Montinola: Consing to make BPI a regional player

MANILA, Philippines – For the last time, Aurelio “Gigi” Montinola III briefed investors as president and CEO of Ayala-led Bank of the Philippine Islands (BPI), one of the country’s biggest commercial banks.

At BPI’s annual stockholders meeting on Thursday, April 18, Montinola also passed on the baton to Cezar P. Consing who was formally named as Montinola’s replacement.

“I am thankful for the 31 good years working for BPI and the 8 great years as CEO. I happily turn over the leadership of BPI to my designated successor, Mr. Consing, who is a competent and experienced professional with many years in the international arena. I firmly believe that he will further take BPI to a new level and position BPI as one of the best Asean banks in the near future,” Montinola said.

“What I was able to do is move around the peripheries…When Bong (Consing) comes in, the foundation is better. He has the choice how to move forward,” he said. “The world is looking at ASEAN region and therefore they’re beginning to compare banks across the region so we’re preparing ourselves internally.”

Consing has over 25 years of experience in international finance, particularly in investment banking, commercial banking, and private equity in Hong Kong and Singapore.

This changing of the guard at BPI was announced in December 2012. Consing and Montinola had been working together for a smooth transition.

Montinola, who has been BPI president since 2005, reached retirement in August 2011, but was asked to stay for two more years to give the bank more time to find his successor. The Harvard-educated veteran banker will continue to serve as a member of the board of BPI.

BPI’s performance

In a briefing with the reporters after the stockholders meeting, Montinola said that BPI has consistently grown ahead of industry, with Fitch Ratings recognizing this and upgrading the bank’s credit rating to investment grade.

“BPI’s ratings have been the highest, due to its established domestic presence, sound financial metrics and prudent management,” Fitch’s had said.

Montinola said the upgrade of the country’s credit rating to investment grade will be the “big driver” for the Philippines, as well as the bank.

“Banks mirror the economy. Whenever the economy is doing well, there’s a tendency for banks to do well,” he explained.

While an investment grade tend to reduce the interest rates, Montinola explained that with “a reduction in interest rates, at least in the short term, banks tend to do well. We expect to do well in the first quarter along with many other banks who I think will be able to take advantage of the favorable business conditions in the first quarter,” he said.

He said BPI has likely experienced an “18% year-on-year [increase] in terms of loan growth in the first quarter.”

Montinola said they also don’t need to raise capital to meet the Basel III requirements, adding that they have programmed a lending growth to be in the 12% to 14% range for the year. “And if we stay at that level, at least in the near future we will not raise capital,” he added when asked if they do not need to raise capital to meet the Basel III requirements.

Banner year

BPI chairman Jaime Augusto Zobel de Ayala II said in his speech that the 6.6% growth of the domestic economy was the fastest since 1988 and noted the resilience of the Philippine economy amid the global slowdown.

Under this environment, Zobel stressed that BPI achieved another banner year with its net income reaching a record high of P16.3 billion with a return on equity of 17.5%. Capital adequacy ratio (CAR) was also robust at 14.2%, while Tier 1 CAR stood at 12.8%.

Zobel noted that BPI’s share price rose by 72% to P95 per share by end 2012, equivalent to 3.5 times its book value per share of P27.30/share. BPI remained as the country’s most valuable bank with a market capitalization of P338 billion. – Rappler.com