CHINA BANKING

CORPORATION (CHIB)

Investor Presentation

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Strengths

Company Profile

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A Premier Banking Franchise in the Philippines

Snapshot of Major Milestones

Who We Are
• Long history as the oldest privately owned bank in the August March December
Philippines, established in 1920

• Listed in 1947 and is one of the original listed companies 1920 2007 2012 2013
upon the formation of the Philippine Stock Exchange

• Ranked 5th in total assets, deposits, capital and number

of branches (excluding gov’t banks) June November

• Has the longest relationship with Chinese-Filipinos, Branch Network as of Dec 2014
serving this community for well over 90 years China
China
Bank Plantersbank
Bank
Our Strategy Savings

• Expand leadership position in SME/MME and consumer Luzon 83 37 44

Metro 152 32 24
segments further enhanced by recent strategic
Manila
acquisitions Visayas 48 6 6
• Accelerate branch expansion to increase customer touch Mindanao 31 3 4
points and grow customer base Branches 314 78 78
Total Branches: 470

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Comprehensive Financial Services Platform

-Bank’s organization highlights three engines of growth: Relationship Banking, Financial Capital Markets and Investments and the Savings Bank .
-Focused growth aims to accelerate business expansion and to ensure efficient client servicing and product delivery.

Relationship Financial Capital Markets and Key Subsidiaries/ Other

Banking Investment Segment Business Units

- China Bank Savings, Inc.

- Investment Banking - Planters Development
Retail Banking Lending Segment
- Treasury Bank
Business Segment
- Private Banking - Manulife-China Bank Life
Institutional Banking - Trust Assurance Corporation
(MCBLife)
- Commercial Banking
-Branch Banking
- Corporate Banking
-Binondo Business
Center (Chinatown) Consumer Banking
- Consumer Banking -
Remittance Business
- Credit Card

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Comprehensive Financial Services Platform
Increased Scale for China Bank Post- Acquisition
Transaction Rationale
Total Assets (BN)

Strategic opportunity to expand its SME

portfolio and geographic footprint

Integration of Plantersbank’s business into

China Bank Savings due to complimentary
clientele, target markets and business
model Net Loans (BN)

Improve cost efficiency through

economies of scale and systems
integration

Optimize platform and increase Number of Branches

opportunities to cross-sell and up-sell
higher value products

Ability to support core customers across

corporate lifecycle

Source: SEC 17Q Reports

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Strengths

Sector Overview

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POSITIVE MACRO-ECONOMIC ENVIRONMENT

Strongest GDP Growth

among ASEAN
countries, which is
expected to be
sustainable

Source: IMF World Economic Outlook- October 2014

Strongest sovereign
credit ratings for the
Philippines
Current Rating BBB BBB- Baa3
Outlook Stable Stable Positive
Date May-14 Mar-14 Oct-13
Source: Rating Agencies

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POSITIVE MACRO-ECONOMIC ENVIRONMENT
Government Infra- spending (% of GDP)

Source: Philippine Economic Briefing, September 2014

Infrastructure Development
under PPP Projects

Source: Public Private Partnership Center (Nov 10, 2014) ~ Current Pipeline of 57 PPP Projects
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Competitive Growth Rates
Competitive Position (as of September 2014)

 Top 5 Bank (private EKB in terms of assets & branches)

 CHIB has officially overtaken RCBC and DBP
ASSETS2/ NET LOANS2/ DEPOSITS2/ CAPITAL2/ Net Income1/ ROE1/
Institution Amt Mkt Share Amt Mkt Share Amt Mkt Share Amt Mkt Share Amt Mkt Share Jan-Sep Jan-Sep Branches
(in P Bn) (%) (in P Bn) (%) (in P Bn) (%) (in P Bn) (%) (in P Bn) (%) '14 '13
BDO 1,764 17.40% 1,102 22.29% 1,425 18.64% 173 16.88% 16.76 20.56% 13.54% 15.41% 858
MBT 1,502 14.82% 764 15.45% 1,108 14.49% 142 13.90% 15.53 19.06% 11.43% 18.94% 887
BPI 1,275 12.58% 698 14.12% 1,045 13.67% 132 12.93% 12.79 15.69% 13.40% 20.50% 825
PNB 586 5.78% 281 5.69% 436 5.71% 92 8.99% 3.72 4.56% 5.50% 13.10% 656
CHIB 454 4.48% 270 5.46% 302 3.95% 51 5.01% 3.37 4.13% 8.94% 11.79% 456
RCBC 435 4.29% 239 4.84% 272 3.56% 49 4.76% 3.01 3.69% 8.56% 14.20% 445
UBP 381 3.76% 119 2.40% 301 3.94% 44 4.31% 5.01 6.15% 14.90% 21.20% 245
SECB 366 3.61% 177 3.57% 232 3.04% 46 4.48% 6.41 7.87% 19.90% 14.50% 254
EW 167 1.65% 109 2.20% 128 1.67% 21 2.03% 1.65 2.02% 10.90% 12.60% 391
Gov't Banks 1,349 13.30% 460 9.32% 1,054 13.78% 113 11.04% 13.25 16.26%
LBP 2/ 911 8.98% 316 6.38% 781 10.22% 72 7.03% 9.30 11.41% 17.28% 16.54% 345
DBP 2/ 437 4.32% 145 2.92% 272 3.56% 41 3.97% 3.95 4.85% 9.84% 7.13% 96
Foreign Banks 1,044 10.29% 418 8.47% 734 9.61% 65 6.36%
Other Local Banks 815 8.04% 306 6.19% 607 7.94% 95 9.31%
TOTAL 10,139 100% 4,942 100% 7,643 100% 1,024 100% 81.50 100%
1/
data from SEC 17-Q, 3Q
2/
data from Published SOC

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Competitive Growth Rates
Total Assets (BN) Sep 2014

Source: 3Q 2014 Published SOC

Net Loans (BN) Sep 2014

Source: 3Q 2014 Published SOC

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Competitive Growth Rates
Total Deposits (BN) Sep 2014

Source: 3Q 2014 Published SOC

Equity (BN) Sep 2014

Source: 3Q 2014 Published SOC

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Competitive Growth Rates
Cost to Income (%) Sep 2014

Source: Sec 17-Q,- 3Q2014, BSP-Statistics

Gross NPL (%)* Sep 2014

9.22

4.44
3.78

1.89
1.50 1.44 1.12
0.45 0.62

BDO MBT BPI PNB CHIB RCBC UBP SECB EWB

* Parent only
Source: Published SOC- 3Q2014

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Competitive Growth Rates
CAR (%) Sep 2014

Source: Published SOC- 3Q2014

ROE (%) Sep 2014 ROA (%) Sep 2014

Source: Sec 17-Q,- 3Q2014, BSP-Statistics

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Strengths

Key Investment Merits

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 Longest Relationship with Affluent Chinese-Filipino Community

Achieving Significant Growth with Improving Asset Quality

Strengths
Sustained Delivery of Superior Value to Shareholders

Well Positioned for Growth Expansion

Strong Balance Sheet Performance

Strong Support from Shareholder and Synergies Enjoyed from the SM Group

Highly Regarded Management Team and Strong Corporate Governance Track Record

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Longest Relationship with Affluent Chinese-Filipino Community

Loyal and highly valuable customer base

Predominantly focused on the SME/MME segments

Multi-generational relationship

Agile and entrepreneurial mindset

Sustainable and profitable niche client relationship

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Achieving Significant Growth with Improving Asset Quality
Total Gross Loans* (in BN) % Share of Secured Loans to Total
14 % increase Y-o-Y

279
243
224 14%
194 13%
152 13%
12% 43%
113 12% 40% 45%
42%
12% 31%
31%
46% 47% 42% 43%
57% 57%

2010 2011 2012 2013 Sep-13 Sep-14

Corporate Commercial Consumer

NPA, NPL and LLR Ratio* (%)

* Consolidated

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Sustained Delivery of Superior Value to Shareholders
Cost to Income Ratio (%) Strong Cash Dividends (in MN)

Diversified Income Stream

12 13 13 14

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Well Positioned for Growth and Expansion
Extensive Distribution Network Conservative Loan-to-Deposit Profile
(Number of Branches as of September 2014)

887 #5
858 825

656

456 445
254
245

MBT BDO BPI PNB CHIB RCBC SECB UBP

On-going Network Expansion Plan Robust and Scalable Infrastructure Platform

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Strong Balance Sheet Performance
Total Assets (BN)
27% increase Y-o-Y

Source: SEC17Q Report

Total Deposits (BN) 27% increase Y-o-Y

34% increase Y-o-Y
385
354

272 303 17%

20%
213 216
193 22%
174 20% 38%
140 41%
25% 23% 33%
122 27%
22% 47%
22% 42% 40%
29% 51% 42%
48% 45%
45% 39% 46%
33% 38% 33%
26% 30% 26% 31%

2006 2007 2008 2009 2010 2011 2012 2013 Sep-13 Sep-14
CASA High Cost FCDU

Source: SEC17Q Report

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Strong Balance Sheet Performance

Total Equity (BN)

~ From excess buffer to efficient use of capital

~ Only major bank with no Tier 2 Notes issuance

Source: SEC17Q Report

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Strong Support from Shareholder and Synergies Enjoyed from the SM Group
Current Shareholdings
Distinct Benefits for China Bank

Mutual to the SM Group’s ecosystem

of merchants, suppliers and
SM Group contractors
39%
Public
49%

Priority rights to place branches and

Dee ATMs in shopping malls owned by SM
Families CBC Prime Holdings, Inc.
10% Retirement
2.3%

Snapshot of SM Group Business Lines Superior network locations for opening

mini-branches in SM Group’s Savemore
supermarkets

Access to SM Group’s retail network to

Financial promote new products such as its
Retail Property upcoming payment cards products
Services

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Highly Regarded Management Team

Hans T. Sy Carlos M. Borromeo

Chairman of the Board CFO & Head of Financial Highly respected senior management
Mgt Segment
team

Gilbert U. Dee Alberto Emilio V. Ramos

Vice Chairman of the
SVP & President of China
Board
Bank Savings
On the average, over 20 years of Industry
experience
Ricardo R. Chua Nancy D. Yang
President, Chief SVP & Head of Retail
Executive Officer Banking Business
(effective Sept 1,
2014)
Successful track record of managing
acquisitions and achieving financial
Willian C. Whang Rosemarie Gan results
EVP & Head of the SVP & Deputy Head of
Lending Business Retail Banking Business
Segment and
Institutional Banking
Group

Antonio S. Espedido,
Jr. Alexander C. Escucha
EVP & Head of the SVP & Head of Investor
Financial Capital Relations
Markets & Investment
Segment and the
Treasury Group
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Strong Corporate Governance Track Record

Asia’s Outstanding Company on Corp Governance

awarded by Corporate Governance Asia
(December 2014)

Recipient of the Bell Award for Corporate

Governance for the 3rd consecutive year
(2012, 2013, 2014)

Highest corporate governance standards as

recognized by the general market
(2011, 2012)

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Strengths

Financial Performance Highlights

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Financial Performance Highlights
(PHP Millions, unless otherwise stated)

Jan-Sep Jan-Sep
FY 2012 FY 2013
2013 2014
Net Interest Income 8,063 9,936 7,084 10,381
Non-Interest Income 5,793 5,160 4,383 3,039
Total Operating Income 13,856 15,096 11,467 13,420
Total Operating Expenses 8,431 9,321 7,013 8,977
Income Before Income Tax 5,425 5,775 4,454 4,443
Provision for Income Tax 422 675 526 1,077
Net Income 5,003 5,100 3,928 3,366
Attributable to :
Equity Holders of the Parent Bank 5,018 5,103 3,922 3,370
Non-Controlling Interest (15) (3) 6 (4)
Net Interest Margin 2.9% 3.0% 3.0% 3.2%
Cost-To- Income Ratio 59.1% 59.0% 58.4% 64.7%
Return on Average Equity 12.2% 11.3% 11.8% 8.9%
Return on Average Assets 1.7% 1.5% 1.6% 1.0%

Source: SEC 17Q Report

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Financial Performance Highlights (Cont’d)

FY 2012 FY 2013 Sep-13 Sep-14

Total Assets (PBn) 324 414 359 456
Loans and Receivables (PBn) 190 221 206 275
Total Deposits (PBn) 272 354 303 385
Low Cost Deposits (PBn) 100 156 142 188
Time Deposits (PBn) 172 198 161 197
Total Equity (PBn) 43 45 44 54
Loans to Deposits Ratio 69.9% 62.3% 68.0% 71.3%
Non-Performing Loans (“NPLs”) Ratio 2.6% 2.0% 2.4% 3.0%
NPL Coverage Ratio 134.9% 146.6% 139.3% 96.8%
Capital Adequacy Ratio (Tier 1) 15.20% 14.50% 15.83% 13.98%
Capital Adequacy Ratio (Total) 16.00% 15.40% 16.71% 14.90%

* Sept ‘14 includes PDB

Source: SEC 17Q Report

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Strengths

Management and Board of Directors

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China Bank: Board of Directors
• Honorary Chairman of the Board since • Chairman of the Board since 2011 and of the
May 2006 Executive Committee since 1989
• Advisor to the Board since 1997 • Elected to the China Bank Board as Director in
• Presently the Chairman of BDO Unibank, 1986
Inc. (Emeritus), SM Investments • Also the President of SM Prime Holdings, Inc.,
Corporation, and SM Prime Holdings, Inc. and serves as adviser to the board of SM
Investment Corporation, and a director of
Henry Sy, Sr. Hans T. Sy various companies in SM Group
Chairman Chairman

• Vice Chairman of the Board since May • Director since 1977

2006 • Retired as President as of Aug 31, 2014
• Chairman of the Board of the Bank from • Presently Director in Bank subsidiaries CBC-
1989 to 2011 PCCI and China Bank Insurance Brokers (CBC-
• Presently the Chairman of Union Motor IBI), in Hydee Management & Resources
Corporation and of the Bank subsidiary Corporation, and GDSK Development
CBC Properties and Computer Center Corporation
(CBC-PCCI) and Director of Super
Gilbert U. Dee Industrial Corporation Peter S. Dee
Vice Chairman Director
• Director since 1984 • Independent Director for two years in
• Presently the Director/ President of accordance with Securities and Exchange
JJACCIS Development Corporation and Commission’s (SEC) Memorandum Circular No.
Enterprise Realty Corporation, and 9, Series of 2011
Director/ Treasurer of Suntree Holdings • Director of the Bank since 1985
Corporation • Presently Vice Chairman of Panelon
Philippines, Honorary Chairman of Chiang Kai
Shek College, and Chairman Emeritus of the Dr.
Joaquin T. Dee Dy Tiong Sun Yat Sen Society
Director Independent Director

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China Bank: Board of Directors
• Director since 1993 • Director since May 20013
• Presently Vice Chairman in SM • Presently President of SM Investment
Supermarket, SM Hypermarket, and Corporation, Treasurer of SM Land, Inc. and
Savemore Market; and SM Prime Director of SM Synergy Properties Holdings
Holdings, Inc. Corporation, Sybase Equity Investments
Corporation, and Tagaytay Resort
Development Corporation
Herbert T. Sy Harley T. Sy
Director Director

• Independent Director for two years in • Independent Director for two years in
accordance with SEC Memorandum accordance with SEC Memorandum Circular
Circular No. 9, Series of 2011 No. 9, Series of 2011
• Director of the Banks since 2004 • Director of the Bank since 2005
• Presently Independent Director of China • Presently Independent Director of Seaoil Phils.,
Bank Savings and Planters Development China Bank Savings, and Planters Development
Bank Bank

Alberto S. Yao Roberto F. Kuan

Independent Director Independent Director
• Director since November 2007 • Director since May 2008
• Presently Director, EVP and CFO of SM • President and CEO Effective Sept 1, 2014
Investments Corporation, Adviser to BDO • Presently Chairman of the Board of China Bank
Unibank Savings, Vice Chairman of Bancnet, Inc. and
• Also Director of SM Keppel Land, Manila Planters Development Bank and Director of
North Tollways Corporation, First Asia CBC-PCCI, CAVACON Corporation, and Sun &
Realty Development Corporation, and Earth Corporation
President of SM Foundation and Global
Jose T. Sio Fund Holdings Ricardo R. Chua
Director, President &
Director
CEO

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China Bank: Management
• EVP since February 13, 2014, subject to • EVP since February 13, 2014, subject to
confirmation by the Monetary Board, confirmation by the Monetary Board, Head of
Head of the Financial Capital Markets & the Lending Business Segment, and concurrent
Investment Segment, and concurrent Head of Institutional Banking Group
Head of Treasury Group • Elected as Director of China Bank Insurance
• Currently Director of CBC Forex Brokers (CBC-IBI) since February 3, 2014, and
Corporation (CBC Forex), China Bank Director/Treasurer of CBC Properties and
Antonio S. Savings and Planters Development Bank William C. Whang computer Center (CBC-PCCI) since February 5,
Espedido, Jr. EVP 2014
EVP
• SVP and Head of Retail Banking Business • SVP and Head of Investor Relations
• Currently Vice Chairman of the Board of • Currently an international resource person at
CBSI, Director of CBC- IBI, and Director of The Asian Banker, Director of CBSI, Director of
Planters Development Bank Planters Development Bank, and Chairman of
• Related within the second civil degree of the UP Visayas Foundation
consanguinity to Mr. Peter S. Dee,
President & CEO
Alexander C.
Nancy D. Yang
Escucha
SVP
SVP
• SVP and Group Head for Centralized • SVP and Head of Trust Group
Operation Group, the Head for • More than 30 years of investment and trust
Remittance Business Division, and operations experience
concurrent Head of Correspondent • Currently Director of CBSI and President of
Banking Sarmiento-Jacinto and Great Success Realty
• Presently Director of CBC Forex, CBC-PCCI, Corp.
CBSI, and Planters Development Bank

Ramon R. Zamora Rene J. Sarmiento

SVP SVP

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China Bank: Management
• President and Chief Operating Officer of • First Vice President and one of the Division
Planters Development Bank since January Heads of Commercial Banking at Institutional
1, 2013 Banking Group
• Joined Plantersbank as EVP and Chief • Has more than 20 years of work experience in
Financial Officer in January 2012 the banking industry
• Has over 20 years of banking experience • Related within the first civil degree of
consanguinity to Mr. Gilbert U. Dee, Vice
Carlos Borromeo Gerard T. Dee Chairman of the board
President & COO, First VP
Plantersbank
• SVP since February 13, 2014, subject to • SVP and elected as President of China Bank
confirmation by the Monetary Board, Savings since August 1, 2011
Deputy Head of Retail Banking Business • Currently Chairman of the Board of Unity Bank,
• Has been with the Bank for over 35 years A Rural Bank Inc., Director of Planters
Development Bank, and Trustee/ Treasurer of
the Chamber of Thrift Banks

Alberto Emilio V.
Rosemarie C. Gan
Ramos
SVP
SVP
• First Vice President II, Head of Investment • First Vice President and Region Head for the
Banking Group, and a member of the Bank’s Metro Manila South and Southern
Management Committee Luzon Branches
• Has 26 years of experience in the fields of
investment banking, corporate banking,
and credit risk management

Virgilio O. Chua Philip S.L. Tsai

First VP II First VP

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China Bank: Management
• First Vice President II and one of the • First Vice President and Chief Risk Officer
Division Heads of Corporate Banking at • Formerly the First Vice President and Chief Risk
Institutional Banking Group Officer of Development Bank of the
• Formerly connected with Australia and Philippines, and also previously connected
New Zealand (ANZ) Banking Group with Rizal Commercial Banking Corp., First
Limited, Security Bank Corporation, Saudi Metro Investment Corp. and Solidbank
British Bank, and Far East Bank Corporation
Victor O. Martinez Ananias Cornelio III
First VP II First VP & CRO

• Vice President and Corporate Secretary • Vice President and Chief Compliance Officer
• Formerly the Director of Corporate and since February 7, 2014, subject to approval of
Legal Department of the Securities and the Monetary Board
Exchange Commission of the Philippines • More than 20 years of experience in the
• Currently Senior Vice President on banking industry
Corporate and Legal Affairs and • Concurrently Chief Compliance Officer of
Compliance Officer in SM Investments Planter Development Bank
Corporation and SM Prime Holdings
Corazon Morando
VP & Corporate Marissa B. Espino
Secretary CCO

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