A reputation for stability and trustworthiness strengthens BPI’s appeal to OFWs

Capturing market share through trust and innovation
BPI is one of the largest and most profitable banks in the country, operating under an ethos of customer focus and support for Filipinos across the globe

Rising by around 20 per cent per year, the total amount of money sent home by the eight million overseas Filipino workers (OFWs) is expected this year to reach a record $14.7 billion (£7.2 billion). For the banks and financial services providers back home in the mother country, it represents a huge and growing market and they are eager to enlarge their share of it.

On past performance with the overseas Filipino market, around $3 billion of the total remittances in 2006 was handled by the Bank of the Philippine Islands (BPI), which serves around 500,000 OFWs through its outposts in the United States, Italy, the United Kingdom, Spain and Hong Kong and through alliances with foreign agents and institutions all over the world. For two straight years, the central bank of the Philippines has cited BPI as the number one bank in the Philippines for volume of OFW remittances. The bank also expects to see up to 40 per cent growth in housing loans to OFWs this year.

The Bank of the Philippine Islands (Europe) will engage in current account, savings and time deposit taking, personal loans, credit cards and remittance business, serving the large Filipino community living in the UK – numbering around 150,000.

In the longer term, it is intended as a bridgehead. “We see London as an opportunity to branch out into the European Union. It’s a first step,” says Aurelio Montinola, BPI’s President.

A big advantage for the bank in its appeal to OFWs is its long established reputation for stability and trustworthiness. Founded in the middle of the nineteenth century, BPI is the oldest bank in the Philippines. Today, it is one of the country’s largest in terms of assets and has the highest market capitalisation. Mr Montinola points out that “The symbol for BPI is a rock,” – referring to the bank’s culture as one of the key drivers of its success.

AURELIO MONTINOLA President of Bank of the Philippine Islands

With the Ayala Corporation, a respected conglomerate in the Philippines, and DBS Bank as its major shareholders, BPI is the industry leader in corporate banking, consumer banking, asset management and overseas remittance. Its network of more than 800 branches and kiosk units, and 1,400 ATMs, is the largest in the country for any single banking institution and serves around three million depositors. It is also consistently the most profitable of the Filipino banks. In 2006, it reported profits of 9 billion pesos (£97 million), 7.5 per cent higher than 2005. This year, overall lending is expected to increase by at least 8 per cent, with growth rates of 10-15 per cent for lending to consumers and SMEs.

While the bank prefers to grow organically, much of its expanded strength is due to a series of mergers and acquisitions over the past decade – the biggest and most strategic with the Far East Bank and Trust Company in 2000, and most recently with Prudential Bank in 2005.

Together with stability and tradition, BPI has also established a reputation for innovation, pioneering services such as automated teller machines, cashless shopping, banking kiosks and internet and telephone banking that the country’s other banks have followed.

The bank actively pursues strategies to differentiate itself and sustain its leadership and is developing lending to consumers and small and medium-sized enterprises. “We are constantly evolving,” says Mr Montinola. “We have upgraded our branches and we are investing in microfinancing and mobile banking.

“It’s not just about lending money,” he adds. “Whether it be microfinance or SMEs, we can help out in capacity building and technology assistance. We want to be known for being customer-oriented, as well as trustworthy and reliable. If you focus on people, the business results will follow.”