Boardroom Discussion – ‘Normal-gility’ – Manila Bulletin



Ignacio R. Bunye

I recently had the privilege of hearing from Ma. Cristina L. “Ginbee” Go as she gave the Board of Directors a very clear roadmap towards the transition to One BPI.

As has already been widely reported, BFSB – which has long been the country’s leading savings bank – will soon be merged with its mother, the Bank of the Philippine Islands – the leading bank in the Philippines and Asia.

Here’s Ginbee in her own words:

“At the start of the pandemic, terms like ‘new normal’ and ‘next normal’ popped up, but with the long-drawn-out pandemic – which is likely to become endemic – what is really normal?

“The sense of normalcy is constantly evolving and maybe the new term we should start to embrace is ‘normal-gility’ – the realization that the new normal is one that needs quick adaptation. That’s why we made the organization ready for change. Our agility to be on site or remotely. Our agility to be defensive or offensive. Our agility to be “at risk” or “without risk” depending on the circumstances.

“Two things: what we don’t know we can’t handle. Number two – what we know we have to question. What we don’t know – we don’t know how long this pandemic will last. What we know – our economic outlook and outlook has changed. The recovery period may take longer than initially anticipated, so we need to manage our business for resilience and relevance – the two strategic themes around which our plan for 2021 has been built. And so far it has worked well for us.

“Resilience and relevance are reflected in the continued strength of our financial position and performance. Even with the CREATE Act’s 576 million peso impact, our year to date NIAT is now 27 percent better than expected, 45 percent better than last year. Adjusted for CREATE, NIAT would have been 85 percent better than last year.

“Let’s talk about relevance. Our core income continues to grow, mainly due to wider spreads due to the lower cost of funds. Our ability to defend our deposit volume, despite lower interest rates, is proof of our clients’ confidence. Given the feeling of “no risk”, clients prefer to be liquid. The Casa ratio is higher at 53%, or 600 basis points better than a year ago.

“Our outings are gaining more ground – more than expected. Regular home loans are 60% higher than last year, although 80% of pre-pandemic levels. Auto loans are 47% better than last year (although 85% of pre-pandemic levels). The dealer-generated versions have already returned to pre-pandemic levels. The loan processing fees are increasing year by year.

“The quality of our assets also continues to improve. NPL rates continue to decline for both automobiles and housing. Because we have stayed ahead of the arrears curve, provisions for losses are now lower than last year, due to aggressive provisions in 2019. This allowed us to maintain a comfortable reserve cushion on ECL, reflecting our defensive stance.

A BPI merger

“The team has formed workflows responsible for planning and organizing critical aspects of the business – regulatory and financial, employee onboarding, customer onboarding, product migration, branch office integration. Suffice it to say that we have progressed as planned.

“Over the past six months, we’ve made sure to communicate with our customers. We have obtained and have obtained regulatory approvals. We designed the migration and integration plans.

“We have taken a three-pronged approach.

“The first is the conversion to BPI which simply requires the migration of pure BPI Family Savings Bank customers (numbering around 780,000). Migration and rebranding of high performing BPI Family Savings Bank branches and migration and rebranding of products unique to BPI Family Savings Bank such as our five year plan, auto loans, home loans and our Ka Negosyo credit product.

“The second approach is consolidation with BPI, which essentially requires:

– Integration of the joint BPI and BPI Caisse d’Épargne Familiale clients, approximately 454,000 in number, with a client file to be managed by an RM-BM or an agency.

– Consolidation or merger or rebranding of around 79 BPI Caisse d’Épargne Familiale branches. The agency consolidation will require a change of account numbers for approximately 375,000 clients matching the surviving agency code.

– Migration and rebranding of common deposit and credit products for SMEs.

“The third strategy is the optimization and rationalization which will require managing the migration of DOSRI unibanker loans, the discontinuation of products that will no longer be migrated to BPI, such as the BPI Family credit card, passbook deposit products and variants of inactive loan products. We will also constantly review our network of agencies with a view to digitization.

“This pandemic has been a major disruptor. Digitization has changed the banking landscape. “Normality” is the new definition of normality. This means that we must always be ready to pivot the business at all times.

Very well said, Ginbee!

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