury Drug) 790 Chino Roces
Avenue cor. Antonio Arnaiz, Makati City
ST. LUKE’S - THE FORT
Basement, St. Lukes Medical Center
5th Ave., The Fort, Taguig City
WALTERMART - SUCAT
Brgy. San Isidro, Dr. A. Santos Avenue
Sucat, Parañaque City
STI - DELOS SANTOS
MEDICAL CENTER
201 E. Rodriguez Sr. Blvd.
Brgy. Damayang Lagi, Quezon City
ZABARTE TOWN CENTER
588 Camarin Road, corner Zabarte
Road, North Caloocan City
TAFT - U.N.
G/F Times Plaza
T.M. Kalaw cor. Gen. Luna St., Manila
TARGET MALL 1
G/F near Star Search Sta. Rosa
Commercial Complex, Brgy. Balibago
Sta. Rosa, Laguna
THE A VENUE
G/F Valdez Site, The A Venue
7829 Makati Avenue, Makati City
THE FORT
1st Floor Bonifacio Technology Center
31st Street cor. 2nd Avenue
Bonifacio Global City, Taguig City
TIENDESITAS
Frontera Verde Ortigas Avenue
cor. C-5, Pasig City
PROVINCIAL
2 MANGO AVENUE
2 Mango Avenue, Solara Building
General Maxilom Avenue, Cebu City
268 MALL
268 Mall CK Building
Plaridel Extension, Sto. Rosario
Angeles City
ABREEZA MALL
J.P. Laurel Avenue, Bajada, Davao City
ADVENTIST UNIVERSITY
OF THE PHILIPPINES
Adventist University of the Philippines
Puting Kahoy Silang
Sta. Rosa, Cavite City
AEGIS PEOPLE SUPPORT - BAGUIO
SM Fiesta Strip, Harrison Road
Baguio City
CDO MEDICAL CENTER
CDO Medical Center Building
2 Tiano cor. Nacalaban St.
Cagayan de Oro City
CEBU DOCTORS’ HOSPITAL
Cebu Doctors’ Hospital
Osmeña Blvd., Cebu City
JENRA MALL
Jenra Grand Mall, Angeles City
Pampanga
JOLLIBEE MABALACAT
McArthur Highway
Mabalacat, Pampanga
CEBU DOCTORS’ UNIVERSITY
#1 Potenciano Larrazabal Ave.
North Reclamation Area, Mandaue City
KCC MALL - GENSAN
G/F KCC Mall - GenSan J. Catolico Sr.
Avenue, General Santos City
South Cotabato
CENTRIO MALL
G/F CM Recto cor. Corrales St.
Cagayan De Oro
KMSCI
Kidapawan Medical Specialist Center
Inc., Sudapin, Kidapawan City
CORPUS CHRISTI
Corpus Christi School
Tomas Saco Street, Macasandig
Cagayan de Oro City
LA NUEVA MINGLANILLA
La Nueva Supermarket
Poblacion, Minglanilla, Cebu
DAVAO ADVENTIST HOSPITAL
KM 7, McArthur Highway
Bangkal, Davao City
LA NUEVA SUPERMART
La Nueva Supermart, Inc.
G.Y. Dela Serna Street, Lapu-lapu
Cebu City
DIPOLOG CENTER MALL
Dipolog Center Mall
138 Rizal Avenue, Dipolog City
LAPU-LAPU CITY
Gaisano Mactan Mall
Pusok, Lapu-Lapu City, Cebu
DIVINE WORD COLLEGE OF VIGAN
Burgos St., Vigan City, Ilocos Sur
LB SUPERMARKET - ZAMBOANGA
Veteran’s Avenue Extension
Zamboanga City
DLSU - DASMARIÑAS
College of Engineering, De La Salle
University, Dasmariñas, Cavite
DLSU - HEALTH SCIENCE
CAMPUS
De La Salle University Health Campus,
Inc., Congressional Road, Dasmariñas
Cavite
LCC SUPERMARKET
Peñaranda corner Rizal St.
Legaspi City
LEE HYPERMARKET
G/F Lee Hypermarket Valencia Road
Bagacay, Dumaguete City
Negros Oriental
ECCO BUILDING
G/F beside Unit A, Fil-Am Friendship
Highway, Brgy. Anunas, Angeles City
LEE SUPER PLAZA
G/F Lee Super Plaza, M. Perdices
cor. San Jose St., Dumaguete City
EMBARCADERO DE LEGAZPI
Ground Level, Victory Village
Legazpi City
LIM KET KAI MALL
M4-193B Lim Ket Kai Mall
Cagayan de Oro City
ALWANA BUSINESS PARK
National Highway, Barangay Cugman
Cagayan De Oro City
GAISANO MALL - BAJADA DAVAO
Gaisano Mall of Davao, J.P. Laurel
Avenue Bajada, Davao City
GAISANO MALL - BULUA
Bulua Street, Cagayan De Oro City
UPM - PGH
Faculty Medical Arts Building
PGH Compound, Taft Avenue, Manila
ANGELES UNIVERSITY
FOUNDATION MEDICAL CENTER
Basement, Angeles University
Foundation Medical Center
McArthur Highway, Angeles
Pampanga
LOPUE’S EAST CENTER
Lopue’s East Centre, Burgos St.
corner Carlos Hilado National Highway
Bacolod City
UST - DOCTOR’S CLINIC
UST Hospital, Vestibule and
New Doctor’s Clinic, España, Manila
ARAULLO UNIVERSITY
Maharlika Highway
Bitas, Cabanatuan City
UST HOSPITAL
University of Sto. Tomas Hospital
España, Manila
ATENEO DE DAVAO UNIVERSITY
Near Main Entrance Along Roxas
Avenue Davao City
GAISANO MALL - TALISAY
G/F Gaisano Fiesta Mall
Tabunok Talisay, Cebu City
VICTORY CENTRAL MALL
G/F, ATM 2 Below Escalator
717 Old Victory Compound
Rizal Ave., Monumento, Caloocan City
BUDGET WISE SUPERMARKET
Veterans Avenue, Zamboanga City
GALERIA VICTORIA
Balanga, Bataan
CAMAYAN BEACH RESORT & HOTEL
Camayan Wharf, West Ilanin Forest
Area, Subic Bay Freeport Zone
GOOD SAMARITAN HOSPITAL
Good Samaritan Compound
Burgos Avenue, Cabanatuan City
CB MALL URDANETA
Mc Arthur Highway, Nancayasan
Urdaneta City, Pangasinan
HOLY ANGEL UNIVERSITY 2
G/F Holy Angel University Student’s
Center, Sto. Rosario St., Angeles City
Pampanga
TRINOMA OFF 1
Level 1 (near Landmark and Chowking)
North Ave., cor. Edsa Quezon City
TRINOMA OFF 2
Level 1 Near X Boutique
North Avenue, cor. EDSA, Quezon City
TWO SHOPPING CENTER
Two Shopping Center
Pasay Taft Avenue near cor. EDSA
Pasay City
VICTORY PASAY MALL
Taft Avenue corner Libertad Street
Pasay City
AG&P
Atlantic, Gulf and Pacific Company of
Manila, Inc., San Roque
Bauan, Batangas
GAISANO MALL - CAGAYAN DE ORO
Unit # 3 2/L Atrium Gaisano Mall
Corrales Extension cor. CM Recto Ave.
Cagayan de Oro City
GAISANO MALL - ILIGAN
G/F Gaisano Citi Super Mall, Iligan City
LORMA HOSPITAL
Lorma Hospital City of San Fernando
La Union
LOTUS CENTRAL MALL
G/F Lotus Central Mall
Nueno Avenue, Imus, Cavite
MACTAN MARINA MALL
Ground Floor, Mactan Marina Mall
MEPZ1, Lapu-lapu City
MAGIC MALL
G/F cor. ITTI Shoes (Entrance B)
Magic Mall, Alexander St., Poblacion
Urdaneta City, Pangasinan
MAGIC STARMALL
Upper G/F, Magic Star Mall
Romulo Boulevard, Barangay Cut-Cut1
Tarlac City
Annual Report 2013
167
CHINA BANK OFF-BRANCH ATMS
MALOLOS-OFF BRANCH
G/F Graceland Mall, BSU Grounds
McArthur Highway, Malolos City
Bulacan
PAVILION MALL
G/F Building A, Pavilion Mall
Km. 35, Brgy. San Antonio
Biñan, Laguna
MARIA REYNA HOSPITAL
Beside Hospital Entrance/Exit.
Maria Reyna Hospital, T.J. Hayes St.
Cagayan De Oro City
PEOPLE SUPPORT - CEBU
Aegis Tower I, Villa Street
Asia Town IT Park, Apas, Cebu City
MARITON GROCERY
Mariton Grocery, Buntun
Tuguegarao City, Cagayan Valley
MARKET CITY
Market City Building, Bus Terminal
Agora, Cagayan De Oro
MARQUEE MALL 1
G/F Activity Center Marquee Mall
Don Bonifacio Road, Angeles City
Pampanga
MINDANAO SANITARIUM
AND HOSPITAL
Mindanao Sanitarium and Hospital
Tibanga Highway, Iligan City
MJS HOSPITAL
Montilla Boulevard, Butuan City
NEPO MALL ANGELES
Nepo Mall Angeles, Doña Teresa Ave.
cor. St. Joseph Street, Nepo Mart
Complex. Angeles City
NEPO MALL DAGUPAN
G/F Nepo Mall Dagupan
Arellano St., Dagupan City
NOTRE DAME DE CHARTRES
HOSPITAL
Notre Dame De Chartres Hospital
No. 25 Gen. Luna Road, Baguio City
NUEVA ECIJA DOCTORS HOSPITAL
Maharlika Highway
Cabanatuan City
ORCHARD GOLF AND
COUNTRY CLUB
Gate 2 The Orchard Golf and
Country Club Inc., Aguinaldo Highway
Dasmariñas, Cavite
OSPA - FMC
Carlota Hills, Brgy. Can - Adieng
Ormoc City, Leyte
OUR LADY OF THE PILLAR
G/F near Emergency Room
Tamsui Avenue, Bayan Luma
Imus, Cavite
PACIFIC MALL
Landco Business Park
F. Imperial St. cor. Circumferential Road
Legaspi City
PACIFIC MALL 2
Pacific Mall Building
Landco Business Park
F. Imperial St., Legazpi City
PANGASINAN MEDICAL CENTER
Nable Street, Dagupan City
STA. ROSA HOSPITAL
RSBS Blvd., Balibago
City of Sta. Rosa, Laguna
SM CITY CAGAYAN DE ORO
ATM Center (2), Main Entrance
SM City, Cagayan de Oro
SUN MALL
Welcome Rotonda, Manila
PORTA VAGA
along Session Road, Baguio City
SM CITY CALAMBA
Ground Floor, National Road
Brgy. Real, Calamba City, Laguna
TARGET MALL 2
ATM-04, Canopy Area Sta. Rosa
Commercial Complex, Brgy. Balibago
Sta. Rosa, Laguna
PRINCE MALL - BAYBAY
Andres Bonifacio &
Manuel L. Quezon St., Baybay, Leyte
SM CITY CALAMBA 2
Second Floor, National Road
Brgy. Real, Calamba City, Laguna
THE DISTRICT MALL - IMUS
Aguinaldo Hi-way cor. Daang Hari Road
Brgy. Anabu II-D, Imus, Cavite
PUREGOLD - ARAYAT
Arayat, Pampanga
SM CITY CALAMBA 3
Near Main Entrance, National Road
Brgy. Real, Calamba City, Laguna
UNION CHRISTIAN COLLEGE
Widdoes Street Brgy. II
San Fernando, La Union City
SM CITY CLARK OFF-BRANCH
ATM # 1 SM City Clark (Fronting
Transport Terminal) M. Roxas Street
CSEZ, Angeles City, Pampanga
UNIVERSITY OF BOHOL
University of Bohol
along M. Clara St., Tagbilaran City
PUREGOLD - DAU
Lot 9 Blk 19, McArthur Highway
Dau, Mabalacat, Pampanga
PURISIMO L. TIAM COLLEGE
PLT Building, Dumlao Blvd.
Bayombong, Nueva Vizcaya
ROBINSONS CALASIAO
San Miguel, Calasiao, Pangasinan
ROBINSONS GENSAN
G/F near Foodcourt, Robinsons Gensan
Jose Catolico Sr. Ave., Lagao
General Santos City
ROBINSONS PLACE - TACLOBAN
G/F National Highway, Tabaon
Marasbaras, Tacloban City
ROYAL DUTY FREE
Subic Bay Freeport Zone, Zambales
SAMULCO
Sta. Ana Multi-Purpose Cooperative
Building 1 Monteverde St., Davao City
SAN FERNANDINO HOSPITAL
along McArthur Highway, Dolores
City of San Fernando, Pampanga
SAVEWISE POZORRUBIO
Pozorrubio, Pangasinan
SHOPWISE - CEBU
N. Bacalso Ave., Basak
San Nicolas, Cebu City
SHOPWISE - SAN PEDRO
Along National Highway
Brgy. Landayan, Pacita, San Pedro
SKYRISE REALTY
Skyrise Realty Development
Corporation, Lobby G/F Skyrise
IT Building, Gorordo Avenue
cor. N. Escario St., Cebu City
SM BAGUIO
SM Baguio Luneta Hill, Upper Session
Road cor. Governor Park Road
Baguio City, Benguet
SM CITY BACOLOD
G/F Building A, ATM # 3
SM City Bacolod Reclamation Area
Bacolod City
SM CITY BALIWAG
1/F near Hypermarket SM City
Baliwag, DRT Highway, Brgy. Pagala
Baliwag, Bulacan
168
SM CITY BATANGAS
ATM-1 SM City Batangas
Pallocan West, Batangas City
SM CITY DASMARIÑAS
Offsite ATM 2
SM City, Dasmariñas, Cavite City
SM CITY DASMARIÑAS 2
SM City Dasmariñas Ground Floor
near Gen. E. Aguinaldo Highway
entrance, SM Dasmariñas Governor’s Drive, Brgy. Sampalok
Dasmariñas, Cavite
SM CITY GENERAL SANTOS
SM City General Santos, cor. Santiago
Blvd. and San Miguel St., Brgy. Lagao
General Santos City, South Cotabato
SM CITY LIPA OFF-BRANCH
ATM 2 (near Transport Terminal)
SM City Lipa, Ayala Highway, Lipa City
SM CITY TARLAC
G/F SM City Tarlac, McArthur Highway
San Roque, Tarlac City
SM DAVAO
ATM Center (1), SM City Davao
Quimpo Boulevard, Ecoland
Subdivision, Barangay Matina
Davao City
SM LANANG OFF-BRANCH
UGF SM Lanang Premier
J.P. Laurel Avenue, Davao City
SM MARILAO OFFSITE
ATM-1 SM City Marilao
Marilao, Bulacan
SM MARKET MALL
ATM 3, SM Market Mall Dasmariñas
Congressional Ave., Dasmariñas
Bagong Bayan, Dasmariñas, Cavite
SM SUPERCENTER MOLINO
G/F SM Supercenter Molino
SCMC, Brgy. Molino 4, Molino Road
Bacoor, Cavite
SOCSARGEN COUNTY HOSPITAL
Socsargen County Hospital
Bula-Iagao Road cor. L. Arradaza St.
General Santos City
SOUTHWAY MALL
Southway Square Mall
cor. Gov. Lim Purisima and
Magno Sts., Zamboanga City
UNIVERSITY OF SAN CARLOS
University of San Carlos
Main University Building
P. del Rosario Street, Cebu City
UST HOSPITAL 3
G/F UST Hospital Clinic Division
A.H. Lacson Avenue, Sampaloc, Manila
WALTERMART - CALAMBA
G/F Waltermart Calamba Real St.
Brgy. Real, Calamba City, Laguna
WALTERMART - DASMARIÑAS
G/F Barrio Burol, Aguinaldo Highway
Dasmariñas, Cavite
WALTERMART - CARMONA
Ground Floor, Waltermart Center Carmona, Macaria Business Center
Governor’s Drive, Mabuhay
Carmona, Cavite
WALTERMART - GEN. TRIAS
Governor’s Drive, Gen. Trias, Cavite
WALTERMART - SAN FERNANDO
Brgy. San Agustin, Mc Arthur Highway
San Fernando, Pampanga
WALTERMART - STA. ROSA 1
Upper G/F Waltermart Center Sta. Rosa, National Highway Mall
Entrance, San Lorenzo Village
Balibago Road, Sta. Rosa, Laguna
WALTERMART - STA. ROSA 2
Upper G/F Waltermart Center Sta. Rosa, in between Goldilocks and
Mall Exit, San Lorenzo Village
Balibago Road, Sta. Rosa, Laguna
WALTERMART - TANAUAN
J.P. Laurel National Highway
Brgy. Darasa, Tanauan, Batangas
WESLEYAN UNIVERSITY
Wesleyan University of the Philippines
Mabini Extension, Cabanatuan City
XAVIER UNIVERSITY
G/F Library Annex, Xavier University
Corrales Ave., Cagayan De Oro City
YUBENGCO STARMALL
MCLL Highway, Putik, Zamboanga City
CHINA BANK BUSINESS CENTERS
CONSUMER BANKING CENTERS
CBG BACOLOD CENTER
China Bank - Bacolod Araneta Branch
CBC Bldg., Araneta corner
San Sebastian Streets, Bacolod City
Tel. No.
(034) 433-0647
Fax No.
(034) 433-0250
Email:
jmedelasalas@chinabank.ph
Center head: Jasmin Mae de Las Alas
CBG CAGAYAN DE ORO CENTER
China Bank - Cagayan de Oro-Lapasan Branch
2/F CBC Bldg., C.M. Recto Avenue
Lapasan, Cagayan de Oro
Tel. No.
(08822) 72-81-95
Fax No.
(088) 856-2409
Email:
eedalaguit@chinabank.ph
Center head: Evelyn E. Dalaguit
CBG BATANGAS CENTER
China Bank - Batangas City Branch
2/F CBC Bldg., P. Burgos Street, Batangas City
Tel. No.
(043) 723-7127; (02) 520-6161
Fax No.
(02) 520-6161
Email:
egricardo@chinabank.ph
Center head: Evelyn G. Ricardo
CBG CEBU CENTER
China Bank - Cebu Banilad Branch
2/F CBC Bldg., A.S. Fortuna Street
Banilad, Cebu City
Tel. Nos. (032) 416-1606; (032) 346-4448
Fax No.
(032) 346-4450
Email:
jfvparaon@chinabank.ph
Center head: James Frances V. Paraon
CBG CABANATUAN CENTER
China Bank – Cabanatuan, Maharlika Branch
2/F CBC Bldg., Brgy. Dicarma, Maharlika Highway
Cabanatuan City 3100, Nueva Ecija
Tel. No.
(044) 463-1063 / 600-1575
Fax No.
(044) 464-0099
Email:
aacvilar@chinabank.ph
Center head: Anthony C. Vilar
CBG DAGUPAN CENTER
China Bank - Dagupan - Perez Branch
Siapno Bldg., Perez Boulevard
Dagupan City
Tel. No.
(075) 522-8471
Fax No.
(075) 522-8472
Email:
amcalalo@chinabank.ph
Center head: Alvin M. Calalo
CBG DAVAO CENTER
China Bank - Davao Main Branch
2/F CBC Bldg., C.M. Recto
corner J. Rizal Streets, Davao City
Tel. Nos. (082) 226-2103/ (082) 221-4163
(082) 222-5761
Fax No.
(082) 222-5021
Email:
rcsanchez@chinabank.ph
Center head: Renato C. Sanchez II
CBG ILOILO CENTER
China Bank - Iloilo-Rizal Branch
2/F CBC Bldg., Rizal corner Gomez Streets
Brgy. Ortiz, Iloilo City
Tel. No.
(033) 336-7918 / (033) 503-2845
Fax No.
(033) 336-7909
Email:
mdcelajes@chinabank.ph
Center head: Marvin D. Celajes
CBG PAMPANGA CENTER
China Bank - San Fernando Branch
2/F CBC Bldg., V. Tiomico Street, Sto. Rosario
Poblacion, City of San Fernando, Pampanga
Tel. Nos. (045) 961-5344; (045) 961-0467
(045) 961-8351
Fax No.
(045) 961-8351
Email:
vgguintu@chinabank.ph
Center head: Verna G. Guintu
PRIVATE BANKING GROUP MAKATI
15/F China Bank Building, 8745 Paseo de Roxas
corner Villar Street, Makati City, Philippines
Angela D. Cruz
(632) 885-5641
adcruz@chinabank.ph
Cesare Edwin M. Garcia
(632) 812-5320
cemgarcia@chinabank.ph
Therese G. Escolin
(632) 885-5693
tgescolin@chinabank.ph
Karen W. Tua
(632) 885-5643
kwtua@chinabank.ph
Grace C. Santos
(632) 885-5697
gcsantos@chinabank.ph
Yvette O. Chua
(632) 885-5691
yochua@chinabank.ph
Eric Von D. Baviera
(632) 885-5688
evdbaviera@chinabank.ph
Hazel Marianne Antolin-Rosero
(632) 885-5644
hmarosero@chinabank.ph
Sheryl Ann C. Hokia
(632) 352-3789 / sachokia@chinabank.ph
CEBU OFFICE
CBC Building, Samar Loop cor. Panay Road
Cebu Business Park, Cebu City
PRIVATE BANKING OFFSITE OFFICES
GREENHILLS OFFICE
14 Ortigas Avenue, Greenhills
San Juan, Metro Manila
Ma. Victoria G. Pantaleon
(632) 7277884 / mvgpantaleon@chinabank.ph
Glynn Hazel C. Yap
(632) 727-7645 / ghcyap@chinabank.ph
Dianne Mae A. Cardenas
(632) 724-0413 / dmacardenas@chinabank.ph
BINONDO OFFICE
6/F ChinaBank, Dasmariñas corner Juan Luna
Binondo, Manila
Irene C. Tanlimco
(632) 241-1452 / ictanlimco@chinabank.ph
Genelin U. Yu
(632) 247-8341 / guyu@chinabank.ph
KALOOKAN OFFICE
167 Rizal Avenue Extension, Caloocan City
QUEZON CITY OFFICE
82 West Avenue, Quezon City
Jaydee Cheng-Tan
(632) 426-6980 / jctan@chinabank.ph
Christopher U. Liao
(632) 441-4685 / culiao@chinabank.ph
ALABANG OFFICE
G/F CBC Building, Acacia Ave.
Madrigal Business Park, Ayala Alabang
Muntinlupa City
Eleanor D. Rosales
(6332) 415-5881 / (6332) 238-0017
edrosales@chinabank.ph
Claire Lorraine L. Co
(6332) 238-0017 / cllco@chinabank.ph
DAVAO OFFICE
Km. 4 McArthur Highway, Matina, Davao City
Mc Queen Benigno-Jamora
(6382) 297-6268 / mqgbenigno@chinabank.ph
Sheila V. Sarmenta-Dayao
(632) 659-2463
svsarmenta-dayao@chinabank.ph
DAGUPAN OFFICE
Carried Realty Bldg., No. 28 M. H. Del Pilar St.
Dagupan City
SAN FERNANDO OFFICE
2/F V. Tiomico St., San Fernando City, Pampanga
Cherry Ann V. Heath
(075) 529-2712 / c
avheath@chinabank.ph
Ma. Cristina D. Puno
(6345) 961-0486 / mdpuno@chinabank.ph
Jennifer Y. Macariola
(632) 366-8669 / jymacariola@chinabank.ph
Annual Report 2013
169
SUBSIDIARIES AND AFFILIATES
VGP Center, 6772 Ayala Avenue
Makati City 1226, Philippines
Tel. No.: (632) 988-9555
www.cbs.com.ph
China Bank Savings, Inc. (CBS) began operations on September 8, 2008, following China Bank’s acquisition of Manila Bank in late 2007. China
Bank owns 95.25% of the total outstanding capital stock of CBS. In 2012, China Bank acquired Pampanga-based Unity Bank, A Rural Bank, Inc.
(Unity Bank), and on January 20, 2014, Unity Bank was merged with CBS, with CBS as the surviving bank. CBS now has a bigger and stronger
banking franchise to serve the banking needs of retail customers and small- to medium-scale businesses. It aims to operate and grow as a
profitable community-oriented institution, focusing on three product lines: deposits, consumer loans, and trust services.
BOARD OF DIRECTORS
CHAIRMAN
Ricardo R. Chua
VICE CHAIRMAN
Nancy D. Yang
DIRECTORS
Ramon R. Zamora
Antonio S. Espedido, Jr.
Rene J. Sarmiento
Alberto Emilio V. Ramos
Alexander C. Escucha
Rosemarie C. Gan
INDEPENDENT DIRECTORS
Alberto S. Yao
Roberto F. Kuan
Margarita L. San Juan
CORPORATE SECRETARY
Edgar D. Dumlao
ASSISTANT CORPORATE
SECRETARY
Bea Carla C. Redoblado
BOARD-LEVEL COMMITTEES
EXECUTIVE COMMITTEE
Chairman
Ricardo R. Chua
Vice Chairman
Nancy D. Yang
Members
Alberto Emilio V. Ramos
Rosemarie C. Gan
Margarita L. San Juan
CORPORATE GOVERNANCE
COMMITTEE / NOMINATION AND
PERSONNEL COMMITTEE
RISK MANAGEMENT COMMITTEE
AUDIT COMMITTEE
Roberto F. Kuan
Roberto F. Kuan
Margarita L. San Juan
Nancy D. Yang
Ramon R. Zamora
Alexander C. Escucha
Margarita L. San Juan
Alberto S. Yao
TRUST COMMITTEE
COMPENSATION/
REMUNERATION COMMITTEE
Chairman
Alberto S. Yao
Antonio S. Espedido, Jr.
Ricardo R. Chua
Members
Ricardo R. Chua
Roberto F. Kuan
Antonio S. Espedido, Jr.
Alexander C. Escucha
Alexander C. Escucha
Anna Maria P. Ylagan
Alberto Emilio V. Ramos
Ramon R. Zamora
Alberto Emilio V. Ramos
Maria Rosanna L. Testa
MANAGEMENT-LEVEL COMMITTEES
MANAGEMENT COMMITTEE
IT STEERING COMMITTEE
CREDIT COMMITTEE
Alberto Emilio V. Ramos
Alberto Emilio V. Ramos
Alberto Emilio V. Ramos
Vice Chairman
Jaime Valentin L. Araneta
Jaime Valentin L. Araneta
Jaime Valentin L. Araneta
Members
Emmanuel C. Geronimo
James Christian T. Dee
Ma. Edralin G. Agbayani
Anna Maria P. Ylagan
Ma. Consuelo S. Ruffy
Jan Nikolai M. Lim
Jose Ramon O. Santamaria
Rosalinda T. Munsayac
Maria Consuelo A. Babas
Consolacion R. Saur*
Emmanuel C. Geronimo
Edralin G. Agbayani
Rosalinda T. Munsayac
Ma. Consuelo S. Ruffy
Jan Nikolai M. Lim
Jose Ramon O. Santamaria
Jezreel R. Pimentel
Edralin G. Agbayani
Ma. Consuelo S. Ruffy**
Jan Nikolai M. Lim**
Jose Ramon O. Santamaria**
Consolacion R. Saur*
Chairman
* Adviser Consultant
** Participation limited to their specific business area only
170
Non-Voting Members
Restituto B. Bayudan
Consolacion R. Saur*
ASSET LIABILITY MANAGEMENT
COMMITTEE
Chairman
Alberto Emilio V. Ramos
Vice Chairman
Jaime Valentin L. Araneta
Members
Emmanuel C. Geronimo
Ma. Consuelo S. Ruffy
Jan Nikolai M. Lim
Jose Ramon O. Santamaria
James Christian T. Dee
Edralin G. Agbayani
Consolacion R. Saur*
RETIREMENT COMMITTEE
ANTI-MONEY LAUNDERING
COMMITTEE
Rex P. Bautista
Ricardo R. Chua
Alberto Emilio V. Ramos
Antonio S. Espedido, Jr.
Jaime Valentin L. Araneta
Edgar D. Dumlao
Rosalinda T. Munsayac
* Adviser Consultant
OFFICERS
PRESIDENT
Alberto Emilio V. Ramos **
SENIOR ASSISTANT
VICE PRESIDENT
James Christian T. Dee **
Treasurer
EXECUTIVE VICE PRESIDENT
Jaime Valentin L. Araneta
ASSISTANT VICE PRESIDENTS
FIRST VICE PRESIDENTS
Maria Consuelo A. Babas
Head, Marketing
Jan Nikolai M. Lim
Head, Real Estate and Personal
Loans
Jose Ramon O. Santamaria
Head, Auto Loans
Restituto B. Bayudan **
Head, Information Teachnology
Kristine Michele M. Chavez
Real Estate Loans
Marilou M. De Guzman
Head, Alternative Channels
VICE PRESIDENTS
Edralin G. Agbayani
Head, Credit & Collections
Management
Emmanuelito M. Gomez
Unit Head, Acquired Assets
Melecio C. Labalan, Jr.**
Chief Security Officer
Edgar D. Dumlao
Corporate Secretary and
Head, Legal Department
Jezreel R. Pimentel
Head, Credit Services
Emmanuel C. Geronimo
Head, Controllership Group
Winifredo G. Solis
Head, Business Intelligence
Rosalinda T. Munsayac
Head, Operations Group
SENIOR MANAGERS
Maria Consuelo S. Ruffy
Head, Commercial /SME Loans
Raymond C. Apo
Head, Risk Management Unit
Maria Rosanna L. Testa **
Head, Human Resources Group
Rolando Rohel R. Briones
Account Officer
Commercial/SME Loans
Anna Maria P. Ylagan
Trust Banking Group
Roberto A. Domingo, Jr.
Project Manager
Information Technology
Reynaldo A. Dones
Project Manager
Information Technology
Grace Z. Floresca
Head, Credit Policy and
Supervision
Julio Joel C. Garcia
Head, Branch Network
Development Division
Irene S. Mariano
Head, Human Resources
Department
Enrico Luis D. Rojas
Account Officer
Personal Loans
MANAGERS
Arnold A. Alcala
Head, Branch Support Services
Meynard Jowell F. Bitas
Head, Business Process
Management
Claro M. Eustaquio
Head, Credit Intelligence
Analytics
Cecilia H. Katipunan
Head, Personal Loans Credit
Evaluation
Gil D. Nolada
Head, Financial Planning and
Tax Management
Raymond Martin C. Rosas
Account Officer
Commercial/SME Loans
Oscar L. Samonte
Head, Appraisal
Michael V. Sabandal
Account Officer
Real Estate Loans
Jose G. Ramos, Jr.**
Head, Administrative Services
Department
Jimmy John C. Santos
Head, Branch Sales Division
Cecilia R. Villaluz
Head, Head Office Audit
Jacqueline T. Tomacruz **
Head, Customer Service
Division
DEPUTY SENIOR MANAGERS
Jinkee C. Rejuso
Head, Loans Operations
Rosalie S. Salaysay
Head, Auto Credit Evaluation
Moises Germel S. Santos, Jr.
Head, Branch Operations
** with interlocking officership with
China Banking Corporation
Annual Report 2013
171
NOTES TO FINANCIAL
SUBSIDIARIES
AND AFFILIATES
STATEMENTS
BRANCHES
METRO MANILA
ALABANG HILLS
G/F Alabang Commercial Citi Arcade
Don Jesus Blvd., Alabang
Muntinlupa City
Tel. No.:
403- 2801
Telefax:
828-4854
Quennie V. Umil
SAVEMORE AMANG RODRIGUEZ
Amang Rodriguez Ave. corner
Evangelista St., Brgy. Santolan
Pasig City
Tel. Nos.:
964-1323; 654-4710
Shane Michelle G. Gueco
SAVEMORE ANONAS
Maamo St. Road Lot 30, V. Luna St.
corner Anonas extension
Sikatuna Village, Quezon City
Vishia Prima B. Baoayan
SAVEMORE ARANETA CENTER COD
Gen. Romulo St., Araneta Center
Cubao, Quezon City
Tel. Nos.:
921-3147; 921-3149
Alejandro Tanawag, Jr.
SAVEMORE AVENIDA
665 Rizal Avenue, Jennet and
Lord Theater, Sta. Cruz, Manila
Tel. Nos.:
734-0534; 734-0543
Michael N. Calderon
AYALA
6772 Ayala Avenue
Makati City
Tel. Nos.:
864-5011, 864-5017
Local 8100 to 8104
Lani D. Larion
BF HOMES
284 Aguirre Avenue
B.F Homes, Parañaque
Tel. Nos.:
964-1292
553-5412; 553-5414
Maria Dolores S. Regala
CHINO ROCES
2176 Chino Roces Avenue
Makati City
Tel. Nos.:
831-0477; 964-1322
Cristina B. Sanchez
FILINVEST CORPORATE CITY
BC Group Bldg., East Asia Drive near
corner Commerce Ave. Filinvest
Corporate City, Alabang
Muntinlupa City
Tel. Nos.:
511-1152; 217-3069
Telefax:
511-1145
Marites B. Nubla
GREENHILLS-WILSON
219 Wilson St.
Greenhills, San Juan City
Tel. Nos.:
748-7625; 584-5946
Telefax:
584-5947
Josephine Joy T. Rillera
172
SAVEMORE JACKMAN
Lower G/F, Jackman Plaza
Edsa-Muñoz, Quezon City
Jeanette Michelle M. Belino
J.P. RIZAL
882 J.P Rizal St.
Poblacion, Makati City
Tel. Nos.:
890-1027; 89010-26
Amapola A. Guina
JUAN LUNA
694-696 Juan Luna Street
Binondo, Manila
Tel. No.:
964-1327; 254-0371
Erlinda C. Sia
KALOOKAN
Augusto Bldg., Rizal Ave.
Grace Park, Kalookan City
Tel. No.:
365-7593
Telefax:
363-2752
Ronaldo M. Centeno
LAS PIÑAS
G/F Parco Supermarket
J. Aguilar Ave., Pulang Lupa Dos
Las Piñas City
Tel. Nos.:
548-0368; 474-6842
Telefax:
548-0367
Geraldine R. Diwa
LAS PIÑAS - ALMANZA UNO
Aurora Center, Alabang Zapote Road
Almanza Uno, Las Piñas City
Tel. Nos.:
966-9001; 551-4724
Telefax:
551-4051
Eleanor B. Montemayor
MARIKINA
33 Bayan-Bayanan Ave.
Bgy. Concepcion 1, Marikina City
Tel. Nos.:
934-6037; 477-2445
Telefax:
477-2443
Bernard M. San Jose
MCKINLEY HILL (THE FORT)
GF Unit-B Commerce & Industry Plaza
(CIP), 1030 Campos Ave. corner
Park Ave., McKinley Towncenter
Fort Bonifacio, Taguig City
Tel. Nos.:
798-0357; 403-0425
Telefax:
403-9413
Oleeve R. Lim
SAVEMORE NEPA-Q-MART
G/F & 2/F, 770 St. Rose Bldg.
EDSA and K-G, St.
West Kamias, Quezon City
Tel. Nos.:
351-4883; 502-7135
Rowena R. Arcangel
SAVEMORE NOVA PLAZA MALL
Novaliches Plaza Mall
Quirino Highway cor. Ramirez St.
Novaliches Proper, Quezon City
Tel. Nos.:
983-1512; 983-1511
Michelle Ann P. Borjal
ORTIGAS
Ground floor, Hanston Square
San Miguel Avenue
Ortigas Center, Pasig City
Tel. Nos.:
654-1912; 477-3439
Domingo V. Ortiz
PASIG-PADRE BURGOS
114 Padre Burgos St.
Kapasigan, Pasig City
Tel. Nos.:
650-3362; 650-3356
650-3361
Telefax:
650-3354
Rolando B. Ordoño
PATEROS
500 Elisco Rd.
Sto. Rosario, Pateros City
Tel. Nos.:
738-3529; 641-8537
Telefax:
641-9556
Ma. Aurora C. Eugeni
SAVEMORE PEDRO GIL
Pedro Gil cor Singalong Sts.
Manila
Tel. Nos.:
521-4056; 354-3117
Kathleen D. Fabro
QUEZON AVENUE
G/F GJ Bldg., 385 Quezon Ave.
Quezon City
Tel. Nos.:
332-2638; 966-7493
Telefax:
332-2639
Michelle Marie S. Fornesa
SAVEMORE TAFT-MASAGANA
Parkview Plaza, Trida bldg.
Taft Avenue corner T.M. Kalaw St.
Ermita, Manila
Tel. Nos.:
554-0617;554-0697
Abigail D. R. Manahan
SAVEMORE TAGUIG-ACACIA
ESTATES
Acacia Town Center
Acacia Estates, Barangay Ususan
Taguig City
Tel. No.:
964-1318
January Anne C. Tapeño
VALENZUELA
385 McArthur Highway
Malinta, Valenzuela City
Tel. Nos.:
709-4641; 709-4642
Telefax:
709-4644
Jobel B. Araña
LUZON
ANGELES
Miranda Ext. corner
Asuncion St., Angeles City
Tel. Nos.:
(045) 458-0297
(045) 286-6586
Local 4833
Telefax:
(045) 458-0298
Maria Beata P. Larin
ARAYAT
Cacutud, Arayat, Pampanga
Tel. Nos.:
(045) 409-9559
(045) 885-2390
Ma. Rowena C. Cura
BACOOR
FRC Mall, Gen. Evangelista St.
Talaba V, Bacoor, Cavite
Tel. Nos.:
(046) 417-4504
Local 4842, 4843
Telefax:
(046) 417-4710
May G. Tan
BAGUIO
Upper G/F KDC Building
91 Marcos Highway, Baguio City
Tel. Nos.:
(074) 442-1245
Local 4816-17
Telefax:
(074) 424-6415
Demetrio D. Madayag, Jr.
BALANGA
Capitol Drive, Balanga City
Bataan
Tel. No.:
(047) 237-3828
Susan Limson Songco
BATANGAS CITY
Miriel’s Place, National Road
Pallocan West, Batangas City
Tel. Nos.:
(043) 980-0544
Local 4846
Telefax:
(043) 980-0545
Edwin R. Guevara
CABANATUAN
Km. 115 Cagayan Valley Rd.
Maharlika Highway near corner
Sanciangco St., Cabanatuan City
Tel. Nos.:
(044) 940-6942
(044) 940-6944
Local 4800
Telefax:
(044) 940-6943
Ma. Theresa R. Padiernos
CALAMBA
HK Bldg II, National Highway
Brgy. Halang, Calamba, Laguna
Tel. No.:
(049) 306-0238
Telefax:
(049) 306-0234
Eva R. Limbo
DAGUPAN
G/F Lyceum-Northwestern University
Tapuac District, Dagupan City
Tel. Nos.:
(075) 523-3637
(075) 515-8278
Telefax:
(075) 523-2568
Gingin T. Aquino
DARAGA
Rizal St., Brgy. San Roque
Daraga, Albay, Bicol
Tel. Nos.:
(052) 204-0024
(052) 204-0025
Local 4822
Telefax:
(052) 483-0706
Timoteo D. De Villa, Jr.
DAU
MacArthur Highway
Dau, Mabalacat, Pampanga
Tel. Nos.:
(045) 624-0167
892-2215; 892-2216
Ronnie Z. Pineda
FILOIL TANAUAN - SUPLANG
FilOil Gas Station
Brgy. Suplang, Tanauan
Batangas
Janrynel T. Gonzales
PORAC
Cangatba, Porac, Pampanga
Tel. Nos.:
(045) 329-3188
329-3177
Mariano V. Garcia, Jr.
SAN RAFAEL
Cagayan Valley cor. Cruz na Daan
Roads, San Rafael, Bulacan
Tel. No.:
(044) 815-8915
Nancy L. Santiago
GUAGUA
Plaza Burgos, Guagua
Pampanga
Tel. Nos.:
(045) 901-0640
901-0966
Betty L. Bacani
SAN FERNANDO
KHY Trading Bldg.
San Fernando-Gapan Rd.
San Fernando City, Pampanga
Tel. Nos.:
(045) 961-1416
(045) 300-0426
Local 4812-13
Telefax:
(045) 961-1415
Mary Ann Jaquelyn S. Tiongson
SANTIAGO
City Road, Centro East
Santiago City, Isabela
Tel. Nos.:
(078) 305-0580
Local 4824-25
Telefax:
(078) 305-0532
Elizabeth K. Chua
IMUS
Gen. Emilio Aguinaldo Highway
Anabu II, Imus, Cavite
Tel. Nos.:
(046) 471-0177
(046) 471-0179
Local 4820-21
Telefax:
(046)471-0178
Rosewedi T. Baltero Cruz
LIPA
G/F Tibayan Bldg.
1705 CM Recto Ave.
cor. Rizal St., Lipa City
Tel. Nos.:
(043)757-5107
(043)981-3602
Telefax:
(043)757-5253
Rolando E. Castillo
MACABEBE
Poblacion, Macabebe
Pampanga
Tel. Nos.:
(045) 921-0594
(045) 434-0258
Christopher G. Benitez
MALOLOS
Canlapan Street, Sto. Rosario
Malolos City, Bulacan
Tel. No.:
(044) 794-2830
Telefax:
(044) 794-2793
Rosanna L. Martinez
NAGA
RL Building, Panganiban St.
Lerma, Naga City
Tel. No.:
(054) 472-1947
Telefax:
(054) 472-5424
Loc 4830/4831
Timoteo D. De Villa, Jr.
OLONGAPO CITY
GF City View Hotel 25
Magsaysay Drive, New Asinan
Olongapo City
Tel. Nos.:
(047) 222-2504
(047) 271-5251
Telefax:
(047) 222-1891
Jessie A. Chua
ORANI
Brgy. Balut, Orani, Bataan
Tel. Nos.:
(047) 638-1281
638-1282
Elsie B. Dimalanta
SAN FERNANDO - BAYAN
V. Tiomico St., City of San Fernando
Pampanga
Tel. Nos.:
(045) 961-3246
861-0894
Editha C. Gomez
SAN ILDEFONSO
Rose Vic Bldg.
Cagayan Valley Road, Poblacion
San Ildefonso, Bulacan
Tel. Nos.:
(044) 762-1075
(044) 677-1610
Ledwina D.C. Villafuerte
SAN JOSE-ANGELES
Sto. Rosario St., San Jose
Angeles City
Tel. Nos.:
(045) 887-6433
(045) 626-1416
SAN JOSE DEL MONTE
Ground Floor, Giron Building
Gov. Halili Avenue, Tungkong Mangga
San Jose Del Monte, Bulacan
Tel. Nos.:
(044) 815-8396
(044) 233-6501
Local 4851, 4850
4001
Telefax:
(044) 815-6616
Othello C. Mendoza
SAN NARCISO
Brgy. Libertad, San Narciso
Zambales
Telefax:
(047) 913-2288
913-2245
Johnest N. Monsalud
SAN PABLO
P. Zamora St., Brgy. VII - B
San Pablo City
Tel. Nos.:
(049) 503-2890
Local 4834, 4835
Grace Asuncion O. Averion
SAN PEDRO
Gen - Ber Bldg.
National Highway, Landayan
San Pedro, Laguna
Tel. Nos.:
869-8220; 869-8221
Local 4836
Telefax:
847-0585
Ma. Corazon G. Leung
STA. ANA
Poblacion, Sta. Ana, Pampanga
Tel. Nos.:
(045) 409-0335
(045) 409-9818
Lita P. Lopez
STA. RITA
San Vicente, Sta. Rita, Pampanga
Tel. Nos.:
(045) 434-0131
900 - 0658
Gloria S. Cunanan
STA. ROSA LAGUNA
Lot 2 Block 5 Phase 2A Avida
Commercial, Sta. Rosa-Tagaytay Road
Barangay Sto. Domingo
Sta. Rosa, Laguna
Tel. No.:
(049) 307-2259
Amor F. Cajucom
SUBIC
Baraca, Subic, Zambales
Tel. Nos.:
(047) 232-6105
232-6104
Cheryl E. Comandante
TARLAC
RIC Bldg., Bypass Road
San Sebastian, Tarlac City
Tel. Nos.:
(045) 628-0761
(045) 628-0755
Local 4826-27
Telefax:
628-0754
Everett B. Lim
TAYTAY
C Gonzaga Building 2
Manila East Road, Taytay, Rizal
Tel. Nos.:
650-3368; 650-3367
Mary Joy D.L Surla
CEBU - MANDAUE
A. Del Rosario Ave., Mantuyong
Mandaue City, Cebu
Mirabel T. Mendoza
CEBU-LAHUG
G/F Skyrise IT Bldg., Brgy. Apas
Lahug, Cebu City
Tel. Nos.:
(032) 236-0809
236-0810
Telefax:
(032) 236-0869
Mark Ryan E. Sy
ILOILO-QUEZON
Ground Floor, 132 Quezon St.
Iloilo City
Tel. Nos.:
(033) 321-0940
335-0213
John Michael L. Denate
ILOILO-JARO
Lopez Jaena corner
EL 98 streets, Jaro, Iloilo City
Tel. Nos.:
(033) 320-0370
320-0426
Anmosel B. Pastrano III
MINDANAO
CAGAYAN DE ORO
Sergio Osmeña St., Cogon District,
Cagayan de Oro City
Tel. Nos.:
(088) 323-1507
323-1508
Local 4807/4807
Ma. Socorro D. Cosme
DAVAO
G/F 8990 Corporate Center Quirino
Ave., Davao City
Tel. Nos.:
(082) 321-0273
321-0274
Liza L. Ricabo
ZAMBOANGA
Nuñez Extension, Camino
Nuevo, Zamboanga City
Tel. Nos.:
(062) 955-0563
310-0900
Jennifer Marie R. De Leon
VISAYAS
BACOLOD
SKT Saturn Bldg.
Lacson cor. Rizal Sts.
Bacolod City
Tel. Nos.:
(034) 435-7143
435-6983
Local 4810/4811
Telefax:
(034) 708-2041
Ronnie A. Vinco, Jr.
Annual Report 2013
173
SUBSIDIARIES AND AFFILIATES
Plantersbank Building
314 Sen. Gil Puyat Avenue Makati City
Tel. No. : (632) 884-7600; 884-7800
E-mail : info@plantersbank.com.ph
Customer Relations: customerrelations@plantersbank.com.ph
www.plantersbank.com.ph
Planters Development Bank (Plantersbank) is the newest member of the China Bank Group, following the approval in principle of the
Monetary Board of the Bangko Sentral ng Pilipinas (BSP) on December 13, 2013. China Bank now owns 84.77% of Plantersbank’s capital
stock. A tender offer will be made to acquire the remaining 15.23% shares owned by minority shareholders. Integration activities have
commenced to merge Plantersbank with either China Bank or CBS within three years from the date of the BSP approval.
Plantersbank is a development-oriented finance institution nationally acclaimed as the country’s lead bank for small and medium
enterprises (SMEs).
BOARD OF DIRECTORS
CHAIRMAN
Amb. Jesus P. Tambunting
VICE CHAIRMAN
Ricardo R. Chua
DIRECTORS
Nancy D. Yang
Alberto Emilio V. Ramos
Alexander C. Escucha
Antonio S. Espedido, Jr.
Ramon R. Zamora
Carlos M. Borromeo
INDEPENDENT DIRECTORS
Roberto F. Kuan
Alberto S. Yao
Margarita L. San Juan
CORPORATE SECRETARY
Edgar D. Dumlao
ASSISTANT CORPORATE
SECRETARY
Odel S. Janda
BOARD-LEVEL COMMITTEES
EXECUTIVE COMMITTEE
Chairman
Vice Chairman
Members
Ricardo R. Chua
NOMINATION AND
COMPENSATION COMMITTEE
RISK OVERSIGHT COMMITTEE
Ricardo R. Chua
Alberto S. Yao
Carlos M. Borromeo
Alberto Emilio V. Ramos
Maria Victoria T. Alfonso
Maria Rosanna L. Testa
Nancy D. Yang
Ramon R. Zamora
Alexander C. Escucha
Ananias S. Cornelio III*
Nancy D. Yang
Alberto Emilio V. Ramos
Carlos M. Borromeo
Antonio S. Espedido, Jr.
*Ex-officio
AUDIT COMMITTEE
CORPORATE GOVERNANCE
COMMITTEE
Chairman
Roberto F. Kuan
Alberto S. Yao
Members
Margarita L. San Juan
Alberto S. Yao
Ricardo R. Chua
Roberto F. Kuan
Antonio S. Espedido, Jr.
Alexander C. Escucha
TRUST AND INVESTMENT
COMMITTEE
Alexander C. Escucha
Carlos M. Borromeo
Marilen E. Sarmiento
Ramon R. Zamora
MANAGEMENT-LEVEL COMMITEES
MANAGEMENT COMMITTEE
(MANCOM)
Chairman
Vice Chairman
Members
174
CREDIT COMMITTEE (CRECOM)
ASSET AND LIABILITY
COMMITTEE (ALCO)
Carlos M. Borromeo
Carlos M. Borromeo
Carlos M. Borromeo
Alberto Emilio V. Ramos
Consolacion R. Saur
James Christian T. Dee
Ma. Agnes J. Angeles
Juanita Margarita O. Umali
Gary A. Vargas
Liberty S. Basilio
Jose F. Acetre
Eleanor R. Recaña
Alesandra E. Tiaoqui
Neliza M. Oñate
Luis Bernardo A. Puhawan
Jeffrey Jose DL Bognot
Maria Victoria T. Alfonso
Juanita Margarita O. Umali
Jose F. Acetre
Alesandra E. Tiaoqui
Ma. Agnes J. Angeles
Gary A. Vargas
Liberty S. Basilio
Jose F. Acetre
Alesandra E. Tiaoqui
Luis Bernardo A. Puhawan
Jeffrey Jose DL. Bognot
Neliza M. Oñate
Rosana B. Amoranto
Allan E. Borreo
COLLECTION AND ASSET
RECOVERY (CARCOM)
Chairman
Vice Chairman
Members
HR/RETIREMENT COMMITTEE
(HR/RETCOM)
IT STEERING COMMITTEE (ITSC)
Carlos M. Borromeo
Carlos M. Borromeo
Maria Luz B. Favis
Editha N. Young
Jose F. Acetre
Juanita Margarita O. Umali
Alesandra E. Tiaoqui
Luis Bernardo A. Puhawan
Odel S. Janda
OPERATIONS COMMITTEE
(OPSCOM)
Ricardo R. Chua
Carlos M. Borromeo
Antonio S. Espedido, Jr.
Maria Victoria T. Alfonso
AMLA COMMITTEE (AMLACOM)
Juanita Margarita O. Umali
Eleanor R. Recaña
Luis Bernardo A. Puhawan
Adonis C. Yap
INTERNAL AFFAIRS
COMMITTEE (IAC)
Juanita Margarita O. Umali
Ma. Chimene C. Alvarez
Juanita Margarita O. Umali
Jaime Valentin L. Araneta
Marissa B. Espino
Maria Rosanna L. Testa
Eleanor R. Recana
Neliza M. Oñate
Renato O. Janairo
Ma. Cristina M. Farol
Matilde M. Ramoso
Odel S. Janda
Alesandra E. Tiaoqui
Maribel M. Dimayuga
Ma. Cristina M. Farol
Renato O. Janairo
Odel S. Janda
Alesandra E. Tiaoqui
Luis Bernardo A. Puhawan
Jay Araceli L. Suria
CHAIRMAN
DEPARTMENT HEADS
Amb. Jesus P. Tambunting
FIRST VICE PRESIDENTS
Matilde M. Ramoso
Branch Operations and Training
PRESIDENT
Rosana B. Amoranto
Treasury
Chairman
Vice Chairman
Members
OFFICERS
Carlos M. Borromeo
GROUP HEADS
Roberto F. Banaag
Corporate Communications
EXECUTIVE VICE PRESIDENT
Odel S. Janda
Legal Support Services
Ma. Agnes J. Angeles
SME Banking Group II
Adonis C. Yap
Transaction Banking
SENIOR VICE PRESIDENTS
Jose F. Acetre
Collection And Assets Recovery
Liberty S. Basilio
SME Banking Group I
Juanita Margarita O. Umali
Operations
Gary A. Vargas
Consumer Banking
FIRST VICE PRESIDENTS
Jeffrey Jose DL. Bognot
Branch Banking
Neliza M. Oñate
SME Banking Group III
Luis Bernardo A. Puhawan
Controllership
Eleanor R. Recaña
Information Technology and
Communications
Alesandra E. Tiaoqui
Credit Supervision and Services
VICE PRESIDENTS
Victoria T. Alfonso
Human Resources
and Premises
Neilo U. Altre, Jr.
SME Metro Manila Lending I
Manolo F. Chan
Loans Administration
Marissa B. Espino
Compliance Office
Ma. Cristina M. Farol
Risk Management
Emmanuel Antonio R. Gomez
SME Plus
Jose Renato O. Janairo
Branch Operations
Gerardo V. Munda
SME Mindanao Lending
Sonia B. Ostrea
Central Operations and Support
Christian Eugene S. Quiros
Collection Services
John Benedict S. Santos
Business Process Management
Jose C. Santos, Jr.
Auditing
SENIOR ASSISTANT
VICE PRESIDENTS
Virgilio I. Libunao, Jr.
SME North Luzon Lending II
Josefina G. Mayor
SME Metro Manila Lending II
Alfredo C. Mojica, Jr.
SME South Luzon Lending I
Joseph Nestor T. Reyes
Acquired Assets
Edmundo D. Sinag
Accounting and Regulatory Report
Jay Araceli L. Suria
Human Resources
Maria Joyce G. Zarate
Product Development
and Management
ASSISTANT VICE PRESIDENTS
Eugene John M. Daga
Business Continuity and Operations
Evangeline DC. Dayrit
Credit Control and Administration
Marjorie T. Esplana
Housing Finance
Annabelle G. Gagarra
SME Visayas Lending
SENIOR MANAGERS
Bernardino G. Lagarde
Credit Investigation
Ivan Rey B. Tagpis
Credit Appraisal
MANAGER
Beverly M. Guevarra
OIC - Customer Service
BRANCH AREA HEADS
Cynthia D. Altiche
Assistant Vice President
BBG - Metro Manila Area I
Manuel Antonio S. Garcia
Assistant Vice President
BBG - Metro Manila Area II
Angel Maria P. Ingalla III
Senior Assistant Vice President
BBG - North Luzon Area I
Elizabeth G. Buencamino
Vice President
BBG - North Luzon Area II
Carlo Magno L. Olmos
Senior Manager
BBG - South Luzon Area I
Emmanuel C. Formeloza
Assistant Vice President
BBG - South Luzon Area II
Marlene M. Camat
Assistant Vice President
BBG - Visayas Area
Maria Theresa S. Pacheco
Assistant Vice President
BBG - Mindanao Area
Rusela G. Maranan
Management Reporting
Annual Report 2013
175
SUBSIDIARIES AND AFFILIATES
BRANCHES
METRO MANILA
MAIN BRANCH
314 Sen. Gil J. Puyat Avenue
Makati City
Trunklines:
(02) 884-7600
(02) 884-7800
locals 3900, 3901
3902 and 7645
Telefax No.: (02) 812-9359
Maridyl V. Aguirre
ALABANG
GF / Common Goal Building
Finance corner Industry Streets
Madrigal Business Park
Ayala Alabang, Muntinlupa City
Tel No.:
(02) 842-1016
Telefax No.: (02) 842-0761
Rudolph Lawrence F. Yance
BANAWE
Nos. 247-249 Banawe Street
Sta. Mesa Heights
Brgy. Lourdes, Quezon City
Tel. No.:
(02) 412-2426
Telefax No.
(02) 412-6249
Ann Marie D. Palac
BANGKAL
GF / Amara Building
1661 Evangelista Street
Bangkal, Makati City
Tel Nos.:
(02) 621-3459
(02) 621-3461
Francisco C. Buenaflor
CUBAO
Fernandina 88 Suites
222 P. Tuazon Boulevard
Cubao, Quezon City
Tel No.:
(02) 913-5209
Telefax No.: (02) 913-4903
Wendell M. Gaza
DEL MONTE
392 Del Monte Avenue
Brgy. Sienna, Quezon City
Tel No.:
(02) 741-2447
Maria Victoria I. Calderon
GREENHILLS
VAG Building, Ortigas Avenue
Greenhills, San Juan
Metro Manila
Tel Nos.:
(02) 721-0105
(02) 724-7523
(02) 724-7528
Maria Jennifer V. Bondoc
176
KALOOKAN
AJ Building
353 A. Mabini Street
Kalookan City
Tel No.:
(02) 709-3435
(02) 961-2628
Abner B. Aballa
PARAÑAQUE
Jaka Plaza Center
Dr. A. Santos Avenue, (Sucat Road)
Brgy. San Isidro, Parañaque City
Tel. No.:
(02) 820-6093
Telefax No.: (02) 820-6091
Roman J. Villacorta
KAPASIGAN
A. Mabini Street
Kapasigan, Pasig City
Tel. No.:
(02) 642-2870
Telefax No.: (02) 640-7085
Santos F. Guadines, Jr. (OIC)
PASO DE BLAS
Andok’s Building
629 General Luis Street
Malinta Interchange-NLEX
Paso de Blas, Valenzuela City
Tel No.:
(02) 984-8258
Telefax No.: (02) 443-5069
Carmelita D. P. Apalisoc
LAGRO
Bonanza Building
Quirino Highway, Greater Lagro
Novaliches, Quezon City
Tel. No.
(02) 936-4988
Telefax No.: (02) 461-7214
Marcelino G. Sison
LAS PIÑAS
459 DMR Building
Gonzales Compound
Alabang-Zapote Road
Brgy. Almanza, Las Piñas City
Tel No.:
(02) 800-8893
Telefax No.: (02) 805-0438
Benjamin T. Cuyos
MANDALUYONG
Paterno’s Building
572 New Panaderos Street
Brgy. Pag-asa, Mandaluyong City
Tel. Nos.:
(02) 238-3745
(02) 238-3744
Cynthia D. Altiche (OIC)
MARIKINA
CTP Building, Gil Fernando Avenue
(former A. Tuazon Avenue)
Brgy. San Roque, Marikina City
Tel No.:
(02) 681-2810
Telefax No.: (02) 645-8169
Catherine S. Tindoy
NINOY AQUINO AVENUE
Ground Floor Skyfreight Building
Ninoy Aquino Avenue corner
Pascor Drive, Parañaque City
Tel No.:
(02) 851-1718
Telefax No.: (02) 851-1681
Rafael Ma. C. Guerra III
ORTIGAS
OMM Citra Building
San Miguel Avenue
Ortigas Center, Pasig City
Tel. No.:
(02) 637-9778
Telefax No.: (02) 637-9824
Irmina V. Dator
PATEROS
120 Almeda Street
Pateros, Metro Manila
Tel No.:
(02) 641-6768
Telefax No.: (02) 641-6760
Santos F. Guadines, Jr.
QUEZON AVENUE
1184-A Ben-Lor Building
Quezon Avenue, Brgy. Paligsahan
Quezon City
Tel Nos.:
(02) 376-4546
(02) 376-4548
Telefax:
(02) 376-4544
Antonette C. Fuentes
RADA
HRC Center, 104 Rada Street
Legaspi Village, Makati City
Tel Nos.:
(02) 810-9369
(02) 810-9370
(02) 818-2368
Telefax No.: (02) 812-2577
Maria Francesca J. Corporal
UN AVENUE
552 U.N. Avenue
Ermita, Manila
Tel No.:
(02) 400-5468
Telefax No.: (02) 400-5467
Elizabeth P. Munda
TIMOG
Jenkinsen Towers
80 Timog Avenue
Brgy. Sacred Heart, Quezon City
Tel. Nos.:
(02) 371-8303
(02) 371-8305
Telefax No.: (02) 371-8304
Randal Ignatius Z. Razo
VALENZUELA CITY
Ong-Juanco Building
92 - J Mac-Arthur Highway
Marulas, Valenzuela City
Tel. Nos.:
(02) 291-6541
(02) 291-6542
Elizabeth G. Buencamino (OIC)
VISAYAS AVENUE
Wilcon City Center Mall
Visayas Avenue, Quezon City
Tel. No.:
990-7717
Telefax No.: (02) 924-5591
Ericson A. Albano
NORTH LUZON
BAGUIO
B108 Lopez Building
Session Road, Baguio City
Tel No.:
(074) 446-3993
Telefax No.: (074) 446-3994
Maria. Elena F. Estira
BATAAN
Balanga
D.M. Banzon Street
Balanga City
Tel. No.:
(047) 237-3666
Fax No.
(047) 237-3667
Mary Jane L. Sazon
Orani
Calle Real, Orani, Bataan
Tel. Nos.:
(047) 638-1130
(047) 431-1275
Telefax No.: (047) 638-1025
Maria Cristina T. Fermin
BULACAN
Balagtas
MacArthur Highway
Wawa, Balagtas, Bulacan
Tel No.:
(044) 693-1849
Telefax No.: (044) 918-1425
Adelaida P. Dumlao
Baliuag
Plaza Naning, Poblacion
Baliuag, Bulacan
Tel No.:
(044) 766-2014
Telefax No.: (044) 673-1338
Maria Editha D. Gatmaitan
Hagonoy
Sto. Niño
Hagonoy, Bulacan
Tel No.:
(044) 667-1431
Telefax No.: (044) 793-0008
Samuel A. Pagsibigan
Malolos
Paseo del Congreso, Catmon
City of Malolos, Bulacan
Tel. No.:
(044) 791-2461
Telefax No.: (044) 662-7819
Romeo G. Esteban
Meycauayan
Mancon Building
MacArthur Highway
Calvario, Meycauayan, Bulacan
Tel No.:
(044) 228-2461
Telefax No.: (044) 840-0099
Roberto S.R. Evangelista
Plaridel
0226 Cagayan Valley Road
Banga 1st, Plaridel, Bulacan
Tel. No.:
(044) 670-1067
Telefax No.: (044) 795-0105
Rolando R. Peralta
Sta. Maria
JC De Jesus corner M. De Leon
Poblacion, Sta. Maria, Bulacan
Tel. Nos.:
(044) 641-1150
(044) 893-0587
Telefax No.: (044) 288-2453
Helen O. Cabuhat
San Miguel
Norberto Street, San Jose
San Miguel, Bulacan
Tel Nos.:
(044) 764-0162
(044) 764-0826
Imelda D. Villamor
CAGAYAN
Tuguegarao
Metropolitan Cathedral Parish
Rectory Complex, Rizal Street
Tuguegarao City
Tel. Nos.:
(078) 255-1020
(078) 255-1024
Mario P. Allauigan
ILOCOS NORTE
Vigan
Agdamag Building
Quezon Avenue corner Calle Mabini
Vigan City, Ilocos Norte
Tel. No.:
(077) 674-0300
Melvin R. Aguinaldo
ISABELA
Santiago
JECO Building
Maharlika Highway corner
Quezon Street, Victory Norte
Santiago City
Tel. Nos.:
(078) 305-0260
(078) 305-0252
Lloyd Vincent R. Binasoy
LA UNION
La Union
AG Zambrano Building
Quezon Avenue
San Fernando City, La Union
Tel. No.:
(072) 700-3800
Telefax No.: (072) 242-0414
Eloisa B. Chan
NUEVA ECIJA
PANGASINAN
Cabanatuan
Burgos Avenue
Cabanatuan City, Nueva Ecija
Tel No.:
(044) 600-2888
Telefax No.: (044) 463-0441
Imelda D. Villamor (OIC)
Dagupan
Burgos Extension, corner
Perez Boulevard and Lingayen Highway
Junction, Dagupan City
Tel Nos.:
(075) 515-7600
(075) 522-9586
Maria Suzette D. R. Ramos
PAMPANGA
Angeles
639 Rizal Street, Angeles City
Tel No.:
(045) 888-4971
Telefax No.: (045) 323-4303
Annalyn L. Tolentino
Balibago
JEV Building
MacArthur Highway
Balibago, Angeles City
Tel Nos.:
(045) 892-3325
Telefax No.: (045) 332-1030
Maricel E. Manalang
Dolores
STCI Building
MacArthur Highway, San Agustin
City of San Fernando, Pampanga
Tel. No.:
(045) 963-3724
Telefax No.: (045) 963-3150
Alexander Y. Liwanag
Guagua
Sto Niño
Guagua, Pampanga
Tel No.:
(045) 900-2326
Fax No.:
(045) 900-0779
Alex L. Serrano
Masantol
San Nicolas
Masantol, Pampanga
Tel. No.
(045) 981-1025
Telefax No.: (045) 981-1064
Jona C. Bernarte
Mount Carmel
AMB Building
Km. 78 MacArthur Highway
Brgy. Saguin, City of San Fernando
Pampanga
Tel No.:
(045) 861-1066
Telefax No.: (045) 636-6055
Regina S. Dayrit
San Fernando
JSL Building Consunji Street
City of San Fernando, Pampanga
Tel Nos.:
(045) 961-4575
(045) 961-2963
Telefax No.: (045) 961-1181
Misael D. Velasquez
Urdaneta
MacArthur Highway, Nancayasan
Urdaneta City, Pangasinan
Tel No.:
(075) 568-8690
Telefax No.: (075) 656-2331
Loreto V. Muñoz, Jr.
TARLAC
Tarlac
MacArthur Highway
San Nicolas, Tarlac City
Tel. No.:
(045) 982- 9652
Telefax No.: (045) 982-9653
Thelma Marie C. Isais
ZAMBALES
Olongapo
G/F R&P Guevarra Building 2
2043 Rizal Avenue, Olongapo City
Tel. No.:
(047) 222-2131
Telefax No.: (047) 222-2020
Ricardo R. Chua
SOUTH LUZON
BATANGAS
Batangas
No. 3 P. Burgos Street
Batangas City
Tel Nos.:
(043) 723-1510
(043) 723-7652
Consorcia M. Gonzales
Lipa
C.M. Recto Avenue, Lipa City
Tel. Nos.:
(043) 756-1414
(043) 756-1022
Telefax No.: (043) 756-5003
Maricel C. Mercado
Sto. Tomas
Agojo Building
Maharlika Highway
Sto. Tomas, Batangas
Tel No.:
(043) 318-0582
Telefax No.: (043) 778-3247
Myla L. Mapalad
CAVITE
Bacoor
Coastal Road corner
Aguinaldo Highway
Brgy. Talaba VII
Bacoor City, Cavite
Tel. Nos.:
(046) 417-5940
(046) 417-5930
Maria Victoria G. Baloy
Imus
Tanzang Luma
Aguinaldo Highway
Imus City, Cavite
Tel. No.:
(046) 471-4715
Telefax No.: (046) 471-4712
Joe Marcel M. Ponseca
Dasmariñas
Veluz Plaza Building
Zone I, Aguinaldo Highway
Dasmariñas City, Cavite
Tel No.:
(046) 416-0501
Joe Marcel M. Ponseca (OIC)
CAMARINES SUR
Naga
P. Burgos Street
corner Gen. Luna Street
Naga City
Tel. Nos.:
(054) 473-6322
(054) 473-6321
Albert B. Tan
LAGUNA
Biñan
Nepa Highway
San Vicente, Biñan, Laguna
Tel No.:
(049) 411-2716
Telefax No.: (02) 429-4878
Lilibeth A. Carandang
Calamba
Ground Floor, AS Building
National Highway, Barangay Uno
Crossing, Calamba City
Tel. Nos.:
(049) 545-5310
(049) 545-3670
Telefax No.: (02) 520-8808
Rodel B. Solomon
U.P. Los Baños
Kanluran Road
UPLB Campus, Los Baños, Laguna
Tel. No.:
(049) 536-3058
Telefax No.: (049) 536-3682
Cherry Jane O. Pamplona
LB-Crossing
Lopez Avenue, Batong Malaki
Los Baños, Laguna
Tel. No.:
(049) 536-2596
Telefax No.: (049) 536-0549
Cherry Jane O. Pamplona (OIC)
San Pablo City
Rizal Avenue corner Lopez Jaena Street
San Pablo City
Tel. No.:
(049) 562-7738
Telefax No.: (049) 562-0697
Simplicia Elizabeth C. Kalaw
Sta. Rosa
National Highway
corner Lazaga Street
Balibago, Sta. Rosa, Laguna
Tel Nos.:
(049) 534-1167
(02) 520-8448
Sonny L. Triviño
Annual Report 2013
177
SUBSIDIARIES AND AFFILIATES
QUEZON
VISAYAS
MINDANAO
Lucena
Merchan corner
Evangelista Street
Lucena City
Tel No.:
(042) 660-6964
Telefax No.: (042) 710-6964
Albert B. Tan
Bacolod
F. Soliman Building
Lacson Street corner Luzuriaga Street
Bacolod City, Negros Oriental
Tel. Nos.:
(034) 704-1084
Telefax No.: (034) 704-1089
Jaime Javier D. Torre
Cagayan De Oro
Tiano Brothers Street
Cagayan de Oro City
Tel. Nos.:
(08822) 727-082
(088) 857-2879
Telefax No.: (08822) 727-083
Yolando M. Radaza
RIZAL
Angono
M.L. Quezon Avenue
Angono, Rizal
Tel. No.:
(02) 651-1782
Telefax No.: (02) 651-1779
Lourdes V. Quitoriano
Cebu - Mango
JSP Mango Plaza
Gen. Maxilom Avenue
corner Echavez Street
Cebu City
Tel. No.:
(032) 231-4304
Telefax No.: (032) 231-4736
Maria Theresa L. Tan
Davao - Recto
C. M Ville Abrille Building
C. M. Recto St., Davao City
Tel. Nos.:
(082) 227-1802
(082) 305-5808
Local 4344
Leah O. Lim
Antipolo
EMS Building
M.L. Quezon Street
corner F. Dimanlig Street
Antipolo City, Rizal
Tel. No.:
(02) 697-1066
Telefax No.: (02) 697-0224
Maria Cecilia C. Oxales
Cebu - P. del Rosario
Cebu Leesons Building
P. Del Rosario Street
corner D. Jakosalem Street
Cebu City
Tel. Nos.:
(032) 253-2212
(032) 253-2213
Carlos M. Gonzales
Taytay
East Road Arcade
Manila East corner Cabrera Road
Tikling, Taytay, Rizal
Tel. Nos.:
(02) 658-0850
(02) 658-6409
Razelyn J. Afuang
Iloilo
Cua Building
Quezon Street, Iloilo City
Tel. No.:
(033) 336-9752
Telefax No.: (033) 336-9752
Elly Beth L. Amparo
178
Mandaue
Co Tiao King Building
Cebu North Road
Basak, Mandaue City
Tel. No.:
(032) 346-8814
Telefax No.: (032) 346-6959
Pia Monica C. Alturas
Davao – J.P. Laurel
Door 2, Gutierrez Building
J.P. Laurel Avenue, Davao City
Tel. No.:
(082) 305-4439
Telefax No.: (082) 222-1255
Mae D. Hipolito
General Santos
I. Santiago Boulevard
General Santos City
Tel. No.:
(083) 552-6329
Telefax No.: (083) 552-6330
Maria Theresa S. Pacheco
Tagum
Jose Rizal Street
Tagum City
Davao del Norte
Tel. No.:
(084) 218-8216
(084) 218-8217
John Y. Sison
Manulife China Bank Life Assurance Corporation (MCBLife) is a joint venture bancassurance
company of China Bank and The Manufacturers Life Insurance Company (Phils.), Inc.
(Manulife Philippines), a wholly-owned domestic subsidiary of Canada-based Manulife
Financial Corporation, one of the largest life insurance companies in the world. The Bank has
5% interest in MCBLife which began operations on March 23, 2007, providing a wide range
of innovative insurance products and services through China Bank branches nationwide.
24/F LKG Tower, 6801 Ayala Ave.
Makati City 1226 Philippines
Tel. No. : (632) 884-5433
Fax No. : (632) 845-0980
Customer Care Line: (632) 884-7000
E-mail : phcustomercare@manulife.com
www.manulife-chinabank.com.ph
8/F VGP Center, 6772 Ayala Ave.
Makati City 1226, Philippines
Tel. No.: (632) 885-5555
VGP Center: (632) 751-6000
Robert D. Wyld
President and Chief Executive Officer
Mark Reynan S. Antiga
Senior Assistant Vice President and
National Sales Head
China Bank Insurance Brokers, Inc. (CBIBI) is a wholly-owned subsidiary of the Bank
established on November 3, 1998 as a full service insurance brokerage. It provides direct
insurance broking for retail and corporate customers, with a wide and comprehensive range
of plans for life and non-life insurance. The life insurance retail products include Whole Life,
Endowment, Investment-Linked, Education, Term and Life Protection with Hospitalization
and Critical Illness Cover. Under the Non-Life insurance category, programs for residential,
personal, corporate and industrial clients are available, with insurance coverages such as
Property, Motor, Marine, Accident and Liability.
Julieta P. Guanlao
President
Cynthia B. Nono
Vice President - Bancassurance
4/F & 15/F China Bank Building
8745 Paseo de Roxas corner Villar St.
Makati City 1226, Philippines
Tel. Nos.: (632) 885-5055; 885-5053
885-5060; 885-5051; 885-5052
Fax No.: (632) 885-5047
Jacquelyn A. Yu
Deputy Senior Manager Non-Life Insurance
China Bank Properties and Computer Center, Inc. (CBPCCI ) was created on April 14,1982
to provide computer-related services solely to China Bank. It manages the Bank’s electronic
banking and e-commerce requirements, including sourcing, developing and maintaining
software and hardware, financial systems, access devices and networks to foster the
safety and soundness of China Bank’s technology infrastructure and keep its processing
capabilities in top shape.
Gilbert U. Dee
Chairman
Phillip M. Tan
General Manager
Peter S. Dee
President
Augusto P. Samonte
Vice President
Editha N. Young
Chief Technology Officer
Ma. Cecilia R. Ignacio
Joseph T. Yu
Belinda P. Mendoza
Ricardo R. Chua
Cristina D. Cristobal
Rosalito C. dela Cruz
Director
Senior Assistant Vice President Georgia Lourdes Melissa F. Maog
Senior Managers
William C. Whang Joseph Jeffrey B. Javier
Ricardo F. Operiano
Director/Treasurer Assistant Vice President
Deputy Senior Manager
Annual Report 2013
179
CHINA BANK PRODUCTS AND SERVICES
DEPOSITS & RELATED SERVICES
TRUST SERVICES
PAYMENT & SETTLEMENT SERVICES
Peso Deposits
• Checking
• Savings
• Time
Foreign Currency Deposits (US Dollar,
Euro and Yuan)
• Savings
• Time
Manager’s/Gift Check/Demand Draft
Safety Deposit Box
SSS Pension Accounts
Payroll Servicing Facility
Direct Deposit Facility for US Pensioner
Night Depository Services
Armored Car Deposit Pick-up Services
Domestic Collections/Out-of-town Checks
Corporate and Institutional Trust
• Fund Management
– Employee Benefit Planning
– Retirement Plan
– Provident/Savings Plan
• Escrow Services
• Collateral/Mortgage Trust
• Loan Agency Services
Wealth Management
• Estate Planning
• Living Trust
• Life Insurance Trust
• Investment Management Arrangement
– Investment Advisory
– Investment Agency
Unit Investment Trust Funds
• China Bank GS Fund
• China Bank Dollar Fund
• China Bank Money Market Fund
• China Bank Balanced Fund
• China Bank Equity Fund
Electronic Banking Channels
• China Bank Automated Teller Machine
(ATM)
• China Bank TellerPhone
• China Bank Online Internet, Mobile
Banking and Speed Banking
• Cashless Shopping (POS)
LOANS & CREDIT FACILITIES
Corporate Loans and Commercial Loans
Loan Syndication
Factoring Receivables
Special Lending Programs
• BSP Rediscounting
• Industrial Guarantee Loan Fund
• Environmental Development Program
• Sustainable Logistics Development
• Industrial and Large Projects
Guarantee Programs
Consumer Loans
• HomePlus Real Estate Loans
• Contract to Sell Financing
• AutoPlus Vehicle Loans
INTERNATIONAL BANKING
PRODUCTS & SERVICES
Import and Export Financing
Foreign and Domestic Commercial Letters
of Credit
Standby Letters of Credit
Irrevocable Reimbursement Undertaking
Collection of Clean and Documentary Bills
Bank Guaranty (Shipside Bond)
Purchase and Sale of Foreign Exchange
Travel Funds
Servicing of Foreign Loans and Investments
Trade Inquiry
Trust Receipt Facility
Correspondent Banking Services
INVESTMENT BANKING SERVICES
Debt Financing
• Bonds
• Syndicated Loan
• Corporate Loan
Equity Financing
• Initial Public Offering (Common Shares)
• Follow on Offering (Common Shares)
• Preferred Shares
Project Finance
Merger & Acquisition / Financial Advisory
REMITTANCE SERVICES
Foreign and Domestic Remittances
• China Bank On-time Remittance
• Overseas Kababayan Savings Account
(OKS) Account
180
TREASURY SERVICES
Peso-Denominated Instruments
• Government and Corporate Bond
Issues
Dollar-Denominated Instruments
• Government and Corporate Bond
Issues
Foreign Exchange
• Spot, Forward, Swaps
INSURANCE PRODUCTS
Bancassurance
• Life and Income Protection
• Critical Illness with Life Cover
• Endowment
• Retirement
• Education
• Investment - Linked
• Term Insurance
Group Life Insurance
Non-Life Insurance
• Fire Insurance - Residential,
Commercial & Trust Receipts
• Motor Car Insurance
• Aviation Insurance
• Marine Insurance - Hull/Vessel and
Cargo
• Electronic Equipment Insurance
• Liability Insurance - Comprehensive
General Liability, Products, etc.
• Directors and Officers Liability
Insurance
• Accident and Health
– Medical Insurance - HMO
– Personal Accident - Individual &
Group
– Travel Insurance
Casualty - Money Insurance, Fidelity
Guarantee, Property Floater
• All Risks Insurance - Contractor’s All
Risk (CAR) Insurance/Erector’s All Risk
Insurance
• Bonds (Judicial/Performance/Fidelity/
Surety, etc.)
Specialized Insurance Programs
CASH MANAGEMENT SOLUTIONS
Delivery Channel
China Bank Online
Liquidity Management
Account Balance & Transaction Reporting
Sure Sweep
Disbursements
Check Write Plus (Outsourced)
Check Write Plus (Software)
BIR 2307 WHT Certificate Printing
TRACC Accounting (Software)
Corporate Inter-bank Fund Transfer
(Corporate IBFT)
TellerCard (ATM Payroll Crediting)
ChinaPay (Payroll Software)
Payroll Processing
Government Facilities
• BIR eFPS Online Tax Payments
• SSSNet Monthly Contribution and Loan
Repayment Facility
• Philhealth Monthly Contribution Facility
• Sickness / Maternity / Employees’
Compensation (SMEC)
Automatic Credit Arrangement (ACA)
Receivables
Check Depot (Post-Dated Check
Warehousing Service)
Bills Pay Plus (Multi-Channel
Bills Payment Services)
BancNet Payment System
• BancNet Debit POS
• BancNet Bills Pay Online
• BancNet Bills Pay ATM
• BancNet eShopping
Automatic Debit Arrangement (ADA)
Bills Payment/Donations:
e-Gov
• BIR
• Philhealth
Cable TV Companies
Credit Card Companies
Government Institutions
• SSS Contributions (SE, VM, NWS, OFW, FF)
Insurance/Pre-need Companies
Internet Companies
Loan Companies
Telecommunication Companies
Utility Companies
Schools
Charitable Institutions
Others
ANNUAL STOCKHOLDERS’ MEETING
May 8, 2014, Thursday, 4:00 p.m.
Penthouse, China Bank Building
8745 Paseo de Roxas corner Villar Street
Makati City 1226, Philippines
SHAREHOLDER SERVICES
For inquiries or concerns regarding dividend payments, account status,
change of address or lost or damaged stock certificates, please get in
touch with:
Stocks and External Relations
Office of the Corporate Secretary
China Banking Corporation
11/F China Bank Building
8745 Paseo de Roxas corner Villar St.
Makati City 1226, Philippines
Contact persons:
Atty. Leilani B. Elarmo
Atty. Julius L. Danas
Pamela D. Pablo
We welcome letters or all such communications on matters pertaining
to the management of the Bank, stockholders’ rights, or any other bankrelated issues of importance. Stockholders who wish to communicate
with any or all of the members of the China Bank Board of Directors may
send letters to:
Atty. Corazon I. Morando
Vice President and Corporate Secretary
China Banking Corporation
11/F China Bank Building
8745 Paseo de Roxas corner Villar St.
Makati City 1226, Philippines
INVESTOR INQUIRIES
China Bank welcomes inquiries from investors, analysts, and the financial
community. For information about the developments at China Bank,
please contact the Investor Relations Office:
Tel. No.: (632) 885-5133
Fax No.: (632) 885-5135
Email:
lbelarmo@chinabank.ph
jldanas@chinabank.ph
ocsstocks@chinabank.ph
Alexander C. Escucha
Senior Vice President
and Head of Corporate Planning & Investor Relations
China Banking Corporation
28/F BDO Equitable Tower
8751 Paseo de Roxas
Makati City 1226, Philippines
Tel. No.: (+632) 885-5601
Email: investor-relations@chinabank.ph
Website: www.chinabank.ph
Stock Transfer Service, Inc.
Unit 34-D Rufino Pacific Tower
6784 Ayala Avenue
Makati City 1226, Philippines
Contact persons:
Antonio M. Laviña
Ricardo D. Regala, Jr.
Tel. No.: (632) 403-2410; 403-2412; 403-9853
Fax No.: (632) 403-2414
Post-consumer Recovered Fiber
The cover of this China Bank Annual Report is printed on Radiance New Evolution White 280gsm. Radiance
is an uncoated felt-marked paper that captures the exrtraordinary printing definition and effects of a coated
paper, certified by the Forest Stewardship Council (FSC) which promotes environmentally appropriate, socially
beneficial, and economically viable management of the world’s forest.
The main report is printed on Limited Edition Fine Smooth 90gsm, 30% Recycled waste and FSC certified fibres.
Made carbon neutral, Limited Edition Fine Smooth is produced with the use of 100% wind-generated electricity.
All pulps are made elemental chlorine free helping to reduce harmful by-products.
The Financial Statement of this report is printed on FSC certified 9 Lives Recycled Offset 100% Recycled 80gsm
that is made from 100% post consumer fiber.
CHINA BANKING CORPORATION
China Bank Building
8745 Paseo de Roxas corner Villar Street
Makati City 1226, Philippines
www.chinabank.ph