BPI seeks new partnerships, alternative channels

MANILA, Philippines - The Bank of the Philippine Islands (BPI) is more concerned about forming new partnerships and alternative channels, rather than raising funds for expansion.

“We are comfortable with our present state, and we have taken a stress test,” Aurelio R. Montinola III, BPI president and chief executive officer said.

Montinola said that for as long as its lending continued to grow by double digits, the commercial bank of the Ayala Group of Companies will not have to go to the capital markets for funds.

“The bank can go all the way to 2012 (without looking for money), and still retain a capital adequacy ratio (CAR) of 11 percent,” he said, during the formal partnership Friday between Go-Negosyo and the SME program of BPI Family Savings Bank called Ka-Negosyo.

The Bangko Sentral ng Pilipinas (BSP) requires banks to have a minimum CAR level of 10 percent, while the Bank for International Settlements (BIS) demands an international average of eight percent.

Its risk-weighted CAR stood at 13.37 percent as of end 2009 while total assets (consolidated) ballooned to over P713 billion.

BPI accounts for 13 percent of Philippine banking system in terms of assets. It operates 831 branches and 1,573 ATMs.

Its main shareholders are the Ayala group (33 percent), Singapore’s DBS Bank (20 percent) and the Roman Catholic Archdiocese of Manila (8.5 percent).

Instead of looking for new sites for bricks-and-mortar (branches), BPI is aggressively seeking partnerships with other institutions and new alternative distribution channels.

Even if BPI failed to buy the Philippine American Life and General Insurance Co. (Philamlife), it was able to forge a bancassurance joint venture with the country’s leading insurer. It sold controlling shares in Ayala Life Assurance Co. (Ayala Life) to Philamlife to start the strategic relationship.

Fee-based earnings from bancassurance grew by 500 percent last year. It is expected to expand just as dramatically this year with the new partnership.

It forged an alliance with One Network Bank (ONB) to facilitate, among others, remittances or money transfers from domestic or overseas Filipinos. ONB is the largest rural bank in Mindanao operating 80 branches and nearly a hundred ATMs, an ideal “last mile” for beneficiaries of migrating Filipinos.

It forged ties with the International Finance Corp. (IFC), the private investment arm of the World Bank, for joint lending for green or environmental-friendly infrastructure projects.

Meanwhile, Ayala Corp., Globe Telecommunications and BPI formed a thrift bank that will specialize in microlending, utilizing a branchless mode of distribution.

BPI Globe Savings Bank (BanKO) will be working on the commercial mobile platform of Globe subsidiary G-Xchange Inc. The mobile wallet is ideal for the microentrepreneurs that need smaller amounts but are limited by the physical presence, or lack of, bank branches.

Instead of branches, BanKO will tap the 15,000 sub-distributors of Globe, and transforming the same as cash-in, cash-out centers. It is like having manual ATMs spread out nationwide. Another 3,000 cash-in, cash-out centers are available through GXI’s own network.

“We are often called the 24/7 bank, since we have made available to the banking public the point-of-sale (POS) system, the ATMs, the Internet, and of course, mobile phones for banking,” Montinola pointed out.