Chairman’s Statement

Aware of our Bank’s dual role as a provider of financial services and solutions, and a portal of economic ascendancy, we kept our focus again in 2015 on our mission of: (i) harnessing the untapped savings and investment resources of the people in North Luzon (Regions I-II-III and CAR); and (ii) providing loans and other allied services to the same localities where we source our funds through our operating units. Our growth avenues, business objectives and operational plans kept on serving us very well, in spite of the continual changes in market conditions.

Stakeholders’ Expectation

To a great degree, we are aware of the explicit expectations that we have to perform extraordinarily well in all aspects of our business operations for the best interests of our Bank and its key internal and external stakeholders—the shareholders, directors, officers and employees, and the customers, regulators, communities and the general public, respectively.

For us to comply with such expectancy requirement, we actively engaged ourselves in evolving productive—yet conservative—business settings, building up an adequate amount of capital, maintaining a higher level of liquidity, generating sufficient volume of loan disbursements, keeping a negligible past due ratio, making enough provisioning available, ensuring reasonable earnings per share, rewarding employees for profitable operations, and keeping our corporate-brand promise of staying in the business of banking for good.

Business Backdrop

As a backdrop to our Bank’s operations, the global economy in 2015 continued to be on an almost status quo. As per BSP Governor’s report, “Growth among major advanced and emerging economies remained uneven and below pre-crisis levels. Three key developments were at the helm of the generally weak global economic environment. First is the moderation in the growth momentum of emerging market economies, particularly China, even as some advanced economies have started to recover. Second is the monetary policy divergence in developed economies, resulting from the varying levels and speed of economic growth in the world economy. Finally, the drastic fall in international oil prices raised concerns of deflation risk amid already sluggish external demand conditions.”

In addition, the BSP Governor reported that these external headwinds presented challenges for the Philippine economy, as they brought about annoyances and volatility in capital flows, the Philippine peso and the stock market.

Business Highlights

Although the economic environment in which we carried out our business operations in 2015 remained to be very volatile, and this was for the most part a recurring experience for us, we are still, in all probability, pleased to book a new net-income record of Php122.53 million. It surpassed our Php122-million net profit goal for the year in review. It was also complemented by a growth rate of 5.56 percent, which is higher by Php6.46 million over the past year’s operational performance of Php116.07 million. We were able to attain this exceptional feat in our operations because of our aim to perform remarkably well. Further, we are particularly focused on our production- and value-based culture that is built on integrity, collaboration, confidence, excellence, transparency, accountability and service. We’re all proud of this operational performance. And we’ll make this as a point of reference in improving further our future accomplishments.

Business Continuity

Our Business Continuity Plan (BCP) was put to test, and into action, with the sudden vacuum in leadership at the top echelon of our Management. It was caused by the brutal killing of our President & CEO, Mr. Herminio G. Ocampo, on December 24, 2015. With the trust and confidence of the banking public on the leadership and management of Mr. Ocampo, which he had gradually built and nurtured over a span of two decades, a crisis scenario—entailing massive or beyond-normal withdrawals of deposits—was foreseen. Some may have thought that his killing was possibly due to internal reason, which is work-related. This perceived notion of the general public might have caused reputational risk, aside from the leadership risk, which could have triggered panic among the depositors of our Bank, if we don’t have an effective BCP that is meant to address such crisis scenario.

Our Business Continuity Plan manifests the commitment of FICOBank to serve incessantly its multi-sectoral clientele in any situation—be it normal or under pressure. It is essentially designed to manage and mitigate our Bank’s interruption risks by prescribing strategies or actions that will be executed during emergency situations. With it, business will always be as usual at FICOBank.

Corporate Governance

Through our Performance Scorecard, an adaptation of the “balanced scorecard” designed by Drs. Robert Kaplan and David Norton, we assess annually the performance of our Board, its committees and individual directors, as well as the senior officers. This performance scorecard is an effective tool in determining and enhancing their respective competence and effectiveness, as it is built on the basic premise that “measurement motivates and that measurement must start with a clearly described strategy.” Specifically, this scorecard is intended to determine their value contributions through specific value drivers and clear-cut measurement protocols that will eventually bring about an effective and efficient functioning, which is essential to sound corporate governance.

Even though we have a diverse range of expertise and experience, we make sure that we combine and utilize the same to perform effectively our oversight function, and to provide guidance on the strategic direction of our Bank. Moreover, such breadth and diversity enable the Board of Directors to appropriately and effectively fulfill its particular role for its core and other recognized stakeholders.

Looking Ahead

Despite the inevitably short-term challenges that will be created by various socio-economic-political-and-technological factors and numerous market forces, we will remain buoyant about the long-term performance of our Bank, as we have rightly defined our market set, key capabilities and competitive advantage. Our business drivers, growth avenues and objectives, and risks appetite have been aptly outlined as well. Thus, in cognizance of our Bank’s corporate DNA, and in the furtherance of our business interests, we will constantly keep our focus on our strategic pursuits—the FICOBank 2020.

We shall pursue two paths of growth. First, we will—to a great deal—strengthen FICOBank, by growing it to its full potential and staying evergreen in the eye of the market. Second, we will put up the FICOBank Investment Holdings Company, which is 100-percent owned and managed by the Bank. We recognize that this is essential for our further growth. This company shall invest in various businesses that can deliver better returns than the Bank itself. Our twofold direction shall make us a hybrid organization, which is capable of addressing our needs in the future.

Most importantly, we will remain committed to our corporate mission, as it will always be our pleasure to provide financial services and solutions, and to bring the economic ascendancy, in any way we can, for everyone in our area of business operation.

Acknowledgment

In closing, I would like to take this opportunity to thank all the people inside and outside our Bank without whose commitment and support, respectively, we would not be as successful as we were in 2015.