PURPOSE The purpose of this nancial analysis report is to consider Bank of the Philippine Island's exposure to risks before making a trading or investing investing decision decision in the bank's nance or stocks. The analysts analysts will also determine how protable and liuid the bank is over its three years of operations from !"#! to !"#$ by analy%ing the entity&s consol consolida idated ted nanci nancial al statem statement ents. s. The users users of these these nanci nancial al statements include the potential investors and the company. The anal analys ysts ts will the then giv give recom ecomm menda endati tion ons s for for the the enti ntity&s ty&s improvement.
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CORPORATE OV OVERVIEW A. INDUSTRY INDUSTRY ANAL ANALYSIS Bank of the Philippine Islands is a bank that engages in the provision of commercial banking services. Its nancial services are are the econo economic mic servi services ces provi provided ded by the nance nance indust industry ry whic which h enco encomp mpas asse ses s a broa broad d rang range e of busi busine ness ss that that mana manage ge money money including including credit credit unions unions banks credit(c credit(card ard companies companies insurance companies accountancy companies consumer(nance consumer(nance comp compan anie ies s stoc stock k brok broker erage ages s inve invest stme ment nt fund funds s and some some government(sponsored government(sponsor ed enterprises. The Bank o)ers wholesale and retail lending and facilitates overseas *ilipino *ilipino +,*- remittances bank assurance asset nance and and leas leasin ing g gov governm ernmen entt sec securi uritie ties deal dealiing ng secu securrities ties distribution and foreign exchange. The Bank o)ers corporate commercial and retail banking products. The Bank has two maor categories for products and services. The rst category covers its core core nancial nancial intermedi intermediation ation business business which which includes includes deposit deposit taking lending and securities investments. The second category covers services ancillary to the Banks' nancial intermediation busi busine ness. ss. Thes These e incl includ ude e inve invest stme ment nt banki banking ng and corp corpor orate ate nance asset management and trust services foreign exchange secu securrities ties dist distrribut ibutiion on sec securit uritiies trad tradin ing g cre credit dit card ard inte interrnatio national nal trad trade e tran transac sacti tion ons s draf drafts ts fund fund tran transfe sfers rs and and deposit related services. In /lobal 0arkets their core competence is the management of the bank&s positions in liuidity interest rates foreign exchange and xed income capital markets instruments. They are one of the largest 1ligible 2ealers in government securities and are a maor counterparty counterparty to the Bureau Bureau of the Treasury reasury +BTr-. +BTr-. Their Bank Bank of of the the Phil Philip ippi pine ne Isl Islan ands ds
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prudent stance in markets risk(taking resulted in signicant retention of comprehensive income from net income underscoring their focus on uality of earnings and their desire to achieve protability through the interest rate cycle. They retain in(house economists who conduct extensive research on Philippine and global macro(economic trends. *urthermore they gather market intelligence through formal advisory arrangements with maor international banks and asset managers. *inally they have reinforced their sales and distribution teams to improve across(the(board connectivity with institutional corporate private banking and retail clients thereby improving their intelligence about market movements and generating 3ow(related volume and revenues. They are a signicant complement to BPI 4apital as it increases its capital markets origination activity and builds out its syndicate functions. In !"#$ they opened investments and foreign exchange centers in 0anila and 5ue%on 4ity6 we also plan to open yet another in 4ebu 4ity in *ebruary !"#7. They have also strategically placed marketing units present in areas like 4ebu 2avao and Pampanga complementing the ability of our branch network to provide funding foreign exchange and hedging products to our clients. 8e are committed to providing services tailored to the local needs of its clients needing to access fast(moving global and capital markets. Their performance in /lobal 0arkets points to signicant opportunities for earnings growth for BPI9 : ;warded by the BT< as the !nd Best Performing /overnment =ecurities 1ligible 2ealer6 : o. ? by the Philippine 2ealing and 1xchange 4orporation&s xed income exchange6 : ;warded ,verall Best @ocal 4urrency Interest
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