#1Investor BPI Presentation 3Q 2020 THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#2Macroeconomic Overview BPI 2 THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#330.0 20.0 10.0 0.0 -10.0 -20.0 -30.0 -40.0 -50.0 -60.0 -70.0 Jan-19 3 Source: CEIC Feb-19 Mar-19 Apr-19 May-19 Jun-19 Jul-19 Aug-19 Sep-19 Oct-19 5.0 0.0 -5.0 10.0 -10.0 -11.1 -15.0 -20.0 Mar-82 Aug-83 Jan-85 Nov-19 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 98-unp Nov-87 Apr-89 Sep-90 Feb-92 0.9 -1.9 -3.4 Jul-93 Dec-94 May-96 Oct-97 Mar-99 PH: GDP contraction and rising unemployment PH economy shrank by 16.5% in 2Q Quarantine measures have curtailed household consumption and investment 15.0 PH Quarterly GDP Growth (%) PH jobless rate improves to 10% in July Unemployment rate improved from 17.7% in April to 10% in July after gradual reopening of the economy PH Jobless Rate (%) 49.8 40.6 -65.3 Aug-00 Jan-02 ED-unr Nov-04 Apr-06 Sep-07 Feb-09 Jul-10 Dec-11 Oct-14 May-13 Mar-16 Aug-17 Jan-19 Jun-20 20.0 18.0 16.0 13.9 14.0 13.3 12.0 10.0 8.0 6.0 -16.5 4.0 2.0 0.0 1982 Source: PSA using 2018 prices Source: CEIC, PSA Imports critical to infrastructure spending fell YTD Driven by supply chain bottlenecks, demand crash, COVID-19 induced lockdowns PH Export and Import Growth (% Change, YoY) -9.6 80.0 61.8 60.0 40.0 PH Capital Goods Imports (% Change, YoY) 20.0 14.6 6.6 -24.4 -Export Growth -Import Growth 8.5 Prof.Sci.and Cont. Inst., Photographic Eqpt. and Optical Goods Aircraft, Ships and Boats Land Transport Eqpt. excl. Passenger Cars and Motorized cycle Telecommunication Eqpt.and Elect. Mach. Office and EDP Machines Jun-20 Jul-20 -20.0 1984 1985 1987 1988 1990 1991 1993 1994 1996 1997 1999 2000 2002 2003 2005 -28.4 -40.0 7M 2016 7M 2017 7M 2018 7M 2019 7M 2020 Source: PSA THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL. Power Generating and Specialized Machines -Total Capital Goods 2006 2008 2009 2011 2012 2014 2015 2017 2018 2020 5.3 10.0 17.7 BPI#44 6.0 Sep-19 Oct-19 Source: PSA Nov-19 Dec-19 Jan-20 Feb-20 PH: Inflation within BSP target, interest rates decline Mar-20 Apr-20 May-20 Jun-20 PHP yield curve Interest rates remain low across the yield curve YTD 2020 (%) Jul-20 September inflation remains benign at 2.3% Higher transport cost pushed the consumer price index higher Inflation and BSP Policy Rate (%) PHL Inflation YoY and Contribution 8.00 3.5 2.9 Breakdown (%) 7.00 6.7 3.0 2.7 2.6 2.5 2.5 2.5 Restaurants 2.4 2.3 6.00 2.5 Educ 2.1 5.00 Recreation 2.0 4.75 4.50 4.00 Comm. 4.00 1.5 Transport 2.75 2.9 3.00 0.8 1.0 Health 3.00 2.00 1.3 0.5 0.0 0.7 0.8 1.0 1.1 Furnishing 1.0 0.8 0.9 0.7 0.6 HW, Electricity, Gas, Other Fuels 1.00 -0.5 -0.4 0.3 0.0 2.25 2.1 0.8 Cloth 0.00 Alco Bev & Tob Food & Non-Alco Bev -1.0 Jan-16 Mar-16 May-16 Jul-16 Sep-16 Nov-16 Jan-17 Mar-17 1 May-17 Jul-17 Sep-17 Nov-17 Jan-18 Mar-18 May-18 Jul-18 Sep-18 Nov-18 Jan-191 Mar-19 May-19 Jul-19 Sep-19 Nov-19 Jan-20 Mar-20 May-20 Jul-20 Sep-20 Inflation Aug-20 Sep-20 Source: CEIC 5.159 5.218 12/31/2019 2.8119 2.7078 5.0 2.5500 4.461 2.50 2.3261 2.3474 2.4040 2.4217 4.061 4.279 4.0 3.830 3.738 3.940 3.894 3.876 09/30/2020 2.0745 1.9440 3.114 3.204 3.373 3.415 2.00 2.4004 2.7748 12/31/2019 2.4217 09/30/2020 10/06/2020 2.3987 2.3984 1.6146 2.980 3.0 2.733 2.894 3.876 3.853 10/06/2020 2.370 2.573 1.50 1.2570 2.118 1.1963 2.0 1.589 1.845 1.169 2.284 2.479 2.632 2.776 2.811 1.6029 1.00 2.052 0.6870 1.2310 1.048 1.814 0.5630 1.1703 10 1.583 1.165 0.50 0.6848 0.982 0.5197 0.0 0.00 1M 3M БМ 1Y 2Y BY NP 4Y SY 10Y 20Y 25Y ROP 24 ROP 26 ROP 28 ROP 29 ROP 30 ROP 40 ROP 41 ROP 42 Source: https://www.pds.com.ph/index.html Source: Global Markets Sales ROP Yield Curve ROP yields lower YTD, reflecting the decline in global rates YTD 2020 (%) THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL. Inflation Target -Inflation -BSP Policy Rate BPI#5Banking Industry Updates • Loan growth slowed to 2.6% as of August 2020 5 Source: BSP Deposit growth down to 10.6%, with M3 also slipping to 14.2% Industry LDR fell slightly to 75.1% M3, Loans ad Deposits Growth 20.0% 100.0% 79.0% 80.2% 79.7% 75.6% 75.9% 75.1% 80.0% 15.0% 14.2% 13.3% 60.0% LDR 11.9% YTD Growth 11.3% 9.5% 10.0% 11.6% 11.4% 40.0% 10.6% 10.1% +4.7% Deposit 8.8% 7.1% -3.6% 20.0% Loan 0.0% 2017 16.5% 13.7% 9.4% 11.1% 6.7% 2.6% 0.0% 2018 2019 Mar 2020 Jun 2020 Aug 2020 Deposit Growth Loan Growth M3 LDR BPI THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#6Financial and Operating Highlights 3Q 2020 BPI 6 THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#7BPI Bank Performance Highlights 9-month recap: Resilience in Crisis Taal Volcano Eruption Luzon ECQ/MECQ Bayanihan Act 1 Highlights: Revenue NCR GCQ Net Interest Income: P18bn, +13% NIM: 3.63%, +24bps Asset Quality Provisions: P4bn, +2.3x NPL Ratio: 1.82% Earnings quality, Cost discipline PPOP: P13bn, +19% CIR: 49.6% Capital position, Liquidity CET1/CAR: 15.3%/16.2% LCR/NSFR: 198.4%/142.9% Operations Branches Open: 30% Digital Txn Count % to Total: 92% Highlights: Revenue Bayanihan Act 2 Net Interest Income: P36bn, +12% NIM: 3.55%, +18bps Asset Quality Provisions: P15bn, +4.3x NPL Ratio: 1.83% Earnings quality, Cost discipline PPOP: P28bn, +32% CIR: 45.9% Capital position, Liquidity CET1/CAR: 15.6%/16.5% LCR/NSFR: 251.6%/156.5% Operations Branches Open: 100% Digital Txn Count % to Total: 90% Highlights: Revenue Net Interest Income: P54bn, +12% NIM: 3.51%, +18bps Asset Quality Provisions: P21bn, +4.6x NPL Ratio: 2.98% Earnings quality, Cost discipline PPOP: P41bn, +22% CIR: 46.9% Capital position, Liquidity* CET1/CAR: 15.5%/16.3% LCR/NSFR: 215.2%/154.4% Operations Branches Open: 100%, rotational Digital Txn Count % to Total: 89% J F M A M J 7 Note: Volumes and metrics as of quarter end, Growth rates are YoY, *Indicative J A S THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#88 Profitability Highlights 9M 3Q ΥΟΥ Δ In P bn Sep-2019 Sep-2020 Sep-2019 Sep-2020 9M 3Q Net Interest Income 48.66 54.40 16.30 17.99 11.8% 10.4% Non-Interest Income 22.34 23.48 8.80 7.19 5.1% -18.2% Trading Income 5.58 8.56 3.10 1.82 53.4% -41.4% Non-Trading Income 16.75 14.91 5.70 5.37 -10.9% -5.6% Revenues 71.00 77.88 25.10 25.18 9.7% 0.3% Operating Expenses 37.09 36.48 12.81 12.29 -1.6% -4.1% PPOP 33.91 41.39 12.29 12.89 22.1% 4.9% Provisions 4.58 21.06 1.09 6.05 360.3% 453.7% NIBT 29.34 20.33 11.19 6.83 -30.7% -39.0% Net Income 22.03 17.17 8.29 5.49 -22.1% -33.7% BPI THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#9BPI Revenue Sustained NIM performance driving Net Interest Income results YoY quarter NIM expansion as cost of funds declined faster than asset yields Sequential quarter shows slight NIM compression of 5bps YTD NIM of 3.51% still higher by 18 bps on lower cost of funds YoY Change YoY Change 5.19% 5.20% 5.08% 5.08% 4.79% -41 bps 4.79% 4.53% -66 bps Asset Yield 3.51% 3.32% +18 bps 3.63% 3.46% 3.48% 3.43% 3.28% +15 bps 2.12% NIM 1.45% -67 bps 60 80 2.14% 1.82% 1.65% -89 bps COF 77.9 1.48% 1.25% 80 +9.7% 71.0 60 60 23.5 60 22.3 +5.1% 40 40 +0.4% 27.4 40 +11.8% 25.1 25.3 25.2 23.3 20 8.8 6.1 7.1 9.2 54.4 7.2 -18.2% 48.7 20 20 16.3 17.3 18.1 18.3 18.0 +10.4% 0 3Q19 4Q19 1Q20 2Q20 3Q20 0 9M 19 9M 20 *Includes DST; Net of GRT 9 Amounts in P bn Net Interest Income* Non Interest Income Net Revenues THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#10Non-Interest Income Up 5% YoY, driven by higher Securities Trading Gains . Forex income from remittance business down by 14% on lower volume Fee income down due to lower transaction volumes and fee waivers: cards, branch service charges, insurance commissions, retail loan fees, ATM fees, securities brokerage Diversified income sources 20 10 10 10 Amounts in P bn Quarterly YTD % to September 2020 Total Non-Interest Income BPI YoY Change 20 40 YoY Change 30 23.5 +5.1% 22.3 -18.2% 20 20 5.6 8.6 +53.4% 8.8 9.2 Cards, 13.9% Asset Mgt, 11.7% Deposits, 9.2% Insurance, 7.5% Forex, 7.5% Trans Banking, 6.9% Leasing, 6.3% Remittance, 2.9% 6.1 7.1 7.2 -41.4% Digital Channel, 2.7% 10 3.1 2.1 4.6 1.8 16.8 -10.9% 14.9 Inv Banking, 1.9% 5.7 5.5 5.0 4.5 5.4 -5.6% Retail Loans, 1.6% 0 Asset Sales, 1.1% 3Q19 4Q19 1Q20 2Q20 3Q20 9M19 9M20 Sec Brokerage, 0.7% 0 Fees, Comms., Others Trading Income Non-Interest Income Sec Trading, 29.0% THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#1111 BPI Operational Efficiency Decline in spending from limited economic activity, cost discipline measures implemented YoY quarter down mainly on lower marketing cost and transaction servicing cost Sequential quarter up due to increased premises and transaction-related expenses Amounts in P bn YTD Opex lower; improved Cost to Income ratio Quarterly 55.7% 51.0% 49.6% 48.8% YoY Change 42.5% CIR YTD 52.2% 46.8% YoY Change 30.0 -4.1% 20.0 12.8 13.0 12.5 11.7 12.3 1.7 1.9 10.0 2.4 2:6 1:3 COLO 2.0 2.2 -15.8% 4.4 4.3 4.2 3.3 3.7 4.3 4.6 4.6 4.7 4.4 +3.2% 00000 Total Opex -1.6% 40.0 37.1 36.5 +15.4% Technology 5.6 5.5 30.0 6.4 6.0 -9.1% Premises 20.0 12.2 11.3 Others 10.0 12.9 13.7 Manpower 00000 -1.1% -7.0% -7.3% +6.1% 3Q19 4Q19 1Q20 2Q20 3Q20 9M19 9M20 L THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#12Balance Sheet Highlights 12 * indicative Δ In P bn Sep-2019 Dec-2019 Sep-2020 YTD YOY Total Assets 2,125.8 2,205.0 2,203.3 -0.1% 3.6% Gross Loans 1,396.0 1,498.7 1,424.9 -4.9% 2.1% Net Loans 1,371.7 1,475.3 1,383.5 -6.2% 0.9% Securities 393.0 350.2 406.9 16.2% 3.5% Borrowings 154.9 150.8 154.5 2.4% -0.3% Deposits 1,619.9 1,695.3 1,684.7 -0.6% 4.0% Equity - BPI 267.9 269.6 283.4 5.1% 5.8% LDR 84.7% 87.0% 82.1% -4.9% -2.6% CASA Ratio 69.1% 69.1% 76.2% 7.1% 10.3% CET1 16.01% 15.17% 15.46%* 0.3% -0.6% CAR 16.91% 16.07% 16.35%* 0.3% -0.6% BPI THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#1313 Loan Portfolio YTD growth down; Moderate YoY growth Corporate and SME 84.7% 87.0% 86.3% 81.4% 82.1% LDR BPI -5.2% -9.8% YTD 1,145.0 1,058.4 1,086.4 +2.6% 60.7 61.0 -9.1% YOY 54.6 1,475 1,372 1,447 1,434 Core Retail 1,384 -6.2% YTD IIIII: +0.9% YoY 3Q19 4Q19 2Q20 1Q20 3Q20 Net Customer Loans 3Q19 4Q19 3Q20 Corporate Mass Retail Aug 2020 A YTD ΔΥΟΥ Industry 9,716 -3.6% +1.2% Loans 3Q19 4Q19 3Q20 SME 142.3 148.6 154.6 -6.6% +4.0% YTD 56.0 57.8 54.0 -3.6% 3Q19 4Q19 Auto 3Q20 3Q19 4Q19 Mortgage 3Q20 +8.7% YOY 75.2 68.4 64.7 -13.9% +7.7% YTD 3.8 4.3 4.6 -6.1% +22.1% YOY 3Q19 4Q19 Credit Cards 3Q20 3Q19 4Q19 Microfinance 3Q20 THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#14Loan Yields Compression in certain segments due to rate cuts and competitive pressure 175 bps cut in overnight policy rates 200 bps cut in reserve requirement ratio Loan yields higher for Auto, Credit Cards, and Personal Loans Date 1/1/2019 Key Policy Rate 4.75% 5/9/2019 4.50% 8/8/2019 4.25% 9/26/2019 4.00% 2/6/2020 3.75% 03/20/2020 3.25% 04/17/2020 2.75% 06/25/2020 2.25% Date 1/1/2019 Reserve Requirement Ratio 18.00% 5/31/2019 17.00% 6/28/2019 16.50% 7/26/2019 16.00% 11/1/2019 15.00% 12/1/2019 14.00% 3/30/2020 12.00% 14 Source: BSP 51.0% 41.0% 31.0% 21.0% 11.0% 1.0% 2016 2017 2018 2019 9M20 Corporate 3.95% 4.06% 4.61% 5.34% 4.74% Mortgage 6.96% 6.80% 6.80% 7.57% 7.34% Auto 9.55% 9.30% 9.36% 9.35% 9.55% Credit Cards 20.03% 19.61% 19.24% 19.08% 19.44% Personal 23.01% 21.99% 22.27% 24.20% 24.80% Microfinance 27.01% 40.14% 48.96% 47.60% 33.17% BPI THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#1515 Funding and Liquidity Diversified funding mix ensuring ample liquidity and optimized cost of funds Deposit growth largely driven by CASA deposits Strong demand from debt capital markets despite lockdown BPI Volumes in P bn 76.2% 73.5% 71.8% 69.1% 69.1% CASA Ratio P15.3B Bonds YTD YoY 1,620 1,695 1,762 1,677 500 524 444 496 1,685 Total 401 Time -0.6% +4.0% 4.2423% p.a. January 13, 2020 ■ 2 years ■ Payable quarterly -23.5% -19.9% P33.9B Bonds 1,120 1,171 1,233 1,266 1,284 CASA +9.6% +14.7% ■ March 27, 2020 ■ 1.5 years 4.05% p.a. ■ Payable quarterly 3Q19 4Q19 1Q20 2Q20 3Q20 Industry Deposits Aug 2020 A YTD ΔΥΟΥ Total 14,317 +4.7% +9.1% Time 3,742 -8.5% CASA 10,574 +10.4% -5.6% +15.5% P21.5B CARE Bonds 3.05% p.a. ■ 1st PH Social Bonds ■ August 7, 2020 ■ 1.75 years ■ Payable quarterly P70.7B YTD Total Bond Issuances THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#16Asset Quality Elevated provisioning Increase in NPL across all loan products as Bayanihan Act 1 relief period ended 16 26.7 26.8 25.1 24.8 42.4 2.98% 1.81% 1.66% 1.82% 1.83% 3Q19 4Q19 1Q20 NPL Level (in P bn) 2Q20 NPL Ratio 3Q20 1 NPL cover excludes reserves for contingent exposures 2 Loss cover includes reserves for contingent exposures 3 As of August 2020 NPL Cover at 100.4% 145.1% 113.1% 140.7% 102.7% 104.8% 108.8% 107.4% 102.9% 91.9% 92.6% 91.3% 99.3% 102.1% 100.4% 109.0% BPI Elevated credit cost due to higher ECL and pre-emptive provisioning 21.1 15.0 42.6 4.2 37.7 4.6 5.8 29.2 24.9 25.4 2.07% 1.94% 1.18% 0.45% 0.43% 3Q19 4Q19 1Q20 2Q20 3Q20 3Q19 4Q19 1Q20 2Q20 3Q20 BPI NPL Cover¹ BPI Loss Cover² Industry - NPL Cover³ Total Allowance For Loan Losses Provision Expense Credit Cost (annualized) THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#17Earnings Higher earnings allowed for acceleration of provisions Profitability metrics impacted by aggressive provisioning Stable dividend payment BPI YoY 11.26% 10.97% 10.43% 41.4 8.99% +22.1% 10.52% 35.1% 10.27% 9.38% 32.1% 31.6% 8.56% 33.9 8.32% 28.2% Provisions 4.6 21.1 360.3% 1.42% 1.38% NIBT 29.3 20.3 -30.7% 1.31% ΓΓ 3Q19 4Q19 1Q20 2Q20 3Q20 1.30% 28,803 22,416 23,078 1.21% 22,050 1.08% 1.05% .31% 1.15% 8,104 8,113 8,124* 7,086 7,091 9M 2019 9M 2020 PPOP (in P bn) Note: PPOP=Net Revenues less Operating Expenses 17,172 2016 2017 2018 2019 BPI - ROA Industry ROA¹ - BPI - ROE Industry - ROE¹ Dividends (in P mn) 9M20 Net Profit to shareholders (in P mn) Payout ratio *Includes second semester dividends 17 1 3Q 2020 data not yet available, 2Q 2020 industry metrics are still the latest published THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#1816.07% 16.25% 16.60% 16.35% CET1 16.01% 15.17% 15.35% 15.70% 15.46% Capital Position Comfortable capital buffer Robust capital position underpinned by stable internal capital generation capacity CAR 16.91% Prudent financial leverage YTD 10% Regulatory Minimum CAR +5.1% 268 270 273 279 283 7.9 8. 8.2 _ 8.0 8. 8.1 7.8 YOY +5.8% 3Q19 4Q19 1Q20 2Q20 3Q20* Total Equity (in P bn) SRO (P bn) Aug 2010 Jan 2014 Apr 2018 10 25 50 * Indicative 18 Sufficient loss-absorption buffer for potential adverse scenario BPI Assets 2.205tn Market Cap 396bn Assets 2.203tn Market Cap 289bn Book Equity 270bn Book Equity 283bn 3Q19 4Q19 1Q20 2Q20 3Q20 2019 9M 2020 Assets/Equity (in x) THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#1919 BPI Transformation Catalyst The pandemic has caused the consumer to rely on remote interactions and digital channels to execute simple banking transactions • Notable shift from branch to digital transactions, even prior to ECQ Branch share to total transaction is down to 8.0% • Other factors forcing a re-think of the traditional branch banking model: 23.2% 19.0% 14.8% 11.6% 9.7% 9.4% 8.2% 8.0% 24.6% 23.6% 22.1% 23.2% 36.6% 31.2% 42.7% 69.6% 65.8% 66.9% 68.8% 47.4% 57.2% 48.6% 38.3% 29.4% Dec-17, Dec-18 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Enrollment ―Active Users ■Digital ATM Branch 3.72 3.38 2.96 1.52 1.76 1.90 3.92 2.01 4.09 4.17 4.22 4.27 2.30 2.39 2.46 2.50 Dec-17 Dec-18 Dec-19 Jan-20 Feb-20 Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Rapid Digital adoption COVID-19 period Banking Products are now bought digitally Decreasing Face to Face interaction Branch consolidation and rationalization in progress THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#2020 BPI BPI in the "New Normal" Pre-COVID-19 focus areas remain Be the main Corporate operating bank Capture the ecosystem Customers Deepen Corporate Relationships Growth in high-margin businesses SME Consumer 88 Microfinance ✓ Banko 4 saloidius of 1 Taking a pause in 2020 given weak market demand and focus on asset quality preservation MOBILE FIRST BPI Strengthen P Funding Franchise A 5-point Digital Strategy SHAPE THE EXPERIENCE HI-TECH X HI-TOUCH Borrowings Deposits Build the need to maintain a working capital (CASA) account Tap alternative funding sources Stakeholders OPEN BANKING INDUSTRY CLASS INFRA THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#21Key Takeaways 9-month recap: Resilience in Crisis 21 PROFITABILITY 1.Core Earnings: strong Net Interest Income, NIM expansion BALANCE SHEET 1. Loans: muted growth from weakened demand due to lockdowns BPI 2. Non-Interest Income: hefty trading gains, weakness in fee income 3. Provisions: aggressive and pre-emptive, elevated credit costs 4. Operating Expenses: shift in branch spending to COVID-19- related expenses, continued digital investment, improved cost efficiency 2. Asset Quality: impact of Bayanihan 1 expiration reflected, monitoring Bayanihan 2 customer take up 3. Funding: strong CASA growth, tapped the debt capital markets through peso bond issuance 4. Capital and earnings: comfortable capital buffer, dividend payments sustained THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#22ΒΡΙ A relationship that nurtures your future DOWNLOAD our digital Integrated Report by either scanning the QR code or visiting the URL below. Scan the QR code here Integrated Report https://www.bpi.com.ph/about/investor-relations/integrated-reports if you wish to view a printed copy of the 2013 integrated Report, please visit or call a branch nearest you which wit request for a printed copy for Viewing watobisty of the printed copy shot be subject to 7 working days for Meers Maria, ond 10-15 working days for provincial areas) For comments and quanes, contact us an [email protected] Tel: (6321 8246 5062 the use of Goden benced by the BSP oor Mec 20 For your comments and queries contact us via: [email protected] https://www.bpi.com.ph/ Tel: (632) 8246 5862 Home Over Filipin Busi About SPI Rated Sites Login BPI Who we are Investor Relations Governance Disclosures Newsroom Corners Search C We're nurturing every Filipino's future Learn more Integrated Reports https://www.bpi.com.ph/about/investor- relations/integrated-reports Company Disclosures https://www.bpiexpressonline.com/p/1/239 /company-disclosures-main Corporate Governance https://www.bpiexpressonline.com/p/0/78/c orporate-governance Service in the time of COVID-19 https://www.bpi.com.ph/service-in-the- time-of-covid-19 Note: Please enlarge above QR code image for your mobile device to access the report 22 Welcome to the Bank of the Philippine Islands As the first bank in Southeast Asia, we have the hater of cent trust, financial strungth, and innovation Since 1851, our business products and services have played a significant role in every Filipino's daily life, all as the country's increasingly expanding and waking economy DISCLAIMER: This presentation has been prepared by the Bank of the Philippine Islands ("BPI" or the "Company") solely for informational purposes. All contents hereof are the sole and exclusive property of BPI. Nothing in this presentation shall be considered a solicitation, offer, advice or recommendation to investors or potential investors in relation to holding, purchasing or selling securities or other financial products or instruments. In all cases, interested parties should conduct their own investigation and analysis of the Company and the data set forth in this presentation. BPI makes no representation or warranty as to the accuracy or completeness of information in this presentation and shall not have any liability for any representations (expressed or implied) regarding information contained in, or for any inaccuracies or errors in, or omissions from, this presentation. This presentation may contain forward looking statements including statements regarding the Company's intent, belief or current expectations with respect to BPI's [businesses and operations, market conditions, results of operation and financial condition, capital adequacy, specific provisions and risk management practices]. Readers are cautioned not to place undue reliance on these forward looking statements. BPI does not undertake any obligation to publicly release the result of occurrence of unanticipated events. While due care has been used in the preparation of forecast information, actual results may vary in a materially positive or negative manner. Forecasts and hypothetical examples are subject to uncertainty and contingencies outside BPI's control.#23Appendices BPI 23 THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#24BPI Macroeconomic & Industry Indicators 2014 2015 2016 2017 2018 2019 2Q 2020 GDP Growth Current Account (% to GDP) Inflation M3¹ 90D T-bill-quarter Overnight RRP² BVAL 3 months BVAL 10 years USD/PHP³ 1Q 2020 Sep 2020 6.1% 5.8% 6.8% 6.7% 6.2% 5.9% -0.2% -16.5% 3.8 2.5 -0.4 -0.7 -2.7 -0.1 0.1 5.3% 3.6% 0.7% 1.3% 2.9% 5.2% 2.5% 2.7% 2.5% 2.3% 11.2% 9.4% 12.8% 11.9% 9.5% 11.5% 13.3% 15.0% 14.2% 1.286 1.7% 1.44 2.0% 5.1% 3.1% 3.2% 2.5% 1.3% 4.0% 4.0% 3.0% 3.0% 4.75% 4.0% 3.6% 2.7% 2.3% 2.380 2.670 2.080 2.430 5.776 3.204 3.290 1.900 1.165 3.860 4.100 4.630 5.700 7.065 4.461 4.872 2.800 2.980 44.617 47.166 49.813 49.923 52.724 50.744 51.044 49.851 48.465 Industry (in P bn except ratios) 2014 2015 2016 2017 2018 2019 1Q 2020 2Q 2020 Aug 2020 Total Assets 11,168.98 12,089.14 13,591.20 15,166.16 16,916.14 18,338.24 18,405.12 18,615.10 18,645.88 Customer Loans 4 5,832.38 6,527.27 7,612.12 8,865.60 9,215.26 10,082.25 10,178.36 9,954.51 9,716.09 Deposits 8,524.55 9,231.34 10,506.56 11,726.97 12,764.13 13,669.47 13,979.93 14,252.69 14,316.80 Capital 1,366.29 1,403.57 1,548.09 1,756.79 2,068.10 2,318.65 2,301.03 2,369.50 2,405.66 Assets Growth Loan Growth Deposits Growth Capital Growth 12.0% 8.2% 12.4% 11.6% 11.5% 8.4% 8.1% 7.9% 7.5% 19.1% 11.9% 16.6% 16.5% 13.7% 9.4% 11.1% 6.7% 2.6% 12.0% 8.3% 13.8% 11.6% 8.8% 7.1% 10.1% 11.4% 10.6% 21.4% 2.7% 10.3% 13.5% 17.7% 12.1% 7.4% 9.2% 7.2% Source: Bangko Sentral ng Pilipinas & Philippine Statistics Office 1 as of August 2020 2 as of July 2020 3 end-of-period 24 4 Customer Loans (Loans and Receivables, net of Allowance for Credit Losses) THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#2525 BPI at a glance BPI ✓ The first bank in the Philippines and Southeast Asia, and the longest tenured bank with almost 170 years of continuous operating history, with highly reputable shareholders, the largest of which include the Ayala Group, the Roman Catholic Church and GIC ✓ Award winning, universal banking franchise licensed by the Bangko Sentral ng Pilipinas, offering a broad range of financial solutions catering to both retail and corporate clients ✓ Customer base has almost doubled since 2010 to 8.8 million customers in September 2020 owing to the Bank's strong brand recognition Ownership Structure Investment Information Credit and Sustainability Ratings September 30, 2020 Citizenship Profile Fundamentals Stock Price BV per share Description P64.00 per share P62.80 Credit Ratings Rating Date S&P BBB+ Long term Issuer Credit Rating Oct 2020 29% P-B Ratio 71% P-E Ratio 1.0x 12.1x Counterparty Moody's Baa2 May 2020 Risk Rating Dividends P1.80 per share Long term Issuer Fitch BBB- Oct 2020 ■Filipino Non-Filipino September 30, 2020 Shareholder Profile Ayala Group1 48.5% RCAM² 7.3% Market Cap Trading Fact Sheet Type Stock Ticker ISIN Exchange Default Rating P288.84 Description Capital Intelligence BBB Long term Foreign Currency July 2020 Common BPI MSCI A ESG Rating Aug 2020 PHY0967S1694 GIC 5.0% 1 Includes share in Liontide Holdings Inc. 2 Roman Catholic Archdiocese of Manila Par Value Outstanding Shares Philippine Stock Exchange 10.00 4,513,100,378 Float 39.2% THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#26Operating Franchise BPI has a leading deposit franchise and expansive reach through its network of traditional channels and unparalleled digital banking platform One of the largest branch & ATM network (as of September 2020) BPI Main Operating Business Segments BPI's digital banking platform is amongst the best in the country Corporate Banking Retail Banking Business Banking BPI Microfinance BPI Digital Channels As of September 2020 Enrollments 4.3 mn Active Users³ 2.5 mn 1,172 Branches: 872 BPI/BFB1 300 Banko² O ATMS & CAMS 20,452 Employees A relationship that nurtures your future -Com P. Dansing President and CEO #5 finance app on Asset Management #11 finance app on App Store Google Play Bancassurance Leasing/Rental 1869 local branches and 3 international offices 2 Branches and branch-lite units (BLUS), 3 Rolling 3 months on a growing client base 26 THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#27Financial Highlights Balance Sheet (in P bn) Assets Net Loans Deposits CASA Capital AUM 9M 2019 Dec 2019 9M 2020 ▲ YoY ▲ YTD 9M 2019 Dec 2019 9M 2020 ▲ YoY Profitability (in P bn) 2,125.8 2,205.0 2,203.3 1,371.7 1,475.3 1,383.5 1,619.9 1,695.3 1,684.7 1,119.6 1,171.2 1,283.9 267.9 269.6 283.4 812.3 831.6 949.4 3.6% -0.1% 0.9% -6.2% 4.0% -0.6% 14.7% 9.6% 5.8% 5.1% 16.9% 14.2% Net Interest Income Non-Interest Income 48.7 65.9 54.4 11.8% 22.3 28.4 23.5 5.1% Revenues 71.0 94.3 77.9 9.7% Operating Expenses 37.1 50.1 36.5 -1.6% Pre-provision Operating Profit 33.9 44.3 41.4 22.1% Net Income 22.0 28.8 17.2 -22.1% 27 Key Metrics NIM ΔΥΟΥ ▲ YTD 3.32% 3.35% 3.51% 18 16 Asset Yield Cost of Deposits 1.87% 1.80% 5.20% 5.16% 4.79% 1.25% (41) (37) (61) (54) Cost of Funds 2.12% 2.04% 1.45% (67) (59) Cost to Assets 2.39% 2.40% 2.22% (17) (18) Cost to Income 52.24% 53.08% 46.85% (539) (623) ROE ROA 11.26% 10.97% 8.32% 1.42% 1.38% 1.05% (294) (265) (37) (33) CASA Ratio Loan-to-Deposit Ratio 69.11% 69.08% 76.21% 84.68% 87.02% 82.12% 710 713 (255) (490) Credit Cost (in bps) NPL Ratio 0.46% NPL Coverage Ratio 0.43% 1.98% 1.81% 1.66% 2.98% 99.27% 102.14% 100.45% 152 156 118 132 117 (169) CAR CET1 16.91% 16.07% 16.35% 16.01% 15.17% 15.46% (56) 28 (55) 29 BPI THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#2828 Financial Highlights (in USD) Balance Sheet (in USD bn) Assets Net Loans Deposits CASA Capital AUM 9M 2019 Dec 2019 9M 2020 ▲ YoY ▲ YTD Profitability (in USD mn) 9M 2019 Dec 2019 9M 2020 ▲ YoY 43.9 45.5 45.5 3.6% -0.1% Net Interest Income 28.3 30.4 28.5 0.9% -6.2% Non-Interest Income 33.4 35.0 34.8 4.0% -0.6% Revenues 23.1 24.2 26.5 14.7% 9.6% Operating Expenses 5.5 5.6 5.8 5.8% 5.1% 16.8 17.2 19.6 16.9% 14.2% Pre-provision Operating Profit Net Income 1,004.1 1,360.7 1,122.4 11.8% 460.9 585.8 484.6 5.1% 1,465.0 1,946.4 1,607.0 9.7% 765.3 1,033.3 752.9 -1.6% 699.7 913.2 854.1 22.1% 454.6 594.3 354.3 -22.1% BPI Source: http://www.bsp.gov.ph/statistics/spei new/tab13.2 php.htm, rates as of end of period THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#2929 Sustainable Finance Framework We have developed a Sustainable Finance Framework under which we intend to issue: Green Bonds and/or Loans - proceeds allocated to selected Eligible Green Projects Social Bonds and/or Loans - proceeds allocated to selected Eligible Social Projects The Framework has been established to continue our thrust to promote positive environmental and social practices in our core markets 1 USE OF PROCEEDS 3 Green Bond and/or Loans Net proceeds will be allocated to Eligible Green Projects in the following categories: Renewable Energy, Energy Efficiency, Sustainable Water & Wastewater Management, Pollution Prevention & Control, Green Buildings Net proceeds of any BPI Green Bond and/or Loan shall not be used towards financing and/or refinancing of fossil fuel related assets and activities. Social Bonds and/or Loans Net proceeds will be allocated to Eligible Social Projects in the following categories: MSME Lending Net proceeds of any BPI Social and Sustainability Bond and/or Loan shall not be used towards financing and/or refinancing of activities related to alcohol, gambling, tobacco, and weaponry. Projects financed or refinanced may be at BPI or at any of the BPI Group entities MANAGEMENT OF PROCEEDS An amount equal to the proceeds will be allocated to finance designated Eligible Green and Social Projects across the BPI Group Internal systems in place governing: Tracking of proceeds via a separate register Policy for deployment of unallocated proceeds Substitution of assets - an amount equal to the net proceeds will be allocated to projects that comply with the Eligibility Criteria, reallocating to replacement projects in the event that a previous project is sold, paid in full, or no longer eligible USE OF PROCEEDS PROJECT EVALUATION AND SELECTION SUSTAINALYTICS The Green Bond Principles The Social Bond Principles ACMF ASEAN Green Bond Standards MANAGEMENT OF PROCEEDS ACMF ASEAN Social Bond Standards ACMF ASEAN Sustainability Bond Standards REPORTING 2 BPI PROJECT EVALUATION AND SELECTION We will follow the guidelines below in evaluating and selecting the Eligible Green and Social Projects: Pre Qualification: Projects are identified, evaluated and nominated by BPI's Sustainable Development Finance Team ("SDF") for Green Projects; and the Business Banking Strategy and Portfolio Analytics Group for Social Projects ➤Inclusion in the Green Finance Portfolio: SDF Head validates and signs off on the Eligible Green Projects list; and Business Banking Strategy and Portfolio Analytics Group Head validates and signs off on the Eligible Social Projects list Sustainable Funding Committee: On a semi-annual basis, validate and approve historical enrolments, review monitoring and reporting of issued Green Bonds and deployment of net proceeds BPI ensures that all loans included for allocation under the Green Finance and Social Finance Portfolio comply with national, local, and environmental laws at the time of issuance 4 REPORTING We will provide annual progress reports to be reviewed and approved by the Sustainable Funding Committee and Senior Management, covering: ➤ A list of approved Eligible Green/Social Projects, including amounts allocated; and ➤ Remaining balance of unallocated proceeds External auditor will be engaged to provide independent verification on our reporting and management of proceeds in accordance with this Framework Impact Reporting will be completed where relevant and possible BPI's Green Bond Framework is aligned with leading industry practices and supports our long-term environmental and social commitments ENTIAL.#3030 BPI Management Team As of January 31, 2020 BPI Bong Consing President & CEO 23 years with BPI Elected President and CEO since 2013 Director of BPI from 1995- 2000, 2004-2007 and 2010-present Former Head of Investment Banking, J.P. Morgan Asia Pacific Currently also serving on the boards of various subsidiaries of BPI • Tere Marcial EVP & CFO 25 years with BPI Chief Finance Officer and Head of Strategy and Finance since April 2017 Serving on the Board of BPI Europe, PLC., BPI MS, BPI Global Payments, BPI Payment Holdings Previously served on the BPI Trust Committee and Board of BPI Investment Management, Inc. Previously held senior positions in Corporate Banking and Asset Management & Trust 25 years of banking experience • . John-C Syquia EVP 4 years with BPI Head of Corporate Banking since January 2018 Former President of BPI Capital Corp. Previously, Country Head of Corporate Clients for Standard Chartered Bank, Head of Corporate Finance at ING Bank Manila, and Head of Strategy and Business Development at ING Asia Pacific Ltd Over 29 years of experience in financial services Jojo Ocampo EVP 24 years with BPI Head of Mass Retail, Former Chief Marketing Officer Serving on the Boards of BPI Payment Holdings Inc, BPI Global Payments, BPI Direct Banko, AF Payments Inc, and Zalora Previously held several positions in Unsecured Lending Cards, Payments, Remittances, Deposits, Kiosk Banking & Customer Segments 24 years of banking experience • Mon Jocson EVP & COO 4 years with BPI Chief Operating Officer since January 2019, and Head of Enterprise Services Formerly Vice President & General Manager of IBM Global Services and Managing Director of IBM Philippines Served on the Economic Development Board of Singapore Vice-Chairman, CyberSecurity Committee of the Bankers Association of the Philippines THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#3131 BPI BPI Management Team As of January 31, 2020 L A L Q E L L An-an King SVP 34 years with BPI • Head of Branch Sales and Service Channels since October 2018 Served as BFB Director (2015- 2017), Chairman of BPI Remittance Centre (HK) Ltc. (2016-2018) Chair, Unibank WoW Committee and Excellence Retail Awards Committee 34 years of banking experience Ginbee Go BFB President 16 years with BPI President of BPI Family Savings Bank since June 2017 Previously served as SVP of Retail Loans Group and Card Banking Group Director of Transunion Phils & Chairman of BPI Payment Holdings, Inc. Secretary & Trustee of Chamber of Thrift Banks 20 years of banking experience Eric Luchangco SVP Sheila Tan AMTC President 6 years with BPI 6 years with BPI Head of Business Banking since June 2019 Previously headed Corporate Credit Products Group, was head of Debt Capital Markets for BPI Capital and served on the Board of BPI Securities Previously worked with Daiwa Capital Markets 23 years of experience in • 3 years with BPI Asset Management and Trust Corp; Chief Operating Officer (2017-2018) Previously headed Strategic Advisory at BPI Capital (2013-2017) Former Co- Managing Director of Ayala Group Legal and Chief Legal Counsel of Ayala Land, Inc financial services In the practice of law for more than 25 years Dino Gasmen SVP & Treasurer 6 years with BPI Assumed position of Treasurer and Head of the BPI's Global Markets in January 2020 Chairman of BPI's Asset & Liability Committee 17 years in HSBC Manila with stints in the UK, Indonesia, and Vietnam 26 years of banking experience Cathy Santamaria SVP & CMO 8 years with BPI Chief Marketing Officer since November 2018 Previously segment head of Globe Telecom Touch Mobile and Mobile Business Former Marketing Director, Kraft Food Philippines; Kraft Foods International Head of Business Development and General Manager Vice President, Bank Marketing Association of the Philippines (2018) Over 31 years of marketing experience Jovi Alonso SVP & CCO 23 years with BPI Chief Credit Officer since January 2017 Previously involved in Corporate Relationship Management Asian Corporations and PEZA Divisions Serving on the Boards of BPI Century Tokyo Lease & Rental Corps Formerly Japan Desk Head in the World Corporation Group of Citibank, N.A. Manila Branch 30 years of banking experience . Mayette Gayares SVP & CRO 35 years with BPI Chief Risk Officer since January 2018, Former Chief Compliance Officer (2012-2017) Member, Risk Management Committee of the Bankers Association of the Philippines Previously served as Director and Treasurer of ABCOMP, Voting Member of the Bankers Institute of the Philippines 35 years of banking experience THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.#3232 2020 Citations Institutional BPI Foundation GLOBAL FINANCE Best Trade Finance Provided 2020 INTERNATIONAL FINANCE Best Asset Manager 2020 WWF WWF Sustainability Trailblazer Award (Phils) 2020 WWF WWF Climate Support Award (Phils) 2020 ORA Outstanding Achievement in Advocacy Marketing 2019 Bancassurance WORLD FINANCE BPI-Philam Life Assurance Corp. Best Life Insurance Company in the Phils. 2019 a Southeast Asia Best FX Bank for Retail Clients 2020 a Southeast Asia Best FX Bank for Corporates & Fls 2020 a Southeast Asia Best FX Bank for CCS, IRS, Forward & Options Hedging 2020 FinanceAsia Best Sustainable Bank 3rd Best in Corporate Governance 2020 Asia Rask Awards House of the Year - PH Bank Risk Manager of the Year 2020 CFA Society Philippines Best Managed Fund of the Year - Dollar Equity Fund 2020 a Southeast Asia Best Overall Asset Fund Manager AMTC a Southeast Asia Best Asset Manager (Money Market Funds) for the 2nd consecutive year ASSET SIAN A Asset TRIPLE Sustainable Investing as Asset Management Company of the Year (Highly Commended) INTERNATIONAL a Southeast Asia Best Fund with Optimal Information Ratio (BPI Invest Money Market Fund) Best Asset Manager Philippines (4th straight win) BPI As of September 30, 2020 THIS DOCUMENT IS THE PROPERTY OF BANK OF THE PHILIPPINE ISLANDS. STRICTLY CONFIDENTIAL.