COVER SHEET

2 0 5 7 3
SEC Registration Number

M E T R O P O L I T A N B A N K & T R U S T C O M P A N Y

(Company’s Full Name)

M e t r o b a n k P l a z a , S e n . G i l P u y a t

A v e n u e , U r d a n e t a V i l l a g e , M a k a t i

C i t y , M e t r o M a n i l a

(Business Address: No. Street City/Town/Province)

RENATO K. DE BORJA, JR. 8898-8805

(Contact Person) (Company Telephone Number)

1 2 3 1 1 7 - A 0 4 2 8
Month Day (Form Type) Month Day
(Fiscal Year) (Annual Meeting)

NONE
(Secondary License Type, If Applicable)

Corporation Finance Department

Dept. Requiring this Doc. Amended Articles Number/Section

Total Amount of Borrowings

2,999
as of 12-31-2020
Total No. of Stockholders Domestic Foreign

To be accomplished by SEC Personnel concerned

File Number LCU

Document ID Cashier

STAMPS
Remarks: Please use BLACK ink for scanning purposes.
 2

SEC Number 20573

File Number______

METROPOLITAN BANK & TRUST COMPANY

(Company’s Full Name)

Metrobank Plaza, Sen. Gil Puyat Avenue, Urdaneta Village, Makati City, Metro Manila

(Company’s Address)

8898-8805

(Telephone Number)

December 31

(Fiscal year ending)

FORM 17-A
(ANNUAL REPORT)

(Form Type)

(Amendment Designation, if applicable)

December 31, 2020

(Period Ended Date)

None

(Secondary License Type and File Number)

 3

SECURITIES AND EXCHANGE COMMISSION

SEC FORM 17-A
ANNUAL REPORT PURSUANT TO SECTION 17 OF
THE SECURITIES REGULATION CODE AND
SECTION 141 OF CORPORATION CODE OF THE PHILIPPINES

1. For the fiscal year ended : December 31, 2020

2. SEC Identification Number : 20573

3. BIR Tax Identification No. : 000-477-863

4. Exact name of issuer as specified in its charter : METROPOLITAN BANK & TRUST COMPANY

5. Province, Country or other jurisdiction of

incorporation or organization : Metro Manila, Philippines

6. Industry Classification Code : __________ (SEC Use Only)

7. Address of principal office : Metrobank Plaza, Sen. Gil Puyat Avenue, Urdaneta
Village, Makati City, Metro Manila

8. Issuer’s telephone number, including area code : (632) 8898-8000; (632) 8898-8805

9. Former name, former address and former fiscal

year, if changed since last report : Not applicable

10. Securities registered pursuant to Sections 8 and 12 of the SRC, or Sec. 4 and 8 of the RSA

Title of Each Class : Common Stock

Number of Shares of Common Stock
Outstanding : 4,497,415,555 shares as of December 31, 2020

Amount of Debt Outstanding : P2.029 trillion for the Group;

P1.769 trillion for the Parent Company (sum of
deposit liabilities, bills payable, bonds payable and
subordinated debts as of December 31, 2020)

11. Are any or all of these securities listed on a Stock Exchange?

Yes [x ] No [ ]

All of the securities of the issuer are listed in the Philippine Stock Exchange.

12. Check whether the issuer:

a. has filed all reports required to be filed by Section 17 of the SRC and SRC Rule 17 or Section 11 of the RSA
and RSA Rule 11(a)-1 thereunder, and Sections 26 and 141 of the Corporation Code of the Philippines during
the preceding 12 months (or for such shorter period that the registrant was required to file such reports.)

Yes [x] No [ ]

b. has been subject to such filing requirements for the past 90 days.

Yes [x] No [ ]

13. Aggregate market value of the voting stock held by non-affiliates based on closing price as of December 31, 2020:

P106.24 billion
 4

PART I – BUSINESS AND GENERAL INFORMATION

ITEM 1 – BUSINESS

DESCRIPTION OF BUSINESS

1. Business Development

Metropolitan Bank & Trust Company (“Metrobank” or “the Bank”) was incorporated on April 6, 1962 by a group
of Filipino businessmen to provide financial services to the Filipino-Chinese community. Since its formation, the
Bank has diversified its business, and to date provides a broad range of banking and collateral services to all
sectors of the Philippine economy. The original Certification of Incorporation of the Bank was issued by the
Securities and Exchange Commission (SEC) for a 50-year corporate term. The SEC approved the renewal on
November 19, 2007.

The Bank opened its first office in Binondo, Manila on September 5, 1962. Within a year, the Bank opened its
second branch in Divisoria, Manila. Soon after, the Bank started expanding outside Manila with the opening of its
first provincial branch in Davao. In 1975, the Bank rolled out its first international branch in Taipei, followed by
offices in New York, Guam, Hong Kong, and Tokyo towards the early 1980s. Initially, the role of the Bank’s
foreign offices was to tap expanding Overseas Filipino Workers (OFW) remittance business and to complement
its corresponding branch network. This strategy proved successful as the OFW market grew strongly and the
political turbulence in the Philippines made access to foreign exchange difficult. It was during this period that the
Bank started its Foreign Currency Deposit Unit (FCDU) operations. The Philippine Central Bank authorized
Metrobank to operate its FCDU on April 15, 1977.

In November 1980, the SEC approved and certified the listing of 500,000 common shares of Metrobank’s capital
stock. On February 26, 1981, Metrobank’s common shares were listed on the Makati Stock Exchange Inc. and
the Manila Stock Exchange (which has since unified to become The Philippine Stock Exchange, Inc. or PSE),
with the trading symbol of MBT.

On August 21, 1981, Metrobank became one of the first to be granted a universal banking license by the
Philippine Central Bank, now Bangko Sentral ng Pilipinas (BSP). This license allowed the Bank to engage in
“non-allied undertakings” which include automobile manufacturing, travel services and real estate, as well as
finance-related businesses such as insurance, savings and retail banking, credit card services and leasing.

On August 13, 2013, the SEC approved the amendment of the Articles of Incorporation of the Bank increasing its
authorized capital stock from P50 billion to P100 billion composed of 4.0 billion common shares and 1.0 billion
non-voting preferred shares, each with a par value of P20 per share. The Bank declared a 30% stock dividend
equivalent to 633.4 million common shares (approved for listing by PSE on September 10, 2013) which was
applied as payment for the required minimum 25% subscription to the increase in authorized capital stock. Total
outstanding shares increased to 2,744,801,066 after the stock dividend.

On February 24, 2015, the SEC confirmed the exemption of a rights offer for up to P32.0 billion worth of
common shares from the registration requirements under Section 8 of the Securities Regulation Code.
Subsequently, in April 2015, the Bank completed a rights offer for 435,371,720 common shares with par value of
P20.00. Total outstanding shares increased to 3,180,172,786 after the transaction. On April 12, 2018, the Bank
completed another stock rights offer for 799,842,250 common shares with par value of P20.00. Total outstanding
shares increased to 3,980,015,036 after the transaction.

On October 4, 2019, the SEC approved the amendment of the Articles of Incorporation of the Bank increasing its
authorized capital stock from P100 billion to P140 billion composed of 6.0 billion common shares and 1.0 billion
non-voting preferred shares, each with a par value of P20 per share. The Bank declared a 13% stock dividend
equivalent to 517.4 million common shares (approved for listing by PSE on November 19, 2019) which was
applied as payment for the required minimum 25% subscription to the increase in authorized capital stock. Total
outstanding shares increased to 4,497,415,555 after the stock dividend.
 5

2. Business of Registrant

Services/Customers/Clients

Metrobank offers a complete range of commercial and investment banking services. The Bank’s customer base
covers a cross section of the top Philippine corporate market. The Bank has always been particularly strong in the
middle market corporate sector, a significant proportion of which consists of Filipino-Chinese business.

The Bank’s principal business activities involve deposit-taking and lending, trade finance, remittances, treasury,
investment banking and thrift banking. The Bank is also a major participant in the Philippine foreign exchange
market. It is accredited as a Government Securities Eligible Dealer (GSED) and has played an active role in the
development of the domestic capital markets.

The Bank provides investment banking services through First Metro Investment Corporation (FMIC) and retail
banking through the Bank and its subsidiaries Philippine Savings Bank (PSBank) and Metrobank Card
Corporation (MCC) (before the merger). On March 13, 2019, the respective BODs of the Bank and MCC
approved the proposal to merge MCC into the Bank which will unlock the value of MCC and help realize the
following objectives: (1) improve synergy and cross-sell; (2) increase the profitability and improve capital
efficiency; and (3) enable the Bank to be more competitive in the credit card business. The proposed merger was
ratified by the stockholders of the Bank on April 24, 2019, approved by the BSP on October 23, 2019, and
approved by the SEC on January 3, 2020.

Contribution to Sales/Revenues

The net interest income derived from lending, investment and borrowing activities represents 70.64%, 72.01%
and 74.32% of the Group’s revenue net of interest and finance charges in 2020, 2019 and 2018, respectively.
Other operating income (consisting of service charges, fees and commissions; net trading and securities gains; net
foreign exchange gain; gain on sale of investments in an associates; leasing income; profit from assets sold;
income from trust operations; dividend income; and miscellaneous income) and share in net income of associates
and a joint venture account for 29.36%, 27.99% and 25.68% of the Group’s revenue net of interest and finance
charges in 2020, 2019 and 2018, respectively.

Contribution of Foreign Offices

The percentage contributions of the Group’s offices in Asia, the United States and Europe to the Group’s revenue,
net of interest and finance charges, and external net operating income for the years 2020, 2019 and 2018 are as
follows:

Percentage Contribution to
Offices in Year External Net
Revenue, Net Operating Income
Asia 2020 2.39 3.34
(Other than 2019 2.62 2.68
Philippines) 2018 2.67 2.69
2020 0.36 0.54
United States 2019 0.41 0.46
2018 0.69 0.76
2020 0.03 0.05
Europe 2019 0.04 0.05
2018 0.06 0.06
 6

Significant Subsidiaries

1. First Metro Investment Corporation

FMIC is the investment banking arm of the Metrobank Group. It is an investment house incorporated in the
Philippines on June 25, 1963 with principal place of business at 45th Floor, GT Tower International, Ayala
Avenue corner H.V. dela Costa Street, Makati City. On September 22, 2000, FMIC was merged with
Solidbank Corporation (Solidbank). Solidbank became the surviving entity and was subsequently renamed
First Metro Investment Corporation. FMIC’s shares of stocks (originally Solidbank) were listed on the PSE on
October 25, 1963 and were subsequently delisted effective December 21, 2012. FMIC is a 99.27%-owned
subsidiary of Metrobank.

FMIC is primarily engaged in investment banking and has a quasi-banking license. FMIC and its subsidiaries
offer a wide range of services, from debt and equity underwriting to loan syndication, project finance, financial
advisory, government securities and corporate debt trading, equity brokering, online trading, asset
management and research. It operates through its two main strategic business units:

• Investment Banking Group - the Group manages the investment banking business of the company. FMIC
stands at the forefront of the Philippine capital markets as the investment bank of choice for prominent
corporations and government agencies. Its track record in debt and equity underwriting rests on its key
strength in origination, structuring and execution. The investment bank perennially engages in the lion’s
share of transactions in the debt and equites markets.

FMIC is widely recognized as a leader in debt capital market issuances. The company provides debt
financing solutions to help achieve client objectives that normally include expansion plans, refinancing,
strategic acquisitions or buy-outs, or complex project financing. For years, it has been actively involved in
originating and underwriting Philippines equity issuances, whether private placement or public offering.
The investment bank integrates its expertise and experience in structuring, execution, and distribution to
provide optimal solutions for its clients’ capital requirements. FMIC is also a PSE-accredited financial
advisor providing strategic advice on enhancing corporate value, selecting optimal fundraising structure, and
addressing valuation issues.

• Sales & Distribution Group - the Group is primarily responsible for offering the various FMIC
underwritten products to the investing public. As an active brokering participant, SDG makes available to
its clients the wide range of tradeable fixed income securities in the market. Driving the success of our
underwritten deals is the dynamic synergy between the Investment Banking Group and SDG. FMIC’s
underwriting strength is complemented by its ability to distribute securities widely.

• Treasury Group - the Group is responsible for the trading of financial instruments such as peso- and dollar-
denominated government securities and corporate papers, as well as managing the liquidity requirements of
the company. It is an SEC and BTr-authorized Government Securities Eligible Dealer (GSED) and one of
the most active dealing participants in the industry. It has been selected as one of the market makers of the
Bureau of Treasury. As a market maker for most corporate issues, it provides counterparties and clients
with active two-way quotes, delivering financial solutions that address their specific funding requirements.
Its traders are consistently recognized as top dealers by prestigious publications and organizations.

2. Philippine Savings Bank (PSBank)

PSBank was incorporated on June 30, 1959 to primarily engage in savings and mortgage banking. PSBank is
the country’s first publicly listed thrift bank. Its principal office is located at the PSBank Center, 777 Paseo de
Roxas corner Sedeño Street, Makati City. PSBank is 88.38% - owned subsidiary of Metrobank.

It has outpaced some of its key competitors and is the country’s second largest thrift bank in terms of assets. It
mainly caters the retail and consumer markets and offers a wide range of products and services such as
deposits, loans, treasury and trust functions. PSBank’s network comprises 250 branches and 535 ATMs in
strategic locations nationwide.

PSBank has a 30% interest in Sumisho Motor Finance Corporation (SMFC), a joint venture with Sumitomo
Corporation of Japan. SMFC is not listed in the stock exchange.
 7

3. ORIX METRO Leasing and Finance Corporation (ORIX Metro)

ORIX Metro was incorporated in the Philippines and was registered with the SEC on June 28, 1977. Its
primary purpose is to engage in financing by leasing all kinds of real and personal property; to extend credit
facilities to consumers and enterprises by discounting commercial papers or accounts receivable, or by buying
or selling evidences of indebtedness; and to underwrite securities. On August 24, 2007, ORIX Metro was
authorized by the BSP to engage in quasi-banking functions. ORIX Metro engaged in quasi-banking functions
effective January 1, 2008 as agreed to by the BSP subject to certain conditions.

ORIX Metro is owned by Orix Corporation, Metrobank and FMIC, with shareholdings of 40%, 40%, and
20%, respectively. ORIX Metro and its subsidiaries’ parent company is Metrobank. The registered office
address of ORIX Metro is at 21st Floor, GT Tower International, Ayala Avenue corner H.V. Dela Costa Street,
Makati City.

4. Metropolitan Bank (China) Ltd. (MBCL)

MBCL is a wholly-owned subsidiary of Metrobank established in the People’s Republic of China with the
approval of China Banking Regulatory Commission (CBRC) (now China Banking Regulatory and Insurance
Commission) on January 14, 2010. Within the territory of China, MBCL may engage in provision of all kinds
of foreign exchange services to all types of customers and except for PRC citizens, provide all kinds of
Renminbi services to all types of customers, with the business scope to include: accepting deposits; granting
short-term, medium-term and long-term loans; handling acceptance and discount of negotiable instruments;
buying and selling treasury bonds, financial bonds and other foreign exchange securities (other than stocks);
offering L/C services and guarantees; arranging settlements of both domestic and overseas accounts; buying
and selling foreign exchange either for itself or on behalf of its clients; handling insurance business as an
agent; undertaking inter-bank borrowing or lending; providing service of safety deposit box; providing credit
standing investigation and consultation service; and other business activities as approved by CBRC.

MBCL started its operations on March 2, 2010. Its headquarters is located in Nanjing, Jiangsu Province. It is
the first wholly foreign-owned bank incorporated in Jiangsu Province, China. The former Metrobank
Shanghai Branch and Pudong Sub-Branch were absorbed by MBCL. At present, aside from its Head Office,
MBCL has nine (9) branches/sub-branches as follows: Nanjing Branch, Shanghai Branch, Shanghai-Pudong
Sub-Branch, Changzhou Branch, Quanzhou Branch, Changzhou Xinbei Sub-Branch, Changzhou Wujin Sub-
Branch, Xiamen Branch and Suzhou Branch.

5. First Metro International Investment Company Limited (FMIIC)

FMIIC is a Hong Kong-registered company incorporated in 1972. It was engaged mainly in deposit-taking,
loans, and remittances. However, since 2008, its activity was limited to investment; non-operating entity.
Metrobank acquired majority shares in FMIIC in 1978. FMIIC is 100% owned by Metrobank.

6. Metro Remittance (Hong Kong) Limited

A wholly-owned subsidiary of Metrobank incorporated in October 1994 to provide money transmission

services in Hong Kong. At present, MRHKL has five (5) branches located in United Centre, Worldwide
House, Shatin, Tsuen Wan and Tsueng Kwan O.

7. Metro Remittance (Singapore) Pte. Ltd.

A wholly-owned remittance subsidiary of Metrobank established in April 2004 to conduct money-changing

businesses and provide remittance services to Filipinos and other nationals in Singapore. The Company
started commercial operations on November 12, 2004.

8. Metro Remittance (USA), Inc. (MRUSA)

A wholly-owned remittance subsidiary of Metrobank was initially established to pursue the plan of expanding
its remittance operations in California, U.S.A. MRUSA merged with Metro Remittance Center, Inc. (MRCI)
effective December 28, 2017. MRCI was a wholly-owned subsidiary of Metrobank incorporated under the
General Corporation Law of the State of Delaware on November 12, 1992. MRUSA, as a surviving company
 8

reclassified its type of business from a money service business to a holding company effective August 1, 2019.
Its subsidiaries are:

• Metro Remittance (Canada), Inc.

The Company was established to further strengthen the Bank's presence and address the remittance needs
of the growing number of Filipinos in Canada. Its branches are located in Vancouver and Toronto which
opened on August 1 and November 6, 2006, respectively.

• MB Remittance Center Hawaii, Ltd.

The Company, established in 2002 and acquired by MRCI in 2005, provides money transmission services
to Filipinos in Hawaii.

9. Metro Remittance (UK) Limited (MR UK)

Metrobank acquired all of the outstanding shares of MRUK in May 2004. It was incorporated on September
24, 2002 in England as a private limited company and commenced trading at its premises at Kensington
Church Street in London on June 4, 2003. The Company provides fast, secure and affordable money
transmission services to the Philippines. It utilizes on-line, real-time computerized links with Metrobank
which completes the funds delivery processes to named beneficiaries.

10. Metro Remittance (Japan) Co. Ltd. (MR Japan)

A wholly-owned subsidiary of Metrobank incorporated in Yokohama, Japan on May 8, 2013. It started its
remittance operations on October 31, 2013. The Company was established to expand the Bank’s presence as
well as to strengthen its remittance business in Japan.

Distribution Methods of Products and Services

To remain strongly positioned and retain its leadership, Metrobank continued to upgrade and expand its
distribution channels:

1. Branches

Metrobank ended 2020 and 2019 with 706 and 707 branches, respectively. The Bank believes that it has
reached its optimal state in terms of its branch network and is confident that it has the size and scale to pursue
its growth plans.

2. Remittance Centers

To further expand the remittance business of the Bank and its presence in the international market, remittance
alliances were established between the Bank and several well-established businesses in the country.

2020 - New International Remittance Tie-Ups

a. Rewire OSG Research and Development Ltd. h. Global Remit Currency Services
b. ARY Exchange Company WLL i. SGS Corporation
c. Moneytun LLC j. Forex World Pty Ltd
d. PFG Forex Pty Ltd k. Jeonbuk Bank Co. Ltd
e. Fastpay International Ltd. l. Kuwait Bahrain International Exchange
f. Kuwait Asian International Exchange Company m. Worldwide Cash Express Limited
g. Lulu Exchange Company WLL n. Guavapay Limited

2020 - New Local Remittance Tie-Up

a. Fast Remit Service Inc.

 9

3. ATMs

All of Metrobank’s 1,774 ATMs are full-featured and allow a wide array of financial and non-financial
transactions for its clients and those of BancNet member banks. Apart from being the first bank to secure
EMV-chip (Euro MasterCard VISA) certification in the Philippines, it has deployed 179 Cash Accept
Machines to allow clients to make real-time cash deposits to their accounts. We have installed security
device in machines, thus providing more secure and convenient solutions to meet its clients’ banking needs.

4. Mobile Banking

Metrobank Mobile Banking is an electronic banking channel that enables customers to perform various
financial transactions via Apple iOS and Android mobile banking devices. Enrollment is done online,
making banking transactions within a customer’s reach anytime, anywhere.

5. Online Banking

• Metrobank Online (onlinebanking.metrobank.com.ph) is Metrobank's new online banking platform with

an enhanced user experience and interface. This allows clients to have instant access to their accounts
and do banking transactions in the most convenient way anytime, anywhere, using any device. Features
include: Balance Inquiry, Transaction History, Fund Transfers, Bill Payments, Online Time Deposits,
UITF Online, QR Code Transfers, and more.

• Metrobankdirect Corporate is an integrated platform that provides companies with online and real-time
access to their accounts. It also helps them manage their business needs through efficient, flexible and
secured designs of the best cash management solutions.

6. MBOS (Metrobank Business Online Solution) is a web-based application that replaced MetrobankDirect.
Similar to MetrobankDirect, MBOS provides real-time access to client account statement and transaction
history. Corporate enrolled in the facility can likewise initiate transactions at their own convenience. A fully
integrated platform that supports latest technology that the market needed. MBOS embodied new
functionalities for Cash and Trade solution for corporate clients.

7. E-Government Facilities

• Tax Direct facility is a web based payment facility of Metrobank that allows both retail and corporate
clients to pay their tax dues on tax returns filed through the BIR EFPS website.

• Bancnet’s eGov Payment facility is a highly convenient online service that allows clients to
electronically remit their monthly SSS, Philhealth and PAG-IBIG contributions and loan payments.

Competition

The Bank faces competition from both domestic and foreign banks. The number of foreign banks operating in the
country has increased in recent years, in part as a result of the liberalization of the banking industry by the
Government in 1994 and again in 2014.

As of December 31, 2020, the Philippine universal/commercial banking sector consisted of 46 banks, including 26
foreign bank entities. In terms of classification, there are 21 universal banks and 25 commercial banks. Of the 21
universal banks, 12 are private domestic banks, three are government banks and six are branches of foreign banks.
Of the 25 commercial banks, five are private domestic banks, two are subsidiaries of foreign banks and 18 are
branches of foreign banks. The ten largest universal/commercial banks in the country accounted for over 80% of
total assets, loans and total deposits of the universal/commercial banking system based on published statements of
condition as of September 30, 2020.

Products and services offered by the larger commercial banks are fairly similar, and banks have used competitive
pricing to attract clients. Customer coverage, accessibility and customer experience also act as other key
 10

differentiating factors. The smaller domestic banks and foreign banks, on the other hand usually operate in
smaller niche markets.

The BSP has been encouraging consolidation among banks in order to strengthen the Philippine banking system.
Mergers and consolidations may result in greater competition as it strengthens the financial capabilities of a
smaller group of “top tier” banks. In December 2016, the BSP issued a memorandum providing regulatory
incentives for mergers, consolidations and acquisition of majority or all outstanding shares of stock of a bank or
quasi bank.

Innovations and Promotions

In 2020, Metrobank Group continued to introduce campaigns and promotions to address the market’s needs.

• To enhance the non-physical banking capabilities of clients, Metrobank revamped its online banking platform
through Metrobank Online. The new facility features allow clients to secure their purchases and money
transfers with a passcode, real-time SMS and email notification of account activities for easy monitoring, and
faster processing of frequent transactions, among others. With Metrobank Online, clients may view, add and
redeem investments, as well as request a call with an investment specialist. Metrobank Online is also
optimized for mobile use, making it easy for clients to access their accounts through their smartphones.
Likewise, through the Earnest app, aside from offering clients bite-sized lessons and easy-to-read articles
about investments, clients may now open digital deposit and investment accounts, while accessing the Bank’s
wide range of products and services. Complementing the Bank’s online banking initiatives, Metrobank also
deployed mobile ATMs to reach more clients and facilitate their banking needs.

• Metrobank continued to offer exclusive deals through its partner merchants, both retail and online, while
supporting client amid disruptions caused by the pandemic. In May 2020, the Bank launched a 0%
installment plan for essential spend to help ease cardholders’ worries and manage their spending during the
enhanced community quarantine. The Bank also launched a donation drive encouraging Metrobank credit
cardholders to help fellow Filipino workers whose livelihoods have been affected by the enhanced
community quarantine. Cardholders had the option convert their credit card Rewards Points into a donation
for Filipino communities in need through the McDo Kindness Kitchen and GMA Kapuso Foundation. Plus,
Metrobank committed to also make a donation equal to the amount that the cardholders pledge.

• To ease customer convenience, the Bank also launched a Mobile Statement of Account (SOA) facility
wherein SOAs are sent to clients’ mobile phones through SMS and a secure personalized link – a way to
minimize physical deliveries. Metrobank also launched PayNow, a convenient facility that lets Metrobank
credit cardholders send money to any bank account in an instant.

• To cap off the year, Metrobank was also recognized by Digital Banker for Outstanding Social Media
Campaign at the Global Retail Banking Innovation Awards for 2020 as the Bank effectively used social
media to reach a younger segment by collaborating with 30 social influencers and had over 30% growth in
card sign-ups.

• Metrobank spearheaded Scam Proof, an online platform that consolidates information about different online
scams and fraudulent activities. Mindful of increasing digital transactions that are vulnerable to illicit
schemes, this financial education initiative aims to increase awareness about such online scams with tips on
how to avoid them. The platform engages the community in detecting and reporting fraud across banks and
other industries, thus empowering consumers. In “Scam Proof,” the users can learn about the basic bank
account security measures so they can protect their confidential information. The website also provides
knowledge on how to identify red flags of potentially fraudulent activities. As the Bangko Sentral ng
Pilipinas aims to further increase the adaptation of digital transactions and as financial technologies improve,
this online repository of latest fraud techniques will be beneficial for everyone as it helps educate the
community and deters fraudulent activity.

• Metrobank once again partnered with AXA Philippines to offer a free one-year PHP 100,000-coverage AXA
Personal Accident Insurance for accidental death or permanent disability from the moment a client opens a
new savings or checking deposit account at any Metrobank branch during the promotion period.
 11

• PSBank upgraded its Mobile App to enable customers to open a Peso time deposit account online, lessening
the need for physical transactions. PSBank also enabled clients to use QR codes for quick and easy money
transfer and P2P payments, thus reducing the need to input or memorize account numbers and other account
details for fast and easy transactions. Likewise, its consumer and business loan clients can now pay loans
through Instapay fund transfer. All these initiatives aim to improve customers’ ability to conveniently and
securely do bank transactions from their homes. PSBank also launched a social media campaign called Tap,
Tap, Tapos Agad that reiterates the value of its robust mobile app, underscoring its commitment to enable
customer to complete any banking transaction in just a few taps on the mobile app, lessening the need for
physical contact or in-branch appearance. The campaign showcases how simple and fast users can do their
banking transactions using the improved functionalities of PSBank Mobile App.

• AXA Philippines partnered with Cebu Pacific to reach more customers and offer value-for-money health
solutions and insurance plans online. In the third quarter of 2020, AXA launched Global Health Access
(GHA) which includes pandemic coverage and GHA Gold Lite Plus which provides inpatient and outpatient
coverage for more affordable rates. Aside from that, customers were given access to free teleconsultation
during the quarantine necessitated by the pandemic. AXA also held several webinars via social media to
discuss relevant topics such as home schooling, prioritizing physical and mental health and managing
investments during the pandemic. During Bayanihan Act I and II, AXA promptly sent customers to inform
them of the grace period extension. In November 2020, AXA launched a rewards program to provide
customers with exclusive benefits and allows them to earn points for transactions and online interactions.

• First Metro Investment Corporation (FMIC) was awarded as the Best Investment Bank in the Philippines by
FinanceAsia, a Hong Kong-based financial publishing firm. For 2020, FMIC’s resilience and ability to adapt
to fast-changing conditions even under business disruptions posed by the pandemic stood out from peers as it
closed 18 investment banking deals with different private companies and facilitated Retail Treasury Bonds
with the government. FMIC also bagged the Best M&A House in the Philippines award by Alpha Southeast
Asia for its advisory work for GT Capital Holdings Inc. FMIC was also recognized in Asiamoney’s Leaders
for Women 2020 for its efforts in encouraging women in the workplace.

• First Metro Asset Management Inc. (FAMI) launched several webinars and promos throughout the year keep
clients engaged and informed. In May 2020, FAMI continued to reach out to clients via webcasts that
discussed views and investment strategies during the pandemic. At the height of the lockdown, FAMI kept
clients informed as much they can, both on safety precautions and investment advisory. Before 2020 ended,
FAMI conducted a free webinar to educate Filipinos about investing for the next year, with a focus on mutual
funds. FAMI also launched occasion-based promos to keep customers engaged as they were urged to share
stories – anecdotes or experiences for promos on Valentine’s Day #MyFAMIValentine promo, Mother’s Day
Treat Your Mom promo and Father’s Day Thank you, Dad! promo. FAMI also reached out to prospective
clients and raised brand awareness through social media contests such as 12 Days of Christmas Fun, a trivia
game on FAMI’s Facebook account. FAMI tied up with Grab Philippines to develop and improve the
financial literacy of Grab’s more than 70,000 Partner-Drivers through seminars on financial goal-setting,
budgeting, education planning, retirement planning, investment planning, and family finance. Partner-Drivers
will also be given their own relationship manager who can advise them on investment strategies to help
achieve their financial goals.

Transactions with and/or Dependence on Related Parties

Transactions with related parties and with certain directors, officers, stockholders and related interests (DOSRI)
are discussed in Note 31 of the audited financial statements of the Group as presented in Exhibit 4.

Patents, Trademarks, Copyrights, Licenses, Franchises, Concessions, and Royalty Agreements Held

The Bank’s major products and service lines are sold through Metrobank trade names or trademarks, among
others:

1. For ATMs: Metrobank Debit Card and Metrobank Prepaid Card

2. For credit cards: Metrobank Rewards Plus Visa; Metrobank Titanium Mastercard; Metrobank Vantage
Mastercard/Visa; Metrobank Femme Visa/Femme Signature Visa; Metrobank Travel Platinum Visa;
Metrobank Peso Platinum Mastercard; Metrobank World Mastercard; Metrobank Dollar Mastercard;
 12

Metrobank ON Internet Mastercard; Metrobank M Free Mastercard; Metrobank M Lite Mastercard;

Metrobank Corporate Card; Toyota Mastercard; PSBank Credit Mastercard; Puregold Mastercard and NCCC
Mastercard. Features: Cash2Go; Balance Transfer; Bills2Pay; M Here (Shopping Perks & Privileges);
Rewards and PayNow.
Prepaid Card: YAZZ Reloadable Prepaid Visa; Victory Liner Premiere Prepaid Visa; NWorld Cash Card;
Pisopay.com Prepaid Visa; AXA Prepaid Visa; Ardeur Bonus Card; JAC Liner My Ride Card; WeEvolve
Prepaid VISA; UniPrint Elite Prepaid VISA; IAM Worldwide Prepaid VISA; Metrobank Prepaid VISA AND
PayCard.
3. For internet banking: Online Banking and MBOS
4. For mobile banking: Metrobank Mobile Banking
5. For remittance services: Metrobank Superbilis Padala, World Cash Card, MetroRemit, PayStation,
CollectAnywhere, PayAnywhere and Payroll Plus
6. For consumer lending: MetroHome and MetroCar
7. For special current account: MetroChecking Extra; MetroAccount One
8. For special savings account for kids below 18 years old.: Fun Savers Club (FSC) Regular and Spark Savings
Account
9. For Trust products: Metro Money Market Fund; Metro Short Term Fund; Metro Max-3 Bond Fund; Metro
Max-5 Bond Fund; Metro Corporate Bond Fund; Metro Balanced Fund; Metro Unit Paying Fund; Metro
Equity Fund; Metro Philippine Equity Index Tracker Fund; Metro High Dividend Yield Fund; Metro$ Money
Market Fund; Metro$ Short Term Fund; Metro$ Max-3 Bond Fund; Metro$ Max-5 Bond Fund; Metro$
Asian Investment Grade Bond Fund; Metro$ World Equity Feeder Fund; Metro$ Eurozone Equity Feeder
Fund; Metro$ US Equity Feeder Fund; Metro$ Japan Equity Feeder Fund; Metro$ US Investment Grade
Corporate Bond Feeder Fund; Metro Aspire Bond Feeder Fund; Metro Aspire Balanced Feeder Fund and
Metro Aspire Equity Feeder Fund.

Corporate licenses include the following:

1. For Metrobank: expanded commercial banking license, FCDU license, license for trust operations, type 2
limited dealer authority, government securities eligible dealer (GSED) with broker-dealer of securities
functions
2. For PSBank: thrift banking license, FCDU license, license for trust operations, GSED (non-market maker) as
dealer-broker, type 3 limited user authority and quasi-banking license
3. For FMIC: investment house and investment company adviser (ICA)
4. For ORIX Metro: financing company and quasi-banking license
5. For MBCL: financial license to expire on January 13, 2040

All the Bank’s trademark registrations are valid for 10 years. The Bank closely monitors the renewal dates of
registrations to protect and secure its rights to these trademarks. Corporate licenses issued by different regulatory
bodies have no specific expiration dates except for the GSED licenses of Metrobank and PSBank which is
renewable annually every November.

Government Approval of Principal Products or Services

The Group regularly obtains approvals and permits from regulatory bodies and agencies, as applicable, prior to
the offering of its products and services to the public.

Effect of Existing or Probable Government Regulations

BSP Reporting

Regulatory Qualifying Capital

Under existing BSP regulations, the determination of the compliance with regulatory requirements and ratios is
based on the amount of the “unimpaired capital” (regulatory net worth) as reported to the BSP, which is
determined on the basis of regulatory accounting policies that differ from PFRS in some respects.

The Group complied with BSP Circular No. 781, Basel III Implementing Guidelines on Minimum Capital
Requirements, which provides the implementing guidelines on the revised risk-based capital adequacy framework
 13

particularly on the minimum capital and disclosure requirements for universal banks and commercial banks, as
well as their subsidiary banks and quasi-banks, in accordance with the Basel III standards. The Circular sets out a
minimum Common Equity Tier 1 (CET1) ratio of 6.00% and Tier 1 capital ratio of 7.50%; capital conservation
buffer of 2.50% comprised of CET1 capital and Total Capital Adequacy Ratio (CAR) of 10.00%. These ratios
shall be maintained at all times. Further, BSP Circular No. 856 covers the implementing guidelines on the
framework for dealing with domestic systemically important banks (DSIBs) in accordance with the Basel III
standards. Banks identified as DSIBs shall be required to have higher loss absorbency, on top of the minimum
CET1 capital and capital conservation buffer. Compliance with this requirement was phased-in starting January 1,
2017, with full compliance on January 1, 2019.

Qualifying capital and risk-weighted assets (RWA) are computed based on BSP regulations. The Group and its
individually regulated operations have complied with all externally imposed capital requirements throughout the
year.

The Internal Capital Adequacy Assessment Process (ICAAP) supplements the BSP’s risk-based capital adequacy
framework. In compliance with this, the Group has adopted and developed its ICAAP framework to ensure that
appropriate level and quality of capital are maintained by the Group. Under this framework, the assessment of
risks extends beyond the Pillar 1 set of credit, market and operational risks and onto other risks deemed material by
the Group. The level and structure of capital are assessed and determined in light of the Group’s business
environment, plans, performance, risks and budget as well as regulatory edicts.

Basel III Leverage Ratio (BLR)

BSP Circular Nos. 881 and 990 cover the implementing guidelines on the BLR framework designed to act as a
supplementary measure to the risk-based capital requirements and shall not be less than 5.00%. The monitoring
period has been set every quarter starting December 31, 2014 and extended until June 30, 2018. Effective July 1,
2018, the monitoring of the leverage ratio was implemented as a Pillar I minimum requirement.

Liquidity Coverage Ratio (LCR)

BSP Circular No. 905 provides the implementing guidelines on LCR and disclosure standards that are consistent
with the Basel III framework. The LCR is the ratio of high-quality liquid assets to total net cash outflows which
should not be lower than 100.00%. Compliance with the LCR minimum requirement commenced on January 1,
2018 with the prescribed minimum ratio of 90.00% for 2018 and 100.00% effective January 1, 2019.

Net Stable Funding Ratio (NSFR)

On June 6, 2018, the BSP issued BSP Circular No.1007 covering the implementing guidelines on the adoption of
the Basel III Framework on Liquidity Standards – NSFR. The NSFR is aimed to promote long-term resilience
against liquidity risk by requiring banks to maintain a stable funding profile in relation to the composition of its
assets and off-balance sheet activities. It complements the LCR, which promotes short term resilience of a bank's
liquidity profile. Banks shall maintain an NSFR of at least 100 percent (100%) at all times. The implementation
of the minimum NSFR shall be phased in to help ensure that covered banks can meet the standard through
reasonable measures without disrupting credit extension and financial market activities. An observation period
was set from July 1 to December 31, 2018. Effective, January 1, 2019, banks shall comply with the prescribed
minimum ratio of 100%.

The details of CAR, BLR, LCR and NSFR of the Group and the Bank, as reported to the BSP, are discussed in
Note 4 of the Audited Financial Statements as presented in Exhibit 4.

Applicable Tax Regulations

Under Philippine tax laws, the RBU of the Parent Company and its domestic subsidiaries are subject to percentage
and other taxes (presented as ‘Taxes and licenses’ in the statement of income) as well as income taxes. Percentage
and other taxes paid consist principally of gross receipts tax (GRT) and documentary stamp tax (DST). Income
taxes include 30.00% regular corporate income tax (RCIT) and 20.00% final taxes paid, which is a final
withholding tax on gross interest income from government securities and other deposit substitutes. Interest
allowed as a deductible expense is reduced by an amount equivalent to 33.00% of interest income subjected to
final tax.
 14

Current tax regulations also provide for the ceiling on the amount of EAR expense (Note 25) that can be
claimed as a deduction against taxable income. Under the regulation, EAR expense allowed as a deductible
expense for a service company like the Parent Company and some of its subsidiaries is limited to the actual EAR
paid or incurred but not to exceed 1.00% of net revenue. The regulations also provide for MCIT of 2.00% on
modified gross income and allow a NOLCO. The MCIT and NOLCO may be applied against the Group’s
income tax liability and taxable income, respectively, over a three-year period from the year of inception.

FCDU offshore income (income from non-residents) is tax-exempt while gross onshore income (income from
residents) is subject to 10.00% income tax. In addition, interest income on deposit placements with other
FCDUs and offshore banking units (OBUs) is taxed at 15.00%. Income derived by the FCDU from foreign
currency-denominated transactions with non-residents, OBUs, local commercial banks including branches of
foreign banks is tax-exempt while interest income on foreign currency loans from residents other than OBUs or
other depository banks under the expanded system is subject to 10.00% income tax.

The applicable taxes and tax rates for the foreign branches of the Bank are discussed in Note 28 of the Audited
Financial Statements as presented in Exhibit 4.

Research and Development Costs

For the last three fiscal years, the Bank has not incurred any expenses for research and development.

Employees

Metrobank had 13,718 employees as of December 31, 2020. By year-end 2021, the Bank projects to have 13,986
employees.

Officers Rank and File Total

As of year-end 2020:
AVPs and up 574 574
Senior Managers and down 6,127 7,017 13,144
6,701 7,017 13,718
By year-end 2021 (projected):
AVPs and up 586 586
Senior Managers and down 6,318 7,082 13,400
6,904 7,082 13,986

Majority of the registrant’s rank and file employees are members of the employees’ union. Benefits or incentive
arrangements of the rank and file employees are covered by the Collective Bargaining Agreement (CBA) that is
effective for three years. The Bank continues to ensure that its employees are properly compensated. The latest
CBA that is effective for three years beginning January 2019 will end in December 2021. The Bank has not
experienced any labor strikes and the management of the Bank considers its relations with its employees and the
Union to be harmonious.

Risk Management

The Group has exposure to the following risks from its use of financial instruments: (a) credit; (b) liquidity; and
(c) market risks. Detailed discussions and analysis on Risk Management of the Group are disclosed in Note 4 of
the Audited Financial Statements as presented in Exhibit 4.

Risk management framework

The Board of Directors (BOD) has overall responsibility for the oversight of the Bank’s risk management process.
On the other hand, the risk management processes of the subsidiaries are the separate responsibilities of their
respective BOD. Supporting the BOD in this function are certain Board-level committees such as Risk Oversight
Committee (ROC), Audit Committee (AC) and senior management committees through the Executive Committee
and Asset and Liability Committee (ALCO) among others.
 15

The ROC, which is composed primarily of independent members of the BOD, is responsible for overseeing the
Bank’s risk infrastructure, the adequacy and relevance of risk policies, and the compliance to defined risk appetite
and levels of exposure. The ROC is assisted in this responsibility by the Risk Management Group (RSK). The
RSK undertakes the implementation and execution of the Bank’s Risk Management framework which involves the
identification, assessment, control, monitoring and reporting of risks.

The Bank and its subsidiaries manage their respective financial risks separately. The subsidiaries have their own
risk management processes but are structured similar to that of the Bank. To a certain extent, the respective risk
management programs and objectives are the same across the Group. The risk management policies adopted by
the subsidiaries and affiliates are aligned with the Bank’s risk policies. To further promote compliance with PFRS
and Basel III, the Bank created a Risk Management Coordinating Council (RMCC) composed of risk officers of
the Bank and its financial institution subsidiaries.

Credit Risk

Credit risk is the risk of financial loss to the Group if a counterparty to a financial instrument fails to meet its
contractual obligations. The Group manages and controls credit risk by setting limits on the amount of risk it is
willing to accept for individual counterparties, related groups of borrowers, market segments, and industry
concentrations, and by monitoring exposures in relation to such limits, among others. The same is true for
treasury-related activities. Each business unit is responsible for the quality of its credit portfolio and for
monitoring and controlling all credit risks in its portfolio. Regular reviews and audits of business units and credit
processes are undertaken by the RSK and Internal Audit Group, respectively.

Liquidity Risk

Liquidity risk is the current and prospective risk to earnings or capital arising from the inability to meet obligations
when they come due. This may be caused by the inability to liquidate assets or to obtain funding to meet liquidity
needs. The Group manages its liquidity risk by holding adequate stock of high quality liquid assets, analyzing net
funding requirements over time, diversifying funding sources and contingency planning. To measure the
prospective liquidity needs, the Group uses Maximum Cumulative Outflow (MCO), a liquidity gap tool to project
short-term as well as long-term cash flow expectations on a business-as-usual condition. The MCO is generated by
distributing the cash flows of the Group’s assets, liabilities and off-balance sheet items to time bands based on cash
flow expectations such as contractual maturity, nature of the account, behavioral patterns, projections on business
strategies, and/or optionality of certain products. The incorporation of behavioral cash flow assumptions and
business projections or targets results in a dynamic gap report which realistically captures the behavior of the
products and creates a forward-looking cash flow projection.

Cash flows from assets are considered as cash inflows, while cash flows from liabilities are considered cash
outflows. The net cash flows are determined for each given time period. If the inflows exceed the outflows, the
Group is said to have a positive liquidity gap or excess funds for the given time bucket. Conversely, if the outflows
exceed the inflows, the Group is said to have a negative liquidity gap or funding need for the given time bucket.

The MCO is monitored regularly to ensure that it remains within the set limits. The Bank generates and monitors
daily its MCO, while the subsidiaries generate the report at least monthly. The liquidity profile of the Group is
reported monthly to the Parent Company’s ALCO and ROC. To supplement the business-as-usual scenario
parameters reflected in the MCO report, the Group also conducts liquidity stress testing to determine the impact of
extreme factors, scenarios and/or events to the Group’s liquidity profile. Liquidity stress testing exercise is
performed quarterly on a per firm basis, and at least annually on the Group-wide level.

Market Risk

Market risk is the possibility of loss to future earnings, fair values, or future cash flows that may result from
changes in the price of a financial instrument. The value of a financial instrument may change as a result of
changes in interest rates, foreign exchange rates, and other market factors. Market risk originates from holdings in
foreign currencies, debt securities, and derivatives transactions. Depending on the business model for the product,
i.e., whether they belong to the trading book or banking book, the Group applies different tools and processes to
manage market risk exposures. Risk limits, approved by the BOD, are enforced to monitor and control this risk.
RSK, as an independent body under the ROC, performs daily market risk analyses to ensure compliance to
policies and limits, while Treasury Group manages the asset/liability risks arising from both banking book and
trading operations in financial markets. The ALCO, chaired by the President, manages market risks within the
 16

parameters approved by the BOD.

As part of group supervision, the Bank regularly coordinates with subsidiaries to monitor their compliance to their
respective risk tolerances and to ensure alignment of risk management practices. Each subsidiary has its own risk
management unit responsible for monitoring its market risk exposures. The Bank, however, requires regular
submission of market risk profiles which are presented to ALCO and ROC in both individual and consolidated
forms to provide senior management and ROC a holistic perspective, and ensure alignment of strategies and risk
appetite across the Group.

Market Risk - Trading Book

In measuring the potential loss in its trading portfolio, the Bank uses VaR. VaR is an estimate of the potential
decline in the value of a portfolio, under normal market conditions, for a given “confidence level” over a specified
holding period. The Bank measures and monitors the Trading Book VaR daily, and this value is compared against
the set VaR limit. Meanwhile, the Group VaR is monitored and reported monthly. The limitations of the VaR
methodology are recognized by supplementing VaR limits with other position and sensitivity limit structures and
by doing stress testing analysis. These processes address potential product concentration risks, monitor portfolio
vulnerability and give the management an early advice if an actual loss goes beyond what is deemed to be
tolerable to the Group and the Bank, even before the VaR limit is hit.

Stress testing is performed by the Bank on a quarterly basis and the results are reported to the ALCO and,
subsequently, to the ROC and BOD. On a Group-wide perspective, stress testing is done, at least, annually. The
results are reported by the Bank’s Risk Management Group to the BOD through ROC.

Market Risk - Banking Book

The Group has in place their own risk management system and processes to quantify and manage market risks in
the banking book. To the extent applicable, these are generally aligned with the Bank’s framework/tools.

Interest rate risk

The Group assesses interest rate risk in the banking book using measurement tools such as Interest Rate Repricing
Gap, Earnings-at-Risk (EaR), Delta Economic Value of Equity (ΔEVE), and Sensitivity Analysis.

Interest Rate Repricing Gap is a tool that distributes rate-sensitive assets and liabilities into pre-defined tenor
buckets according to time remaining to their maturity (if fixed rate) or repricing (if floating rate). Items lacking
definitive repricing schedule (e.g., current and savings account) and items with actual maturities that could vary
from contractual maturities (e.g., securities with embedded options) are assigned to repricing tenor buckets based
on analysis of historical patterns, past experience and/or expert judgment.

The Group calculates EaR using Historical Simulations (HS) approach, with one-year horizon and using five
years data. EaR is then derived as the 99th percentile biggest drop in net interest income.

Foreign currency risk

Foreign exchange risk is the probability of loss to earnings or capital arising from changes in foreign exchange
rates. Foreign currency liabilities generally consist of foreign currency deposits in the Group’s FCDU account.
Foreign currency deposits are generally used to fund the Group’s foreign currency-denominated loan and
investment portfolio in the FCDU. Banks are required by the BSP to match the foreign currency liabilities with
the foreign currency assets held in FCDUs. Outside the FCDU, the Group has additional foreign currency assets
and liabilities in its foreign branch network. The Group’s policy is to maintain foreign currency exposure within
acceptable limits and within existing regulatory guidelines.

ITEM 2 – PROPERTIES

Metrobank’s Head Office is located at Metrobank Plaza, Sen. Gil Puyat Avenue, Urdaneta Village, Makati City, Metro
Manila. The Bank owns the premises occupied by its Head Office, including most of its branches (40% of its branch
sites are owned). Presented in Exhibit 1 is the list of Bank-owned nationwide branches as of December 31, 2020.
The Bank also owns the premises occupied by the Cash Management Services Unit (CMSU) located at
Metropolitan Technological Park which becomes the main hub of all CMSU operations and the premises occupied
by various support units including Trust Banking Group located at Metrobank Center, Bonifacio Global City,
Taguig City. The Bank holds clean titles to these properties.
 17

The Bank leases the premises occupied by many of its branches. Generally, lease contracts are for periods ranging
from 1 to 25 years and are renewable under certain terms and conditions. Presented in Exhibit 2 is a summary of the
Bank’s nationwide branches as of December 31, 2020 that occupy leased premises.

The Bank has no current plans to acquire properties in the next twelve (12) months other than those discussed in
Item 6, Management’s Discussion and Analysis or Plan of Operations under Material Commitments for Capital
Expenditures Section.

The composition of and movements in the properties of the Bank are disclosed in Note 10 of the Audited Financial
Statements as presented in Exhibit 4.

ITEM 3 – LEGAL PROCEEDINGS

Several suits and claims relating to the Group’s operations and labor-related cases remain unsettled. In the opinion of
management, these suits and claims, if decided adversely, will not involve sums having a material effect on the
Group’s financial statements.

PART II – OPERATIONAL AND FINANCIAL INFORMATION

ITEM 5 – MARKET FOR ISSUER’S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

Market Information

In November 1980, the SEC approved and certified the listing of 500,000 common shares of Metrobank’s capital stock
with par value of P100.00 each. On February 26, 1981, the listing and trading of Metrobank’s common shares with
the Makati Stock Exchange, Inc. and Manila Stock Exchange (which unified to become The PSE) took effect with the
trading symbol of MBT. Today, the Bank’s common shares are all listed at the PSE.

Average market prices per share for each quarter within the last two years and subsequent interim periods were as
follows:

MARKET PRICES
YEAR QUARTER ENDED HIGH LOW CLOSE AVERAGE
2021 March 31 51.60 44.40 44.40 47.75
February 28 51.00 44.50 50.70 48.17
January 31 50.00 44.50 45.00 47.52
2020 March 31 67.00 35.30 40.00 56.16
June 30 43.00 33.20 37.00 37.77
September 30 39.20 33.10 38.20 35.65
December 31 51.75 38.60 49.05 45.02
2019 March 31 74.60 66.55 70.71 71.36
June 30 70.75 62.35 63.05 65.62
September 30 69.03 59.20 60.53 63.45
December 31 68.45 58.36 66.30 65.26

Closing price as of April 6, 2021 was P44.70 per share.

Holders

The Bank has 2,999 stockholders as of December 31, 2020.

Top Twenty Stockholders

Following are the top 20 stockholders as of December 31, 2020:

 18

PERCENT TO
TOTAL
NAME OF STOCKHOLDER NO. OF SHARES ADDITIONS/ NO. OF SHARES NO. OF
AS OF (DISPOSALS) AS OF OUTSTANDING
DECEMBER 31, DECEMBER 31, COMMON
2019 2020 SHARES
1 GT Capital Holdings, Inc. a 1,648,502,340 22,108,670 1,670,611,010 37.146
2 PCD Nominee Corporation (Filipino) b 870,478,737 197,102,043 1,067,580,780 23.738
3 PCD Nominee Corporation (Non-Filipino) 1,247,585,508 (236,744,787) 1,010,840,721 22.476
4 Grand Titan Capital Holdings, Inc. 203,246,909 - 203,246,909 4.519
5 Philippine Securities Corp. 113,000,000 - 113,000,000 2.513
6 Nove Ferum Holdings, Inc. 76,226,918 - 76,226,918 1.695
7 82 Alpha Holdings Corporation 54,871,292 - 54,871,292 1.220
8 Neiman Rhodes Holdings, Inc. 28,607,046 - 28,607,046 0.636
9 Philippine Geiko Holdings, Inc. 28,276,333 - 28,276,333 0.629
10 Metrobank Foundation, Inc. c 25,379,981 - 25,379,981 0.564
11 Go, James 20,192,545 - 20,192,545 0.449
12 Ty, George Siao Kian 19,717,814 - 19,717,814 0.438
13 Ty, Alfred Vy 17,087,722 - 17,087,722 0.380
14 Ty, Arthur d 15,205,313 396,200 15,601,513 0.347
15 Bloomingdale Enterprises, Inc. 9,139,685 5,888,159 15,027,844 0.334
16 Asia Pacific Capital Equities and Securities
Corp. 9,659,228 1,255,699 10,914,927 0.243
17 Solid State Multi-Products Corporation 5,174,831 5,372,728 10,547,559 0.235
18 Ty, Alesandra Vy e 7,703,038 - 7,703,038 0.171
19 Grand Asia Realty Investment Corp. 2,510,754 5,026,398 7,537,152 0.168
20 Dy Buncio, Anjanette Ty 7,372,325 4,891 7,377,216 0.164

December 31, 2020 balances are:

a. Inclusive of 35,482,859 shares lodged with PCD Nominee Corporation
b. Net of 35,482,859 shares owned by GT Capital Holdings, Inc.;7,465,361 shares owned by Metrobank
Foundation, Inc.; 222,836 shares owned by Mr. Arthur Ty; and 259,900 shares owned by Ms. Alesandra Ty.
c. Inclusive of 7,465,361 shares lodged with PCD Nominee Corporation
d. Inclusive of 222,836 shares lodged with PCD Nominee Corporation
e. Inclusive of 259,900 shares lodged with PCD Nominee Corporation

As of December 31, 2020, public ownership on the Bank was at 48.16%. Of the total shares issued, 22.509%
represents foreign ownership.

Dividends

There are no restrictions that limit the ability of the Bank to pay cash dividends. Details of cash dividend distribution
from 2018 to 2020 follow:

Amount
Date of Declaration Per Share (In Millions) Record Date Payment Date
February 19, 2020 P1.00 P4,497 March 6, 2020 March 20, 2020
February 13, 2019 P1.00 P3,980 March 1, 2019 March 14, 2019
February 21, 2018 P1.00 P3,180 March 8, 2018 March 16, 2018

The computation of surplus available for dividend declaration in accordance with SEC Memorandum Circular No. 11
issued in December 2008 differs to a certain extent from the computation following BSP guidelines.

Recent Sales of Unregistered or Exempt Securities

The information required under Part II paragraph (A) (4) of Annex C of the Securities Regulation Code (SRC) under
SRC Rule 12 is not applicable to the Bank.
 19

Compliance with Lead Practice on Corporate Governance

In the midst of a pandemic, running a business is an unprecedented challenge for business leaders. The restrictions
imposed by the government in handling the COVID-19 outbreak raise significant challenges as regards to corporate
governance. The crisis presents complex issues on business operations like disruptions to meetings, risk management,
internal control, disclosure, etc. It is imperative to ensure that appropriate strategies are put in place to anticipate and
to mitigate the impact and ensure compliance with the rapidly evolving regulatory landscape.

Integrity, accountability, fairness and transparency, the four pillars upon which the Bank’s governance policies rest,
are maintained during these difficult times. The corporate governance framework as embodied in the Corporate
Governance Manual setting out the roles and responsibilities within the Bank as well as the practices and procedures
that are adopted is sustained to ensure that the organization remains to be governed with the highest standards of good
governance. These principles and values are continued to be observed in all our operations and dealings.

Board of Directors
A competent Board of Directors (Board) that has collective responsibilities for leadership and control of the Bank’s
affair ensuring its long-term sustainability and success heads the Bank. The Board sets the Corporate Governance tone
in the Bank by collectively directing the company’s affairs, whilst meeting the appropriate interest of shareholders and
stakeholders. It leads the process of developing and reviewing the Bank’s strategies annually. It oversees the
development, review and approval of the Bank’s mission vision, a sound corporate governance framework, strategic
and business plans, risk management, internal control system, financial performance and environmental, social and
governance issues. The detailed responsibilities of the Board are disclosed in the Corporate Governance Manual
posted on the company’s website through the Corporate Governance page.

The Board is comprised of a diverse group of proficient people who combine insight and good judgment in
implementing good governance. Diversity takes various forms and is inclusive of different elements such as gender,
expertise, policy-making experience, ethnicity and independence. The members of the Board possess integrity,
probity, physical & mental fitness, competence, education, financial literacy, training, diligence, knowledge and
experience relevant to the banking industry.

To adequately fulfill their responsibilities, the Board has separate and independent access to the corporate secretary
who manages the flow of information to the Board prior to the meetings.

Board Composition
The Bank consistently maintained the Board composition to twelve (12) directors. Ten (10) are non-executive
directors of which five (5) are independent including one (1) female independent director, a deliberate stance to
promote objectivity and strong element of independence in the Board. The number of independent director constitutes
42% of the Board, bringing focus, clear perspective and the ability to lead objective board discussions and better
decision-making.

The members of the Board are elected annually. In accordance with Bank’s By Laws, any stockholder may submit
nominations for directorial positions to represent their interest in promoting long-term value creation. The
Nominations Committee is responsible for screening and recommending candidates to the full Board, based on its
screening policies and parameters, including among others, alignment with the strategic directions of the Bank. The
Nominations Committee assesses the qualifications of the nominees as defined in the Bank’s By-laws and Corporate
Governance Manual and due consideration of the relevant regulations of BSP and SEC. The Board through its
Nominations Committee strives to ensure the optimal mix of skills and talent and balanced membership of the Board
to achieve its strategic objectives.

When identifying or screening potential candidates, the Committee may use whatever resources it deems appropriate,
including but not limited to, referrals from existing directors and officers, recommendations and suggestions from
stockholders. To the extent possible, they also make use of external databases or external search firms. Only
nominees whose names appear in the Final List of Candidates shall be eligible for election as director.

Directors are committed to actively engage in their role in the Board, with sufficient time to carry out the duties of the
Board and their Board committee membership. As a rule, the non-executive directors of the Board may concurrently
serve as directors only to a maximum of five (5) publicly listed companies, making sure however that the
shareholders’ legal right to vote and be voted directors remains inviolable. None of the Bank’s directors serve in more
than five (5) publicly listed companies.
 20

The independent directors are independent of management and major shareholders. They have not engaged and do not
engage in any transaction with the institution or with any of its related companies or with any of its substantial
shareholders, whether by themselves or with other persons or through a firm of which they are partners or a company
of which they are directors or substantial shareholders, other than transactions which are conducted at arm’s-length
and could not materially interfere with or influence the exercise of their judgment. The independent directors, as a
rule, may serve for a maximum cumulative term of nine (9) years. After which, the independent director shall be
perpetually barred from re-election as such, but may continue to qualify for nomination and election as a regular
director. Reckoned from 2012 election, none of the independent directors have reached the maximum cumulative term
of more than nine (9) years.

In 2020, the Board approved the retirement of Mr. Rex C. Drilon II as a director. In his replacement, the Board
welcomed Mr. Philip G. Soliven as Independent Non-Executive Director effective May 28, 2020. With extensive
experience in banking and finance, he can bring valuable contributions, capabilities and exceptional leadership in the
Board.

The Chairman of the Board and the President

The roles of the Chairman of the Board and the President are separate but complementary positions that work together
for the good of the Bank. This split balances power, responsibility and accountability while preserving the independent
decision-making of the Board. Each has clearly defined responsibilities in the Bank’s By-Laws and Corporate
Governance Manual.

The Chairman of the Board provides leadership in the Board. He ensures effective functioning of the Board, including
maintaining a relationship of trust with Board members. In addition, the Chairman ensures a sound decision making
process and encourages and promotes critical discussions and makes sure that dissenting views can be expressed
within the decision-making process. On the other hand, the President exercises direct and active management of the
business and operations of the Bank, conducting the same according to the orders, resolutions and instructions of the
Board and according to his own discretion wherever the same is not expressly limited by such orders, resolutions and
instructions. He communicates and implements the vision, mission, values and overall strategy of the Bank and
promotes any organization change in relation to the same. He exercises general superintendence and direction over the
other officers and the employees of the Bank and to see to it that their respective duties are properly performed.

The Chairman of the Board is Arthur Ty while the President is Fabian S. Dee.

Board Meetings
Regularly scheduled Board meeting are held to keep directors up to date on the Bank’s performance as well as approve
strategies, appointments, and other decisions requiring their attention. The Regular Board meetings are held every
second Wednesday of each month. Special meetings may be called at any time by the Chairman, or, in his absence, by
the Vice Chairman, or pursuant to the written request of any four (4) directors. An organizational meeting is held
immediately after the Annual Stockholder’s Meeting (ASM) and the Board-level committees are reconstituted during
this meeting.

In light of the COVID-19 pandemic, Securities and Exchange Commission issued guidelines allowing participation in
corporate meetings through remote communication such as videoconferencing, teleconferencing, or other alternative
modes. To support the measures in controlling the spread of COVID-19 outbreak, at the start of the imposed
community quarantine, the Bank had transitioned the Board as well as the committee meetings from in-person to
virtual meetings with the use of videoconferencing tools. The Bank also created an alternative mode, safely accessible
through the internet or mobile technology, in providing the pertinent materials for discussion to address administrative,
technical and logistical issues of the current situation.

In 2020, the Board held a total of fourteen (14) meetings. The Board meeting attendance, which is at 100%, exhibits
active participation among the directors. For the first two months of 2020, the meetings were done face-to-face. After
the declaration of the community quarantine in March 2020, meetings were conducted through electronic means. This
did not hinder in any way the directors’ effective discharge of their responsibilities as board members.

Directors Attendance
Arthur V. Ty, Group Chairman (NED) 14/14
Francisco C. Sebastian, Vice Chairman (NED) 14/14
Fabian S. Dee, President (ED) 14/14
Vicente R. Cuna, Jr. (ED) 14/14
 21

Alfred V. Ty (NED) 14/14

Edmund A. Go (NED) 14/14
Solomon S. Cua (NED) 14/14
Jesli A. Lapus (ID) 14/14
Edgar O. Chua (ID) 14/14
Angelica H. Lavares (ID) 14/14
Francisco F. Del Rosario, Jr. (ID) 14/14
Philip G. Soliven* (ID) 9/9
*Elected director on May 28, 2020
**Mr. RCDrilon II served as director until the 2020 Annual Stockholders’ Meeting. He attended 5/5 meetings
ED: Executive Director; NED: Non-Executive Director; ID: Independent Director

The Bank’s Non-Executive Directors (NEDs) also met separately and conducted its virtual meeting together with the
Bank’s External Auditors, Risk Officer, Compliance Officer and Chief Audit Executive, without the presence of any
executive directors on November 18, 2020. The meeting was led by Vice-Chairman Francisco C. Sebastian and all
NEDs were present. Among the agenda is the discussion on the challenges faced by the control function units brought
about by the pandemic, corporate governance matters and on-going initiatives.

The Annual Stockholders’ Meeting was also held exclusively in digital form without requiring the physical presence
of the Board members and shareholders via WebEx Events on May 28, 2020. All Board members were present in the
meeting.

The Office of the Corporate Secretary, which plays a significant role in supporting the Board in discharging its
responsibilities, prepares the agenda and sends out notices and materials at least five (5) business days before the
meeting dates. It also prepares and distributes the minutes of the previous meeting and keeps full minutes of all Board
and stockholder meetings.

Board-level Committees
The Board assigns specific tasks to committees to help them fulfill their diverse range of responsibilities. It delegates
particular matters or affairs of the Bank to the committees to prepare the groundwork for decision-making and
eventually report to the Board for notation or approval. In 2020, the Bank has ten (10) board-level committees that
assist the Board in the optimal performance of its roles and responsibilities. Seven (7) committees namely Anti-Money
Laundering Committee, Audit Committee, Corporate Governance and Compensation Committee, Nominations
Committee, Related Party Transactions Committee, Risk Oversight Committee and Trust Committee, are chaired by
independent directors. The Board-level committees have their own respective charters which set out their mandate,
scope and working procedures and can be found in the Bank’s website.

The Anti-Money Laundering Committee (AMLACOM) is tasked to assist the Board in fulfilling its oversight
responsibility over the Bank’s AML Compliance Management to make sure that the Bank complies with the
provisions of the AMLA, as amended, its Revised Implementing Rules and Regulations (RIRR), and BSP regulations.
This committee is comprised of three (3) non-executive directors, of which two (2) are independent directors. The
Committee conducted five (5) meetings in 2020.

Members Committee Membership Attendance

Angelica H. Lavares, Independent Director Chairman 5/5
Arthur V. Ty, Chairman Regular Member 5/5
Edgar O. Chua, Independent Director Regular Member 5/5

The Audit Committee (AUDITCOM) is tasked to assist the Board in fulfilling its statutory and fiduciary
responsibilities, enhancing shareholder value, and protecting shareholders’ interest through effective oversight of
internal and external audit functions, transparency and proper reporting, compliance with laws, rules and regulations
and codes of conduct, and adequate and effective internal controls. This committee is primarily responsible for the
appointment/selection, re-appointment and dismissal of internal auditor, as well as independent external auditor and
external service providers based on fair and transparent criteria. It is comprised of four (4) non-executive directors,
three (3) of whom are independent, including the Chairman, who is not the chairman of the Board or of any other
Board-level committee. In 2020, the Committee had its monthly meetings with two (2) joint meetings with Risk
Oversight Committee.
 22

Members Committee Membership Attendance

Edgar O. Chua, Independent Director Chairman 14/14
Solomon S. Cua, Non-Executive Director Regular Member 13/14
Francisco F. Del Rosario, Independent Director Regular Member 13/14
Angelica H. Lavares, Independent Director Regular Member 13/14

The Corporate Governance and Compensation Committee assists the Board in fulfilling its corporate governance
responsibilities and in providing oversight on the implementation of the Bank’s Compliance System. The committee is
tasked with establishing a formal and transparent procedure in determining the remuneration of directors and officers
that is consistent with the Bank’s culture, strategy, business environment and industry practice. The Committee is
composed of four (4) members, three (3) are independent directors, including the committee chairperson. The
Committee convened three (3) times in 2020.

Members Committee Membership Attendance

Angelica H. Lavares, Independent Director Chairman 3/3
Arthur V. Ty, Chairman Regular Member 3/3
Francisco F. Del Rosario, Independent Director Regular Member 3/3
Jesli A. Lapus, Independent Director Regular Member 3/3
Arnulfo B. Pascioles, Jr. Corporate Governance Officer 3/3

The Executive Committee is primarily responsible for the review and approval of credit proposals and credit policies
within its authority and limits as well as provides recommendations or conditions to lending. The Committee may also
act on other matters as delegated by the Stockholders and the Board within its competence and in accordance with the
By-Laws of the Bank. The Committee had 77 meetings in 2020.

Members Committee Membership Attendance

Arthur V. Ty, Chairman Chairman 74/77
Francisco C. Sebastian, Vice-Chairman Vice Chairman 74/77
Fabian S. Dee, President Regular Member 76/77
Vicente R. Cuna Jr., Director Regular Member 76/77
Mary Mylene A. Caparas Regular Member 77/77
Corazon Ma. Therese B. Nepomuceno Regular Member 76/77
Noel Peter Z. Yuseco Regular Member 77/77

The Information Technology Steering Committee provides governance and oversight in the management of the
Bank’s information technology (IT) resources. Its principal function is to ensure that IT strategies are consistent with
the overall business objectives. It shall have oversight of the IT Risk Management Program of the Bank and the
development of policies, controls, and specific accountabilities consistent with the Bank’s IT Risk Management
Framework. As delegated by the Board, it shall also approve IT-related requests and other IT-related
services/arrangements, including outsourcing/insourcing activities. It should regularly render periodic report to the
Board regarding overall IT performance, status of major projects and other significant issues related to IT risks. The
Committee is composed of non-executive director, Heads of Financial and Control Sector and Information Technology
Group. The Committee should meet at least four (4) times annually.

Members Committee Membership Attendance

Vicente R. Cuna Jr. Director Chairman 7/7
Edmund A. Go, Non-Executive Director Regular Member 6/7
Fabian S. Dee, President Regular Member 7/7
Joshua E. Naing, Head, Financial and Control Sector Regular Member 6/7
Bernardino V. Ramos, Head, Information Technology Regular Member 7/7
Group

The Nominations Committee reviews and evaluates the qualifications of all persons nominated to the Board.
Moreover, it also reviews the qualifications of those nominated to other positions requiring approval by the Board.
The Committee is composed of three (3) independent directors, including the Chairman. The Committee meets as
needed.

Members Committee Membership Attendance

Jesli A. Lapus, Independent Director Chairman 9/9
Edgar O. Chua, Independent Director Regular Member 9/9
Philip G. Soliven*, Independent Director Regular Member 5/5
*replaced by Angelica H. Lavares attended 4/4 meeting
 23

The Overseas Banking Committee assists the Board in its oversight functions over the operations and financial
performance of the overseas branches and subsidiaries, and Metrobank expatriates assigned in countries without
foreign office but with remittance tie-up arrangement, their compliance with the rules and regulations of their
respective host countries and their adherence to the parent Bank’s business and corporate governance policies as
prescribed by the Bangko Sentral ng Pilipinas and Securities and Exchange Commission. The Committee convened
five (5) times in 2020.

Members Committee Membership Attendance

Francisco A. Sebastian, Vice Chairman Chairman 5/5
Francisco F. Del Rosario Jr., Independent Director Regular Member 4/5
Alfred V. Ty, Non-Executive Director Regular Member 4/5
Solomon S. Cua, Non-Executive Director Regular Member 4/5

The Related Party Transactions Committee assists the Board in ensuring that transactions with related parties
(including internal group transactions) are reviewed to assess risk and subject to appropriate restrictions to ensure that
such are conducted at arm’s-length terms and that corporate or business resource of the Bank are not misappropriated
or misapplied. The Committee is entirely composed of three (3) independent directors. The Committee, which meets
monthly, is supported by the Compliance Officer.

Members Committee Membership Attendance

Rex C. Drilon II*, Independent Director Chairman 5/5
Philip G. Soliven, Independent Director Chairman 8/8
Edgar O. Chua, Independent Director Regular Member 13/13
Angelica H. Lavares, Independent Director Regular Member 13/13
*replaced by Philip G. Soliven in May 2020

The Risk Oversight Committee (ROC), as an extension of the Board, is primarily responsible for the development and
oversight of the risk management framework of the Bank, its affiliates, and subsidiaries (collectively, the Group), and
its Trust Banking arm. The Committee is majority composed of independent directors, including the Chairman who is
not a Chairman of the Board or of any other committee. The ROC members possess a range of risk management
expertise and adequate knowledge of the Group’s risk exposures. The Committee held twelve (12) meetings in 2020.

Members Committee Membership Attendance

Francisco F. Del Rosario Jr., Independent Director Chairman 12/12
Jesli A. Lapus, Independent Director Vice-Chairman 12/12
Edmund A. Go, Non-Executive Director Regular Member 12/12
Philip G. Soliven*, Independent Director Regular Member 7/7
*Joined in June 2020

The Trust Committee is responsible for the oversight of all Trust activities and shall act within the sphere of authority
as provided by the pertinent rules and regulations in the exercise of fiduciary powers under the Manual or Regulations
for Banks. The Committee is composed of five (5) members, three (3) members of the Board, President and Trust
Officer. The Committee convened eleven (11) times in 2020.

Members Committee Membership Attendance

Jesli A. Lapus., Independent Director Chairman 11/11
Edmund A. Go, Non-Executive Director Vice-Chairman 10/11
Philip G. Soliven*, Independent Director Regular Member 7/7
Fabian S. Dee, President Regular Member 11/11
Leandro Antonio G. Santillan, Head, Trust Banking Group Regular Member 11/11
*Joined in June 2020
 24

Company’s Policies

Orientation Program for New Directors

In accordance with applicable SEC rules and expressly stated in the Bank’s CGM, orientation for first time directors
shall be for at least eight (8) hours. Each first-time director is provided with orientation kit, which contains a copy of
the Bank’s Articles of Incorporation, By-Laws, Code of Conduct, Bank’s CGM and applicable Board Committee
Charters. They are also provided with the general responsibilities and specific duties of the Board and of an individual
director. Directors are required to certify under oath that they have received copies and fully understand and accept
the general responsibilities and specific duties. In addition, each director certifies that he or she has all the prescribed
qualifications and none of the disqualification as a director.

Continuing Education
The Covid-19 global pandemic crisis is an adaptive and transformative challenge especially in keeping the Board well
informed of developments in the evolving corporate governance norms as well as being attuned to the rapidly
changing external situation. Given these challenges, the Bank still recognizes the value of continuing education for its
Directors.

For 2020, amidst the on-going crisis, the Bank ensures constant education of its Directors and key officers to keep
them abreast of updates in corporate governance standards to support their leadership roles, by taking advantage of
available public seminars via online platforms. As such, Directors and key officers attended the following webinars
provided by the Bangko Sentral ng Pilipinas (Introduction to Environmental and Social Risk Management System
Webinar), Institute of Corporate Director (Pilipinas: Aspire, Rise, Sustain Series "The Nexus of Climate Change and
Sustainable Development", "Integrating Climate Risks in Corporate Strategy" and "Cultivating Business Impact
Through Sustainability Reporting") and Association of Bank Compliance Officers (Risk based Approach:
Implementing an Enterprise-wide ML/TF Risk Assessment Process), among others.

Corporate Governance Programs Attended by the Board of Directors.

For 2020, in its letter dated 12 October 2020, Metrobank, as well as its group and subsidiaries, requested the
Securities and Exchange Commission (“the Commission”) for the deferment of its compliance with the annual four (4)
hour Corporate Governance training of its directors and key officers due to the disruption brought by the COVID-19
pandemic. The Commission granted the request in its letter dated 09 November 2020.

Corporate Governance Manual

Metrobank has a strong corporate governance framework that is embodied in the Corporate Governance Manual
(CGM), which sets out the roles and responsibilities within the Bank and the practices and procedures that are adopted
to ensure that the organization is directed with the highest standards of good governance.

The CGM serves as a practical toolkit designed to help implement good governance practices in the institution. It is
periodically updated to guarantee that it remains relevant and in alignment with new regulatory issuances and best
industry practices. The Bank’s structures and processes ensure that business is conducted ethically and comply with
applicable laws and regulations. The Board, Management, Officers and Staff of the Bank fully commit themselves to
the principles and practices contained in the Manual and acknowledge that the same will guide them in the
development and achievement of the Bank’s corporate goals. Our staunch duty to safeguard the long-term interest of
our shareholders and all other stakeholders translates into a corporate culture that embraces good governance practices
and fiduciary duties made manifest by the Board, Senior Management and down to all other employees.

The Manual was revised to include changes in the regulations and approved by the Board on 24 August 2020. To
enforce bank-wide compliance, a copy of the Board-approved Manual on Corporate Governance is available in the
Bank’s Insight Online (intranet) for easy access by the Board, Management and all employees of the Bank. Likewise,
it is posted in the Bank’s website accessible to the public.

Code of Conduct and Ethics for Bank Directors

In today’s environment, stakeholders have high expectations that companies are operating in accordance with good
corporate governance practices. As such, the Bank is unwavering to conduct its business with the highest ethical
standard of fairness, accountability and transparency, taking into account the interest of all stakeholders. These values
are the guiding principles of good corporate governance adopted by the Bank in its Code of Conduct and Ethics for
Directors.
 25

The Code of Conduct and Ethics for Directors articulates the standard of conduct for ensuring the proper discharge of
duties and responsibilities, basic principle that a director should not use his position to make profit or to acquire
benefit or advantage for himself and/or his related interests, avoiding situations that would compromise his
impartiality, maintaining professional integrity, enhancement of skills, knowledge and understanding of bank
activities, etc.

The Code is properly disseminated to directors. The Code can be accessed by both internal and external stakeholders
as it is posted in the Bank’s intranet and company’s website through the Corporate Governance page.

Code of Conduct for Employees

In place also is the Bank’s Code of Conduct for employees which includes the principles of ensuring the proper
discharge of duties and responsibilities, the avoidance of conflict of interest between the Bank’s business and personal
activities, the preservation of confidential information which mandates adoption of every practicable measure at all
times and the prohibition of direct or indirect offering or receiving by an employee of any gift, gratuity, other payment
or entertainment from any person, be it a client, vendor, supplier, business partner or subordinate, when the gift might
affect the employee’s judgment or actions in the performance of his/her duties.

The Human Resource Management Group (HRMG) has disseminated the Bank of Code of Conduct to all employees
including the new hires. HRMG also regularly circulates core advisories which serve as a reminder on the values that
the Bank wishes to foster by its employees. Both internal and external stakeholders can access the Bank’s Code of
Conduct for Employees as it is posted in the Bank’s intranet and company’s website through the Corporate
Governance page.

Performance Evaluation and Self-Assessment

The best measure of the Board effectiveness is through an assessment process. Metrobank conducts its annual
performance assessment of the Board, Chairman of the Board, President, Board Committees and each of the individual
directors using Board-approved rating sheets.

The Board conducts its annual evaluation process through the Corporate Governance and Compensation Committee. It
has adopted an internal self-rating system and procedures to determine and measure compliance vis-à-vis good
corporate governance principles and practices as prescribed in the Code of Corporate Governance: (i) Each Director
self-rates and collectively rates the Board, the Chairman of the Board and the President; (ii) Corporate Governance,
Audit, Risk Oversight and other Board committees conduct self-rating. The performance rating sheet normally
circulated on paper or online using questionnaires that are tailor-made to the Bank’s needs and objectives. This
evaluation process allows the Board to consider the accomplishments of individuals and the group of individuals
within the Board and this serves as an avenue to revisit existing process or areas in need of improvement within the
Board.

In July 2020, the Corporate Governance and Compensation Committee Secretary presented summary results of the
self-assessments and evaluation covering the performance of the different key persons: Board of Directors, Individual
Directors, Chairman, President and Board-Level Committees of the Bank to the Corporate Governance Compensation
Committee and endorsed to the Board. The assessment showed that the Bank’s key persons possess the right mix of
backgrounds and competencies to fulfill their duties.

In line with the SEC rules and global best practices, the self-assessment exercise of the Bank is supported by an
external facilitator every three (3) years. The Corporate Governance and Compensation Committee in its meeting on
October 13, 2020, and the President, approved the engagement of the Bank of a third party facilitator that shall
conduct Board effectiveness review. For 2020, the Bank commissioned Reyes Tacandong & Co to facilitate the Board
effectiveness evaluation in compliance with the SEC Code of Corporate Governance, and to further align its
governance framework with the principles of the said Code and global best practices. This will provide an independent
review of the effectiveness of the Board and the efficiency of the execution of the roles and responsibilities of the
Board under existing governance arrangements, taking into account the review, communication, and reportorial
requirements and procedures within the Board and between the Board and Management.

Fair Business Transactions & Managing Conflicts of Interest

The Bank has adopted the Anti-Bribery and Corruption Policy, which requires the directors and employees to conduct
business in accordance with the highest possible standards of ethics, honesty, accountability and good governance. The
Bank does not tolerate any form of bribery or corruption to obtain an unfair advantage. Directors, officers and
employees are prohibited in taking advantage of their positions in the Bank to directly or indirectly derive personal
gain or profit.
 26

The members of the Board conduct fair business transactions with the Bank and ensure that personal interest does not
bias Board decisions. All directors are expected to act ethically at all times, notify promptly of any material facts or
potential conflict of interest and take appropriate corrective action. Employees are expected to effectively manage their
personal affairs and avoid any situation or business endeavors arising from associations, interest or relationships that
may lead to conflict or potential conflict between their personal interest and of the Bank.

It is also part of the Bank’s corporate governance framework that all related parties are properly identified and related
party transactions are vetted and approved either by Related Party Transactions Management Committee (RPTMC), a
management-level committee composed of senior officers or the Related Party Transactions Committee (RPTC), a
Board-level committee composed of independent directors, depending on the materiality threshold set by the Bank.
Directors and officers with personal interest in the transaction shall abstain from the discussion, approval and
management of transaction. No director or officer shall participate in the RPTC or RPTMC or Board discussion of a
related party transaction for which he, she or any member of his or her close family or related interest is involved,
including transactions of subordinates, except in order to provide material information on the related party transaction.
The material related party transactions that reach ten percent (10%) or higher of the Bank’s total consolidated assets
are required to be evaluated by an appointed external independent party to ensure the fairness of the terms. All acts of
the Board, including related party transactions, are confirmed by the majority vote of the Bank’s stockholders during
the Annual Stockholders’ Meeting.

Policy on Insider Trading

In accordance with the Bank’s Insider Trading Policy, the Reporting Insiders and his Associates as defined in the
policy, shall not sell or buy Metrobank shares of stock during the period within which Material Non-public
Information is obtained and up to two (2) trading days after the Information is disclosed. All officers and employees
involved in the transaction shall maintain the level of confidentiality consistent with ethical standards and in
compliance with the insider trading policy even prior to Board approval.

In case of change in the beneficial ownership of Metrobank shares (e.g., sale, purchase, inheritance, transfer of
residence, etc.), the Reporting Insider shall accomplish and submit a scanned copy of the Statement of Changes in
Beneficial Ownership of Securities on the next trading day from the date of the change in the beneficial ownership
pursuant to the requirements of the SEC and the PSE.

Whistle Blowing Policy

It is the goal of the Bank to develop an ethical corporate culture that aims to control and eliminate wrongdoings and
wrongdoers from the organization. The Bank recognizes the importance of whistleblowing in both detecting and
deterring acts of fraud, malpractice, conflict of interest or violation of internal/regulatory policies, procedures and
controls. Complaints or concerns may be filed through the Bank’s website or sent via an e-mail
([email protected]) or text hotline (+639427471359), without fear of retaliation as the identity of
the reporting employee/stakeholders is not required to be disclosed.

The Head of Internal Audit Group is the designated recipient of complaints from the reporting employees and other
stakeholders. Consistent with the principle of good governance, the Chief Audit Officers report to the Board’s Audit
Committee for any reported matters.

Customer/Creditor’s Welfare
In Metrobank, Customer Protection is part of the Bank’s culture. It is not a responsibility of only one person or a
single unit. It is a collective and shared responsibility of each and everyone, from the Board, to Management, and to all
employees.

The five pillars of consumer protection standards namely: a) Disclosure and Transparency; b) Protection of client
information; c) Fair treatment; d) Effective Recourse and 5) Financial Education and Awareness, govern the conduct
of the Bank in dealing with its customers and creditors. As such, the Customer Protection Policy Manual is created to
ensure that customer protection is inherent in the day-to-day operations, providing the foundation in ensuring the
Bank’s adherence to customer protection standards of conduct. The Board, through the Executive Committee, provides
effective oversight of the Bank’s Financial Customer Protection while the Senior Management, through the Customer
Experience Committee, ensures that the Bank developed a Customer Protection Risk Management System.

The Bank continuously adapt to regulatory requirements particularly on standardizing the process in the handling of
complaints across all segments, redefining the turnaround time in resolving incidents to meet the client’s expectation.
In compliance with BSP Circular No. 949, the Bank also has a Social Media Risk Management Policy that provides
 27

guidance to covered individuals in the business and legal risks associated with the use of social media. Specifically,
these rules require respecting co-workers privacy, respecting customer privacy, protecting confidentiality and security,
safeguarding and proper use of the Bank’s information and assets.

Stockholders’ Rights and Protection of Minority Stockholders’ Interests

In accordance with the Bank’s CGM, the Bank treats all its shareholders fairly and equitably, and also recognizes,
protects and facilitates the exercise and their rights. The Board respects the rights of the stockholders as provided for
in the Corporation Code. It promotes transparency and fairness in conducting annual and special stockholders’
meeting. The Bank encourages active shareholders to participate in the meeting by sending Notice of Annual and
Special Shareholders’ meeting with sufficient relevant information. The notice for the Bank’s 2020 Annual
Stockholders Meeting (ASM) was published and distributed to all stockholders as of record date of May 7, 2020
pursuant to the SEC rules of sending notices of at least twenty (21) days before the meeting. If they cannot attend, they
are apprised ahead of time of their right to appoint a proxy. Subject to the requirements of the By-Laws, the exercise
of the right shall not be unduly restricted and any doubt about the validity of a proxy should be resolved in the
stockholder’s favor. For 2020, since mass gatherings are discouraged, the ASM was live streamed via Cisco WebEx
app to ensure the health and safety of the participants. The stockholders who participated pre-registered at
[email protected]. The Minutes of the Annual Stockholders’ Meeting was available and posted in
the Bank’s website five (5) business days from the end of the meeting.

Every stockholder entitled to vote on a particular question or matter involved is entitled to one (1) vote for each share
of stock in his name. Cumulative voting is allowed provided that the total votes cast by a stockholder shall not exceed
the number of shares registered in his name as of the record date multiplied by the number of directors to be elected.
Matters submitted to stockholders for the ratification shall be decided by the required vote of stockholders present in
person or by proxy. The Bank has not solicited any discretionary authority to cumulative voting.

Majority vote is required for the following: (a) approval of the minutes of the annual meeting of the stockholders; (b)
ratification of corporate acts; (c) election of external auditors. On the election of directors, nominees receiving the
highest number of votes shall be declared elected following the provision of the Corporation Code. SGV & Co.
validated all votes cast in the Bank’s 2020 ASM.

Policy on Health, Safety and Welfare of Employees

The Bank understands the magnitude of a safe and healthy workplace during a pandemic; as such, the Bank has
instituted health and safety protocols that are aligned with Department of Health (DOH) and the Centers for Disease
Control and Prevention (CDC) on the onset of the Covid-19 pandemic. It is committed to mitigation and prevention
strategy in response to the Covid-19 pandemic to ensure the health and safety of each Metrobanker. Employees have
been properly guided through various communications on good hygiene and appropriate disinfection procedures;
available personal protective equipment (PPE) for employees and how to wear, use, clean and store it properly and
disinfectant supplies such as alcohol, hand soaps etc.; social distancing strategies, including avoiding close physical
contact and large gatherings of people.

Metrobank has been very adaptive to the change brought upon by the pandemic. The Bank has modified immediately
the work environment and changes the work practices to provide additional protection for its employees, clients and
other stakeholders such as providing physical barriers, installation of temperature checking machines, installation of
hand sanitizers and additional disinfection methods such as UV filtration and improve social distancing set-up. It has
provided options to employees on flexible working schedule and working remotely. It implemented work-from-home
policies and revises work schedules and/or create staggered shifts to limit the number of workers on-site at a given
time.

It actively promotes a safe and healthy work environment that is conducive to the well-being and professional
development of its employees. Among the programs instituted are wellness check of employees, results of which are
the basis of choosing relevant health interventions for the workforce. Medical services have been properly set up for
all employees and the availability of Bank’s health partner from ActiveOne was made sure to answer common
questions about COVID-19. The Bank has also provided series of webinars to employees which focuses on active and
healthy lifestyle habits to combat Self-Inflected Diseases (hypertension, diabetes and obesity) through SEED (Sleep,
Eat Right, Exercise and De-stress) Campaign.

The Bank acknowledges that it has a responsibility to ensure the safety and security of its employees and clients. The
Bank also believes that providing them with a secure and safe work environment greatly enhances business and work
productivity. In particular, the Bank ensures a drug-and alcohol-free work environment at all times. The Bank also
conducted lectures on bank security to equip personnel.
 28

The Bank also strives to empower Metrobankers with the right skills, knowledge, work ethics and expertise that are
relevant to the stakeholders. It is fully committed to ensure that all employees perform their work consistently to high
standards and achieve their full potential. It recognizes that training and development is fundamental to the
improvement of the Bank’s operational performance and the achievement of strategies and goals. The Metrobank
Academy provides all employees with a wide range of suitable programs to assist in their continuing professional
development, so that the organization will have the right quality of people for the business to grow and achieve its
goals.

Supplier & Contract Selection

To mitigate the risk of dealing with unqualified suppliers/contractor, the Bank maintains policies and guidelines in the
accreditation/re-accreditation and selection process of supplier and contractor that is in accordance and compliant with
BSP regulations. Annual performance evaluation is being conducted as part of appropriate control in determining the
ability and performance of the contractor/service provider.

The Bank practices also the policy of canvassing and bidding services in the conduct of purchase of products or
contracts for services to ensure that Bank secure the best deal in terms of price, quality of materials or work services,
delivery time frame and related terms and conditions.

Environment Protection
Metrobank is committed to sound environmental stewardship. It consistently strives to look for areas to improve its
operations towards the conservation of energy, water and resources. Various policies on optimizing the use of paper,
power shutdown of office equipment to minimize resource usage and to save on electricity costs, use of vehicles for
carpool and regular maintenance and servicing of vehicles to reduce transportation cost and carbon emissions are in
place.

As part of Metrobank’s core value of being a responsible corporate citizen, it believes that sustainable development is
a fundamental aspect of sound business management and recognizes that this must rank among the top priorities of its
lending portfolio. Metrobank is focused on developing a loan portfolio that directly protects and promotes
environmental and social care, and likewise instilling in the borrowers, the awareness that social and environmental
care are inextricable to economic growth in order to achieve sustainable development.

The Metrobank Purple Hearts Club (PHC) has “You’re In Green Hands” (YIGH), an environmental stewardship
program which centers on combating various environmental issues faced by the country through restoration activities
such as tree planting, mangrove planting, seashore, and coastal clean-up drives.

Corporate Governance Scorecard

In recognition of the impact of the COVID-19 pandemic on the regular operations of corporations and to ease the
regulatory burden on the business sector during these trying times, SEC extended the deadline for the filing of the I-
ACGR until 01 September 2020.

The Bank’s Integrated Annual Corporate Governance Report (I-ACGR) was submitted to the regulators in August
2020 and was posted in the Bank’s website. The I-ACGR provides a consolidated reporting tool to disclose
compliance/non-compliance with the recommendations provided under the Corporate Governance Code for Publicly-
Listed Companies as well as practices under the PSE CG Guidelines and the ASEAN Corporate Governance
Scorecard. In 2020 reporting, the Bank generally complied with all the relevant provisions as set out in the Code of
Corporate Governance.

With the utmost dedication in aligning its policies and procedures to the international benchmark in corporate
governance, the Bank has been recognized as one of the top performing companies in the ASEAN region for achieving
high scores in the corporate governance assessment.

Plans for Improvement of Corporate Governance

Commitment to having good corporate governance remains at the heart of the Bank’s overall strategy and strong risk
culture. The Board plays a key role in overseeing management performance and ensuring that controls and systems of
check and balance are in place and effective. Hence, continuous adoption of best practices in corporate governance
coupled with the aim of facilitating sustained growth and steady improvement of the corporate value in the medium
and long term will be the foremost focus.
 29

Awards
• The Asian Banker Bank Quality Consumer Survey and Rankings
o Most Recommended Retail Bank in the Philippines, and 4th in Asia Pacific
o 3rd Most Helpful Bank in the Philippines and 38th in Asia Pacific During Covid 19
• 2020 Annual Philippine Dealing System (PDS) Awards
o Cesar EA Virata Award for Best Securities House (Bank Category)
o Top 5 PDDTS-PvP Participants (Rank 2)
o Top Corporate Securities Dealing Participant
o Top Brokering Participant for Retail Transactions
o Top Dealing Participant
• The Asset Benchmark Research Awards 2020
o Top Investment Houses in Asian G3 Bonds (Rank 1)
o Top Investment Houses in Asian Local Currency Bonds (Rank 4)
o The most Astute Investors in Asian G3 Bonds (Rank 1)
o The most Astute Investors in Asian Local Currency Bonds (Highly Commended)
o Best Local Currency Bond Individual - Trading (Rank 2 & 3)
o Best Local Currency Bond Individual - Sales (Rank 4 & Highly Commended)
• The Asset Top Sellside Firms in Asian Currency Bonds 2020
o Top sellside firms in the secondary market - Corporate bonds - PHP (Rank 1)
o Top sellside firms in the secondary market - Government bonds - PHP (Rank 1)
o Top arrangers - Investors' Choice for primary issues - Government bonds - PHP (Rank 1)
• 2020 Fund Managers Association of the Philippines (FMAP) Awards & Fellowship Night
o Best Fixed Income House (Rank 2)
o Best Foreign Fixed Income Trader (Rank 1)
o Best Local Fixed Income Trader (Rank 1)
• The Bureau of Treasury GSED-Market Maker
• Institute of Corporate Directors (ICD) Corporate Governance Award

Deviations

This is not applicable to the Group.

ITEM 6 – MANAGEMENT’S DISCUSSION AND ANALYSIS OR PLAN OF OPERATIONS

The audited financial statements of the Group and the Bank are presented in Exhibit 4 as an attachment to this report.

Details of the Group’s financial statements as of and for the years ended December 31, 2020, 2019, 2018 and 2017 are
presented below.
 30

Statements of Financial Position

(Amounts in millions)

Increase (Decrease) Increase (Decrease) Increase (Decrease)

December 31 2020 vs. 2019 2019 vs. 2018 2018 vs. 2017

2020 2019 2018 2017 Amount % Amount % Amount %

Assets
Cash and Other Cash Items P38,469 P32,956 P33,091 P 27,631 P5,513 16.73 (P135) (0.41) P5,460 19.76
Due from Bangko Sentral ng
Pilipinas 304,906 219,994 240,134 261,959 84,912 38.60 (20,140) (8.39) (21,825) (8.33)
Due from Other Banks 38,233 54,767 45,802 31,291 (16,534) (30.19) 8,965 19.57 14,511 46.37
Interbank Loans Receivable and
Securities Purchased Under
Resale Agreements (SPURA) 79,394 72,174 50,719 45,475 7,220 10.00 21,455 42.30 5,244 11.53
Investment Securities at
Fair Value Through Profit or
Loss (FVTPL) 77,551 61,867 39,689 43,887 15,684 25.35 22,178 55.88 (4,198) (9.57)
Fair Value Through Other
Comprehensive Income
(FVOCI) 569,445 202,520 111,288 343,910 366,925 181.18 91,232 81.98 (232,622) (67.64)
Amortized Cost 23,293 251,628 265,376 - (228,335) (90.74) (13,748) (5.18) 265,376 100.00
Loans and Receivables 1,252,929 1,483,568 1,391,034 1,265,469 (230,639) (15.55) 92,534 6.65 125,565 9.92
Property and Equipment 24,617 25,700 21,954 22,362 (1,083) (4.21) 3,746 17.06 (408) (1.82)
Investments in Associates and a
Joint Venture 6,248 6,591 5,947 5,764 (343) (5.20) 644 10.83 183 3.17
Goodwill 5,199 5,200 5,200 5,200 (1) (0.02) - - - -
Investment Properties 7,667 7,762 7,500 7,717 (95) (1.22) 262 3.49 (217) (2.81)
Deferred Tax Assets 14,028 10,512 10,238 9,161 3,516 33.45 274 2.68 1,077 11.76
Other Assets 13,184 15,574 15,721 10,466 (2,390) (15.35) (147) (0.94) 5,255 50.21

Total Assets P2,455,163 P2,450,813 P2,243,693 P 2,080,292 P4,350 0.18 P207,120 9.23 P163,401 7.85

Liabilities and Equity

Liabilities
Deposit Liabilities
CASA P1,311,357 P1,077,507 P964,944 P950,216 P233,850 21.70 P112,563 11.67 P14,728 1.55
Demand 515,378 411,873 355,473 344,708 103,505 25.13 56,400 15.87 P10,765 3.12
Savings 795,979 665,634 609,471 605,508 130,345 19.58 56,163 9.22 3,963 0.65
Time 450,103 592,897 548,019 547,721 (142,794) (24.08) 44,878 8.19 298 0.05
Long-Term Negotiable
Certificates 35,755 43,740 43,790 30,025 (7,985) (18.26) (50) (0.11) 13,765 45.85
1,797,215 1,714,144 1,556,753 1,527,962 83,071 4.85 157,391 10.11 28,791 1.88
Bills Payable and Securities Sold
Under Repurchase Agreements 139,614 238,281 259,607 227,835 (98,667) (41.41) (21,326) (8.21) 31,772 13.95
Derivative Liabilities 13,465 7,427 6,537 5,352 6,038 81.30 890 13.61 1,185 22.14
Manager’s Checks and Demand
Drafts Outstanding 6,024 6,806 7,565 8,054 (782) (11.49) (759) (10.03) (489) (6.07)
Income Taxes Payable 2,711 4,188 2,830 3,381 (1,477) (35.27) 1,358 47.99 (551) (16.30)
Accrued Interest and Other
Expenses 9,149 10,499 9,619 6,973 (1,350) (12.86) 880 9.15 2,646 37.95
Bonds Payable 91,397 80,486 30,743 2,910 10,911 13.56 49,743 161.80 27,833 956.46
Subordinated Debts 1,167 7,660 26,618 26,580 (6,493) (84.77) (18,958) (71.22) 38 0.14
Non-equity Non-controlling
Interest 8,315 6,553 6,747 8,002 1,762 26.89 (194) (2.88) (1,255) (15.68)
Other Liabilities 52,931 56,278 45,970 59,153 (3,347) (5.95) 10,308 22.42 (13,183) (22.29)

Total Liabilities 2,121,988 2,132,322 1,952,989 1,876,202 (10,334) (0.48) 179,333 9.18 76,787 4.09
 31

Increase (Decrease) Increase (Decrease) Increase (Decrease)

December 31 2020 vs. 2019 2019 vs. 2018 2018 vs. 2017

2020 2019 2018 2017 Amount % Amount % Amount %

Equity
Equity Attributable to Equity
Holders of the Bank
Common stock P89,948 P89,948 P79,600 P63,603 P- - P10,348 13.00 P15,997 25.15
Capital paid in excess of par
value 85,252 85,252 85,252 42,139 - - - - 43,113 102.31
Surplus reserves 2,260 2,098 1,956 1,810 162 7.72 142 7.26 146 8.07
Surplus 153,282 144,154 130,550 116,786 9,128 6.33 13,604 10.42 13,764 11.79
Treasury stock (65) (72) (67) (46) 7 9.72 (5) (7.46) (21) (45.65)
Remeasurement losses on
retirement plan (4,778) (5,531) (3,591) (4,025) 753 13.61 (1,940) (54.02) 434 10.78
Net unrealized loss on
investment securities at
FVOCI 7,611 2,629 (2,994) (15,804) 4,982 189.50 5,623 187.81 12,810 81.06
Equity in other
comprehensive income
(losses) of investees (22) 345 (27) 22 (367) (106.38) 372 1,377.78 (49) (222.73)
Translation adjustment and
others (9,284) (9,269) (7,719) (2,530) (15) (0.16) (1,550) (20.08) (5,189) (205.10)
324,204 309,554 282,960 201,955 14,650 4.73 26,594 9.40 81,005 40.11
Other equity reserves - - - (7,400) - - - - 7,400 100.00
Non-controlling Interest 8,971 8,937 7,744 9,535 34 0.38 1,193 15.40 (1,791) (18.78)

Total Equity 333,175 318,491 290,704 204,090 14,684 4.61 27,787 9.56 86,614 42.44

Total Liabilities and Equity P2,455,163 P2,450,813 P2,243,693 P2,080,292 P4,350 0.18 P207,120 9.23 P163,401 7.85

Statements of Income

Interest Income P107,787 P116,183 P97,186 P80,322 (P8,396) (7.23) P18,997 19.55 P16,864 21.00
Interest and Finance Charges 21,680 39,186 28,364 18,916 (17,506) (44.67) 10,822 38.15 9,448 49.95
Net Interest Income 86,107 76,997 68,822 61,406 9,110 11.83 8,175 11.88 7,416 12.08
Provision for Credit and
Impairment Losses 40,760 10,078 7,770 7,507 30,682 304.45 2,308 29.70 263 3.50
Net Interest Income After
Provision for Credit and
Impairment Losses 45,347 66,919 61,052 53,899 (21,572) (32.24) 5,867 9.61 7,153 13.27
Other Operating Income 35,129 29,054 22,910 22,147 6,075 20.91 6,144 26.82 763 3.45
Other Operating Expenses 60,120 57,906 53,656 47,475 2,214 3.82 4,250 7.92 6,181 13.02
Income Before Share in Net
Income of Associates and a
Joint Venture 20,356 38,067 30,306 28,571 (17,711) (46.53) 7,761 25.61 1,735 6.07
Share in Net Income of
Associates and a Joint
Venture 664 868 874 689 (204) (23.50) (6) (0.69) 185 26.85
Income Before Income Tax 21,020 38,935 31,180 29,260 (17,915) (46.01) 7,755 24.87 1,920 6.56
Provision for Income Tax 7,046 10,061 7,745 7,990 (3,015) (29.97) 2,316 29.90 (245) (3.07)
Net Income P13,974 P28,874 P23,435 P21,270 (P14,900) (51.60) P5,439 23.21 P2,165 10.18
Attributable to:
Equity holders of the Bank P13,831 P28,055 P22,008 P18,223 (P14,224) (50.70) P6,047 27.48 P3,785 20.77
Non-controlling interest 143 819 1,427 3,047 (676) (82.54) (608) (42.61) (1,620) (53.17)
P13,974 P28,874 P23,435 P21,270 (P14,900) (51.60) P5,439 23.21 P2,165 10.18
 32

Statements of Comprehensive Income

Increase (Decrease) Increase (Decrease) Increase (Decrease)

December 31 2020 vs. 2019 2019 vs. 2018 2018 vs. 2017

2020 2019 2018 2017 Amount % Amount % Amount %

Net Income P13,974 P28,874 P23,435 P21,270 (P14,900) (51.60) P5,439 23.21 P2,165 10.18
Other Comprehensive Income
for the Year, net of tax
Items that may not be
reclassified to profit or loss:
Change in net unrealized loss
on equity securities at (94) (414) (351) - 320 77.29 (63) (17.95) (351) -
FVOCI
Change in remeasurement gain
(loss) on retirement plan 794 (2,038) 498 26 2,832 138.96 (2,536) (509.24) 472 1,815.38
Items that may be reclassified to
profit or loss:
Change in net unrealized gain
(loss) on investment on debt
securities at FVOCI 5,038 6,142 (2,443) (5,772) (1,104) (17.97) 8,585 351.41 3,329 57.67
Change in equity in other
comprehensive income
(loss) of investees (370) 375 (50) (32) (745) (198.67) 425 850.00 (18) (56.25)
Translation adjustment and
others (23) (399) (309) 733 376 94.24 (90) (29.13) (1,042) (142.16)
4,645 6,118 (2,802) (5,071) (1,473) (24.08) 8,920 318.34 2,269 44.74
Total Comprehensive Income
for the Year P19,319 P32,540 P20,780 P16,225 (P13,221) (40.63) P11,760 56.59 P4,555 28.07
Attributable to:
Equity holders of the Bank P19,140 P31,214 P19,665 P13,365 (P12,074) (38.68) P11,549 58.73 P6,300 47.14
Non-controlling Interest 179 1,326 1,115 2,860 (1,147) (86.50) 211 18.92 (1,745) (61.01)
P19,319 P32,540 P20,780 P16,225 (P13,221) (40.63) P11,760 56.59 P4,555 28.07

Key Performance Indicators

The performance of the Bank and its significant majority-owned subsidiaries are measured by the following key
indicators:

Performance Indicators
Basic/
Company Name Book Diluted Return on Return on Net Interest Margin on
Value Earnings Average Average Average
Per Share Per Share Equity Assets Earning Assets

For the Interim Period, February 28, 2021 (unaudited)

Metrobank Group P68.64 P1.56 13.31% 1.75% 3.51%

FMIC (a) 40.09 (0.17) 4.54% 2.07% 2.87%
PSBank 80.64 2.93 3.63% 0.56% 6.53%

For the Year 2020

Metrobank Group P72.10 P3.08 4.36% 0.56% 3.98%

FMIC (a) 40.26 0.98 2.45% 1.05% 2.18%
PSBank 81.82 2.63 3.21% 0.50% 7.26%

For the Year 2019

Metrobank Group P68.84 P6.24 9.47% 1.20% 3.84%

FMIC (a) 39.66 1.08 2.72% 1.02% 0.58%
PSBank 91.38 8.03 10.29% 1.31% 5.82%
MCC (b) 19.48 4.91 28.63% 5.55% 13.50%
(a) FMIC and Subsidiaries
(b) MCC was merged into the Parent Company effective January 3, 2020
 33

A separate schedule showing financial soundness indicators of the Group as of December 31, 2020 and 2019 is
presented in Exhibit 5 as an attachment to this report.

Book value per share

Book value per share is computed by dividing the equity attributable to equity holders of the Parent Company by the
total number of common shares outstanding.

Earnings Per Share

Basic earnings per share (EPS) is computed by dividing the net income by the weighted average number of common
shares outstanding after giving retroactive effect to stock dividends declared, stock rights exercised and stock splits
made during the period, if any. As of December 31, 2020, 2019 and 2018, the Parent Company had no shares of stock
that had a dilutive effect on its basic earnings per share.

Return on Average Equity

Return on average equity (ROE) or the ratio of net income attributable to equity holders of the Parent Company for the
year divided by average total equity attributable to the Parent Company, measures the return on capital provided by the
stockholders.

Return on Average Assets

Return on average assets (ROA) or the ratio of net income attributable to equity holders of the Parent Company for the
year divided by average total assets, measures the return on money provided by both stockholders and creditors, as
well as how efficiently all assets are managed.

Net Interest Margin

Net interest margin (NIM) is the ratio of net interest income for the year divided by average interest-earning assets.

2020 Performance

Financial Position

As of December 31, 2020, the Metrobank Group posted a total assets of P2.46 trillion or higher by P4.35 billion
compared with P2.45 trillion as of December 31, 2019. Total liabilities of the Group decreased to P2.12 trillion from
P2.13 trillion or by P10.33 billion. On the other hand, equity attributable to equity holders of the Parent Company was
higher by P14.65 billion from P309.55 billion to P324.20 billion.

Cash and Other Cash Items increased by P5.51 billion or 16.73%. Due from BSP which represents 12.42% of the
Group’s total assets increased by 38.60% due to the net effect of the increase in overnight deposit facility placement
and term deposit with the BSP and lower reserve requirement. Due from Other Banks decreased by P16.53 billion or
30.19% as a result of the net movements in the balances maintained with various local and foreign banks. Interbank
Loans Receivable and SPURA went up by P7.22 billion or 10.0% due to the P20.25 billion increase in interbank loans
receivable reduced by the P13.03 billion decrease in securities under resale agreement with the BSP.

Total investment securities which consisted of FVTPL, FVOCI and securities at amortized cost and represents 27.30%
and 21.05% of the Group’s total assets as of December 31, 2020 and 2019, respectively, went up by P154.27 billion or
29.90%. FVTPL securities consist of HFT securities and derivative assets amounting to P65.71 billion and P11.85
billion, respectively, as of December 31, 2020 and P53.38 billion and P8.49 billion, respectively, as of December 31,
2019. The P366.93 billion increase in FVOCI securities was mainly due to the net effect of the increases in
investments in treasury notes and bonds (P230.56 billion), treasury bills (P81.50 billion) and BSP bonds (P30.05
billion). In 2020, the Group disposed of investment securities at amortized cost as discussed in Note 8 of the audited
financial statements of the Group as presented in Exhibit B.

Net loans and receivables, representing 51.03% and 60.53% of the Group’s total assets as of December 31, 2020 and
2019, respectively, went down by P230.64 billion or 15.55% due to lower portfolios of corporate, commercial and
consumer loans. Investments in Associates and a Joint Venture went down by P0.34 billion or 5.20% due to lower net
income and other comprehensive income of the associates and a joint venture. Deferred Tax Assets increased by
P3.52 billion or 33.45% due to movements on temporary tax differences. Other Assets decreased by P2.39 billion or
15.35% from P15.57 billion to P13.18 billion primarily due to the decreases in interoffice float items and creditable
withholding tax.
 34

Deposit liabilities represent 84.69% and 80.39% of the consolidated total liabilities as of December 31, 2020 and
2019, respectively, wherein, low cost deposits represent 72.97% and 62.86% of the Group’s total deposits,
respectively. The Group’s deposit level, sourced by the Bank, PSBank and MBCL reached P1.80 trillion as of
December 31, 2020, an increase of P83.07 billion or 4.85% from P1.71 trillion as of December 31, 2019. The
increment came from demand and savings by P103.51billion and P130.35 billion, respectively, while time deposits
went down by P142.79 billion. Further, the P8.00 billion long-term negotiable certificates of deposits of the Parent
Company had matured in April 2020.

Bills Payable and SSURA representing 6.58% and 11.17% of the Group’s total liabilities as of December 31, 2020 and
2019, respectively, went down by P98.67 billion or 41.41% due to the net effect of lower borrowings from foreign
banks by P38.43 billion, local banks by P7.81 billion and deposit substitutes by P53.99 billion offset by the P1.57
billion increase in SSURA. Derivative Liabilities which represent mark-to-market of foreign currency forwards,
interest rate swaps, cross currency swaps, credit default swaps and foreign currency options with negative fair value
increased by P6.04 billion or 81.30%.

The decrease of P0.78 billion or 11.49% in Manager’s Checks and Demand Drafts Outstanding resulted from normal
banking operations of the Bank and PSBank. Income taxes payable decreased by P1.48 billion or 35.27% and
Accrued Interest and Other Expenses went down by P1.35 billion or 12.86% due to decrease in accruals of interest
expenses. Bonds payable increased by P10.91 billion or 13.56% on account of the P4.65 billion fixed rate bonds
issued by PSBank, the P10.50 billion fixed rate bonds and USD500 million senior unsecured notes net of the maturity
of P28.0 billion fixed rate bonds issued by the Parent Company. Details of these bonds are discussed in Note 19 of the
audited financial statements of the Group as presented in Exhibit B. On August 8, 2020, the Parent Company
redeemed its 2025 Notes ahead of its maturity, which caused the decrease in Subordinated Debts.

Non-equity Non-controlling Interest representing the portion of net income and net assets of the mutual fund
subsidiaries of FMIC not attributed to the Group went up by P1.76 billion or 26.89% due to the net effect of the
increase in income and the decrease in ownership of these mutual funds. Other Liabilities decreased by P3.35 billion
or 5.95% primarily due to the decreases in bills purchased contra (P3.10 billion), notes payable (maturity in 2020 of
the unsecured notes issued by ORIX Metro amounting to P2.59 billion) and marginal deposits (P0.77 billion) offset by
the increases in accounts payable (P2.59 billion) and miscellaneous liabilities (P2.84 billion).

Equity attributable to equity holders of the Parent Company increased by P14.65 billion or 4.73% mainly due to the net
income reported during the year and improvement in net unrealized gain on investment securities at FVOCI.

Results of Operations

For the year ended December 31, 2020, interest income went down by P8.40 billion or 7.23% resulting from lower
interest income on loans and receivables by P10.16 billion partially offset by the improvements in interest income on
investment securities by P0.54 billion and on interbank loans receivable, deposit with banks and others by P1.22
billion. Meanwhile, lower interest expense on deposit liabilities by P12.08 billion and on borrowings by P5.43 billion
accounted for the decrease of P17.51 billion or 44.67% in interest and finance charges. These resulted to a P9.11
billion or 11.83% improvement on net interest income.

Other operating income of P35.13 billion increased by P6.08 billion or 20.91% from P29.05 billion in 2019 on account
of higher net trading and securities and gain by P1.24 billion and foreign exchange gain by P0.61 billion net of the
decreases in fee-based income by P2.56 billion and miscellaneous income by P0.73 billion. The disposal of
investment securities at amortized cost by the Group in 2020 (as discussed in Note 8 of the audited financial
statements of the Group as presented in Exhibit B) resulted to a gain of P8.18 billion.

Total operating expenses increased by P2.21 billion or 3.82% from P57.91 billion to P60.12 billion with higher
compensation and fringe benefits by P1.18 billion or 4.99%, occupancy and equipment-related costs by P0.21 billion
or 11.41% and miscellaneous expenses by P1.10 billion or 6.66%. To recognize the impact of the current COVID-19
pandemic, the Group’s provision for credit and impairment losses was increased to P40.76 billion from P10.08 billion
in previous year. Provision for income tax was lower by P3.02 billion from P10.06 billion to P7.05 billion due to net
movements in corporate, final and deferred income taxes.

Income attributable to non-controlling interests went down to P0.14 billion from P0.82 billion or by P0.68 billion or
82.54% due to lower net income. The audited income attributable to equity holders of the Parent Company for the
 35

year 2020 went down by P14.22 billion or 50.70% to P13.83 billion from the P28.06 billion net income reported in
2019.

Total comprehensive income went down by P13.22 billion from P32.54 billion to P19.32 billion for the year ended
December 31, 2020 and 2019, respectively, due to the net effect of the decrease in net income, lower net unrealized
gain recognized this year on FVOCI investments and the gain recognized in retirement liability. Total comprehensive
income attributable to equity holders of the Parent Company for the year ended December 31, 2020, went down to
P19.14 billion or by P12.07 billion from P31.21 billion for the same year in 2019.

Market share price was at P49.05 from P66.30 as of December 31, 2019 with a market capitalization of P220.60
billion as at December 31, 2020.

2019 Performance

Financial Position

As of December 31, 2019, the Metrobank Group posted a 9.23% growth in total assets from P2.24 trillion as of
December 31, 2018 to P2.45 trillion. Total liabilities of the Group increased to P2.13 trillion from P1.95 trillion or by
9.18%. Moreover, equity attributable to equity holders of the Parent Company was higher by 9.40% from P282.96
billion to P309.55 billion.

Due from BSP which represents 8.98% of the Group’s total assets decreased by 8.39% due to the various reserve cuts
in 2019. Due from Other Banks increased by P8.97 billion or 19.57% as a result of the net movements in the balances
maintained with various local and foreign banks. Interbank Loans Receivable and SPURA went up by P21.46 billion
or 42.30% primarily due to the increase in securities under resale agreement with the BSP.

Total investment securities which consisted of FVTPL, FVOCI and securities at amortized cost and represents 21.05%
and 18.56% of the Group’s total assets as of December 31, 2019 and 2018, respectively, went up by P99.66 billion or
23.94%. FVTPL securities consist of HFT securities and derivative assets amounting to P53.38 billion and P8.49
billion, respectively, as of December 31, 2019 and P29.04 billion and P10.65 billion, respectively, as of December 31,
2018. The P91.23 billion increase in FVOCI securities was mainly due to the net effect of the increases in investments
in government bonds (P25.87 billion) and treasury notes and bonds (P71.01 billion). On the other hand, the P13.75
billion decrease in investment securities at amortized cost was due to various maturities and FMIC’s disposal of HTC
debt securities as discussed in Note 8 of the audited financial statements of the Group as presented in Exhibit B.

Loans and Receivables, representing 60.53% and 62.0% of the Group’s total assets as of December 31, 2019 and
2018, respectively, went up by P92.53 billion or 6.65% driven by the strong demand for loans from all segments.
Non-performing loans were at 1.30% of the total receivables from customers as of December 31, 2019. Investments in
Associates and a Joint Venture went up by P0.64 billion or 10.83% due to the share in net income and other
comprehensive income of the associates of FMIC. Property and equipment increased by P3.75 billion or 17.06% from
P21.95 billion to P25.70 billion resulting from the adoption of PFRS 16 effective January 1, 2019 which requires
recognition by lessees of the assets and related liabilities for most leases on their balance sheets and subsequently
depreciates the lease assets and recognizes interest on the lease liabilities in their profit or loss. Upon adoption, initial
recognition of right-of-use asset classified under “Property and Equipment” amounted to P4.2 billion and lease
liability classified under “Other Liabilities” amounted to P4.5 billion.

Deposit liabilities represent 80.39% and 79.71% of the consolidated total liabilities as of December 31, 2019 and
2018, respectively, wherein, low cost deposits represent 62.86% and 61.98% of the Group’s total deposits,
respectively. The Group’s deposit level, sourced by the Bank, PSBank and MBCL reached P1.71 trillion as of
December 31, 2019, an increase of P157.39 billion or 10.11% from P1.56 trillion as of December 31, 2018. The
increment came from CASA by P112.56 billion or 11.67% and time deposits by P44.88 billion or 8.19%.

Bills Payable and SSURA representing 11.17% and 13.29% of the Group’s total liabilities as of December 31, 2019
and 2018, respectively, went down by P21.33 billion or 8.21% due to the net effect of lower borrowings from local
banks by P23.95 billion, from BSP by P21.50 billion and SSURA by P3.76 billion offset by the increases in
borrowings from foreign banks by P19.90 billion and deposits substitutes by P7.97 billion. Derivative Liabilities
which represent mark-to-market of foreign currency forwards, interest rate swaps, cross currency swaps, credit default
swaps and foreign currency options with negative fair value increased by P0.89 billion or 13.61%.
 36

The decrease of P0.76 billion or 10.03% in Manager’s Checks and Demand Drafts Outstanding resulted from normal
banking operations of the Bank and PSBank. Income taxes payable increased by P1.36 billion or 47.99% while
Accrued Interest and Other Expenses went up by P0.88 billion or 9.15% due to increase in accruals of other bank
expenses. Bonds payable increased by P49.74 billion or 161.80% on account of the P17.50 billion, P11.25 billion and
P13.75 billion fixed rate bonds issued by the Parent Company on April 11, 2019, July 3, 2019 and October 24, 2019,
respectively; the P6.30 billion fixed rate bonds issued by PSBank on July 24, 2019; and the P4.16 billion fixed rate
bonds issued by ORIX Metro on November 15, 2019 reduced by the maturity of the P2.92 billion fixed rate bonds of
FMIC in August 2019. Details of these bonds are discussed in Note 19 of the audited financial statements of the
Group as presented in Exhibit 4. On June 27, 2019 and August 23, 2019, the Parent Company and PSBank redeemed
their 2024 Peso Notes amounting to P16.0 billion and P3.0 billion, respectively, ahead of its maturity, which caused
the decrease in Subordinated Debts.

Other Liabilities increased by P10.31 billion or 22.42% primarily due to the recognition of lease liability as a result of
the adoption of PFRS 16 (P4.04 billion) and increases in marginal deposits (P2.14 billion), bills purchased contra
(P1.92 billion) and accounts payable (P1.81 billion).

The P1.19 billion or 15.40% increase in equity of non-controlling interest was attributed to the net income generated
by the majority-owned subsidiaries for the year ended December 31, 2019 and the net effect of PSBank’s stock rights
in January 2019 and the increase in the ownership of the Bank. Equity attributable to equity holders of the Parent
Company increased by P26.59 billion or 9.40% mainly due to the net effect of the net income reported during the year
and improvement in net unrealized gain on FVOCI.

Results of Operations

Net income attributable to equity holders of the Bank amounted to P28.06 billion for the year 2019 or 27.48% higher
compared with P22.01 billion net income for the year 2018.

Interest income improved by P19.0 billion or 19.55% resulting from higher interest income on loans and receivables
by P16.19 billion, on investment securities at FVTPL and FVOCI by P2.73 billion and on deposit with banks and
others by P0.23 billion. Meanwhile, higher interest expense on deposit liabilities by P4.44 billion and on borrowings
by P6.38 billion accounted for the increase of P10.82 billion or 38.15% in interest and finance charges. These resulted
to a P8.18 billion or 11.88% improvement on net interest income.

Other operating income of P29.05 billion increased by P6.14 billion or 26.82% from P22.91 billion in 2018 on account
of higher net trading and securities and foreign exchange gains by P6.52 billion and fee-based income by P1.57 billion
reduced by the P1.01 billion lower miscellaneous income.

Total operating expenses increased by P4.25 billion or 7.92% from P53.66 billion to P57.91 billion with higher
compensation and fringe benefits by P1.34 billion or 5.98%, taxes and licenses by P1.44 billion or 16.44%,
depreciation and amortization of P1.45 billion or 35.60%, of which P1.30 billion pertains to the depreciation expense
recognized in 2019 due to the adoption of PFRS 16 (resulted in the decline in occupancy and equipment related
expenses by P1.33 billion), and miscellaneous expenses by P1.34 billion or 8.80%. Provision for credit and
impairment losses increased by P2.31 billion from P7.77 billion to P10.08 billion and provision for income tax was
higher by P2.32 billion from P7.75 billion to P10.06 billion due to net movements in corporate, final and deferred
income taxes.

Income attributable to non-controlling interests went down to P0.82 billion from P1.43 billion or by P0.61 billion or
42.61% due to decrease in ownership of minority particularly on MCC and PSBank.

Total comprehensive income went up by P11.76 billion from P20.78 billion to P32.54 billion for the year ended
December 31, 2018 and 2019, respectively, due to the net effect of the increase in net income; the net unrealized gain
recognized this year on FVOCI investments compared with the net unrealized loss recognized in previous year; and
the loss recognized in retirement liability. Total comprehensive income attributable to equity holders of the Parent
Company for the year ended December 31, 2019, went up to P31.21 billion or by P11.55 billion from P19.67 billion
for the same year in 2018.

Market share price was at P66.30 from P80.95 as of December 31, 2018 with a market capitalization of P298.18
billion as at December 31, 2019.
 37

2018 Performance

Financial Position

As of December 31, 2018, the Metrobank Group posted a 7.85% growth in total assets from P2.08 trillion as of
December 31, 2017 to P2.24 trillion. Total liabilities of the Group increased to P1.95 trillion from P1.88 trillion or by
4.09%. Moreover, equity attributable to equity holders of the Parent Company was higher by P81.01 billion or 40.11%
from P201.96 billion to P282.96 billion.

Cash and Other Cash Items increased by P5.46 billion or 19.76% due to the higher level of cash requirements of the
Parent Company. Due from BSP which represents 10.70% of the Group’s total assets decreased by P21.83 billion or
8.33% due to reserve cuts in 2018. Due from Other Banks increased by P14.51 billion or 46.37% as a result of the net
movements in the balances maintained with various local and foreign banks. Interbank Loans Receivable and SPURA
went up by P5.24 billion or 11.53% primarily due to increase in balance of securities under resale agreement with
BSP.

Total investment securities which consisted of FVTPL, FVOCI (AFS in 2017) and securities at amortized cost which
represents 18.56% and 18.64% of the Group’s total assets as of December 31, 2018 and 2017, respectively, went up by
P28.56 billion or 7.36%. As a result of the adoption of the classification and measurement requirements of PFRS 9,
the Group classified debt securities held under AFS investments as at January 1, 2018 as either at amortized cost for
securities belonging to portfolios managed under a hold to collect business model or at FVOCI.

Loans and Receivables, representing 62.0% and 60.83% of the Group’s total assets as of December 31, 2018 and
2017, respectively, went up by P125.57 billion or 9.92% driven by the strong demand for loans from all segments.
Non-performing loans were at 1.20% as of December 31, 2018. Deferred Tax Assets (DTA) increased by P1.08
billion or 11.76% primarily attributable to allowance for credit and impairment losses. Other Assets increased by
P5.26 billion or 50.21% from P10.47 billion to P15.72 billion primarily due to the increases in miscellaneous assets
(inclusive of the funding for retirement) and interoffice float items.

Deposit liabilities represent 79.71% and 81.44% of the consolidated total liabilities as of December 31, 2018 and
2017, respectively, wherein, low cost deposits represent 61.98% and 62.19% of the Group’s total deposits,
respectively. The Group’s deposit level, sourced by the Bank, PSBank and MBCL reached P1.56 trillion as of
December 31, 2018, an increase of P28.79 billion or 1.88% from P1.53 trillion as of December 31, 2017. The
increment came from CASA by P14.73 billion or 1.55%, time deposits by P0.30 billion or 0.05% and from the
issuances of LTNCDs by the Bank for P8.68 billion and by PSBank for P5.08 billion on October 4 and August 9,
2018, respectively.

Bills Payable and SSURA representing 13.29% and 12.14% of the Group’s total liabilities as of December 31, 2018
and 2017, respectively, went up by P31.77 billion or 13.95% due to the net effect of higher balances of borrowings
from foreign banks by P18.48 billion, local banks by P4.07 billion and SSURA by P30.67 billion reduced by the
decreases in borrowings from BSP by P6.50 billion and deposits substitutes by P14.95 billion. Derivative Liabilities
which represent mark-to-market of foreign currency forwards, interest rate swaps, cross currency swaps and foreign
currency options with negative fair value increased by P1.19 billion or 22.14%.

The decrease of P0.49 billion or 6.07% in Manager’s Checks and Demand Drafts Outstanding resulted from normal
banking operations of the Bank and PSBank. Income taxes payable decreased by P0.55 billion or 16.30% while
Accrued Interest and Other Expenses went up by P2.65 billion or 37.95% due to increases in accruals of other bank
expenses and interests on deposit liabilities. Bonds payable increased by P27.83 billion on account of the P10.00
billion and P18.00 billion fixed rate bonds issued by the Parent Company on November 9 and December 17, 2018,
respectively, which bear an interest rate of 7.15% per annum and will mature on November 9, 2020. Non-equity Non-
controlling Interest representing the portion of net income and net assets of the mutual fund subsidiaries of FMIC not
attributed to the Group went down by P1.26 billion or 15.68% on account of the net decline in income of these mutual
funds.

Other Liabilities decreased by P12.91 billion or 21.92% primarily due to the settlement of the P14.80 billion liability
on the agreed purchase of 40% stake in MCC and the funding of the P3.40 billion retirement liability, partially offset
by the P1.00 billion increase in marginal deposits and the P2.60 billion unsecured notes issued by ORIX Metro on
October 29, 2018.
 38

Equity attributable to equity holders of the Parent Company increased by P81.01 billion or 40.11% due to the net effect
of the P59.1 billion net proceeds from the stock rights issued by the Parent Company on April 12, 2018, net income
reported during the year, net impact of PFRS 9 adoption on Surplus and net unrealized loss on FVOCI/AFS
investments, and the P3.18 billion cash dividends declared and paid during the year. The Group also recognized
additional equity reserves (included in “Translation adjustment and others”) for the difference between the acquisition
price and the acquired remaining non-controlling interest of 20% in MCC. The acquisition of the remaining 20%
interest in MCC was completed on September 4, 2018 (“second tranche”) and the Group recognized equity reserves
(included in “Translation adjustment and others”) for the difference between the acquisition price and the acquired
non-controlling interest amounting to P5.1 billion. Other accounts affected by this transaction were “other equity
reserves” and “non-controlling interest”.

Results of Operations

Net income attributable to equity holders of the Bank amounted to P22.01 billion for the year 2018 compared with
P18.22 billion net income for the year 2017.

Interest income improved by P16.86 billion or 21.00% resulting from higher interest income on loans and receivables
by P16.27 billion and on total investment securities by P0.72 billion net of the P0.14 billion decrease in interest
income on interbank loans and SPURA. Meanwhile, the increases in interest expense on deposit liabilities by P6.36
billion and on borrowings by P3.09 billion accounted for the increase of P9.45 billion or 49.95% in interest and
finance charges. These resulted to a P7.42 billion or 12.08% increase net interest income.

Other operating income of P22.91 billion increased by P0.76 billion or 3.45% from P22.15 billion in 2017 on account
of the increases in fee-based income by P1.65 billion, income from leasing by P0.12 billion and profit from disposal of
foreclosed properties by P0.30 billion, reduced by lower net trading and securities and foreign exchange gains by
P1.10 billion.

Provision for credit and impairment losses in 2018 was at P7.77 billion under PFRS 9 compared with P7.51 billion in
2017 under PAS 39 or increased by P0.26 billion or 3.50%. Total other operating expenses increased by P6.18 billion
or 13.02% as a result of the increases in compensation and fringe benefits by P2.15 billion or 10.63%, taxes and
licenses by P2.20 billion or 33.37% (as a result of changes on tax rates, particularly on documentary stamp taxes,
brought about by the implementation of the TRAIN law in 2018), occupancy and equipment-related expenses by P0.26
billion or 9.01% and miscellaneous expenses by P1.51 billion or 10.96%. Provision for income tax was lower by
P0.25 billion or 3.07% due to net movements in deferred income tax, corporate and final taxes.

Share in net income of associates and a joint venture increased by P0.19 billion or 26.85% due to higher net income of
certain associates while income attributable to non-controlling interest went down by P1.62 billion or 53.17% due to
the effect of the acquisition of the remaining 20% interest in MCC.

Total comprehensive income went up by P4.56 billion from P16.23 billion income in 2017 to P20.78 billion in 2018.
The variance was attributable to the higher net income of the Group and the lower net unrealized loss recognized on
investment securities. As a result, total comprehensive income attributable to equity holders of the Parent Company
went up to P19.67 billion or by P6.30 billion from P13.37 billion in 2017.

Market share price was at P80.95 from P101.40 as of December 31, 2017 with a market capitalization of P322.18
billion as at December 31, 2018.

Key Variable and Other Qualitative and Quantitative Factors

Plans for 2021

Metrobank continues to reinforce its Core Values program and maintains the principles and standards espoused in its
Meaningful Banking campaign as the Bank navigates through a new operating environment under this pandemic to
deliver the “You’re in Good Hands” promise to each client. This commitment underpins the Bank’s continued focus
on sustaining market relevance, alongside continuous improvement in customer experience, products and services,
operational efficiency and people development. Moreover, the Bank aims to deepen its commitment to instill financial
discipline across new and underserved markets, and explore venues outside its current CSR activities by which it can
increase its socio-economic impact.
 39

To adapt to an evolving environment, the Bank believes that fulfilling its promises will be dependent on a sustainable
culture transformation and change management program, a robust IT infrastructure, as well as sound control and risk
management practices. Thus, the Bank’s investments in people are further backed by investments in IT and
information security, process efficiencies, and risk and control systems.

Capital position

The Bank will continue to actively improve on the Group's strong capital position. The Bank has benefited from a
series of capital markets transactions to raise Tier 1 and Tier 2 capital.

In 2006, the Bank issued US$125.0 million Hybrid Tier 1 capital security in February and 173,618,400 common
shares at P38.00 per common share in October. In May 2010, the Bank raised an additional P5.0 billion in capital
through a private placement of common shares. In January 2011, the Bank raised approximately US$220.0 million
through a rights offer for 200 million common shares at the offer price of P50.00 per rights share. In August 2013, the
Bank increased its capital stock from P50 billion to P100 billion and on September 16, 2013, it issued a stock dividend
equivalent to 633,415,049 common shares (with a par value of P20) that was applied as payment of the required
subscription to the increase in capital stock. In April 2015, the Bank raised P32.0 billion through a rights offer for
435,371,720 common shares with par value of P20.00 priced at P73.50 per share. The newly issued shares were listed
on the PSE on April 7, 2015. Further, in April 2018, the Bank raised P60.0 billion through a rights offer for
799,842,250 common shares with par value of P20.00 priced at P75.00 per share. The newly issued shares were listed
on the PSE on April 12, 2018. In October 2019, the Bank increased its capital stock from P100 billion to P140 billion
and on November 26, 2019, it issued a stock dividend equivalent to 517,400,519 common shares (with a par value of
P20) that was applied as payment of the required subscription to the increase in capital stock, which further improved
the Bank’s capital position.

The Bank also issued Tier 2 instruments to boost its capital adequacy ratio. The Bank issued Basel II compliant Tier 2
subordinated notes in October 2007 for P8.5 billion with a coupon of 7.0%; in October 2008 for P5.5 billion with a
coupon of 7.75%; and in May 2009 for P4.5 billion with a coupon of 7.5%. With the advent of Basel III, the Bank
subsequently redeemed these previously issued subordinated debt issuances as they would not have been considered as
capital beginning January 1, 2014. The Bank exercised the call option on its P8.5 billion 7.0%; P5.5 billion 7.75% and
P4.5 billion 7.5% Lower Tier 2 Notes on October 22, 2012, October 4, 2013 and May 6, 2014, respectively. The early
redemptions of these instruments were in accordance with the terms and conditions of the notes when they were
originally issued. By redeeming the notes, the Bank avoided a step-up in the interest rate and the capital decay from
the instruments. In 2014, the Bank raised a total of P22.5 billion in subordinated debt wherein P16.0 billion was
issued on March 27, 2014 at a coupon rate of 5.375% and P6.5 billion on August 8, 2014 at 5.25%. The terms of the
notes contain a loss absorption feature, allowing them to be recognized as bank capital in accordance with Basel III
standards. The transactions were done in part to replace the Basel II Tier 2 notes which were redeemed on their call
option dates. As approved by the BSP on April 25, 2019, on June 27, 2019, the Bank redeemed its 2024 Peso Notes
amounting to P16.0 billion, ahead of its maturity. Likewise, on August 8, 2020, the Bank redeemed the 2025 Peso
Notes amounting to P6.5 billion, ahead of its maturity after approval by the BSP on May 7, 2020.

As part of the Group’s capital efficiency initiatives, the Group has been active in optimizing its allied and non-allied
undertakings. Among the initiatives include the sale of the Bank’s ownership in Toyota Motor Philippines
Corporation in tranches between 2012 and 2013 as well as the sale of FMIC’s holdings in Global Business Power
Corporation in tranches between 2013 and 2016 and FMIC’s holdings in Charter Ping An Insurance Corporation in
2014. In 2014, the Bank and PSBank also disposed of its holdings in Toyota Financial Services Philippines
Corporation. Altogether, these sales further improved the Bank’s capital adequacy under Basel III. As discussed in
Part I - Business item number 2 “Description of Business-Business of Registrant”, on March 13, 2019, the respective
BODs of the Bank and MCC approved the proposal to merge MCC into the Bank. The proposed merger was ratified
by the stockholders of the Bank on April 24, 2019, approved by the BSP on October 23, 2019, and approved by the
SEC on January 3, 2020.

As of December 31, 2020, the Group’s Capital Adequacy Ratio (CAR) and Common Equity Tier 1 (CET1) Ratio are
20.15% and 19.28%, respectively, both well above the regulatory requirements.
 40

2020 Economic Performance

2020 was a very challenging year for the global economy amid the triple shock brought by the COVID-19 pandemic: a
health crisis, strict lockdown measures, and a global recession of unprecedented scale. The Philippines, along with
most of the world’s economies, fell into recession, with the full-year 2020 GDP contraction coming in at -9.5%, a
significant fall from the positive expansion of 6.0% in 2019. The sharp economic decline, especially in the second
quarter of the year, was mainly attributed to the steep dive in household spending, deep slump in capital formation,
and the collapse of external trade due to the impact of strict lockdown measures domestically and globally.

Full-year average inflation came in slightly higher at 2.6% compared to 2.5% in 2019 amid the faster annual increases
in some commodity groups towards the end of the year. The price of food, a heavily-weighted commodity, was higher
in the last quarter of the year as weather-related disturbances adversely affected domestic supply conditions.
Nevertheless, the full-year average still came in within the BSP’s target range of 2-4%.

Domestic interest rates remained low throughout 2020 on ample liquidity condition, benign inflation expectations, and
subsequent policy rate cuts from the US Federal Reserve and the BSP. Central banks in almost all of the countries
adopted a loose monetary policy stance to support their own economies. The Fed slashed the federal funds rate to near-
zero in March and has been buying about $120 billion in government-backed debt every month. Meanwhile the BSP
cut key policy rates by a total of 200 basis points and deployed regulatory relief measures to complement fiscal
stimulus and help stimulate the domestic economy.

Risk appetite was the key driver of the USD well into the end of 2020. Demand for the USD as a safe haven declined
amid improving global market risk appetite especially for emerging market assets. The Philippine peso made strong
gains and remained within the P48 level from the P50.69 close at the start of the year. The peso was even hailed as
Asia’s best performing currency last year.

To overcome the adverse impact of the pandemic on the domestic economy, the government launched a
socioeconomic strategy to address the Covid-19 pandemic which included fiscal and monetary measures. On the fiscal
side, the National Government approved several stimulus packages aimed at helping the highly-vulnerable sectors. On
the monetary side, the BSP slashed key policy rates by a total of 200 basis points and deployed regulatory relief
measures to complement fiscal stimulus and help stimulate the economy.

The near-term outlook for the global economy remains highly uncertain amid the renewed infection waves and new
variants of the coronavirus. Nevertheless, a likely softening in the 1st half of 2021 is seen to usher in a recovery in the
2nd half as the roll-out of vaccination programs in different countries gain pace. Furthermore, the unprecedented
policy support by governments is seen to continue and will become more targeted and flexible so as to adapt to fast-
changing conditions.

For the Philippine economy, support will still largely come from the National Government and the BSP. A return of
consumer confidence -- or the confidence of consumers to once again do both discretionary and non-discretionary
spending -- will play a large role in the economic recovery because fundamentally, consumer spending is what drives
the economic engines of the Philippines

Liquidity

To ensure that funds are more than adequate to meet its obligations, the Bank proactively monitors its liquidity
position daily. Based on this system of monitoring, the Bank does not anticipate having any cash flow or liquidity
problem within the next twelve months. As of December 31, 2020, the contractual maturity profile shows that the
Bank has at its disposal about P1.192 trillion of cash inflows in the next twelve (12) months from its portfolio of cash,
placements with banks, debt securities and receivable from customers. This will cover 76.29% of the P1.561 trillion
total deposits that may mature during the same period. These cash inflows exclude securities booked in FVTPL and
FVOCI whose maturities beyond one (1) year but may easily be liquidated in an active secondary market. Inclusive of
these securities, the total current assets will cover 101.90% of the total deposits that may mature within one (1) year.
On the other hand, historical balances of deposits showed that no substantial portion has been withdrawn in one year.
 41

Events That Will Trigger Material Direct or Contingent Financial Obligation

In the normal course of the Group’s operations, there are various outstanding commitments and contingent liabilities
which are not reflected in the accompanying financial statements. No material losses are anticipated as a result of
these transactions.

Several suits and claims relating to the Group’s operations and labor-related cases remain unsettled. In the opinion of
management, these suits and claims, if decided adversely, will not involve sums having a material effect on the
Group’s financial statements.

The summary of the commitments and contingent liabilities of the Group is discussed in Note 30 of the audited
financial statements of the Group as presented in Exhibit 4.

Material Off-Balance Sheet Transactions, Arrangements or Obligations

The summary of off-balance sheet transactions, arrangement or obligations (including contingent obligations) is
discussed in Note 30 of the audited financial statements of the Group as presented in Exhibit 4.

Other Relationships of the Registrant with Unconsolidated Entities or Other Persons

The Group has ownership in the following significant unconsolidated entities as of December 31, 2020:

Effective
% of Ownership

Taal Land, Inc. 35.00%

Cathay International Resources Corporation 34.49%
Sumisho Motor Financing Corporation* 26.52% *
SMBC Metro Investment Corporation 30.00%
Northpine Land, Inc. 20.00%
Lepanto Consolidated Mining Company 13.35%

* Represents investments in a joint venture of the Group and effective ownership interest of the Bank through
PSBank.

Material Commitments for Capital Expenditures

For the year 2020, the Bank estimates to incur capital expenditures of about P3.0 to P5.0 billion, of which 70% is
estimated to be incurred for information technology.

Significant Elements from Continuing Operations

Standards Issued But Not Yet Effective

Standards issued but not yet effective up to date of issuance of the Group’s financial statements are listed in Note 2 of
the audited financial statements of the Group as presented in Exhibit 4. The listing consists of standards and
interpretations issued, which the Group reasonably expects to be applicable at a future date. The Group intends to
adopt these standards when they become effective. Except as otherwise indicated, the Group does not expect the
adoption of these new and amended PFRS and Philippine Interpretations to have significant impact on its financial
statements. The Group will assess impact of these amendments on its financial position or performance when they
become effective.
 42

Material Subsequent Events

1. On January 21, 2021, the BOD of PSBank declared 7.50% regular cash dividend for the fourth quarter of 2020
amounting to P=320.14 million or =
P0.75 per share, payable on February 22, 2021 to all stockholders of record as of
February 5, 2021.

2. On February 17, 2021, the BOD of the Parent Company declared a regular cash dividend of = P1.00 per share and a
special cash dividend of =
P3.00 per share payable on March 18, 2021 to all stockholders of record as of March 5,
2021.

Others

As of December 31, 2020, the Group has no significant matters to report on the following:

1. Known trends, events or uncertainties that would have material impact on liquidity and on the sales or revenues
except that in order to anticipate the impact of COVID-19 pandemic, as required by the expected credit loss model
of PFRS 9, the Group increased provisions for credit and impairment losses to = P40.8 billion for the year ended
December 31, 2020.

2. Explanatory comments about the seasonality or cyclicality of operations.

3. Issuances, repurchases and repayments of debt and equity securities except for (a) maturity of the = P8.0 billion
LTNCD and = P28.0 billion fixed rate bonds of the Bank; (b) issuances of the P =10.5 billion fixed rate bonds and
US$ 500 million senior unsecured notes of the Bank and the = P4.65 billion fixed rate bonds of PSBank; (c)
redemption of the 2025 Peso Notes by the Bank and (d) maturity of the P =1.7 billion and =
P895.2 million unsecured
notes issued by ORIX Metro on April 29 and October 29, 2020, respectively as discussed in Notes 16, 19, 20 and
21 of the audited financial statements of the Group as presented in Exhibit 4.

4. Unusual items as to nature, size or incidents affecting assets, liabilities, equity, net income or cash flows except for
the disposal of investment securities at amortized cost and payment of cash dividends by the Bank, as discussed in
Notes 8 and 23, respectively, of the audited financial statements of the Group as presented in Exhibit 4; and

Effect of changes in the composition of the Group during the year, including business combinations, acquisition or
disposal of subsidiaries and long-term investments, restructurings, and discontinuing operations (except as
discussed in Notes 2 and 11 of the audited financial statements of the Group as presented in Exhibit 4).

ITEM 7 – FINANCIAL STATEMENTS

Presented in Exhibit 4 is the Audited Financial Statements of Metrobank and its Subsidiaries as of December 31, 2020
and 2019 and for the years ended December 31, 2020, 2019 and 2018. SyCip Gorres Velayo & Co. (SGV) audited
such financial statements.

Attached to the audited financial statements is the notarized Statement of Management Responsibility for Financial
Statements which was signed by Messrs. Arthur Ty (Chairman), Fabian S. Dee (President), Joshua E. Naing (Head of
Financial and Control Sector), Fernand Antonio A. Tansingco (Treasurer and Head of Financial Markets Sector) and
Mr. Renato K. De Borja, Jr. (Controller).

Information on Independent Accountant

1. SGV has been the external auditors of the registrant since 1962. In compliance with the revised SRC Rule 68 (3)
(b) (ix), the signing partners are rotated after every five years reckoned from the year 2002 (increased to seven
years effective August 2019 per Professional Regulatory Board of Accountancy Resolution No. 53, Series of
2019). The following SGV Partners have reviewed/audited the financial statements of the registrant and signed
the reports of the independent auditors for the years ended as indicated below:
 43

SGV Partner Years Ended December 31

Ms. Josephine Adrienne A. Abarca 2020 and 2019
2019 and 2018
Ms. Janeth T. Nuñez-Javier 2018 and 2017
2017 and 2016
2016 and 2015
2015 and 2014
2014 and 2013

Mr. Aris C. Malantic 2013 and 2012

2012 and 2011
2011 and 2010
2010 and 2009
2009 and 2008

2. The Bank intends to retain SGV as its external auditors for the year 2021. The external auditors are appointed
annually by the registrant’s Board of Directors in its organizational meeting held immediately after the Annual
Stockholders’ Meeting.

Professional Services and Fees

The aggregate fees billed and paid for each of the last two fiscal years for professional services rendered by the
registrant’s external auditors are summarized below:

Aggregate Fees
Nature of Services Rendered (in millions)
2020 2019
Audit and Annual and interim audit of the Consolidated, Parent Company and FCDU
Audit-Related Financial Statements in connection with statutory and regulatory filings;
Fees annual audit of the Combined Financial Statements of Trust and Managed
Funds Operated by the Trust Banking Group with Supplementary
Combined Information; limited review of financial statements and offering
circulars based on agreed-upon procedures and issuance of comfort letters
relative to the issuances of debt securities (MTN, bonds). P24.50 P41.77
Tax Fees - -
All Other Fees Seminar fees and others 0.89 4.61
Total Fees P25.39 P46.38

Audit Committee’s Approval Policies and Procedures for Above Services

The Institutional Accounting Division of the Bank’s Controllership Group, upon consultation with the Controller, the
Financial and Control Sector Head and the President, reviews the continuing eligibility of the Bank’s external auditor
and/or other probable candidates, considering certain criteria.

Upon selection by the Controller, the Financial and Control Sector Head and the President, the recommendation for
engaging the preferred external auditor shall be presented by the Controller to the Audit Committee, which shall then
evaluate and endorse the appointment of the external auditor to the Board of Directors for approval.

On March 18, 2020, the Board of Directors approved the endorsement of the Audit Committee re-appointing SyCip
Gorres Velayo & Co. (SGV) as the external auditors for 2020, and it was ratified by the stockholders during the
Annual Stockholders’ Meeting on May 28, 2020.

Appointment of Members and Composition of the Audit Committee

The members of the Audit Committee are appointed annually by the Board of Directors. It shall be composed of at
least three (3) qualified non-executive directors, and majority of whom shall be independent directors, including the
Chairperson. All of the members of the Audit Committee must have relevant background, knowledge, skills and/or
experience in the areas of accounting, auditing and finance commensurate with the size, complexity of operations and
risk profile of the bank. It shall have access to independent experts to assist them in carrying out its responsibilities.
The Chairman of the Audit Committee should not be the chairman of the board or of any other board-level
committees.
 44

Each member shall serve for a maximum tenure of nine years. If a member does not serve the position of director
within the term, his/her Audit Committee membership is automatically removed; the vacancy should then be filled up
by the remaining Board of Directors, if still constituting a quorum. Once an independent director loses his/her
independent director’s position within the term, he/she will automatically lose qualification of Audit Committee
chairperson. A new chairperson shall be appointed subject to the approval of the Board of Directors. The Audit
Committee chairperson or member so appointed to fill a vacancy shall be appointed only for the unexpired term of his
predecessor in office. The committee members, including the chairperson, may also be occasionally rotated.

Metrobank’s Audit Committee is composed of the following:

Name of Member Designation - Audit Committee Designation - Registrant

Edgar O. Chua Chairman Independent Director
Francisco F. Del Rosario, Jr. Regular Member Independent Director
Solomon S. Cua Regular Member Director
Angelica H. Lavares Regular Member Independent Director

As provided for in its amended charter, among the duties and responsibilities of the Audit Committee is the exercise of
an effective oversight of external audit function. With respect to the registrant’s independent external auditor, the
Audit Committee is responsible to:

1. Recommend the appointment or selection, re-appointment and dismissal of the independent external auditor based
on fair and transparent criteria. The external auditor shall be selected from the List of Selected External Auditors
for Bangko Sentral Supervised Financial Institutions and the recommendation should be approved by the Board
and ratified by the stockholders. If the external auditor resigns or communicates an intention to resign, the Audit
Committee should follow up the reasons or explanations giving rise to such resignation, and should consider
whether it needs to take any action in response to those reasons. For removal of the external auditor, the reasons
for removal or change should be disclosed to the regulators and the public through the company website and
required disclosures. The external auditor, including the engagement and quality control partners, shall be
periodically rotated in accordance with the relevant regulatory requirements.

2. Discuss and agree to the terms of the engagement letter issued by the external auditor prior to the approval of the
engagement; obtain an understanding of the nature, audit approach, and scope of work covering areas specifically
prescribed by the Bangko Sentral ng Pilipinas and other regulators and those relevant to the Bank’s operations and
risk exposures. These include (i) review of the adoption of applicable reporting framework as well as the
assessment of the accuracy, adequacy, and reliability of accounting records and financial reports; (ii) assessment
of the propriety and adequacy of disclosures in the financial statements; (iii) assessment of the adequacy and
effectiveness of internal controls and risk management systems; (iv) assessment of the quality of capital in
relation to risk exposures; and (v) evaluation of the quality of corporate governance, among others.

3. Set compensation of the external auditor in relation to the scope of its duties upon recommendation of Controller
and ensure coordination where more than one audit firm is involved in the activity to secure proper coverage and
minimize duplication of efforts.

4. Ensure that the external auditor shall have free and full access to all the Bank’s records, properties and personnel
relevant to the audit activity, and that audit be given latitude in determining the scope of auditing examinations,
performing work, and communicating results and shall be free from interference by outside parties in the
performance of work.

5. Assess the extent of cooperation provided by the management during the conduct of external audit.

6. Evaluate and determine non-audit work by external auditor and keep under review the non-audit fees paid to the
external auditor both in relation to the significance to the total annual income of the external auditor and in
relation to the Bank’s total expenditure on consultancy and disallow any non-audit work that will conflict with or
pose a threat to the independence of the external auditor. The non-audit work, if allowed, should be disclosed in
the Annual Report and Annual Corporate Governance Report.

7. Review management representation letters before these are transmitted to the external auditor to ensure that items
in the letter are complete and appropriate.
 45

8. Review the disposition of the recommendations in the external auditor’s management letter.

9. Review and monitor the overall suitability and effectiveness and conduct of regular performance appraisal of
external auditor on an annual basis. These shall involve assessing and monitoring the integrity, independence and
objectivity of external auditor, and the effectiveness of the audit process, taking into consideration relevant
Philippine professional and regulatory requirements.

10. Continually engage external auditor on matters concerning audit quality and enhancements in audit processes.

11. Oversee the financial reporting process, practices, and controls; and ensure that the reporting framework enables
the generation and preparation of accurate and comprehensive information and reports. The Audit Committee
shall perform review of independent external auditor’s report on the results of the financial statements audit,
focusing particularly on any change/s in accounting policies and procedures; major estimates, assumptions and
judgmental areas; unusual or complex transactions; significant adjustments, material errors and fraud; going
concern assumption; compliance with accounting standards, and tax, legal and regulatory requirements; and, fully
funding of employee pension funds or recognition of corresponding liability in the books; and conduct discussion
with external auditor and management to decide on the appropriate action to be taken to address issues noted
before these are submitted to the Board of Directors for approval.

12. Understand and assess the external auditor’s opinion regarding the capability of the management and the
adequacy of accounting or information systems to comply with the financial and prudential reporting
responsibilities.

13. Meet with external auditor every semester or as the need arises.

ITEM 8 – CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS

ON ACCOUNTING AND FINANCIAL DISCLOSURE

SGV has been the external auditors of the Bank since 1962 with engagement partner being changed every five (5)
years effective 2002 (increased to seven years effective August 2019 per Professional Regulatory Board of
Accountancy Resolution No 53, Series of 2019) in accordance with SEC and BSP regulations. There have been no
disagreements with the Bank’s independent accountants on any matter of accounting principles or practices, financial
statement disclosures, or auditing scope or procedure.

PART III – CONTROL AND COMPENSATION INFORMATION

ITEM 9 – DIRECTORS AND EXECUTIVE OFFICERS OF THE ISSUER

Directors and Executive Officers of the Issuer

The names and ages of all directors and executive officers are as follows:

Directors - 12

Office Name Citizenship Age

1 Chairman Arthur Ty Filipino 54
2 Vice-Chairman Francisco C. Sebastian Filipino 66
3 President Fabian S. Dee Filipino 58
4 Director Alfred V. Ty Filipino 53
5 Director Edmund A. Go Filipino 70
6 Director Vicente R. Cuna, Jr. Filipino 58
7 Director Solomon S. Cua Filipino 65
8 Independent Director Jesli A. Lapus Filipino 71
9 Independent Director Francisco F. Del Rosario, Jr. Filipino 73
10 Independent Director Edgar O. Chua Filipino 64
11 Independent Director Angelica H. Lavares Filipino 67
12 Independent Director Philip G. Soliven Filipino 59
 46

The Independent Directors, namely, Mr. Jesli A. Lapus, Mr. Francisco F. Del Rosario, Jr., Mr. Edgar O. Chua, Ms.
Angelica H. Lavares and Mr. Philip G. Soliven have always possessed the qualifications, and none of the
disqualifications of an independent director.

Officers - Sectors and Group Heads - 26

Office Name Citizenship Age

1 Senior Executive Vice- Joshua E. Naing Filipino 60
President
2 Senior Executive Vice- Fernand Antonio A. Tansingco Filipino 54
President
3 Executive Vice-President Maritess B. Antonio * Filipino 59
4 Executive Vice-President Mary Mylene A Caparas Filipino 56
5 Executive Vice-President Paul Robert Y. Murga Filipino 55
6 Executive Vice-President Corazon Ma. Therese B. Nepomuceno Filipino 58
7 Executive Vice-President Richard Benedict S. So Filipino 55
8 Executive Vice-President Aniceto M. Sobrepeña Filipino 67
9 Executive Vice-President Vivian L. Tiu * Filipino 59
10 Senior Vice-President Christine Y. Carandang Filipino 54
11 Senior Vice-President Anna Therese Rita D. Cuenco Filipino 47
12 Senior Vice-President Renato K. De Borja, Jr. Filipino 49
13 Senior Vice-President Ramon Jaime L.V. Del Rosario Filipino 44
14 Senior Vice-President Pocholo V. Dela Peña Filipino 54
15 Senior Vice-President Hierbert A. Dimagiba Filipino 43
16 Senior Vice-President Rommel Enrico C. Dionisio Filipino 48
17 Senior Vice-President Ferlou I. Evangelista Filipino 59
18 Senior Vice-President David Holmes British 45
19 Senior Vice-President Antonio R. Ocampo, Jr. Filipino 50
20 Senior Vice-President Bernardino D. Ramos Filipino 55
21 Senior Vice-President Angelica S. Reyes Filipino 47
22 Senior Vice-President Leandro Antonio G. Santillan Filipino 52
23 Senior Vice-President Lita S. Tan Filipino 57
24 Senior Vice-President Anthony Paul C. Yap Filipino 44
25 First Vice-President Leo R. Fragante Filipino 55
26 First Vice-President Ely Roy B. Lindo Filipino 56

* Retired effective February 1, 2021

Directors - 12

Name Experience

ARTHUR TY Mr. Arthur Ty, Filipino, 54 years old, has been the Bank’s
Chairman Chairman since 2012. He was the Bank’s President from
Chairman, Executive Committee 2006 to 2012. He has been the Chairman of GTCAP since
Member, Anti-Money Laundering Committee May 2016 and Metropolitan Bank China (Ltd.) (MBCL)
Corporate Governance and Compensation since 2010, Vice-Chairman of Philippine Savings Bank
Committee (PSBank) since 2001, First Metro Investment Corporation
(FMIC) since 2012 and AXA Philippines since 2017. He
earned his Bachelor of Science degree in Economics at the
University of California, Los Angeles and obtained his
Masters in Business Administration degree from Columbia
University, New York.

His brother Alfred Ty is the Director of the Bank. He is

married to Zandra M. Ty, Metrobank First Vice-President.
 47

Name Experience

FRANCISCO C. SEBASTIAN Mr. Francisco C. Sebastian, Filipino, 66 years old, has been
Vice-Chairman the Vice-Chairman of the Bank since 2006. He joined the
Chairman, Overseas Banking Committee Metrobank Group in 1997 as FMIC President until he was
Vice-Chairman, Executive Committee appointed Chairman in 2011. He was the Chairman of
Adviser, Risk Oversight Committee GTCAP from 2014 to April 2016. He has been the Vice-
Chairman of GTCAP since May 2016. He earned his AB
degree in Economics, Magna Cum Laude, from the Ateneo
de Manila University in 1975.

FABIAN S. DEE Mr. Fabian S. Dee, Filipino, 58 years old, became President
President of Metrobank in 2012. Before becoming President, he
Member, Executive Committee headed the National Branch Banking Sector (2006-2012),
IT Steering Committee Account Management Group (2002-2006) and Marketing
Trust Committee Center (2001-2002). He has been the Director of Bankers
Association of the Philippines since 2014 and Trustee of
Metrobank Foundation, Inc. (MBFI) since 2012. He was the
Chairman and Director of Metrobank Card Corporation
(MCC) from 2006 to January 2020; Chairman of Metro
Remittance Singapore PTE Ltd. from 2010 to 2019;
Chairman of LGU Guarantee Corporation from 2017 to 2019;
Chairman of SMBC Metro Investment Corporation (SMBC
Metro) from 2014 to 2017; and Director of Bancnet from
2015 to 2017. He holds a degree in Management Engineering
from the Ateneo de Manila University.

ALFRED V. TY Mr. Alfred V. Ty, Filipino, 53 years old, was first elected
Director director in September 2015. He has been the Chairman of
Member, Overseas Banking Committee Toyota Motor Philippines Group of Companies and Federal
Land Group of Companies. He has been the Vice-Chairman
of Metro Pacific Investment Corp. since March 2018 and
GTCAP since 2012. He graduated with a Bachelor of Science
degree in Business Administration from the University of
Southern California in 1989.

His brother Arthur Ty is the Chairman of the Bank. He is the

brother-in-law of Zandra M. Ty, Metrobank First Vice-
President.

EDMUND A. GO Mr. Edmund A. Go, Filipino, 70 years old, was first elected
Director director in 2007. He has been a director of Metropolitan
Vice-Chairman, Trust Committee Bank China (Ltd.) since 2010, a member of the Board of
Member, IT Steering Committee Advisors of PSBank since 2009. He has also been a Director
Risk Oversight Committee for Investments of Ateneo de Manila University since 2010
and Investment Consultant for St. Peter’s Life Group since
2011. He was a director of First Metro International
Investment Corporation (FMIIC) Hong Kong from 2001 to
2008. He served as Metrobank Treasurer (2000-2007) and
consultant of the Philippine Dealing and Exchange Corp. on
Securities Training and Development (2008-2010). Prior to
2000, he held various management positions at Citibank
Manila, Hong Kong, Taiwan and New York in the areas of
Treasury, Derivatives, Investment Banking and Private
Banking. He is a Certified Public Accountant and holds a BS
Commerce Degree in Accounting, Cum Laude, from the San
Beda College and an MBA degree, with distinction, from the
Asian Institute of Management.
 48

Name Experience

VICENTE R. CUNA, JR. Mr. Vicente R. Cuna, Jr., Filipino, 58 years old, became a
Director director of Metrobank in 2014. He has been the Head of the
Chairman, IT Steering Committee Enterprise Services Sector of Metrobank since April 2018.
Member, Executive Committee Prior to this, he was the President of PSBank from 2013 to
Adviser, Risk Oversight Committee 2018; Head of Institutional Banking Sector (2012-2013) and
Corporate Banking Group (2006-2012) of Metrobank. He is
the Chairman of ORIX Metro Leasing and Finance
Corporation (ORIX Metro) since March 2016 and Vice-
Chairman of PSBank since April 2018. He was the Director
of FMIC from 2011 to 2015. He graduated from De La Salle
University with a degree in AB Economics and pursued
further studies at the Ateneo Graduate School of Business.

SOLOMON S. CUA Mr. Solomon S. Cua, Filipino, 65 years old, is a former

Director Undersecretary of the Department of Finance. He is
Member, Audit Committee currently the Chairman of AXA Philippines since April 2010
Overseas Banking Committee and Charter Ping An Insurance Corporation since April 2016.
He has been the Vice-Chairman since June 2012 and Director
since 2001 of Philippine Racing Club, Inc.; Adviser of
MBCL since 2018; Director of Global Treasure Holdings,
Inc. since 2011 and Grand Titan Capital Holdings, Inc. since
2011. He is also the President/Director of SC & SSC
Holdings, Inc. since 2015 and Director/Treasurer of Palm
Integrated Commodities, Inc. since 2011. He obtained his
Bachelor of Arts (Mathematical Sciences and Economics) in
University of Melbourne, Australia; Bachelor of Law in
University of Queensland, Australia and Masters of Laws in
London School of Economics & Political Science, England.

JESLI A. LAPUS Mr. Jesli A. Lapus, Filipino, 71 years old, became an

Independent Director independent director in 2010. He has been the Chairman and
Chairman, Nominations Committee Independent Director of STI Education Services Group, Inc.
Trust Committee since 2013, Chairman of LSERV (formerly LBP Service
Vice-Chairman, Risk Oversight Committee Corporation) since 2012 and Optimus Management Services
Member, Corporate Governance and Compensation Inc. since 2010. He has been an Independent Director of STI
Committee Education Systems Holdings Inc. since 2013 and Philippine
Life Financial Assurance Corp. since June 2012. He has
been a member of the Board of Governors of Information and
Communication Technology Academy, Inc. since November
2010. He is the Advisor to the Board since 2013 of
Radiowealth Finance Company. He was the Chairman of
Manila Tytana Colleges (MTC) from 2010 to 2013. He has
been the Chairman - Center for Tourism of the Asian Institute
of Management since 2012. He was the Secretary of the
Department of Trade and Industry (2010), Secretary of the
Department of Education (2006-2010), Congressman, Third
District of Tarlac, House of Representatives (1998-2006) and
President/CEO and Vice-Chairman of Land Bank of the
Philippines (1992-1998). He is a Certified Public Accountant
and holds an Accountancy degree from the Philippine School
of Business Administration and a Master’s degree in
Business Management from the Asian Institute of
Management. He has a Doctorate in Public Administration
(Honoris Causa) from the Polytechnic University of the
Philippines. He also studied Investment Appraisal and
Management at Harvard University; Management of Transfer
of Technology at INSEAD (France), Project Management at
BITS (Sweden); and Personal Financing Planning at UCLA.
 49

Name Experience

FRANCISCO F. DEL ROSARIO, JR. Mr. Francisco F. Del Rosario, Jr., Filipino, 73 years old, was
Independent Director first elected independent director in 2013. He has been a
Chairman, Risk Oversight Committee director of Omnipay, Inc. since 2014 and DMCI Homes, Inc.
Member, Audit Committee since 2011. He has been a Trustee of ABS-CBN Foundation
Corporate Governance and Compensation since 2007, Senior Executive Director of PWC Isla Lipana
Committee and Chairman for Institute for Solidarity in Asia since 2017
Overseas Banking Committee and Trustee for Center for Family Ministries from 2009 to
2014. He was the President and CEO of the Development
Bank of the Philippines from 2010 to 2012. He obtained his
BSC Accounting and BA Economics degrees from De La
Salle University, and his MBM degree from the Asian
Institute of Management.

EDGAR O. CHUA Mr. Edgar O. Chua, Filipino, 64 years old, became an

Independent Director independent director in 2017. He is currently the President
Chairman, Audit Committee and Chief Executive of Cavitex Holdings, Inc. He has been
Member, Anti-Money Laundering Committee an Independent Director of PhilCement Integrated Micro-
Nominations Committee Electronics, Inc. since 2014 and Energy Development
Related Party Transactions Committee Corporation since 2007. He is also the Chairman of
Philippine Business for the Environment, Philippine Eagle
Foundation since 2017, De La Salle Philippines, De La Salle
Science Foundation since 2017 and Makati Business Club
since 2016. He is currently the Chairman for the College of
Saint Benilde and University of La Salle Bacolod. He is a
Trustee/Treasurer of Philippine Business for Education and
Trustee for the De La Salle Greenhills, De La Salle National
Mission Council, Integrity Initiative, Gawad Kalinga
Community Development Foundation, Inc. since 2005,
Zuellig Family Foundation, Pilipinas Shell Foundation, Inc.
since 2003, Philippine Disaster Relief Foundation and
Alvarez Foundation Philippines. He is the Chairman of The
English-Speaking Union of the Philippines, Inc. since 2009.
He is the Co Vice-Chairman of National Resilience Council
and Governor of Employers Confederation of the Philippines.
He is also the Board Advisor of Mitsubishi Motors Phil.
Corp. and Coca Cola FEMSA. He was the Chairman of
Pilipinas Shell Petroleum from September 2003 to May 2017
and the Country Chairman of Shell companies in the
Philippines from September 2003 to October 2016. He
obtained his Bachelor of Science in Chemical Engineering
from De La Salle University in 1978.

ANGELICA H. LAVARES Ms. Angelica H. Lavares, Filipino, 67 years old, is a

Independent Director Teaching Fellow at the Institute of Corporate Directors. She
Chairman, Anti-Money Laundering Committee is an Independent Director of several companies, namely,
Corporate Governance and Compensation Prulife UK and MCC (April 2018 - January 2020). Her other
Committee affiliations include being Head of Strategic Support Group of
Member, Audit Committee Bank of Commerce from 2009 to 2015, and as a Consultant
Related Party Transactions Committee starting November 2015 up to present. Prior to joining Bank
of Commerce, she served as Chief Legal Counsel (2003 to
2007), concurrent Chief Compliance Officer and Chief Legal
Officer - Legal Services Department (2007 to 2009) and
Assistant Corporate Secretary (2007-2009) of Metrobank.
She was also the Chief Legal Counsel and Head of Legal
Services Division for United Coconut Planters Bank (UCPB)
from 1999 to 2002 acting concurrently as its Head for Human
Resource Division. Previous to that, she was the Vice-
President for Sales Documentation and Head of Collection
Department of Filinvest Land Inc. and Special Assistant to
the Commissioner for the Bureau of Customs in 1987. She
obtained her degree in AB Psychology, Cum Laude, from St.
Theresa’s College, QC in 1973 and Bachelor of Laws, First
Honorable Mention, from the University of the Philippines in
1981.
 50

Name Experience

PHILIP G. SOLIVEN Mr. Philip G. Soliven, 59 years old, is Chairman Emeritus

Independent Director and Senior Advisor for Cargill Phils. Inc. He began his
Chairman, Related Party Transaction Committee professional career with the First National Bank of Boston,
Member, Nominations Committee working in the Manila, Philippines branch as foreign
Risk Overshight Committee exchange trader. He moved to the Bank of Boston’s
Trust Committee corporate headquarters in Boston, Massachusetts in 1984 to
assume a role within corporate banking. In 1985, he was
assigned to Hong Kong as manager of the Bank’s corporate
banking business where he occupied a number of positions
across Corporate Loan Recovery, Treasury Sales-Foreign
Exchange, Debt Trading and Trade Services. He relocated to
Singapore in 1991 as Vice-President for Corporate Banking
covering corporate banking clients in Singapore, Indonesia
and Thailand. He is also the Commercial Director for various
Food Ingredients and Bio-Industrial (FIBI) businesses and
President of Philippine Bio-Industries, Inc. since 2017. He is
a Board representative and Treasurer of Cargill Joy Poultry
Meats, Inc., a Cargill-Jollibee Foods joint venture. Mr.
Soliven is currently a Director and Treasurer of the American
Chamber of Commerce of the Philippines and is also
Chairman of its Agribusiness Committee. In addition, he
serves as a Director at Scorbin Inc., Multico Prime Power,
The Rotary Club of Makati and Impact Enrvironmental
Solutions. He is a member of Makati Business Club and
Management Association of the Philippines. He holds a
degree in Business Management from the Ateneo de Manila
University.

The Directors of the Bank are elected during the Annual Stockholders’ Meeting. Each director holds office until the
Annual Stockholders’ Meeting in the succeeding year, or until a successor is elected, appointed or shall have been
qualified.

Executive Officers - 26

Name Experience

Joshua E. Naing Mr. Joshua E. Naing, Filipino, 60 years old, has been the Head of the
Senior Executive Vice-President Financial and Control Sector since November 2013 after serving as Controller
from October 2002 to November 2013. He has been a director of FMIC since
April 2015; Manila Medical Service, Inc. (MMSI) since April 2018; Metro
Remittance (Hong Kong) Limited since January 2009; and MB Remittance
Center (Hawaii), Ltd. from April 2010 to May 2019.

Fernand Antonio A. Tansingco Mr. Fernand Antonio A. Tansingco, Filipino, 54 years old, has been the Head
Senior Executive Vice-President of Financial Markets Sector since 2013, and Treasurer since 2007. He was a
director from 2012 to 2016 and adviser of MBCL since 2016, Chairman of
Metrobank Bahamas since 2010, and Vice-Chairperson of AXA Philippines
since 2010. He is the Adviser to the Board of FMIC since 2019.

Maritess B. Antonio Ms. Maritess B. Antonio, Filipino, 59 years old, Executive Vice President
Executive Vice-President (EVP), has been the Chief Risk Officer and Head of Risk Management Group
since August 2016. She was the Chief Audit Executive and Head of Internal
Audit Group from June 2010 to July 2016 after serving as Deputy Chief
Audit Executive from 2008 to 2010.
 51

Name Experience

Mary Mylene A. Caparas Ms. Mary Mylene A. Caparas, Filipino, 56 years old, has been the Head of
Executive Vice-President the Institutional Banking Sector since 2014. She is the Vice-Chairman of
FMIC since June 2020. She was the Director of ORIX Metro from 2015 to
March 2020. From 2013 to 2014, she was the Managing Director, Regional
Head of Client Delivery, Treasury and Trade Solutions of Citibank N.A.,
Hong Kong Branch. From 2011 to 2013, she was the Managing Director,
Country Head of Citi Transaction Services of Citibank N.A., Manila Branch.

Paul Robert Y. Murga Mr. Paul Robert Y. Murga, Filipino, 55 years old, has been the Head of
Executive Vice-President Operations Group since March 2014 after serving as Assistant to the
Operations Group Head from 2013 to 2014. He is a member of the Board of
Directors of the Philippine Clearing House Corporation since 2014.

Corazon Ma. Therese B. Nepomuceno Ms. Corazon Ma. Therese B. Nepomuceno, Filipino, 58 years old, has been
Executive Vice-President the Head of Credit Group since 2012 after serving as its Deputy from 2005 to
2012.

Richard Benedict S. So Mr. Richard Benedict S. So, Filipino, 55 years old, is the Head of Products,
Executive Vice-President Channels and Overseas Banking Group since October 2020. He was the
Head of Countryside Branch Banking under the National Branch Banking
Sector from March 2016 to September 2018 and was the Retail Banking
Sector Head from September 2018 to September 2020. He serves as a
member of the Board of Directors of several foreign subsidiaries wholly-
owned by Metrobank. He has been a Vice-Chairman of Metro Remittance
Singapore Pte. Ltd. since 2010. He has been a director of Metrobank
Bahamas since 2009, MCC from 2010 to 2019, Metro Remittance Italia Spa
from 2010 to January 2021 and Corporate Secretary of MBCL from 2014 to
2019. He was appointed as Head of the International Offices and Subsidiaries
Group (IOSG) from 2009 to 2016 after serving as its Deputy from 2007 to
2009; and Head of the Transaction Banking Segment in 2014.

Aniceto M. Sobrepeña Mr. Aniceto M. Sobrepeña, Filipino, 67 years old, has been the President of
Executive Vice-President MBFI since 2006 and Executive Director of GT Foundation, Inc. (GTFI)
since January 2010. He is also the Chairman of Manila Tytana Colleges
(MTC) and Vice-Chairman of MMSI. He is a member of the Board of
Trustees of PinoyMe Foundation since 2007 and Philippine Business for
Education since 2008. He is also a member of Galing Pook Foundation since
2000, International Center for Innovation Transformation and Excellence in
Governance since 2006 and Philippine Institute of Environmental Planners
since 1995.

Vivian L. Tiu Ms. Vivian L. Tiu, Filipino, 59 years old, EVP, has been the Head of Human
Executive Vice-President Resources Management Group since 2001. She has been serving as adviser of
MTC since 2019.

Christine Y. Carandang Ms. Christine Y. Carandang, Filipino, 54 years old, has been the Head of
Senior Vice-President General Services Group since June 2014, and the President of Circa 2000
Homes, Inc. since 2009. She has been the Head of Acquired Assets
Management and Disposition Group from May 2007 to December 2015.

Anna Therese Rita D. Cuenco Ms. Anna Therese Rita D. Cuenco, Filipino, 47 years old, assumed the
Senior Vice-President position of Head, Consumer Lending Group under the Consumer Business
Sector (CBS) effective January 3, 2020. She was seconded from MCC to
Metrobank as Head of Consumer Lending Group from 2018 to 2019. She
was the Deputy Cards Head, Marketing and Service Quality Group of MCC
from 2009 to 2018 and the Head of Sales, Marketing and Portfolio
Management of MCC from 2008 to 2009.
 52

Name Experience

Renato K. De Borja, Jr. Mr. Renato K. De Borja, Jr., Filipino, 49 years old, has joined the Bank as
Senior Vice-President Controller on November 16, 2020. He previously served as a Group Head of
Remittance, Cards and Contact Center of China Banking Corporation from
2016 to 2020 and as a Director of China Bank Insurance Brokers, Inc. from
2017 to 2019. He was the Chief Finance Officer of East West Banking
Corporation from 2009 to 2016.

Ramon Jaime L.V. Del Rosario Mr. Ramon Jaime L.V. Del Rosario, Filipino, 44 years old, assumed the
Senior Vice-President position of Cards and Personal Credit Sector Head in January 2020 then took
the role of CBS Head in September 2020. Prior to this, he was the MCC
President from July to December 2019 and Director of Cards and Loans
Business of Citibank Indonesia from 2016 to June 2019.

Pocholo V. Dela Peña Mr. Pocholo V. Dela Peña, Filipino, 54 years old, has been the Head of
Senior Vice-President Business Banking Center of Institutional Banking Sector since October 2018
after serving as Head of Special Accounts Management Group from 2014 to
2018 and Head of Special Accounts Management Division II from 2005 to
2014. He is the Corporate Secretary of PSBank since 2011 and Director of
SMFC since August 2017.

Hierbert A. Dimagiba Mr. Hierbert Dimagiba, Filipino, 43 years old, is the Chief Marketing Officer
Senior Vice-President and Head of the Analytics, Brand, Communications & Marketing-Technology
(ABCMT) Group (formerly ABCMT Division) since 2017. He also serves as
Internal Vice President and elected member of the Board of Directors of the
Internet & Mobile Marketing Association of the Philippines (IMMAP)
industry group since 2018. He is also an incorporator and member of the
board of directors of the H&D Group of Companies since 1999. Previously,
he was the first Country Director of Facebook Philippines from 2016 to 2017
and before that, was the Country Director of the IT & Mobile Business Unit
of Samsung Philippines from 2014 to 2016.

Rommel Enrico C. Dionisio Mr. Rommel Enrico C. Dionisio, Filipino, 48 years old, assumed the position
Senior Vice-President as Head of Markets Sales Group effective January 1, 2020. He was the Head
of Institutional Sales Division from February 2017 to December 2019 after
serving as Deputy Head from July 2016 to February 2017. He was the Head
of Corporate Sales Department under Sales and Structuring Division -
Markets Sales Group from October 2014 to July 2016 and Head of
Multinational Corporations Division under Corporate Banking Group from
November 2011 to September 2014.

Ferlou I. Evangelista Mr. Ferlou I. Evangelista, Filipino, 59 years old, has been the Head of
Senior Vice-President Commercial Banking Group since May 2017. He joined the Bank in 2011 as
Division Head and later as Center Head of Commercial Banking Metro
Manila under the Institutional Banking Sector.

David Holmes Mr. David Holmes, British, 45 years old, has been the Customer Engagement
Senior Vice-President Group Head since July 2020. He also held the role of Centralized Processing
Division Head from Oct 2019 to Aug 2020 concurrent to his position BSC
Deputy Head from Jun 2019 to Nov 2020. Prior to this he worked for
Citibank where he was the Head of Customer Experience for EMEA and
prior to that for APAC between 2014 and 2018.

Antonio R. Ocampo, Jr. Mr. Antonio R. Ocampo, Jr., Filipino, 50 years old, has been the Head of
Senior Vice-President Corporate Banking Group since 2014. He was the Head of Large Corporate
Division from 2013 to 2014 after serving as Deputy Head from 2012 to 2013.
He is a member of the Bank’s Senior Credit Committee. He is also the
Director of Northpine Land, Inc. since 2016 and SMBC Metro Investment
Corporation since 2014. He is a member of the Financial Executives Institute
of the Philippines since 2016 and Makati Business Club since 2018.
 53

Name Experience

Bernardino D. Ramos Mr. Bernardino D. Ramos, Filipino, 55 years old, has been the Head of
Senior Vice-President Information Technology Group since August 2015. He also served as the
Head of Program Management Division from July 2013 to July 2015.

Angelica S. Reyes Ms. Angelica S. Reyes, Filipino, 47 years old, assumed the position as Head
Senior Vice-President of Treasury Group effective January 1, 2020. She was the Head of the
Markets Sales Group from 2013 to 2019 after serving as Head of Sales and
Structuring Division from 2010 to 2013. She was the concurrent Head of
Investment Distribution Division from 2012 to 2013. She serves as Corporate
Secretary of AXA Philippines since 2015 and Charter Ping An Insurance
Corporation since 2016.

Leandro Antonio G. Santillan Mr. Leandro Antonio G. Santillan, Filipino, 52 years old, has been the Head
Senior Vice-President of Trust Banking Group since May 1, 2018 after serving as Deputy Head
from January 2017 to April 2018. He was the Head of Fixed Income Division
from 2013 to 2015 and Treasurer of PSBank from June 30, 2015 to December
2016.

Lita S. Tan Ms. Lita S. Tan, Filipino, 57 years old, assumed the position of Branch
Senior Vice-President Banking Group Head last October 2020. She was the Retail Banking Sector
Head from September 2018 to September 2020. She was the Branch Banking
Group Head for Metro Manila branches under National Branch Banking
Sector; Region Head of Central Metro Manila Region from 2015 to 2016 and
Area Head from 2006 to 2015. She is also a director of ORIX Metro since
June 2016.

Anthony Paul C. Yap Mr. Anthony Paul C. Yap, Filipino, 44 years old, assumed the position as
Senior Vice-President Head of RBS on October 1, 2020. He was the Head of RBS Strategy &
Transformation from January 1, 2020 to September 30, 2020 which was
renamed to RBS Analytics Insight and Strategy Unit; Head of Treasury
Group from January 2018 to December 2019; Head of Trading from July
2016 to December 2017; and Head of Rates and Foreign Exchange Division
from December 2013 to July 2016 after serving as Deputy Head from August
to December 2013.

Leo R. Fragante Mr. Leo R. Fragante, Filipino, 55 years old, has been the Head of Internal
First Vice-President Audit Group since April 2017 after serving as Head of Special Audit Division
and Branch Audit Division.

Ely Roy B. Lindo Mr. Ely Roy B. Lindo, Filipino, 56 years old, assumed the position of Head
First Vice-President of Operations Control Group effective January 1, 2020. He was the Head of
Branch Operations Control Division from December 2013 to 2019 after
serving as Deputy Head from June 2012 to November 2013. He was the
Head of Booking and Reconciliation Unit from October 2001 to June 2012.

Principal officers are elected annually by the BOD at the organizational meeting held immediately following the
Annual Stockholders Meeting.

Significant Employees

Except for the above list of executive officers, there are no other significant employees as contemplated under the
Securities Regulation Code.
 54

Family Relationships Among the Directors and Officers of the Bank

The family relationships among the directors and/or senior officers of the Bank are:

1. Chairman, Arthur Ty is related to the following:

Name Position Held in the Bank Relationship

Alfred Ty Director Brother
Zandra M. Ty First Vice President Wife

3. Director Alfred Ty, is related to the following:

Name Position Held in the Bank Relationship

Arthur Ty Chairman Brother
Zandra M. Ty First Vice President Sister-in-law

Involvement in Certain Legal Proceedings

To the Bank’s best knowledge and information, there are no material legal proceedings filed by or against its directors
and executive officers specified under Part IV (A)(4) of Annex C of SRC Rule 12 during the past five (5) years such
as:

a) Any bankruptcy petition filed by or against any business of which such person was a general partner or executive
officer either at the time of the bankruptcy or within two years prior to that time;

b) Any conviction by final judgment, including the nature of the offense, in a criminal proceeding, domestic or
foreign, or being subject to a pending criminal proceeding, domestic or foreign, excluding traffic violations and
other minor offenses;

c) Being subject to any order, judgment, or decree, not subsequently reversed, suspended or vacated, of any court of
competent jurisdiction, domestic or foreign, permanently or temporarily enjoining, barring, suspending or
otherwise limiting his involvement in any type of business, securities, commodities or banking activities; and

d) Being found by a domestic or foreign court of competent jurisdiction (in a civil action), the Commission or
comparable foreign body, or a domestic or foreign Exchange or other organized trading market or self- regulatory
organization, to have violated a securities or commodities law or regulation, and the judgment has not been
reversed, suspended, or vacated.

ITEM 10 – EXECUTIVE COMPENSATION

Information as to the aggregate compensation paid during the last two fiscal years and to be paid in the ensuing fiscal
year to the Bank’s Chief Executive Officers and each of Metrobank’s four other most highly compensated executive
officers follows:
 55

SUMMARY OF COMPENSATION TABLE

2021 (Estimate)
Name and Principal Position Other Annual
Salary Bonus Compensation *
Arthur Ty - Chairman
Fabian S. Dee - President
Vicente R. Cuna, Jr. - Senior Executive Vice President
Joshua E. Naing - Senior Executive Vice President
Fernand Antonio A. Tansingco - Executive Vice President
Total for the President and four (4) other highest paid executive
officers named above P264.35 million P46.88 million
All executive officers as a group unnamed (except the President
and four other highly compensated executive officers mentioned
above) P521.06 million P68.27 million
All Directors P67.00 million

2020
Name and Principal Position Other Annual
Salary Bonus Compensation *
Arthur Ty - Chairman
Fabian S. Dee - President
Vicente R. Cuna, Jr. - Senior Executive Vice President
Joshua E. Naing - Senior Executive Vice President
Fernand Antonio A. Tansingco - Executive Vice President
Total for the President and four (4) other highest paid executive
officers named above P254.19 million P45.07 million
All executive officers as a group unnamed (except the President
and four other highly compensated executive officers mentioned
above) P501.02 million P65.65 million
All Directors P67.00 million

2019
Name and Principal Position Other Annual
Salary Bonus Compensation *
Arthur Ty - Chairman
Fabian S. Dee - President
Vicente R. Cuna, Jr. - Senior Executive Vice President
Joshua E. Naing - Senior Executive Vice President
Fernand Antonio A. Tansingco - Executive Vice President
Total for the President and four (4) other highest paid executive
officers named above P222.29 million P36.37 million
All executive officers as a group unnamed (except the President
and four other highly compensated executive officers mentioned
above) P390.51 million P47.84 million
All Directors P65.09 million

* Inclusive of directors per diem and transportation allowances amounting to P38.26 million, P37.57 million and P39.22 million as of December 31,
2021, 2020, and 2019, respectively, or an average of P265,666.67, P260,888.89 and P272,375.00 per month/per director in 2021, 2020 and 2019,
respectively.

For the protection and security of its directors and officers, the Bank is unable to provide their individual
compensation.
 56

The directors receive other fees that are already included in the amounts stated above. Aside from the said amounts,
they have no other compensation plan or arrangement with the registrant. The directors receive compensation based
on their banking or finance experience and their attendance in the meetings of the board and the committees where
they are members or chairs of.

The executive officers receive salaries, bonuses and other usual cash benefits that are also already included in the
amounts stated above. Aside from the said amounts, they have no other compensation plan or arrangement with
Metrobank.

Warrants and Options Outstanding: Repricing

The information required under Part IV, Paragraph B (5) of the SRC is not applicable to the Bank. None of the
directors and officers holds any warrant or option related to Metrobank.

ITEM 11 – SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

Security Ownership of Certain Record and Beneficial Owners

The following stockholders own more than 5% of the common voting securities as of December 31, 2020:

Name, Address of Name of Beneficial

Class of Record Owner and Owner and
Shares Relationship with Relationship with Citizenship No. of Shares Held Percentage
Issuer Record Owner
1 Common GT CAPITAL Beneficial and Record Filipino 1,670,611,010 37.146%
HOLDINGS, INC. Owner

Stockholder The following persons own

more than 5% of the
43/F GT Tower outstanding voting shares
of GTCAP as of December
International
31, 2020:
Ayala Avenue Corner
H.V. Dela Costa Street, Grand Titan Capital
Makati City Holdings, Inc. - 55.93%

Arthur Ty is authorized to PCD Nominee

vote the shares of GT Corporation (Non-
Capital Holdings, Inc. Filipino) – 24.08%
(GTCAP) in Metrobank.
PCD Nominee Corporation
(Filipino) – 19.64%

GTCAP is a publicly-listed
company that is majority
owned and controlled by
the family of the late
George S.K. Ty through
Grand Titan Capital
Holdings, Inc.
2 Common PCD NOMINEE Various Scripless Filipino 1,067,580,780 23.738%
CORPORATION Stockholders
(Filipino)
There is no beneficial
29th Floor, BDO owner of PCD who holds
Equitable Tower, 8751 more than 5% of the
common stock of
Paseo de Roxas, 1226
Metrobank.
Makati City
 57

Name, Address of Name of Beneficial

Class of Record Owner and Owner and
Shares Relationship with Relationship with Citizenship No. of Shares Held Percentage
Issuer Record Owner
3 Common PCD NOMINEE Various Scripless Foreign 1,010,840,721 22.476%
CORPORATION (Non- Stockholders
Filipino)
There is no beneficial
29th Floor, BDO owner of PCD who holds
Equitable Tower, 8751 more than 5% of the
common stock of
Paseo de Roxas, 1226
Metrobank.
Makati City

TOTAL 3,749,032,511 83.360%

PCD Nominee Corporation (Filipino and Non-Filipino) (PNC) is a wholly-owned subsidiary of the Philippine Central
Depository (PCD) and acts as trustee-nominee for all shares lodged in the PCD system where trades effected on the
PSE are finally settled and lodged. Persons who opt to trade through the PCD do not receive stock certificates as an
evidence of ownership as trading using the PCD is completely scripless. Beneficial ownership of shares lodged with
the PCD remains with the lodging stockholder.

Voting Trust Holders of 5% or More

There are no persons who own more than 5% of the registrant’s securities under a voting trust or similar agreement.

Changes in Control

There are no arrangements that may result in a change in control of the registrant. There is no change in control that
has occurred since the beginning of the last fiscal year.

Security Ownership of Management

The Bank’s directors and officers as a group held a total of 34,686,994 common voting shares as of
December 31, 2020. This is broken down as follows:

No. of Shares No. of Shares

Class of Name of Beneficial Owner Citizenship as of Additions/ as of Nature Percent
Shares December 31, (Disposal) December 31, of Class
2019 2020
Directors (12)
1 Common ARTHUR TY Filipino 15,205,313 396,200 15,601,513 Direct 0.347
2 Common FRANCISCO C. SEBASTIAN Filipino 1,442,283 - 1,442,283 Direct 0.032
3 Common FABIAN S. DEE (a) Filipino 734 - 734 Direct 0.000
4 Common ALFRED V. TY Filipino 17,087,722 - 17,087,722 Direct 0.380
5 Common EDMUND A. GO Filipino 7,482 - 7,482 Direct 0.000
6 Common VICENTE R. CUNA, JR. (b) Filipino 129 - 129 Direct 0.000
7 Common SOLOMON S. CUA Filipino 113 - 113 Direct 0.000
8 Common JESLI A. LAPUS (c) Filipino 28,419 - 28,419 Direct 0.001
9 Common FRANCISCO F. DEL
ROSARIO, JR. (c) Filipino 146 - 146 Direct 0.000
10 Common EDGAR O. CHUA (c) Filipino 113 - 113 Direct 0.000
11 Common ANGELICA H. LAVARES (c) Filipino 113 - 113 Direct 0.000
12 Common PHILIP G. SOLIVEN (c) Filipino - 100 100 Direct
Sub-total 33,772,567 396,300 34,168,867 0.760
 58

No. of Shares No. of Shares

Class of Name of Beneficial Owner Citizenship as of Additions/ as of Nature Percent
Shares December 31, (Disposal) December 31, of Class
2019 2020
Officers (26)
Senior Executive Vice Presidents (2)
1 Common JOSHUA E. NAING Filipino 339,000 - 339,000 Direct 0.008
2 FERNAND ANTONIO A.
Common TANSINGCO Filipino 57,184 45,000 102,184 Direct 0.002
Executive Vice Presidents (7)
3 MARITESS B. ANTONIO Filipino - - -
4 MARY MYLENE A.
CAPARAS Filipino - - -
5 PAUL ROBERT Y. MURGA Filipino - - -
6 CORAZON MA. THERESE
B. NEPOMUCENO Filipino - - -
7 RICHARD BENEDICT S. SO Filipino - - -
8 Common ANICETO M. SOBREPEÑA Filipino 10,370 - 10,370 Direct 0.000
9 VIVIAN L. TIU Filipino - - -
Senior Vice Presidents (15)
10 Common CHISTINE Y. CARANDANG Filipino - - -
11 ANNA THERESE RITA D. Filipino - - -
CUENCO
12 RENATO K. DE BORJA, JR. Filipino - - -
13 RAMON JAIME L.V. DEL Filipino - - -
ROSARIO
14 POCHOLO V. DELA PEÑA Filipino - - -
15 HIERBERT A. DIMAGIBA Filipino - - -
16 ROMMEL ENRICO C. Filipino - - -
DIONISIO
17 FERLOU I. EVANGELISTA Filipino - - -
18 DAVID HOLMES British - - -
19 ANTONIO R. OCAMPO, JR. Filipino - - -
20 Common BERNARDINO D. RAMOS Filipino 4,657 - 4,657 Direct 0.000
21 ANGELICA S. REYES Filipino - - -
22 LEANDRO ANTONIO G.
SANTILLAN Filipino - - -
23 Common LITA S. TAN Filipino 9,365 9,000 18,365 Direct 0.000
24 Common ANTHONY PAUL C. YAP Filipino 19,551 24,000 43,551 Direct 0.000
First Vice President (2)
25 LEO R. FRAGANTE Filipino - - -
26 ELY ROY B. LINDO Filipino - - -
Sub-total 440,127 78,000 518,127 0.011
Total (Directors and Officers) 34,212,694 474,300 34,686,994 0.771
(a) Director and President
(b) Director and Senior Executive Vice-President
(c) Independent Directors

ITEM 12 – CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Group has several business relationships with related parties. Transactions with such parties are made in the
ordinary course of business and on substantially same terms, including interest and collateral, as those prevailing at the
time for comparable transactions with other parties. These transactions also did not involve more than the normal risk
of collectibility and did not present other unfavorable conditions.

The Bank has a Related Party Transactions Committee (RPTC) and a Related Party Transactions Management
Committee (RPTMC), both of which are created to assist the BOD in ensuring that transactions with related parties are
reviewed to assess risks and are subjected to appropriate restrictions to ensure that these are conducted at arm’s-length
terms and that corporate or business resources of the Parent Company are not misappropriated or misapplied. After
appropriate review, RPTMC (through RPTC) and RPTC disclose all information and endorses to the BOD with
recommendations, the proposed related party transactions. Major subsidiaries, which include FMIC, PSBank and
 59

MBCL, have their own respective RPTCs which assist their respective BODs in ensuring that transactions with related
parties are reviewed to assess risks and are subjected to appropriate restrictions to ensure that these are conducted at
arm’s-length terms and that their corporate or business resources are not misappropriated or misapplied.

Moreover, in the ordinary course of business, the Group has loan transactions with investees and with certain directors,
officers, stockholders and related interests (DOSRI) based on BSP Circular No. 423 dated March 15, 2004, as amended.
Existing banking regulations limit the amount of individual loans to DOSRI, 70.00% of which must be secured, to the
total of their respective deposits and book value of their respective investments in the lending company within the
Group. In the aggregate, loans to DOSRI generally should not exceed the respective total equity or 15.00% of the
respective total loan portfolio, whichever is lower, of the Parent Company, PSBank, FMIC, and ORIX Metro.

Transactions with related parties and with DOSRI are discussed in Note 31 and 37 of the audited financial statements
of the Group as presented in Exhibit 4.

In 2020, none of the Bank’s directors had self-dealing/related party transactions with the Bank directly by themselves
that required disclosure.

PART IV – EXHIBITS AND SCHEDULES

ITEM 13 – EXHIBITS AND REPORTS ON SEC FORM 17-C

Exhibits

EXHIBIT 1 Nationwide Branches Bank-Owned as of December 31, 2020

EXHIBIT 2 Nationwide Branches Under Lease as of December 31, 2020

EXHIBIT 3 Events Previously Reported under SEC Form 17-C (Current Report)

EXHIBIT 4 Audited Financial Statements as of December 31, 2020 and 2019 and Years Ended
December 31, 2020, 2019 and 2018
(together with the notarized Statement of Management’s Responsibility for Financial Statements
signed by the registrant’s Chairman, President, Head of Financial and Control Sector,
Treasurer/Head of Financial Market Sector and Controller)

EXHIBIT 5 Index to Consolidated Financial Statements and Supplementary Schedules (together with
Independent Auditors’ Report)

EXHIBIT 6 Sustainability Report

Reports on SEC Form 17-C

Summarized in Exhibit 3 are the reports filed under SEC Form 17-C during the year 2020 up to the date of filing of the
report under SEC Form 17-A.
 Exhibit 1

METROPOLITAN BANK & TRUST COMPANY

NATIONWIDE BRANCHES
BANK-OWNED
As of December 31, 2020

BRANCH NAME BRANCH ADDRESS

METRO MANILA BRANCHES

1 A. ARNAIZ-SAN LORENZO 908 Arnaiz Avenue, Makati City

2 A. MACEDA 1174 A. Maceda St., Sampaloc, Manila
3 ACROPOLIS E. Rodriguez Ave. Acropolis, Quezon City
4 ADDITION HILLS 204 Wilson St., San Juan, MM
5 ANGONO Along M. L. Quezon Ave., Brgy. San Isidro, Angono, Rizal
6 ANNAPOLIS-GREENHILLS 14 Annapolis St. corner La Salle St., North Greenhills, San Juan
7 ARRANQUE CENTER 1346 Soler St., Sta. Cruz Manila
8 ASUNCION Chinatown Steel Tower, Asuncion St., Tondo, Manila
9 B. F. HOMES 22 Aguirre Ave., B.F. Homes, Paranaque City
10 BACLARAN Quirino Avenue corner M. Roxas St., Baclaran, Parañaque City
11 BAGBAGUIN-VALENZUELA Gen. Luis St. corner J. Molina St., Bagbaguin, Valenzuela City
12 BALINTAWAK 295 Del Monte Avenue corner G. Roxas Street, Barangay Manresa, Quezon City
13 BAYVIEW Bayview International, Roxas Blvd., Paranaque City
14 BINANGONAN Along National Road, Binangonan, Rizal
15 BLUE RIDGE No. 222 Katipunan Avenue, Blue Ridge, Quezon City
16 BLUMENTRITT-STA. CRUZ 2460 Rizal Avenue corner Cavite St., Sta. Cruz, Manila
17 BONI AVENUE 743 Boni Ave., Brgy. Malamig, Mandaluyong City
18 BONI SERRANO 45 Boni Serrano Avenue corner Greenview Compound, Quezon City
19 BUENDIA-DIAN Buendia Avenue corner Dian St., Makati City
20 C. M. RECTO-MENDIOLA 2046-2050 CM Recto Ave., Sampaloc, Manila
21 CAINTA Felix Avenue, Cainta, Rizal
22 CALOOCAN 315 Rizal Avenue Ext., Grace Park, Caloocan City
23 CALUMPANG-MARIKINA J. P. Rizal St., Calumpang, Marikina
24 CAMARIN ROAD-CALOOCAN Camarin Road cor. Susano Road, Caloocan City
25 CIRCUMFERENTIAL ROAD-ANTIPOLO Along Circumferential Rd., Antipolo City
26 CONCEPCION-MARIKINA 15 Bayan-Bayanan Ave., Concepcion, Marikina City
27 CONGRESSIONAL AVENUE 141 Congressional Ave., Bahay Toro 1, Q.C.
28 CORINTHIAN PLAZA-MAKATI G/F Corinthian Plaza Bldg., 121 cor Paseo de Roxas & Gamboa Sts., Legaspi Village, Makati City
29 CUBAO-P. TUAZON 210 P. Tuazon cor. 12th Ave., Cubao, Quezon City
30 DASMARIÑAS-T. PINPIN 321 Dasmarinas St. cor. Ugalde St., Binondo, Manila
31 DEL MONTE 295 Del Monte Avenue, Quezon City
32 DON ANTONIO HEIGHTS Lot 20, Blk.6, Holy Spirit Drive, Don Antonio Heights, Diliman, Quezon City
33 DOÑA SOLEDAD AVE.-BICUTAN 65 Doña Soledad Ave., Better Living Subd., Bicutan, Paranaque City
34 DOWNTOWN CENTER Tytana Plaza, Plaza Lorenzo Ruiz, Binondo, Manila
35 E. RODRIGUEZ-CORDILLERA E. Rodriguez Sr. Blvd. cor. Cordillera St., Doña Aurora Dist. 4, Quezon City
36 EDSA-KALOOCAN CENTER 487 EDSA cor. A. De Jesus St., Caloocan City
37 EDSA-SHAW Beside Shangrila Shopping Center, Shaw Blvd., Mandaluyong City
38 EL GRANDE-B.F. HOMES Aguirre St., cor. Tehran El Grande Phase 3, B.F. Homes, Paranaque City
39 F. B. HARRISON-GIL PUYAT AVENUE Gil J. Puyat Ave., cor. F.B. Harrison St., Pasay City
40 FAIRVIEW Commonwealth Ave. cor. Winston St., Quezon City
41 FEDERAL TOWER Dasmarinas St. cor. Muelle de Binondo, San Nicolas, Manila
42 FELIX AVENUE Along Felix Avenue, Brgy. Tatlong Kawayan, Pasig City
43 FILINVEST CORPORATE CITY Asean Drive cor. Singapura Lane, Filinvest Corp. City, Alabang, Muntilupa City
44 FORT-GRAND HYATT Veritown, 8th Ave. & 35th St., Bonifacio Global City, Fort, Taguig City
45 GIL PUYAT - BURGUNDY TOWER Unit A1, Burgundy Corporate Tower, Sen. Gil Puyat Ave., Makati City
46 GRACE PARK CENTER 446 Rizal Ave. Ext., Grace Park, Caloocan City
47 GT TOWER CENTER GT Tower , Ayala Ave. corner dela Costa St., Makati City
48 H. V. DE LA COSTA G/F Westgate Condominium Plaza, 120 H.V. dela Costa St., Salcedo Village, Makati City
49 HEAD OFFICE CENTER Metrobank Plaza, Sen. Gil Puyat Avenue, Urdaneta Village, Makati City
50 J. NAKPIL-TAFT AVENUE Along Taft Ave. near cor. J. Nakpil St., Manila
51 J.P. RIZAL Along J. P. Rizal St., Makati City
52 KALAYAAN-BEL AIR G/F Primetown Tower, Kalayaan Ave., Bel-air, Makati City
53 KAMAGONG-SAMPALOC Kamagong corner Sampaloc St., San Antonio Vill., Makati City
54 KAMIAS #39 Kamias Road cor. K-H St., Diliman, Quezon City
55 KAMUNING 22 Kamuning Road, Kamuning, Quezon City
56 KATIPUNAN 339 Katipunan Road, Loyola Heights, Quezon City
57 LAS PIÑAS-ALABANG ZAPOTE ROAD Real St., Alabang Zapote Road, Las Pinas City
58 LEGASPI VILLAGE-MIDORI TOWER Unit G01, The Grand Midori Makati Tower 1, Legaspi St., Legaspi Village, Makati City
59 M. NAVAL-NAVOTAS 767 M. Naval St., Navotas, MM
60 MAGALLANES VILLAGE Lot 3, Block 5, Paseo de Magallanes, Magallanes Village, Makati City
61 MALABON 696 Rizal Avenue, Malabon City
62 MALANDAY-VALENZUELA Km 16, MacArthur H-Way, Malanday, Valenzuela City
63 MARIKINA CENTER 321 J. P. Rizal St., Sta. Elena, Marikina City
64 MARULAS-VALENZUELA Km. 12 MacArthur H-Way, Marulas, Valenzuela, MM
65 MASANGKAY 942 G. Masangkay St., Binondo, Manila
66 MAYON-STA. TERESITA 177 Mayon St., Brgy. Sta. Teresita, Quezon City
67 MIDTOWN- U. N. AVE. 1236 Unit I Midtown Exec. Comm'l. Town Homes, U.N. Ave., Ermita, Manila
68 MOTHER IGNACIA-TIMOG #23 Carlos P. Garcia Ave., Quezon City
69 MUNTINLUPA Along National Road Poblacion, Muntinlupa City
70 NORTH BAY BLVD.-NAVOTAS 130 Northbay Blvd., Navotas MM
71 NOVALICHES Quirino Highway Gulod, Novaliches, Quezon City
72 OCEAN TOWER Ocean Tower, Roxas Blvd. Manila
73 ONGPIN 910 Ongpin St., Sta. Cruz, Manila
74 ORTIGAS AVE. EXT.-CAINTA Fairtrade Comm’l Center, Ortigas Ave. Ext., Cainta, Rizal
75 ORTIGAS COMM’L. COMPLEX CENTER Banker's Plaza Bldg., J. Vargas St., cor. San Miguel Ave., Ortigas Comm'l. Center, Pasig City
76 ORTIGAS-EMERALD AVENUE G/F Wynsum Corp. Plaza, Emerald Ave., Pasig City
77 PASAY-BUENDIA AVENUE 2183 Taft Avenue near Gil Puyat Ave., Pasay City
78 PASAY-LIBERTAD 232 Libertad St., Pasay City
79 PASIG MABINI A. Mabini St., Brgy. Kapasigan, Pasig City
80 PASO DE BLAS-MAYSAN 179 Paso De Blas, Valenzuela City
81 PASONG TAMO-BAGTIKAN G/F Unit A BM Lou-Bel Plaza, Bagtikan cor. Pasong Tamo, Makati City
82 PASONG TAMO-JAVIER The Oriental Place, Chino Roces Avenue, Makati City

Page 1 of 4
 Exhibit 1

METROPOLITAN BANK & TRUST COMPANY

NATIONWIDE BRANCHES
BANK-OWNED
As of December 31, 2020

BRANCH NAME BRANCH ADDRESS

83 PRITIL-TONDO 1995 Juan Luna St., Tondo, Manila
84 Q. C. ROTONDA CENTER 17 Quezon Ave. cor. Speaker Perez St., Quezon City
85 QUEZON AVENUE 982 Quezon Ave., Quezon City
86 QUIRINO AVE.-LEON GUINTO Quirino Ave. cor. Leon Guinto St., Malate, Manila
87 RADA-RODRIGUEZ Unit 101 La Maison Condo., 115 Rada St., Legaspi Village, Makati City
88 RAON 633 Gonzalo Puyat St., Sta. Cruz, Manila
89 ROCKWELL CENTER Phinma Plaza, 39 Plaza Drive, Rockwell Center, Makati City
90 ROOSEVELT 285 Roosevelt Ave., San Antonio 1, Quezon City
91 ROXAS BLVD. VITO CRUZ G/F Legaspi Towers 300 Inc., 2600 Roxas Blvd. cor. Vito Cruz, Manila
92 SALCEDO VILLAGE G/F Plaza Royale Bldg., 120 LP Leviste St., Salcedo Village, Makati City
93 SAMSON ROAD-CALOOCAN Cor. U.E. Tech. & Samson Road, Caloocan City
94 SAN MATEO 121 Gen. Luna St., Guitnangbayan 1, San Mateo, Rizal
95 SAN ROQUE-MARIKINA 67 Tuazon corner Chestnut St., San Roque, Marikina City
96 SANTOLAN-PASIG A. Rodriguez Ave. cor. Santolan St., Santolan, Pasig City
97 SEAFRONT Seafront Garden Homes, Roxas Blvd., Pasay City
98 SHAW BLVD. 676 Shaw Blvd., Pasig City
99 SHAW BLVD.-ORANBO Along Shaw Blvd., near Hill Crest Circle, Pasig City
100 SHAW BLVD.-PINAGTIPUNAN Shaw Blvd., corner Pinagtipunan St., Mandaluyong City
101 SIKATUNA VILLAGE-ANONAS Anonas Road, corner K-7th St., Proj. 2, Quezon City
102 STA. CRUZ-MANILA 582 Gonzalo Puyat St., Raon, Sta. Cruz Manila
103 STA. MESA 73 Aurora Blvd. corner G. Araneta Bgy. Santos Dist. 4, Quezon City
104 SUCAT-GATCHALIAN 8165 Dr. A. Santos Ave., Parañaque City
105 SUCAT-IRENEVILLE Dr. A. Santos Ave. cor. Ireneville Ave., Sucat Pque. City
106 SUCAT-SAN ANTONIO VALLEY Along Dr. A. Santos Ave. Beside Uniwide, Parañaque City
107 TAFT AVENUE 1915 Taft Ave., Pasay City
108 TANDANG SORA 185 Tandang Sora Ave., Quezon City
109 TAYTAY East Road Avenue (fronting New Taytay Public Market) Taytay, Rizal
110 TAYUMAN-FELIX HUERTAS Tayuman cor. Felix Huertas Sts., Sta. Cruz, Manila
111 THE CAPITAL TOWERS 222 E. Rodriguez Senior Blvd., Barangay Kalusugan, Quezon City
112 TIMOG Timog Ave. cor. Scout Torillo St., Quezon City
113 TUGATOG-MALABON 139 M.H. del Pilar St., Tugatog, Malabon City
114 UST-ESPANA 1364 Espana cor. Centro St., Sampaloc, Manila
115 V. MAPA 3244 V. Mapa St. corner Valenzuela, Sampaloc, Manila
116 VALENCIA HILLS Valencia St. corner N. Domingo, Quezon City
117 VALLE VERDE 73 E. Rodriguez cor. P.E. Antonio St., Bo. Ugong, Pasig City
118 VASRA-VISAYAS AVENUE Along Visayas Ave., Proj. 6, Quezon City
119 WEST AVENUE 98 West Avenue, Quezon City
120 WEST TRIANGLE 1387 Quezon Avenue, Quezon City
121 YLAYA-TONDO 1057 Ylaya Mansion, Ylaya St., Tondo, Manila

COUNTRYSIDE BRANCHES

1 ALAMINOS, PANGASINAN Quezon Avenue, Poblacion Alaminos, Pangasinan

2 ALBAY-TABACO Corner Luna & Llorente Sts., Tabaco, Albay
3 ANGELES-BALIBAGO MacArthur Highway, Balibago, Angeles City
4 ANGELES–MAIN Henson Street, Angeles City, Pampanga
5 ANTIQUE T.A. Fornier St., San Jose, Antique
6 APALIT MacArthur Highway, San Vicente, Apalit, Pampanga
7 APARRI Rizal St. Aparri, Cagayan
8 BACAO-CEPZ Bacao Diversion Road, Gen. Trias, Cavite
9 BACOLOD-ARANETA Araneta St., Bacolod City, Negros Occidental
10 BACOLOD-CAPITOL Capitol Shopping Ctr., Hilado St. cor. Yakal St., Bacolod City, Negros Occ.
11 BACOLOD-GATUSLAO 175-177 Gov. Gatuslao St., Bacolod City, Negros Occidental
12 BACOLOD-NORTH DRIVE B.S. Aquino Drive, Bacolod City
13 BACOOR-CAVITE 206 Gen. Aguinaldo Hi-way, Bacoor, Cavite
14 BAGUIO-BONIFACIO Bonifacio Street, Baguio City
15 BAGUIO-MAGSAYSAY Magsaysay Ave. cor. Gen. Luna Road, Baguio City
16 BALAGTAS-BULACAN McArthur Highway, Wawa, Balagtas, Bulacan
17 BALANGA MAIN Paterno St. cor. Hugo St., Balanga, Bataan
18 BALIUAG-J. P. RIZAL J.P.Rizal St., San Jose, Baliuag, Bulacan
19 BASILAN J.S. Alano St. cor. L. Magno St., Isabela, Basilan
20 BATANGAS-BALAYAN Antorcha cor. Emma Sison St., Balayan, Batangas
21 BATANGAS-LEMERY Along Independencia & Ilustre Sts., Lemery, Batangas
22 BATANGAS-MAIN Corner J.P. Rizal & P. Burgos Sts., Batangas City
23 BATANGAS-TANAUAN JP LAUREL J.P. Laurel Highway, Tanauan, Batangas
24 BIÑAN A. Bonifacio St. Canlalay, Binan, Laguna
25 BOCAUE-BULACAN 23 McArthur Highway, Wakas, Bocaue, Bulacan
26 BUKIDNON-VALENCIA Apolinario Mabini St., Valencia Bukidnon
27 BUTUAN-MAIN San Francisco St. cor. P. Burgos St., Butuan City
28 CABANATUAN-MAHARLIKA SOUTH Maharlika Highway, Cabanatuan
29 CABANATUAN-MAIN Burgos Avenue cor. Sanciangco St., Cabanatuan City
30 CABUYAO-LAGUNA Along Nat’l. Highway near cor. F. Bailon St., Sala, Cabuyao
31 CAGAYAN DE ORO-CARMEN Cor. Max Suniel & Ipil Sts., Carmen Market, Cag. De Oro City
32 CAGAYAN DE ORO-COGON Osmeña St., Cogon, Cagayan de Oro City
33 CAGAYAN DE ORO-DIVISORIA PARK G/F RN Abejuela Pabayo St., Cagayan de Oro City
34 CAGAYAN DE ORO-J.R. BORJA J.R. Borja St., Cagayan de Oro City
35 CAGAYAN DE ORO-LAPASAN National Highway cor. Agora Road, Lapasan District, Misamis Oriental
36 CAGAYAN DE ORO-MAIN Corales Avenue, Cag. de Oro City
37 CAGAYAN DE ORO-OSMENA Osmena, Capitol Comp., Poblacion, Cagayan de Oro City
38 CAGAYAN DE ORO-VELEZ A. Velez St. cor. Yacapin St., Cagayan de Oro City
39 CALAMBA-CROSSING J.P. Rizal Street, Calamba, Laguna
40 CALAPAN J.P. Rizal St., Calapan, Oriental, Mindoro
41 CANDON National Highway cor. Calle Gray, Candon, Ilocos Sur

Page 2 of 4
 Exhibit 1

METROPOLITAN BANK & TRUST COMPANY

NATIONWIDE BRANCHES
BANK-OWNED
As of December 31, 2020

BRANCH NAME BRANCH ADDRESS

42 CARIDAD-CAVITE P. Burgos Avenue, Caridad, Cavite
43 CARMEN ROSALES, PANGASINAN MacArthur Highway, Carmen West, Rosales, Pangasinan
44 CATARMAN Cor. Bonifacio St. & P. Garcia St., Brgy. Mabolo, Catarman, Northern Samar
45 CATBALOGAN Lot 116 Rizal Ave. corner Callejon St., Catbalogan, Western Samar
46 CATICLAN Catiklan, Malay, Aklan 5608
47 CAUAYAN-MAIN Rizal Ave. cor. Roxas & Reyes Sts., Cauayan, Isabela
48 CEBU-BANILAD Metrobank Bldg. Gov. Cuenco Ave., Banilad Road, Banilad, Cebu City
49 CEBU-BORROMEO Borromeo St. cor. Lopez St., Cebu City
50 CEBU-BUSINESS PARK Mindanao Ave. cor. Cardinal Rosales Ave., Cebu Business Park, Cebu City
51 CEBU-CAPITOL N. Escario St. cor. M. Zosa St., Cebu City
52 CEBU-COLON CENTER 0251 Palaez Street, Cebu City
53 CEBU-DOWNTOWN CENTER 191 Plaridel St., Cebu City
54 CEBU-FUENTE OSMEÑA CENTER Metrobank (Cebu) Plaza, Osmeña Blvd near Rotonda, Cebu City
55 CEBU-LAPU LAPU Nat’l Highway, Pusok, Lapu Lapu City
56 CEBU-MABOLO 1956 M. J. Cuenco Ave. Mabolo, Cebu City
57 CEBU-MAGALLANES Magallanes St., Barangay Ermita, Cebu City
58 CEBU-MANDAUE CENTER Corner Nat’l Highway & Jayme St., Mandaue, Cebu City
59 CEBU-MANGO AVENUE Metrobank Bldg., Gen. Maxilom Ave., Cebu City
60 CEBU-NORTH ROAD Metrobank Bldg., North Nat’l Road, Bgy. Tabok, Mandaue City
61 CEBU-OPON G.Y. dela Serna St. Poblacion, Lapu Lapu City
62 CEBU-RAMOS Metrobank Bldg. F. Ramos St. cor. Junguera Ext., Cebu City
63 CEBU-SUBANGDAKU Lopez Jaena St., Subangdaku, Mandaue City
64 CEBU-TABO-AN Along B. Aranas St., Taboan, Cebu City
65 CEBU-TABUNOK South National Road, Bulacao, Talisay, Cebu City
66 COTABATO-MAIN Makakua St., Cotabato City
67 DAET Vinzons Avenue, Daet, Camarines Norte
68 DAGUPAN-MAIN A. B. Fernandez Avenue, Dagupan City
69 DASMARIÑAS-CAVITE Aguinaldo Hi-way, Dasmariñas, Cavite
70 DAU MacArthur Highway, Dau, Mabalacat, Pampanga
71 DAVAO–AGDAO J.P. Cabaguio Ave., Agdao, Davao City
72 DAVAO–BANKEROHAN Corner Quirino Ave. & Pichon St., Davao City
73 DAVAO–BUHANGIN Along Kilometer 5, Buhangin Road, Davao City
74 DAVAO-CENTER Magsaysay Ave. cor. J. dela Cruz St., Davao City
75 DAVAO-RIZAL J. Rizal St. cor. F. Inigo St., Davao City
76 DAVAO–STA. ANA Monteverde Ave. cor. Lizada St., Sta. Ana District, Davao City
77 DAVAO–TAGUM JP Rizal St. cor. Abad Santos St., Tagum, Davao Del Norte
78 DAVAO-TORIL 61 Saavedra St., cor. D. Agaton St., Toril, Davao City
79 DIGOS Estrada St. cor. Cabrillo St., Digos
80 DIPOLOG-GEN. LUNA Gen. Luna St. Dipolog City, Zamboanga del Norte
81 DUMAGUETE-MAIN Dr. Vicente Locsin St., Dumaguete City, Negros Oriental
82 DUMAGUETE-REAL 131 Real St., Dumaguete City
83 GAPAN Gen. Tinio St., Sto. Niño, Gapan, Nueva Ecija
84 GENERAL SANTOS-MAKAR Makar-National Highway, Purok Bagong Silang, Brgy. Labangal, General Santos City
85 GENERAL SANTOS-NATIONAL HIGHWAY Along National Highway, General Santos City
86 GENERAL SANTOS-PIONEER Pioneer Ave., General Santos City
87 GENERAL SANTOS–SANTIAGO BLVD. I. Santiago Blvd., General Santos City
88 GUAGUA Sto. Cristo, Guagua, Pampanga
89 GUMACA A. Bonifacio St., Gumaca Quezon
90 ILAGAN Rizal St., Ilagan, Isabela
91 ILIGAN–MAIN # 0055 Gen. Aguinaldo St., Iligan City
92 ILOILO-DELGADO Delgado St., Iloilo City
93 ILOILO-GEN. LUNA Gen. Luna St., Iloilo City
94 ILOILO-IZNART Iznart St., Iloilo City
95 IMUS-CAVITE Along Nuevo Ave., Tansang Luma, Imus, Cavite
96 IRIGA, CAMARINES SUR Poblacion, Iriga, Camarines Sur
97 JOLO Gen. Arolas St., Jolo, Sulu
98 KALIBO Along Roxas Ave., Kalibo, Aklan
99 KAWIT-CAVITE National Road corner Visita, Binakayan , Kawit, Cavite
100 KIDAPAWAN Along National Highway, Kidapawan, North Cotabato
101 KORONADAL-NATIONAL HIGHWAY Southwest National Highway, Koronadal City, South Cotabato
102 LA UNION-MAIN Quezon Ave., Along Nat’l. Highway, San Fernando, La Union
103 LAGUNA BEL-AIR STA. ROSA Sta. Rosa Tagaytay Nat’l. Road cor. Rodeo Drive, Sta. Rosa, Laguna
104 LAGUNA TECHNOPARK LTI Complex Spine Road, Biñan, Laguna
105 LAOAG–RIZAL Rizal cor. Guerrero Streets, Brgy. 19, Sta. Marcella, Laoag City
106 LEGAZPI-MABINI Rizal St. cor. Mabini St., Legazpi City
107 LEGAZPI-RIZAL 85 Rizal St. Brgy. 35, Tinago, Legazpi City, Albay
108 LIPA–B. MORADA B. Morada Avenue, Lipa City
109 LUCENA-MAIN Cor. Enriquez/Magallanes St., Lucena City
110 LUCENA-QUEZON Enriquez near cor. San Fernando St., Lucena City
111 MACARIA BUS. CENTER-CARMONA Blk 2, Lot 4, Macaria Business Center, Governors Drive, Carmona, Cavite
112 MALOLOS-PASEO DEL CONGRESO Paseo del Congreso, Catmon, Malolos, Bulacan
113 MARBEL Gen Santos Drive, Nat’l. Highway, Marbel, South Cotabato
114 MARILAO-BULACAN MacArthur Highway, Abangan Norte, Marilao, Bulacan
115 MEYCAUAYAN-MC ARTHUR HIGHWAY MacArthur Highway, Calvario, Meycauayan, Bulacan
116 MOLINO-BACOOR CAVITE Molino II, Molino Road, Bacoor, Cavite
117 NAGA-GEN. LUNA Gen. Luna St., Naga City
118 NAGA-MAIN Caceres cor. Dela Rosa St., Naga City
119 NAGA-PEÑAFRANCIA Peñafrancia Ave. cor. Arana St., Naga
120 NAIC-CAVITE Governor’s Drive, Ibayo Silangan, Naic, Cavite
121 OCCIDENTAL MINDORO SAN JOSE C. Liboro St. cor. Rajah Soliman St., San Jose, Occidental Mindoro
122 OLONGAPO-MAIN # 1967 Rizal Ave., West Bajac-Bajac, Olongapo City
123 ORMOC Real St., cor. Lopez Jaena St., Ormoc City, Leyte
124 OZAMIS–BURGOS 602-604 Burgos St., Ozamis City
125 OZAMIS-RIZAL 38-C Rizal Ave., Ozamis City
126 PAGADIAN-RIZAL Cor. Rizal Ave. & J.S. Alano Sts., Pagadian City

Page 3 of 4
 Exhibit 1

METROPOLITAN BANK & TRUST COMPANY

NATIONWIDE BRANCHES
BANK-OWNED
As of December 31, 2020

BRANCH NAME BRANCH ADDRESS

127 PANIQUI-TARLAC M.H. del Pilar St., Paniqui, Tarlac
128 PLARIDEL-BULACAN Gov. Padilla Road, Banga, Plaridel, Bulacan
129 PUERTO PRINCESA-RIZAL AVENUE Rizal Ave., Puerto Princesa City, Palawan
130 ROSARIO-CAVITE Along Gen. Trias Drive, Rosario, Cavite
131 ROXAS Roxas Ave., Roxas City, Capiz
132 SAN CARLOS–NEGROS OCC. Carmona St., San Carlos City, Negros Occidental
133 SAN FERNANDO-DOLORES MacArthur Highway, Dolores, San Fernando, Pampanga
134 SAN FERNANDO - JASA Jose Abad Santos Ave., City of San Fernando, Pampanga
135 SAN FERNANDO–MAIN V. Tiomico Street, San Fernando, Pampanga
136 SAN JOSE DEL MONTE-QUIRINO HIGHWAY #27 Quirino Highway, Pecsonville Subdivision, Bo. Tungkong Mangga, San Jose Del Monte, Bulacan
137 SAN JOSE, NUEVA ECIJA Maharlika Highway cor. Market Road, San Jose City, Nueva Ecija
138 SAN PABLO-COLAGO Colago Avenue, San Pablo City
139 SAN PABLO–MAHARLIKA Maharlika Highway, San Pablo City
140 SAN PABLO-MAIN Corner Regidor & Paulino Sts., San Pablo City
141 SANTIAGO-MAHARLIKA Daang Maharlika St. cor. Camacam St., Santiago, Isabela
142 SILANG-CAVITE 139 J. Rizal St., Bgy. I, Silang, Cavite
143 SILAY-NEGROS OCCIDENTAL Rizal St., Silay City
144 SOLANO National Highway cor. Mabini St., Solano, Nueva Vizcaya
145 STA. MARIA-BULACAN Corazon De Jesus St., Poblacion, Sta. Maria, Bulacan
146 STA. ROSA-BALIBAGO Old Nat’l. Highway, Balibago, Sta. Rosa, Laguna
147 SURIGAO Borromeo St., Surigao City, Surigao del Norte
148 SULTAN KUDARAT-ISULAN National Highway, Brgy. Poblacion (Kalawag III), Isulan, Sultan Kudarat
149 TACLOBAN-P. BURGOS P. Burgos cor. Del Pilar St., Tacloban City
150 TACLOBAN-MAIN P. Zamora St., Tacloban City
151 TACLOBAN–RIZAL AVENUE 109 Rizal Ave. Tacloban City
152 TACURONG Tacurong, Sultan Kudarat
153 TAGAYTAY Foggy Heights Subd., San Jose, Tagaytay City, Cavite
154 TANZA-CAVITE Along A. Soriano Highway, Daang Amaya I, Tanza, Cavite
155 TARLAC-F. TAÑEDO F. Tañedo St., Poblacion, Tarlac, Tarlac
156 TARLAC-MACARTHUR HIGHWAY MacArthur Highway, Tarlac, Tarlac
157 TARLAC-MAIN MacArthur Highway, San Roque, Tarlac City
158 TRECE MARTIRES-CAVITE Governor’s Drive, Bgy. San Agustin, Trece Martires, Cavite City
159 TUGUEGARAO-MAIN Luna St. cor. Blumentritt, Tuguegarao, Cagayan
160 URDANETA, PANGASINAN Alexander Street, Urdaneta, Pangasinan
161 ZAMBOANGA–GALLERIA Gov. Lim Ave. cor. Almonte St., Zamboanga City
162 ZAMBOANGA–GOV. LIM Gov. Lim Ave., Zamboanga City
163 ZAMBOANGA–VETERANS AVE. Cor. Veterans & Gov. Alvarez Ave., Zamboanga City

Page 4 of 4
 Exhibit 2

METROPOLITAN BANK & TRUST COMPANY

NATIONWIDE BRANCHES
UNDER LEASE
As of December 31, 2020

MONTHLY EXPIRATION TERM

BRANCHES ADDRESS RENTAL OF OF
(In Pesos) LEASE RENEWAL

METRO MANILA BRANCHES

1 168 MALL 6th Floor, Unit 607, 168 Shopping Mall, Sta. Elena/Soler Streets, Binondo, Manila 75,830.26 July 31, 2023 renewable upon mutual agreement of both parties
2 20TH AVE.-CUBAO No. 100, 20th Ave., Cubao, Quezon City 119,061.73 December 14, 2023 renewable upon mutual agreement of both parties
3 A. LACSON AVE.-SAMPALOC Mother Rosario Bldg., 1234 Lacson Ave., Sampaloc, Manila 222,996.45 November 30, 2020 under negotiation
4 ACACIA-AYALA ALABANG Unit 101, Alabang Business Tower, Acacia Ave., Madrigal Business Park, Ayala Alabang, Muntinlupa City 341,091.89 February 18, 2021 renewable upon mutual agreement of both parties
5 ADB 6 ADB Avenue 1501, Mandaluyong City n/a n/a renewable upon mutual agreement of both parties
6 ADRIATICO 1633 M. Adriatico Street, Malate, Manila 270,112.50 November 4, 2023 renewable upon mutual agreement of both parties
7 AGUIRRE-SALCEDO G/F Cattleya Condominium Salcedo cor. Aguirre Sts., Legaspi Village, Makati City 210,688.68 July 31, 2020 under negotiation
8 ALABANG JM Bldg., West Service Road cor. Montillano St., Alabang Viaduct, Muntinlupa City 288,634.50 July 31, 2027 renewable upon mutual agreement of both parties
9 ALFARO G/F ALPAP Building, 140 LP Leviste St., Salcedo Vill., Makati City 365,905.38 December 15, 2024 under negotiation
10 ANDA CIRCLE-PORT AREA Knights of Rizal Bldg., Bonifacio Drive, Port Area, Manila 149,152.64 May 31, 2022 renewable upon mutual agreement of both parties
11 ANTIPOLO-iMALL iMall Antipolo Bayan, J. Sumulong cor. M.L. Quezon, Brgy. San Roque, Antipolo City 282,355.20 May 29, 2024 renewable upon mutual agreement of both parties
12 AURORA BLVD.-MANHATTAN PARKWAY Parkway Shopping Arcade, Manhattan Garden City, Aurora Blvd., Araneta Center, Cubao, Quezon City 376,245.00 September 30, 2020 under negotiation
13 AURORA BLVD-ANONAS 986 Caly Bldg., cor. F. Castillo, Aurora Blvd., Cubao, Quezon City 261,800.00 December 31, 2024 renewable upon mutual agreement of both parties
14 AYALA ALABANG Sycamore Prime Bldg., Alabang-Zapote Rd. cor. Buencamino St., Alabang, Muntinlupa 433,375.00 February 29, 2024 renewable upon mutual agreement of both parties
15 AYALA AVENUE-BANKMER Bankmer Bldg., 6756 Ayala Avenue, Makati City 321,296.60 December 31, 2019 under negotiation
16 AYALA AVENUE-VA RUFINO GF Rufino Bldg., 6784 Ayala Ave., Makati City 260,463.60 June 30, 2022 renewable upon mutual agreement of both parties
17 AYALA MALLS MANILA BAY Unit 2009, 2F Macapagal Blvd. cor. Asean Ave., Brgy. Tambo, Paranaque City 399,525.00 April 30, 2021 under negotiation
18 AYALA TRIANGLE Units E1 & E2, Tower One and Exchange Plaza, Ayala Triangle, Ayala Ave., cor. Paseo de Roxas, Makati City 504,714.80 January 31, 2020 under negotiation
19 BACLARAN-MILENYO 2nd Floor, Baclaran Bagong Milenyo Plaza, F.B. Harrison cor. Russel Ave., Baclaran 319,130.38 September 19, 2021 renewable upon mutual agreement of both parties
20 BAESA 131 Quirino Highway corner Palm Road, Baesa, Quezon City 97,489.33 June 14, 2022 renewable upon mutual agreement of both parties
21 BARANGKA-RIVERBANKS 164 A. Bonifacio Avenue, Brgy. Tañong, Marikina City 127,338.75 May 15, 2026 renewable upon mutual agreement of both parties
22 BENAVIDEZ 943-945 Benavidez St., Sta. Cruz, Manila 151,622.10 November 1, 2024 renewable upon mutual agreement of both parties
23 BRIXTON HILL 118 G. Araneta Ave. Sta. Mesa, Quezon City 162,640.11 January 31, 2024 renewable upon mutual agreement of both parties
24 BUSTILLOS-SAMPALOC Dona Paz Bldg., 443 J. Figueras St., Sampaloc, Manila 271,400.40 June 30, 2021 renewable upon mutual agreement of both parties
25 C-3-A. MABINI G/F Marea Commercial Complex, 200 A. Mabini St., Maypajo, Caloocan City 161,662.26 May 31, 2026 renewable upon mutual agreement of both parties
26 CALOOCAN-DEPARO Puregold, Deparo Road cor. Road Lot. 1, Villa Maria Subd., Deparo, Caloocan City 91,593.89 June 19, 2021 renewable upon mutual agreement of both parties
27 CHINA PLAZA-TOMAS MAPUA 645 Tomas Mapua Street, Sta. Cruz, Manila 110,250.00 July 31, 2023 renewable upon mutual agreement of both parties
28 COMMONWEALTH UGF, Lenjul Bldg., Commonwealth Ave., Quezon City 185,833.59 May 31, 2023 renewable upon mutual agreement of both parties
29 CONCEPCION-MALABON G/F Domana Bldg., Gen Luna St., Concepcion, Malabon City 86,609.79 September 30, 2025 renewable upon mutual agreement of both parties
30 CUBAO 922 Aurora Blvd., Cubao, Quezon City 273,488.91 December 31, 2020 renewable upon mutual agreement of both parties
31 CUBAO-ARANETA CYBERPARK Telus Building, Araneta Center Cubao, Quezon City 376,875.00 September 30, 2022 renewable upon mutual agreement of both parties
32 CULIAT-TANDANG SORA No. 96859 D & B Royal Midway Plaza, 419 Tandang Sora, Brgy. Culiat, Quezon City 110,496.17 March 31, 2021 renewable upon mutual agreement of both parties
33 D. TUAZON-DEL MONTE(DEL MONTE-TALAYAN) Along D. Tuazon near corner Del Monte Avenue, Quezon City 84,000.00 July 19, 2029 renewable upon mutual agreement of both parties
34 DAPITAN-BANAWE Unit 1-4 Solmac Bldg., Dapitan corner Banaue Sta. Teresita, Quezon City 188,556.81 March 31, 2024 renewable upon mutual agreement of both parties
35 DELA ROSA-SALCEDO ST. Unit I, Kalayaan Bldg., 164 Salcedo St., Legaspi Village, Makati City 245,050.69 June 30, 2021 renewable upon mutual agreement of both parties
36 DIVISORIA CENTER Doña Salustiana Bldg., Ylaya St., Binondo, Manila 342,225.76 February 28, 2022 renewable upon mutual agreement of both parties
37 DOMESTIC AIRPORT Salem Int'l Comml Complex, Domestic Road, Pasay City 136,485.09 February 15, 2022 renewable upon mutual agreement of both parties
38 DON BOSCO-MAKATI La Fuerza Plaza Bldg., 2241 Don Chino Roces Ave., Makati 378,000.00 May 31, 2024 renewable upon mutual agreement of both parties
39 E. RODRIQUEZ 1661 E. Rodriguez Sr., Blvd., Quezon City 133,754.11 November 1, 2024 renewable upon mutual agreement of both parties
40 EAST SERVICE ROAD-BICUTAN East Service Road, South Superhighway, Bicutan Interchange, Paranaque City 64,209.52 monthly renewable upon mutual agreement of both parties
41 EASTWOOD CITY Techno Plaza One Bldg., 118 E. Rodriguez, Brgy. Bagumbayan, Quezon City 627,895.62 April 30, 2020 under negotiation
42 EDSA-CONGRESSIONAL Global Trade Center Building, 1024 North EDSA, Quezon City 221,618.99 March 14, 2022 renewable upon mutual agreement of both parties
43 EDSA-CORINTHIAN 219-223 CLMC Building, Edsa, Mandaluyong City 157,726.37 June 30, 2024 renewable upon mutual agreement of both parties
44 EDSA-MUNOZ MARKET 1199 E. Delos Santos Avenue, Brgy. Katipunan, Quezon City 107,072.54 November 14, 2021 renewable upon mutual agreement of both parties
45 EDSA-POEA GF Lobby, POEA Building, Ortigas Ave. cor EDSA, Mandaluyong n/a n/a
46 EDSA-TRAMO 453 Highway Master Bldg. EDSA, Pasay City 470,764.26 July 31, 2021 renewable upon mutual agreement of both parties
47 ERMITA Metrobank Bldg., A. Mabini cor. A. Flores Sts., Ermita, Manila 200,000.00 January 31, 2021 renewable upon mutual agreement of both parties
48 ESCOLTA TOWER 288 Escolta Twin Tower, Escolta St., Binondo, Manila 129,973.34 August 31, 2023 renewable upon mutual agreement of both parties
49 ESPANA España Blvd., corner Vicente Cruz St., Sampaloc, Manila 256,715.74 October 31, 2025 renewable upon mutual agreement of both parties
50 EVANGELISTA-BANGKAL 1645 Evangelista Street, Brgy. Bangkal, Makati City 174,162.60 November 30, 2027 renewable upon mutual agreement of both parties
51 EVANGELISTA-QUIAPO 675-679 B. Evangelista St., Quiapo, Manila 109,725.00 May 31, 2023 renewable upon mutual agreement of both parties
52 EXAMINER-QUEZON AVENUE Ave Maria Bldg., 1517 Quezon Ave., West Triangle, Quezon City 239,347.78 October 14, 2023 renewable upon mutual agreement of both parties
53 FAIRVIEW-REGALADO AVE. College Square Dormitory cor. Lyric St. & Regalado Ave., West Fairview, Quezon City 198,804.73 July 31, 2024 renewable upon mutual agreement of both parties
54 FARMERS PLAZA LGF Farmers Plaza, Araneta Center, Cubao, Quezon City 430,205.00 March 31, 2021 renewable upon mutual agreement of both parties
55 FOLGUERAS 918 Folgueras Street, Tondo, Manila 104,500.00 March 31, 2024 renewable upon mutual agreement of both parties
56 FORT MILESTONE-5TH AVE. Milestone Bldg., 5th Ave., Bonifacio Global City, Taguig City 784,728.00 August 31, 2024 renewable upon mutual agreement of both parties
57 FORT SEIBU TOWER Seibu Tower, 24th St. cor. 6th Ave., Bonifacio Global City, Taguig City 642,316.50 January 31, 2025 renewable upon mutual agreement of both parties
58 FORT SOUTH OF MARKET North Tower Bldg. Cor. 11th Ave. and 26th St. South of Market, Fort Bonifacio Global City, Taguig 281,861.15 October 31, 2023 renewable upon mutual agreement of both parties
59 FORT-BAYANI ROAD Ground Flr., GPI Bldg., 9A Bayani Road, Fort Bonifacio, Taguig City 220,491.04 September 30, 2023 renewable upon mutual agreement of both parties

Page 1 of 7
 Exhibit 2

METROPOLITAN BANK & TRUST COMPANY

NATIONWIDE BRANCHES
UNDER LEASE
As of December 31, 2020

MONTHLY EXPIRATION TERM

BRANCHES ADDRESS RENTAL OF OF
(In Pesos) LEASE RENEWAL
60 FORT-BONIFACIO GLOBAL CITY 32nd St., 5th Avenue, Bonifacio Global City, Taguig, MM 435,239.44 August 31, 2023 renewable upon mutual agreement of both parties
61 FORT-BURGOS CIRCLE Ground Floor, The Fort Residences, 30th Street cor 2nd Ave., cor Padre Burgos Circle, Crescent Park, West Bonifacio Global City, Taguig 524,735.71 July 15, 2021 renewable upon mutual agreement of both parties
62 FORT-CLIPP CENTER 11th Ave. Corner 39th Street, Bonifacio Global City, Taguig City 319,712.01 May 31, 2023 renewable upon mutual agreement of both parties
63 FORT-ECOPRIME TOWER Ecoprime Tower, 32nd St., cor. 9th Ave., Bonifacio Global City, Taguig City 905,654.40 August 31, 2024 renewable upon the written agreement of both parties
64 FORT-FINANCE CENTRE The Finance Centre, 26th St., Bonifacio Global City, Taguig City 654,885.00 November 14, 2023 renewable upon mutual agreement of both parties
65 FORT-MCKINLEY Unit B, McKinley Hill 1820 Bldg., McKinley Hill, Fort Bonifacio, Taguig City 630,148.64 July 31, 2020 under negotiation
66 FORT-SHANGRI-LA 30th St., cor. 5th Avenue, BGC, Taguig City 884,098.47 November 14, 2020 under negotiation
67 FORT-TEN WEST CAMPUS Ten West Campus, Le Grand Avenue, McKinley West, Fort Bonifacio, Taguig City 345,581.40 September 30, 2024 renewable upon mutual agreement of both parties
68 FORT-TFT Unit GF 8, The Trade & Financial Tower, 7th Ave., cor. 32nd St., Bonifacio Global City, Fort, Taguig City 703,000.00 December 31, 2024 renewable upon mutual agreement of both parties
69 FORT-W 5TH AVE. W. Fifth Bldg., 5th Ave., Bonifacio Global City, Taguig City 483,546.68 May 14, 2024 renewable upon the written agreement of both parties
70 FTI COMPLEX-TAGUIG Old Admin Bldg., FTI Ave., FTI Complex, Taguig, Metro Manila 131,537.85 December 31, 2020 renewable upon mutual agreement of both parties
71 G ARANETA-QUEZON AVENUE Ground Floor, C. Ramirez Company Bldg., G. Araneta corner Quezon Ave., Quezon City 273,000.00 November 30, 2022 renewable upon mutual agreement of both parties
72 GEN LUIS-NOVALICHES St. Claire Building, Gen. Luis St., Novaliches, Quezon City 161,015.60 November 15, 2022 renewable upon mutual agreement of both parties
73 GEN. LUNA-PACO 1546 Gen. Luna St., Paco, Manila 246,655.71 January 31, 2026 renewable upon mutual agreement of both parties
74 GREENBELT G/F Pioneer House Bldg., 108 Paseo de Roxas cor. Legaspi St., Makati 356,368.20 September 30, 2021 renewable upon mutual agreement of both parties
75 GREENHILLS NORTH 338 Ortigas Avenue, San Juan, Metro Manila 169,338.03 March 3, 2021 renewable upon mutual agreement of both parties
76 GREENHILLS-EISENHOWER G/F Goldland Plaza Bldg., Eisenhower St., Greenhills, San Juan 175,944.04 June 30, 2022 renewable upon mutual agreement of both parties
77 GREENHILLS-PROMENADE Unit #131 Ground Flr., Promenade Bldg., Greenhills, Shopping Center, San Juan City 318,631.77 September 30, 2023 renewable upon mutual agreement of both parties
78 GREENHILLS-V MALL GF, Unit V-108B1, V-Mall Greenhills 586,767.37 September 15, 2021 renewable upon mutual agreement of both parties
79 GREENHILLS-WILSON One Wilson Square, Ortigas Ave. cor. Wilson St., Greenhills, San Juan City 954,758.96 August 31, 2029 renewable upon mutual agreement of both parties
80 HONORIO LOPEZ BLVD.-BALUT TONDO 262 Honorio Lopez Blvd. cor. Rodriguez St., Balut, Tondo, Manila 97,879.25 December 31, 2020 renewable upon mutual agreement of both parties
81 INTRAMUROS FEMII Bldg., A. Soriano Jr. Avenue, Intramuros, Manila 110,876.17 March 31, 2021 renewable upon mutual agreement of both parties
82 INTRAMUROS-CBCP CBCP Building, 470 General Luna St., Intramuros, Manila 151,251.63 June 30, 2023 renewable upon mutual agreement of both parties
83 J. ABAD SANTOS-MAYHALIGUE 1385 Jose Abad Santos Avenue, Tondo, Manila 159,203.36 October 31, 2024 renewable upon mutual agreement of both parties
84 J.P. LAUREL-SAN MIGUEL MANILA G/F First Residences, 1557 J.P. Laurel St. cor. Matienza St., San Miguel, Manila 192,294.91 April 30, 2025 renewable upon mutual agreement of both parties
85 JUPITER-68TH BEL-AIR 68 Jupiter St., Bel-Air, Makati City 335,479.73 March 1, 2025 renewable upon mutual agreement of both parties
86 JUPITER-BEL AIR 112 Jupiter St., Bel-Air, Makati City 378,662.38 October 31, 2021 renewable upon mutual agreement of both parties
87 KALAW HILL Commonwealth Ave. cor. Kalaw Hill Subd., Culiat, Quezon City 156,517.50 July 7, 2023 renewable upon mutual agreement of both parties
88 KALAYAAN - CENTURY CITY Unit GF 9 & 10 Centuria Medical Makati, Century City, Kalayaan Ave., Makati City 631,416.99 April 1, 2025 renewable upon mutual agreement of both parties
89 KALAYAAN AVENUE Odelco Bldg., 128 Kalayaan Avenue, Diliman, Quezon City 130,097.39 September 15, 2022 renewable upon mutual agreement of both parties
90 KALENTONG-MANDALUYONG 188 Gen. Kalentong, Daang Bakal, Mandaluyong City 172,298.00 May 4, 2025 renewable upon mutual agreement of both parties
91 KARUHATAN-VALENZUELA 235-I McArthur Highway, Karuhatan, Valenzuela City 168,338.36 August 17, 2022 renewable upon mutual agreement of both parties
92 KAYAMANAN C 2300 PIFCO Bldg., Pasong Tamo Ext., Makati City 431,462.40 October 31, 2020 under negotiation
93 LAGRO KM 21 Lester Bldg., Quirino Highway, Lagro, Novaliches, Quezon City 216,734.20 October 31, 2024 renewable upon mutual agreement of both parties
94 LAS PIÑAS-ALMANZA Cillben Bldg., 467 Alabang-Zapote Road, Almanza Uno, Las Piñas City 178,679.42 December 15, 2025 renewable upon mutual agreement of both parties
95 LAS PIÑAS-BF RESORT Lot 18 & 20, Block 18, BF Resort Drive, Las Pinas City 88,082.48 May 31, 2022 renewable upon mutual agreement of both parties
96 LAS PIÑAS-NAGA ROAD Naga Road, Pulang Lupa II, Las Piñas City 113,451.23 June 15, 2023 renewable upon mutual agreement of both parties
97 LAVEZARES 403 CDC Building, Lavezares St. cor. Asuncion St., Binondo, Manila 193,918.35 July 31, 2022 renewable upon mutual agreement of both parties
98 LEGASPI VILLAGE-MAKATI Don Pablo Bldg., 114 Amorsolo St., Legaspi Village, Makati City 390,000.00 August 31, 2024 renewable upon mutual agreement of both parties
99 LIBERTAD-MANDALUYONG G/F PGMC Bldg., Domingo M. Guevarra St., corner Calbayog Street, Mandaluyong City 238,239.23 March 31, 2025 renewable upon mutual agreement of both parties
100 LUNETA-T.M. KALAW 470 T.M. Kalaw cor. Cortada St., Ermita, Manila 279,686.60 May 15, 2020 under negotiation
101 MADRIGAL BUSINESS PARK-ALABANG El Molito Bldg., Madrigal Business Park, Alabang-Zapote Road., Muntinlupa City 533,404.16 August 31, 2020 under negotiation
102 MANDALUYONG - PIONEER Sunshine 100 City, Plaza Pioneer, Pioneer St., Mandaluyong City 206,484.95 February 28, 2023 renewable upon mutual agreement of both parties
103 MARIKINA-LILAC 3 Lilac St., Hacienda Heights Subd., Concepcion 2, Marikina City 96,458.30 July 12, 2024 renewable upon mutual agreement of both parties
104 MARIKINA-NANGKA J.P. Rizal St., Brgy. Nangka, Marikina City 112,395.74 February 28, 2024 renewable upon mutual agreement of both parties
105 MASANGKAY-LUZON 1161-1163 Masangkay St., Sta. Cruz, Manila 183,556.18 July 31, 2021 renewable upon mutual agreement of both parties
106 MASANGKAY-MAYHALIGUE 1348-1352 Broadview Towers, G. Masangkay St., Sta. Cruz, Manila 192,724.22 July 31, 2024 renewable upon mutual agreement of both parties
107 MASINAG-MARCOS H-WAY Kingsville Arcade, Marcos Highway, Mayamot, Antipolo City 306,533.20 September 30, 2020 under negotiation
108 MAYSILO CIRCLE-MANDALUYONG (MINI) 344 Maysilo St., Jojemar Bldg., Boni Avenue, Mandaluyong City 104,454.95 October 31, 2022 renewable upon mutual agreement of both parties
109 MCARTHUR HIGHWAY-MALINTA Km 14, McArthur Highway, Malinta, Valenzuela City 101,944.43 March 20, 2026 renewable upon mutual agreement of both parties
110 METROPOLITAN PARK-iMET iMET Bldg., Metropolitan Park, Bay Area, Roxas Blvd., Pasay City 245,612.60 May 31, 2028 renewable upon mutual agreement of both parties
111 METROPOLITAN PARK-ROXAS BLVD. Bldg. M, Blue Bay Walk, Metropolitan Ave. cor. EDSA Extension, Bay Area, CBD, Pasay City 246,140.02 January 31, 2021 renewable upon mutual agreement of both parties
112 MINDANAO AVENUE Units 1-3 Ground Floor, Puregold, Mindanao Avenue, Quezon City 173,734.39 December 5, 2020 under negotiation
113 MORAYTA 870 Nicanor Reyes Sr. Ave., Sampaloc , Manila 211,878.34 September 30, 2023 renewable upon mutual agreement of both parties
114 MUNTINLUPA-LAKEFRONT Space No. B 04, Presidio Walk Lakefront, Sucat, Muntinlupa City 94,348.23 July 31, 2020 under negotiation
115 MUNTINLUPA-TUNASAN Gian Plaza, Blk. 9, Lot 1, Carolina Subd., National Road, Brgy. Tunasan, Muntinlupa City 121,000.00 September 30, 2024 renewable upon mutual agreement of both parties
116 N. DOMINGO-SAN JUAN 128-132 N. Domingo St., San Juan, M.M. 399,562.37 August 31, 2029 renewable upon mutual agreement of both parties
117 NAIA Columbia Airfreight Complex Building, Ninoy Aquino Ave., Parañaque City 162,889.46 April 30, 2022 renewable upon mutual agreement of both parties
118 NEW MANILA 676 Aurora Blvd., New Manila, Quezon City 389,395.09 May 31, 2024 renewable upon mutual agreement of both parties
119 NORTH EDSA Rockwell Business Center, Tower2 Level 1, Units No. 6 & 7, Meralco Complex Center, Pasig 304,208.56 February 15, 2021 renewable upon mutual agreement of both parties
120 NOVALICHES-TALIPAPA HBC Corporate Center, 526 Quirino Highway, Talipapa, Novaliches, Quezon City 138,326.77 December 9, 2021 renewable upon mutual agreement of both parties
121 NUEVA 562-568 Nueva St., Binondo, Manila 209,840.00 April 30, 2025 renewable upon mutual agreement of both parties

Page 2 of 7
 Exhibit 2

METROPOLITAN BANK & TRUST COMPANY

NATIONWIDE BRANCHES
UNDER LEASE
As of December 31, 2020

MONTHLY EXPIRATION TERM

BRANCHES ADDRESS RENTAL OF OF
(In Pesos) LEASE RENEWAL
122 ORTIGAS-MERALCO AVENUE G/F Ortigas Bldg., Ortigas cor. Meralco Ave., Pasig City 160,839.33 March 31, 2020 under negotiation
123 ORTIGAS-SAN MIGUEL AVENUE G/F Belevedere Tower Condominium, San Miguel Ave., Pasig 312,437.02 November 14, 2025 renewable upon mutual agreement of both parties
124 ORTIGAS-SAPPHIRE Unit G105-B, GF AIC Gold Tower, F. Ortigas Jr. Ave. (formerly Emerald Ave.) cor. Garnet & Sapphire Sts., Ortigas Center, Pasig City 535,787.87 July 15, 2024 renewable upon mutual agreement of both parties
125 ORTIGAS-TAIPAN G/F Taipan Place Bldg., Emerald Ave., Oritgas, Pasig City 461,447.47 August 31, 2021 renewable upon mutual agreement of both parties
126 ORTIGAS-XAVIER Ortigas Ave. corner Xavier St., San Juan, Metro Manila 209,737.09 January 31, 2022 renewable upon mutual agreement of both parties
127 PACO 1756 Singalong St., Paco, Manila 301,997.06 May 31, 2021 renewable upon mutual agreement of both parties
128 PACO-A. LINAO Units 1650, 1652, & 1654, Bldg. B, Along Angel Linao St., Paco, Manila 77,534.10 August 31, 2024 renewable upon mutual agreement of both parties
129 PARANG-MARIKINA 94 Balagtas St., cor. Tanguille St., Parang, Marikina 129,602.39 December 16, 2021 renewable upon mutual agreement of both parties
130 PASAY-BACLARAN Kapt. Ambo St., Pasay City 520,627.16 August 1, 2030 renewable upon mutual agreement of both parties
131 PASAY-NAIA 3 Stall No. 10, Arrival Lobby, NAIA Terminal III, Pasay City 20,600.00 monthly renewable upon mutual agreement of both parties
132 PASAY-ROTONDA 2717 Taft Ave. Ext., Pasay City 126,562.50 September 30, 2021 renewable upon mutual agreement of both parties
133 PASEO DE ROXAS Ground Floor, 777 Paseo de Roxas, Makati City 639,450.00 August 31, 2024 renewable upon mutual agreement of both parties
134 PASEO-MAKATI AVE. 8735 Makati Avenue cor. 1226 Paseo de Roxas, Makati City 845,670.00 October 15, 2020 under negotiation
135 PASIG-C. RAYMUNDO Along C. Raymundo Ave., Brgy. Rosario, Pasig City 118,196.44 January 31, 2022 renewable upon mutual agreement of both parties
136 PASIG-ROSARIO Choice Market Ortigas, #68 Ortigas Ave. Ext., Brgy. Rosario, Pasig City 191,839.44 January 26, 2029 renewable upon mutual agreement of both parties
137 PASIG-SILVER CITY KPO-2 Plaza, Silver City 2, Frontera Verde, Pasig City 288,230.39 December 31, 2024 renewable upon mutual agreement of both parties
138 PASONG TAMO 2300 Leelin Building, Pasong Tamo St., Makati City 393,532.72 August 15, 2024 renewable upon mutual agreement of both parties
139 PASONG TAMO EXTENSION UPRC VII, 2287 Pasong Tamo Extension, Makati City 431,761.05 March 31, 2023 renewable upon mutual agreement of both parties
140 PASONG TAMO-BUENDIA Unit A, Lilac Tower, Oriental Garden Makati, Chino Roxes Ave., Makati City 364,005.23 August 9, 2020 under negotiation
141 PASONG TAMO-METROPOLITAN AVENUE Prudence Building, 1140 Pasong Tamo, Brgy. San Antonio Village, Makati City 236,932.56 September 15, 2026 renewable upon mutual agreement of both parties
142 PATEROS No. 104 M. Almeda Street, Pateros, Metro Manila 147,271.00 February 28, 2030 renewable upon mutual agreement of both parties
143 PEREA-GALLARDO G/F Century Plaza Condominium, 120 Perea St., Legaspi Village, Makati City 234,028.94 January 31, 2022 renewable upon mutual agreement of both parties
144 PLAZA CERVANTES State Investment Center Bldg., No. 333 Juan Luna St., Binondo, Manila 450,303.00 November 30, 2024 renewable upon mutual agreement of both parties
145 PLAZA LORENZO RUIZ 475 Juan Luna St., Binondo, Manila 178,435.95 August 31, 2020 under negotiation
146 POTRERO-MALABON Ponciana Center, Along McArthur Highway corner Del Monte Avenue, Potrero, Malabon City 209,989.48 November 30, 2022 renewable upon mutual agreement of both parties
147 PROJECT 8-SHORTORN No. 37 Shortorn St., Project 8, Quezon City 268,018.43 January 2, 2025 renewable upon mutual agreement of both parties
148 PUREZA-R. MAGSAYSAY BLVD. 2244 De Ocampo Memorial School Annex Bldg., R. Magsaysay Blvd. near cor. Pureza Sts., Sta. Mesa, Manila 144,455.96 August 31, 2025 renewable upon mutual agreement of both parties
149 QUEZON AVE.-CORDILLERA EU State Tower, No. 30 Quezon Avenue, Quezon City 116,388.65 January 15, 2024 renewable upon mutual agreement of both parties
150 QUIAPO No. 117 & 119 C. Palanca St., Quiapo, Manila 190,071.00 July 15, 2031 renewable upon mutual agreement of both parties
151 QUINTIN PAREDES No. 457-459 Quintin Paredes Street, Binondo, Manila 183,750.00 March 31, 2024 renewable upon mutual agreement of both parties
152 REINA REGENTE 852-882 Reina Regente St., Binondo, Manila 188,137.32 June 30, 2023 renewable upon mutual agreement of both parties
153 RETIRO-CORDILLERA N. S. Amoranto corner Cordillera St., Quezon City 139,089.50 November 15, 2022 renewable upon mutual agreement of both parties
154 RETIRO-MAYON 314 N. Amoranto Ave. cor. Mayon St., Quezon City 300,000.00 February 28, 2025 renewable upon mutual agreement of both parties
155 RIZAL AVENUE EXT.-3RD AVE. 213-C Rizal Ave. Ext. Bet. 2nd & 3rd, Caloocan 98,772.07 December 31, 2024 renewable upon mutual agreement of both parties
156 ROBINSON'S PLACE-ADRIATICO 1413 M. Adriatico St., Ermita, Manila 550,000.00 March 28, 2021 renewable upon written agreement of both parties
157 ROCES AVENUE Roces Avenue cor Scout Reyes St., Quezon City 219,834.62 March 15, 2021 renewable upon mutual agreement of both parties
158 ROXAS BLVD.-PADRE FAURA Units C2, C3 & C4, Grand Riviera Suites, Roxas Blvd., cor. Padre Faura St., Ermita, Manila 336,646.61 May 31, 2025 renewable upon mutual agreement of both parties
159 SAN AGUSTIN-HV DELA COSTA Unit 101 Liberty Center Bldg., 104 HV dela Costa St. cor. San Agustin St., Salcedo Vill., Makati 350,650.00 October 31, 2021 renewable upon mutual agreement of both parties
160 SAN JOAQUIN-PASIG 25 R. Jabson St., San Joaquin, Pasig City 330,259.07 February 28, 2029 renewable upon mutual agreement of both parties
161 SAN LORENZO VILLAGE G/F la O' Ctr. 1000 A. Arnaiz Ave., Makati City 347,902.26 May 31, 2024 renewable upon mutual agreement of both parties
162 SAN NICOLAS CENTER 455 and 457 Clavel St., San Nicolas, Binondo, Manila 270,884.25 January 31, 2023 renewable upon mutual agreement of both parties
163 SHAW BLVD-CBC CENTER CBC Corporate Center, Shaw Blvd., Mandaluyong City 130,059.17 October 15, 2025 renewable upon mutual agreement of both parties
164 SHAW BLVD-J.M. ESCRIVA J. M. Escriva, Shaw Blvd., Pasig City 356,170.24 November 30, 2022 renewable upon mutual agreement of both parties
165 SKYLAND-PLAZA G/F Skyland Plaza Condominium, Sen. Gil Puyat Ave., Makati City 99,884.00 December 31, 2019 under negotiation
166 SOLER 1064-1074 Soler, Binondo Manila 126,798.14 August 31, 2021 renewable upon mutual agreement of both parties
167 STA. ANA-MANILA G/F Commercial Bldg., 2447 Pedro Gil St., Sta. Ana, Manila 187,000.00 July 31, 2021 renewable upon written agreement of both parties
168 STA. ANA-PEDRO GIL 1929 Pedro Gil, Sta. Ana, Manila 79,007.91 December 15, 2024 renewable upon written agreement of both parties
169 STA. ELENA 602 Bodega Sales Bldg., Sta. Elena St., San Nicolas St., Manila 155,452.50 May 31, 2023 renewable upon mutual agreement of both parties
170 STA. MONICA-NOVALICHES 1035 Quirino Highway, Sta. Monica, Novaliches, Quezon City 65,000.00 August 31, 2023 renewable upon mutual agreement of both parties
171 STO. CRISTO-C.M. RECTO 859 Sto. Cristo Street, Binondo, Manila 101,200.00 June 30, 2026 renewable upon mutual agreement of both parties
172 STO. CRISTO-SAN NICOLAS ST. 600 Sto. Cristo St. cor. San Nicolas St., Binondo, Manila 92,000.00 April 30, 2026 renewable upon mutual agreement of both parties
173 STO. NINO-MARIKINA Sumulong Highway, Toyota Ave. Brgy. Sto. Niño, Marikina City 155,511.23 June 30, 2023 renewable upon mutual agreement of both parties
174 SUMULONG-FATIMA Unit R-106, Antipolo Valley Mall, Brgy. Sta. Cruz, Sumulong Highway, Antipolo City 148,561.88 August 20, 2027 renewable upon mutual agreement of both parties
175 SUSANO ROAD-NOVALICHES 29 Susano Road, Novaliches Proper, Novaliches, Quezon City 255,256.31 April 30, 2021 renewable upon mutual agreement of both parties
176 TAFT AVE.-P. OCAMPO 2456 Taft Avenue, Manila 170,170.88 October 31, 2022 renewable upon mutual agreement of both parties
177 TAFT-APACIBLE 883 G. Apacible cor. Leon Guinto Sts., Ermita Manila 198,551.25 December 31, 2021 renewable upon mutual agreement of both parties
178 TAGUIG-PUREGOLD Commercial Units 7-10, Puregold, Taguig, Gen. Luna St., Tuktukan, Taguig City 137,781.35 September 26, 2021 renewable upon mutual agreement of both parties
179 THE FORT MARAJO G/F, Marajo Tower 4th Ave. cor. 26th St., Bonifacio Global City, Taguig 503,025.60 July 14, 2023 renewable upon mutual agreement of both parties
180 TOMAS MAPUA-FUGOSO 1052-1056 Tomas Mapua corner Fugoso St., Sta. Cruz, Manila 112,260.56 September 30, 2022 renewable upon mutual agreement of both parties
181 TOMAS MORATO 46 Tomas Morato Ave. corner Scout Gandia St., Quezon City 200,656.18 August 8, 2023 renewable upon mutual agreement of both parties
182 TONDO-GAGALANGIN 2569 Juan Luna St., Gagalangin, Tondo, Manila 130,028.73 December 31, 2024 renewable upon mutual agreement of both parties
183 TORDESILLAS-GIL PUYAT AVE. Condominium Units 102 and 103 G/F Le Triomphe Condominium, Sen. Gil Puyat Ave. cor. Dela Costa St., Salcedo Village Makati City 499,994.54 March 31, 2026 renewable upon mutual agreement of both parties

Page 3 of 7
 Exhibit 2

METROPOLITAN BANK & TRUST COMPANY

NATIONWIDE BRANCHES
UNDER LEASE
As of December 31, 2020

MONTHLY EXPIRATION TERM

BRANCHES ADDRESS RENTAL OF OF
(In Pesos) LEASE RENEWAL
184 TUTUBAN L5. CM17, Tutuban Centermall II along Loop Road, East and CM Recto Ave., Manila n/a n/a
185 TUTUBAN PRIME BLOCK Tutuban Prime Block C. M. Recto Ave., Tondo, Manila n/a n/a
186 U.N. AVENUE G/F Manila Doctors Hospital, 667 U.N. Avenue, Ermita, Manila 613,798.00 December 31, 2023 renewable upon mutual agreement of both parties
187 V.LUNA-EAST AVENUE 18 Lyman Bldg., V. Luna Road cor East Ave., Diliman, Quezon City 225,401.70 November 2, 2028 renewable upon mutual agreement of both parties
188 VALENZUELA-GEN. T. DE LEON Our Lady of Lourdes College, Gen. T. De Leon St., Valenzuela City 140,255.17 August 31, 2024 renewable upon mutual agreement of both parties
189 VALENZUELA-NLEX GATEWAY Unit LG-4, Valenzuela Gateway Complex, #318 Paso de Blas St., Brgy. Paso de Blas, Valenzuela City 101,998.34 December 31, 2026 renewable upon mutual agreement of both parties
190 VISAYAS AVENUE Visayas Avenue cor. Congressional Ave., Quezon City 121,607.55 August 15, 2023 renewable upon mutual agreement of both parties
191 WACK-WACK S & R Compound, 514 Shaw Blvd., Mandaluyong City 165,362.70 December 1, 2023 renewable upon mutual agreement of both parties
192 WEST SERVICE ROAD-ALABANG HILLS G/F Don Jesus Blvd. cor. West Service Road, South Superhighway, Muntinlupa City 129,788.56 April 30, 2021 renewable upon mutual agreement of both parties
193 WEST SERVICE ROAD-MERVILLE Km. 12, West Service Road, Pasay City 108,166.40 April 30, 2020 under negotiation
194 XAVIERVILLE Xavierville Avenue, corner B. Gonzales Street, Loyola Heights, Quezon City 77,174.73 July 31, 2025 renewable upon mutual agreement of both parties
195 ZABARTE ROAD-NOVALICHES C.I. Plaza, 1151 Old Zabarte Road cor. Quirino Highway, Kaligayahan, Novaliches, Quezon City 230,372.41 November 30, 2025 renewable upon mutual agreement of both parties
196 ZURBARAN 1662 V. Fugoso St., corner Oroquieta St., Sta. Cruz, Manila 224,809.41 December 5, 2023 renewable upon mutual agreement of both parties

COUNTRYSIDE BRANCHES

1 AGUINALDO-IMUS Aguinaldo Highway, Brgy. Tanzang Luma, Imus, Cavite 126,000.00 October 18, 2029 renewable upon mutual agreement of both parties
2 AGUSAN DEL SUR Bonifacio Street, San Francisco, Agusan Del Sur 149,962.40 August 31, 2021 renewable upon mutual agreement of both parties
3 ALBAY-DARAGA Vicente Dy Bldg., Along Rizal St., Daraga, Albay 65,597.58 March 31, 2021 renewable upon mutual agreement of both parties
4 ANGELES-MARQUEE MALL Space MG0017, GF Marquee Mall, Francisco G. Nepomuceno Ave., Angeles City 172,057.30 September 30, 2021 renewable upon written agreement of both parties
5 ANGELES-MC ARTHUR HI-WAY Lot 22-27, Blk. 42, Mc Arthur Hi-way, Brgy. Lourdes, Angeles City 89,426.53 January 31, 2027 renewable upon mutual agreement of both parties
6 ANGELES-STO DOMINGO Lot 408, Sto. Rosario, Sto. Domingo, Angeles City 71,471.77 June 30, 2025 renewable upon mutual agreement of both parties
7 ANGELES-STO. ROSARIO 772 Santo Rosario St., Brgy. Santo Rosario, Angeles City 191,730.48 July 31, 2019 under negotiation
8 BACOLOD-AYALA CAPITOL CENTRAL Ayala Malls Capitol Central, Gatuslao St., Brgy. 8, Bacolod City, Negros Occidental 101,060.66 October 31, 2019 under negotiation
9 BACOLOD-EASTSIDE Villa Angela Arcade Annex, Circumferential Road, Bacolod City 81,647.00 April 30, 2020 under negotiation
10 BACOLOD-GONZAGA MGL Bldg., Gonzaga Street, Bacolod City 121,609.65 August 31, 2024 renewable upon mutual agreement of both parties
11 BACOLOD-LACSON Lacson-San Sebastian Sts., Brgy. 37, Bacolod City 119,401.13 April 15, 2022 renewable upon written agreement of both parties
12 BACOLOD-LIBERTAD San Lorenzo Ruiz Bldg., Lopez Jaenan St., Bacolod City 139,360.42 May 31, 2023 renewable upon written agreement of both parties
13 BACOLOD-MANDALAGAN Paseo Verde, Lacson St., Brgy. Mandalagan, Bacolod City 79,735.69 June 10, 2024 renewable upon written agreement of both parties
14 BACOLOD-SINGCANG UTC Building corner Araneta-Alunan Street, Bacolod City 107,000.00 February 28, 2025 renewable upon mutual agreement of both parties
15 BACOOR-BAYANAN BACOOR BLVD. Altrove Building, Bacoor Blvd., Brgy. Bayanan, Bacoor City 168,750.00 March 31, 2030 renewable upon mutual agreement of both parties
16 BAGUIO BURNHAM Heritage Mansion, Kisad Rd. thru Abanao Ext. cor. G. Del Pilar St., Baguio City 285,660.00 September 14, 2023 renewable upon mutual agreement of both parties
17 BAGUIO-LUCBAN F2 Building, No. 532 Magsaysay Avenue, Baguio City 79,505.57 January 31, 2024 renewable upon mutual agreement of both parties
18 BAGUIO-MARCOS HIGHWAY TG Building, Along Marcos Highway, Km 3, Brgy. Central, Bakakeng, Baguio City 73,798.59 November 15, 2023 renewable upon mutual agreement of both parties
19 BAGUIO-NAGUILIAN ROAD Cooyesan Hotel Plaza, Naguilian Road, Baguio City 164,064.26 July 14, 2021 renewable upon mutual agreement of both parties
20 BAGUIO-SESSION ROAD Porta Vaga Bldg., Session Road, Baguio City 262,678.36 December 31, 2020 renewable upon mutual agreement of both parties
21 BAIS CITY, NEGROS ORIENTAL National Highway Cor. Aguinaldo St., Bais City, Negros Oriental 93,170.00 August 15, 2023 renewable upon mutual agreement of both parties
22 BALANGA-DON M. BANZON AVE. Don Manuel Banzon Ave., Balanga, Bataan 97,733.67 October 21, 2023 renewable upon mutual agreement of both parties
23 BALIUAG-TRINIDAD HIGHWAY Doña Remedios Trinidad Highway, Baliuag 160,907.49 September 14, 2023 renewable upon mutual agreement of both parties
24 BATAAN-MARIVELES 172 Lakandula St., Poblacion, Mariveles, Bataan 63,354.62 March 31, 2024 renewable upon mutual agreement of both parties
25 BATAC, ILOCOS NORTE Washington St., Brgy., Ablan, Batac, Ilocos Norte 115,599.37 November 30, 2025 renewable upon mutual agreement of both parties
26 BATANGAS-CALICANTO P. Burgos St. Extension, Brgy. Calicanto, Batangas City 108,592.98 August 8, 2025 renewable upon mutual agreement of both parties
27 BATANGAS-KUMINTANG ILAYA PPG Building, National Highway, Kumintang Ilaya, Batangas City 74,024.33 April 14, 2025 renewable upon mutual agreement of both parties
28 BATANGAS-LIMA PARK Units R01-S01, Block D, The Outlets at Lipa, Lima Technology Center, Brgy. Bugtong na Pulo, Lipa City, Batangas 93,150.23 August 31, 2023 renewable upon mutual agreement of both parties
29 BATANGAS-MABINI Along National Road, Poblacion, Mabini, Batangas 52,766.27 November 15, 2022 renewable upon mutual agreement of both parties
30 BATANGAS-SAN JUAN Gen. Luna cor. Dandan Sts., Poblacion, San Juan, Batangas 86,741.71 January 31, 2025 renewable upon mutual agreement of both parties
31 BATANGAS-STO. TOMAS Brgy. 2, Maharlika Highway, Sto. Tomas, Batangas 92,305.79 July 31, 2023 renewable upon mutual agreement of both parties
32 BATANGAS-V. LUNA V. Luna St., Batangas City 75,425.96 June 30, 2023 renewable upon mutual agreement of both parties
33 BAUAN-BATANGAS National Highway, Poblacion I, Bauan, Batangas City 99,343.16 May 31, 2025 renewable upon mutual agreement of both parties
34 BAYAWAN CITY, NEGROS ORIENTAL Purok 1, National Highway, Tinago, Bayawan City, Negros Oriental 84,061.97 October 27, 2023 renewable upon mutual agreement of both parties
35 BAYBAY Magsaysay Ave. cor. Tres Martires St., Baybay City 86,881.68 July 14, 2023 renewable upon mutual agreement of both parties
36 BOHOL-TALIBON Blk. 248, Talibon Commercial Building 1, Carlos P. Garcia Street, Talibon, Bohol 54,608.90 May 31, 2023 renewable upon mutual agreement of both parties
37 BORACAY Brgy Balabag, Boracay, Malay, Aklan (infront of Astoria Boracay) 153,499.85 July 14, 2020 under negotiation
38 BORACAY-STATION II Brgy. Balabag, Boracay, Malay Aklan (beside Boracay Crown Regency Resort) 318,953.48 January 14, 2024 renewable upon mutual agreement of both parties
39 BORONGAN, SAMAR Real cor. G. Abogado Street, Borongan, Eastern Samar 87,007.19 June 14, 2023 renewable upon mutual agreement of both parties
40 BUKIDNON-MALAYBALAY Sayre Highway, Brgy. 3 Fortich St., Malaybalay City, Bukidnon 120,072.57 November 30, 2028 renewable upon mutual agreement of both parties
41 BUKIDNON-MARAMAG JBC Tyson Bldg., National Highway, North Poblacion, Maramag, Bukidnon 63,175.94 September 20, 2029 renewable upon mutual agreement of both parties
42 BULACAN-NORZAGARAY 786 Crossing, Partida, Norzagaray, Bulacan 91,892.27 October 31, 2024 renewable upon mutual agreement of both parties
43 BULACAN-SAN ILDEFONSO Brgy. San Juan, San Ildefonso, Bulacan 82,478.95 January 27, 2022 renewable upon mutual agreement of both parties
44 BULACAN-SAN MIGUEL Zone 5, Tecson St., San Jose, San Miguel, Bulacan 60,455.12 January 29, 2026 renewable upon mutual agreement of both parties

Page 4 of 7
 Exhibit 2

METROPOLITAN BANK & TRUST COMPANY

NATIONWIDE BRANCHES
UNDER LEASE
As of December 31, 2020

MONTHLY EXPIRATION TERM

BRANCHES ADDRESS RENTAL OF OF
(In Pesos) LEASE RENEWAL
45 BUTUAN-JC AQUINO JC Aquino Ave., Butuan City 97,316.47 August 31, 2024 renewable upon mutual agreement of both parties
46 BUTUAN-MONTILLA BLVD. Montilla corner Villanueva Sts., Butuan City, Agusan del Norte 130,742.52 March 14, 2022 renewable upon mutual agreement of both parties
47 CABANATUAN-MAHARLIKA H. CONCEPCION Priscilla Bldg., Brgy. H. Concepcion, Maharlika Highway, Cabanatuan City 124,106.26 July 7, 2021 renewable upon mutual agreement of both parties
48 CABANATUAN-MAHARLIKA NORTH Maharlika Highway, Sangitan, Cabanatuan City 165,129.49 January 2, 2030 renewable upon the option of the lessee
49 CAGAYAN DE ORO GAISANO-C.M. RECTO Ground Level, Gaisano City Mall, C.M. Recto Ave., cor. Corrales Ext., Cagayan de Oro City 73,992.38 August 5, 2023 renewable upon mutual agreement of both parties
50 CALAMBA CARMELRAY Aries 1400 Bldg., Carmelray Industrial Park (CIP) II, along National Highway, Brgy. Tulo, Calamba, Laguna 109,534.32 October 15, 2028 renewable upon mutual agreement of both parties
51 CALAMBA MARKET Pabalan St., Calamba, Market Site, Calamba City 72,333.32 October 31, 2029 renewable upon mutual agreement of both parties
52 CALAMBA-PARIAN 728 South Nat'l. Highway Brgy., Parian, Calamba, Laguna 114,682.00 March 31, 2023 renewable upon mutual agreement of both parties
53 CALAMBA-REAL PJM Bldg., Along National Highway Brgy. Real Calamba, Laguna 132,359.53 December 31, 2023 renewable upon mutual agreement of both parties
54 CALAPAN-LALUD J.P. Rizal cor. Bayabas St., Brgy. Laud, Calapan City, Oriental Mindoro 87,441.91 February 28, 2024 renewable upon mutual agreement of both parties
55 CALASIAO-PANGASINAN MacArthur Highway, San Miguel, Calasiao, Pangasinan 148,819.34 May 12, 2024 renewable upon mutual agreement of both parties
56 CALBAYOG G/F Gaisano Mall Corner Orquin and Gelera Sts., Brgy. Central, Calbayog City 124,444.69 November 30, 2027 renewable upon mutual agreement of both parties
57 CAMARINES SUR-GOA Jose Remo Bldg., San Jose St. cor. Scout Funtabella, Goa, Camarines Sur 40,202.87 November 30, 2023 renewable upon mutual agreement of both parties
58 CAMILING-TARLAC Quezon Avenue, Camiling Tarlac 56,104.11 March 31, 2021 renewable upon the option of the lessee
59 CANLUBANG-CARMELRAY Integrity corner Excellence Avenue, Carmelrary Industrial Park I, Canlubang, Laguna 136,222.28 June 30, 2024 renewable upon mutual agreement of both parties
60 CARMONA BINAN-HIGHWAY 88 National Highway, Brgy. Maduya, Carmona, Cavite 72,027.46 June 15, 2024 renewable upon mutual agreement of both parties
61 CARMONA-CAVITE Grandville Ind. Complex, Bangkal, Carmona, Cavite City 125,709.94 June 30, 2021 renewable upon mutual agreement of both parties
62 CAUAYAN-MAHARLIKA Highway Renew Lumber Bldg., Maharlika Highway, Cauayan City 74,463.75 October 14, 2024 renewable upon mutual agreement of both parties
63 CAVITE ECONOMIC ZONE Lot A, Cavite Economic Zone, Rosario, Cavite 15,214.76 October 11, 2024 renewable upon mutual agreement of both parties
64 CEBU M.C. BRIONES La Nueva Supermart, City Hall Center, M.C. Briones St., Cebu City 158,712.48 June 30, 2022 renewable upon mutual agreement of both parties
65 CEBU-A.S. FORTUNA A.S. Fortuna St., Mandaue City, Cebu 175,310.11 June 30, 2022 renewable upon mutual agreement of both parties
66 CEBU-ARGAO Prince Warehouse Club, Lakandula St., cor. Kintanar St., Argao, Cebu City 48,120.72 January 15, 2024 renewable upon mutual agreement of both parties
67 CEBU-AYALA CENTER MALL Stall PL1J/EBB1, Basement Level 1, Ayala Center Cebu, Archbishop Reyes Ave., Cebu Business Park, Cebu City 267,534.00 November 30, 2020 under negotiation
68 CEBU-BALAMBAN E.S. Binghay St., Balamban, Cebu City 47,860.56 July 31, 2023 renewable upon mutual agreement of both parties
69 CEBU-BOGO SIM Building, P. Rodriguez St., Bogo City, Cebu 63,319.52 August 15, 2022 renewable upon mutual agreement of both parties
70 CEBU-CARCAR Gaisano Price Club Carcar, Poblacion III, Awayan, Carcar City, Cebu 130,016.08 August 31, 2022 renewable upon mutual agreement of both parties
71 CEBU-CONSOLACION Cansaga Road, National Highway, Consolacion, Cebu 136,702.78 July 15, 2026 renewable upon mutual agreement of both parties
72 CEBU-DANAO CITY C.P. Garcia Avenue, Danao City, Cebu 83,834.09 January 16, 2022 renewable upon mutual agreement of both parties
73 CEBU-FLB CORPORATE CENTER FLB Corporate Center, Bohol Ave., Cebu Business Park, Cebu City 134,313.40 April 30, 2025 renewable upon mutual agreement of both parties
74 CEBU-GORORDO 117 Gorordo Avenue, Lahug, Cebu City 169,516.77 March 14, 2023 renewable upon mutual agreement of both parties
75 CEBU-GUADALUPE No. 97 M. Velez St., Guadalupe Cebu 198,000.00 December 31, 2024 renewable upon mutual agreement of both parties
76 CEBU-IT PARK Ayala Malls Central Bloc, Blk. 10 Cebu IT Park, Apas, Cebu City 225,579.20 November 24, 2024 renewable upon mutual agreement of both parties
77 CEBU-LAHUG Archbishop Reyes Ave., Cor. Tojong St., Lahug, Cebu City 208,459.73 November 2, 2020 under negotiation
78 CEBU-LEON KILAT Gaisano Capital South cor. Colon & Leon Kilat Sts., Cebu City 84,908.46 July 9, 2023 renewable upon mutual agreement of both parties
79 CEBU-LILOAN Gaisano Grandmall, Purok Sampaguita, Poblacion, Liloan Cebu 79,762.49 January 31, 2026 renewable upon mutual agreement of both parties
80 CEBU-MACTAN MEPZ Mactan Economic Zone 1, Lapu-lapu City 91,643.03 June 30, 2023 renewable upon mutual agreement of both parties
81 CEBU-MACTAN NEWTOWN G/F Retail 2, Two World Center, Mactan Newton, Lapu-Lapu City 197,134.84 January 31, 2021 renewable upon mutual agreement of both parties
82 CEBU-MAMBALING N. Basalco Avenue (Cebu South Road), Mambaling, Cebu City 118,750.00 August 30, 2028 renewable upon mutual agreement of both parties
83 CEBU-MEPZ II N.G.A. Devt. Corp. Bldg., MEPZ II, Basak, Lapu Lapu City 156,935.61 July 15, 2021 renewable upon mutual agreement of both parties
84 CEBU-MINGLANILLA Carlita Uno Building, Cebu South Road, Poblacion Barangay Ward 1, Minglnilla Cebu 133,644.00 July 15, 2028 renewable upon mutual agreement of both parties
85 CEBU-NORKIS CYBERPARK GF, Unit 3, Cyberpark BPO Bldg., A.S. Fortuna St. Cor. V. Albano St., Brgy. Bakilid, Mandaue City, Cebu 122,432.16 July 14, 2021 renewable upon mutual agreement of both parties
86 CEBU-NORTH RECLAMATION AREA APM Mall, A. Soriano Avenue Cebu Port Centre, Cebu North Reclamation Area Cebu City 134,034.75 January 17, 2025 renewable upon mutual agreement of both parties
87 CEBU-PARK DISTRICT Ground Flr., 2 Quad Bldg., Cardinal Rosales Ave. cor. Sumilon Road, Cebu Business Park, Cebu City 112,233.04 December 31, 2023 renewable upon mutual agreement of both parties
88 CEBU-PARKMALL North Reclamation Area, Mandaue City 195,276.74 February 28, 2021 renewable upon mutual agreement of both parties
89 CEBU-SRP TALISAY Gaisano Capital SRP Mall, Brgy. San Roque, SRP Highway, Talisay City, Cebu 88,795.92 January 7, 2023 renewable upon mutual agreement of both parties
90 CEBU-TALAMBAN PNF Commercial Bldg., Talamban, Cebu City 75,245.63 August 31, 2022 renewable upon mutual agreement of both parties
91 CEBU-TOLEDO Along Diosdado Macapagal Highway, Barangay Poblacion, Toledo City, Cebu 115,956.72 June 21, 2024 renewable upon mutual agreement of both parties
92 CLARK Unit 24, The Pavilion Mall, PhilExcel Business Park Clark Freeport Zone, Pampanga 92,305.79 March 15, 2023 renewable upon mutual agreement of both parties
93 CONCEPCION-TARLAC Concepcion Consumers Marketing Bldg., Poblacion, Concepcion, Tarlac 78,473.00 October 31, 2025 renewable upon mutual agreement of both parties
94 COTABATO-QUEZON Crossroads Arcade Building, Quezon Ave., Cotabato City 111,178.52 May 31, 2021 renewable upon mutual agreement of both parties
95 DAGUPAN-FERNANDEZ AVENUE Vicar Bldg., AB Fernandez Avenue, Dagupan City 174,188.11 June 30, 2021 renewable upon mutual agreement of both parties
96 DAGUPAN-PEREZ Siapno Bldg., Perez Boulevard, Dagupan City 140,710.04 December 31, 2022 renewable upon mutual agreement of both parties
97 DAGUPAN-TAPUAC No. 371, Tapuac District, Dagupan City, Pangasinan 77,197.05 July 10, 2021 renewable upon mutual agreement of both parties
98 DASMARIÑAS-SALAWAG Molino, Paliparan Road Brgy., Salawag, Dasmariñas City 113,764.07 November 2, 2021 renewable upon mutual agreement of both parties
99 DAVAO C.M. RECTO Hotel UNO, C.M. Recto Street, Davao City 185,272.77 May 15, 2023 renewable upon mutual agreement of both parties
100 DAVAO ORIENTAL-MATI Andrada Bldg., 56 Rizal St., Mati City, Davao Oriental 79,960.19 December 14, 2021 renewable upon mutual agreement of both parties
101 DAVAO-ABREEZA Ground Floor, Abreeza Mall, J.P. Laurel Avenue, Brgy. 20-B, Davao City 256,847.67 April 30, 2023 renewable upon mutual agreement of both parties
102 DAVAO-AIRPORT VIEW LDL Commercial Bldg., Phil-Japan Friendship Highway, Catitipan, Davao City (Fronting Davao International Airport) 107,207.65 July 31, 2023 renewable upon mutual agreement of both parties
103 DAVAO-BAJADA JP Laurel Avenue, Bajada, Davao City 174,075.58 July 30, 2021 renewable upon mutual agreement of both parties
104 DAVAO-BANGOY CHINATOWN Delgar Commercial Bldg., F. Bangoy St., Davao Ctiy 187,613.39 October 15, 2023 renewable upon mutual agreement of both parties
105 DAVAO-D. SUAZO Sta. Ana Avenue corner Damaso Suazo Street, Davao City 103,500.00 January 31, 2026 renewable upon mutual agreement of both parties
106 DAVAO-DAMOSA Damosa Business Center, Angliongto Ave., Lanang, Davao City 90,752.70 June 14, 2023 renewable upon mutual agreement of both parties

Page 5 of 7
 Exhibit 2

METROPOLITAN BANK & TRUST COMPANY

NATIONWIDE BRANCHES
UNDER LEASE
As of December 31, 2020

MONTHLY EXPIRATION TERM

BRANCHES ADDRESS RENTAL OF OF
(In Pesos) LEASE RENEWAL
107 DAVAO-DOCTORS Davao Doctors Medical Tower, Quirino Avenue, Davao City 93,256.42 March 19, 2022 renewable upon mutual agreement of both parties
108 DAVAO-ECOLAND Quimpo Blvd. Cor. Eco W. Drive, Ecoland District, Davao City 165,836.35 September 15, 2022 renewable upon mutual agreement of both parties
109 DAVAO-GAISANO J.P. LAUREL Upper Ground Level, Gaisano Mall, J.P. Laurel Ave., Davao City 119,191.75 October 31, 2020 under negotiation
110 DAVAO-I.T. PARK MATINA GF, Bldg. 2, Matina I.T. Park, McArthur Highway, Matina, Davao City 165,375.00 May 31, 2028 renewable upon mutual agreement of both parties
111 DAVAO-LANANG Insular Village Phase 1, Lanang, Davao City 94,189.58 May 31, 2025 renewable upon mutual agreement of both parties
112 DAVAO-MATINA Catotal Building, Km 5, MacArthur Highway, Matina, Davao City 83,464.76 March 15, 2023 renewable upon mutual agreement of both parties
113 DAVAO-PANABO Poblacion, Panabo, Davao del Norte 159,440.60 June 14, 2021 renewable upon mutual agreement of both parties
114 DAVAO-TIONKO Tionko Ave., Brgy. 10-A Poblacion, Davao City 112,590.61 November 15, 2026 renewable upon mutual agreement of both parties
115 DINALUPIHAN, BATAAN No. 3 San Ramon Highway, Dinalupihan, Bataan 78,000.00 October 4, 2025 renewable upon mutual agreement of both parties
116 DIPOLOG-QUEZON Grnd. Flr., Top Plaza Hotel Cor., Quezon Ave., & Echaves St., Dipolog City 163,491.67 December 31, 2020 renewable upon mutual agreement of both parties
117 DUMAGUETE-CAPITOL Victoria Residence Condominium Bldg., Capitol Front, North National Highway, Dumaguete City 89,423.24 July 15, 2023 renewable upon mutual agreement of both parties
118 FPIP-STO TOMAS, BATANGAS First Philippine Industrial Park (FPIP), Sto. Tomas, Batangas 104,714.66 July 31, 2023 renewable upon mutual agreement of both parties
119 GEN. TRIAS-CAVITE Governor’s Drive, Manggahan, Gen. Trias, Cavite 50,000.00 February 28, 2026 renewable upon mutual agreement of both parties
120 GUIGUINTO-BULACAN Puregold Guiguinto, Brgy. Sta. Cruz, Guiguinto, Bulacan 17,556.01 June 14, 2021 renewable upon mutual agreement of both parties
121 GUIGUINTO-RIS RIS 5, Industrial Complex, Tabe, Guiguinto, Bulacan 38,587.50 January 15, 2028 renewable upon mutual agreement of both parties
122 GUIUAN, EASTERN SAMAR Lugay St., Brgy. 08, Guiuan, Eastern Samar 59,639.32 July 24, 2021 renewable upon mutual agreement of both parties
123 HAGONOY-BULACAN Poblacion, Hagonoy, Bulacan 72,930.38 March 2, 2025 renewable upon mutual agreement of both parties
124 IBA-ZAMBALES G/F Magsaysay National Highway, Iba, Zambales 85,323.05 March 31, 2021 renewable upon mutual agreement of both parties
125 ILIGAN-ROXAS AVENUE Eltanal Building, Roxas Avenue corner Zamora St., Iligan City 82,730.66 September 30, 2024 renewable upon mutual agreement of both parties
126 ILOCOS NORTE-SAN NICOLAS McKinley Bldg., National Highway, San Nicolas, Ilocos Norte 103,318.04 December 31, 2022 renewable upon mutual agreement of both parties
127 ILOCOS SUR-TAGUDIN JTC Tagudin Central, Brgy. Del Pilar, National Highway, Tagudin, Ilocos Sur 61,001.15 October 30, 2024 renewable upon mutual agreement of both parties
128 ILOILO-DIVERSION ROAD JSD Bldg., 88 B.S. Aquino Avenue (Iloilo Diversion Road), Mandurriao, Iloilo City 107,427.60 October 14, 2025 renewable upon mutual agreement of both parties
129 ILOILO-GUANCO Guanco Street, Iloilo City 144,523.65 December 31, 2021 renewable upon mutual agreement of both parties
130 ILOILO-JARO JEC Diakonia Bldg. cor. Plaza Rizal & E. Lopez Sts., Jaro, Iloilo City 118,899.00 August 31, 2029 renewable upon mutual agreement of both parties
131 ILOILO-JM BASA Ground Floor, Magdalena Bldg, J.M. Basa St., Iloilo City 143,729.79 May 15, 2021 renewable upon mutual agreement of both parties
132 ILOILO-LA PAZ Rizal corner Huervana Sts., La Paz Iloilo City 177,562.67 February 15, 2021 renewable upon mutual agreement of both parties
133 ILOILO-MABINI Valiant Building, Mabini Street, Iloilo City 98,772.10 October 14, 2020 renewable upon mutual agreement of both parties
134 ILOILO-MANDURRIAO Along Q. Abeto St., Mandurriao, Iloilo City 72,203.93 November 30, 2023 renewable upon mutual agreement of both parties
135 ILOILO-OTON Gaisano Capital Oton, JC Zulueta St. cor. Benedicto St., Oton, Iloilo 82,549.89 May 17, 2023 renewable upon mutual agreement of both parties
136 ILOILO-QUINTIN SALAS Brgy. Quintin Salas, McArthur Highway, Tagbac, Jaro, Iloilo City 80,405.74 December 15, 2023 renewable upon mutual agreement of both parties
137 JAGNA, BOHOL Along National Highway, Pagina, Jagna, Bohol 90,000.00 October 7, 2026 renewable upon mutual agreement of both parties
138 KALINGA-TABUK National Highway, Brgy. Bulanao, Tabuk City, Kalinga 89,339.71 September 23, 2024 renewable upon mutual agreement of both parties
139 LA TRINIDAD-BENGUET JB78 Central Pico KM. 4, La Trinidad, Benguet 164,780.78 November 15, 2023 renewable upon mutual agreement of both parties
140 LA UNION-AGOO Sta. Barbara, National Highway, Agoo, La Union 93,712.50 September 15, 2023 renewable upon mutual agreement of both parties
141 LA UNION-BAUANG McArthur Highway, National Rd., Brgy. Central West, Bauang, La Union 81,033.75 June 15, 2024 renewable upon mutual agreement of both parties
142 LA UNION-ML QUEZON Kenny's Plaza, Quezon Ave., San Fernando City, La Union 92,466.60 March 15, 2025 renewable upon mutual agreement of both parties
143 LAOAG-GEN. SEGUNDO AVE. Gen. Segundo Avenue Laoag City 121,550.62 October 31, 2025 renewable upon mutual agreement of both parties
144 LA-UNION-SEVILLA MONUMENTO Tan Bldg., Quezon Avenue, National Highway, Brgy. Sevilla, San Fernando City, La Union 99,285.01 May 15, 2021 renewable upon mutual agreement of both parties
145 LEGAZPI-ALBAY DISTRICT 863 Rizal St., Albay District, Legazpi City 62,053.13 October 25, 2021 renewable upon mutual agreement of both parties
146 LEGAZPI-MARISON Marison Plaza, Tahao Rd. cor. Lakandula Dr., Brgy 38, Gogon, Legazpi City 89,600.00 December 31, 2029 renewable upon mutual agreement of both parties
147 LEYTE-PALO CATHEDRAL Cathedral Compound Cor. Brgy. Luntad & Maharlika Highway, Palo, Leyte 626,234.90 May 22, 2039 renewable upon mutual agreement of both parties
148 LEYTE-PALOMPON Ipil 1, Public Market, Palompon, Leyte 28,410.03 July 15, 2023 renewable upon mutual agreement of both parties
149 LIGAO CITY, ALBAY Chua Kim Chio Bldg., McKinley St., Ligao City, Albay 103,274.14 September 15, 2021 renewable upon mutual agreement of both parties
150 LIPA-AYALA Ayala Highway, Brgy. San Carlos, (Lipa by-pass) Lipa City 99,343.16 November 30, 2024 renewable upon mutual agreement of both parties
151 LIPA-CATHEDRAL Brgy . 9A, C.M. Recto Ave., Lipa City 140,000.00 December 19, 2030 renewable upon mutual agreement of both parties
152 LIPA-TAMBO National Road, Brgy. Tambo, Lipa City 61,261.52 August 15, 2024 renewable upon mutual agreement of both parties
153 LOS BAÑOS Olivarez Plaza, National Highway, Los Banos, Laguna 147,006.40 November 30, 2029 renewable upon written agreement of both parties
154 LUCENA-IYAM ML Tagarao St., Gaisano/Pacific Mall Compound, Iyam, Lucena City 73,872.72 August 15, 2031 renewable upon mutual agreement of both parties
155 LUCENA-RED V 5365 Dalahican Road, Purok 1, Little Baguio, Red-V, Lucena City 60,775.31 September 14, 2025 renewable upon mutual agreement of both parties
156 MALOLOS-CABANAS The Cabanas, KM 44/45, Mac Arthur Highway, Malolos City 49,470.84 October 31, 2023 renewable upon mutual agreement of both parties
157 MALOLOS-MC ARTHUR HIGHWAY CARZEN Bldg. MacArthur Highway, Malolos City 139,619.54 November 15, 2020 under negotiation
158 MAASIN, SOUTHERN LEYTE Tomas Oppus St., Maasin City, Southern Leyte 88,647.33 September 15, 2022 renewable upon mutual agreement of both parties
159 MASBATE Zurbito Street, Masbate 80,000.00 June 15, 2026 renewable upon mutual agreement of both parties
160 MEYCAUAYAN-IBA 287 Iba Road, Brgy. Iba, Meycauayan City, Bulacan 101,581.59 October 31, 2026 renewable upon mutual agreement of both parties
161 MIDSAYAP ML Quezon Ave., Poblacion 6, Midsayap, Cotabato 89,386.55 January 31, 2021 renewable upon mutual agreement of both parties
162 MISAMIS OCCIDENTAL-OROQUIETA Mayor Enerio St., Pob. 2, Oroquieta City, Miss. Occ. 44,323.66 August 14, 2026 renewable upon mutual agreement of both parties
163 NAGA-ROXAS AVENUE Doña Dolores Bldg., Diversion Road, Naga City 79,360.46 May 14, 2022 renewable upon mutual agreement of both parties
164 NASUGBU-BATANGAS J.P. Laurel corner R. Martinez Sts., Nasugbu, Batangas 110,809.16 October 15, 2022 renewable upon mutual agreement of both parties
165 NAVAL-BILIRAN Along Ballesteros St., Brgy. Santissimo Rosario, Naval, Biliran 50,000.00 August 15, 2024 renewable upon mutual agreement of both parties
166 NEGROS OCCIDENTAL-CADIZ CITY Villena St., Cadiz City, Negros Occidental 68,545.89 August 31, 2024 renewable upon mutual agreement of both parties
167 NEGROS OCCIDENTAL-KABANKALAN CITY Mercedes Bldg., Brgy. 5 Guanzon St., Public Plaza, Kabankalan City, Negros Occidental 62,013.00 December 31, 2029 renewable upon mutual agreement of both parties
168 NORTHERN SAMAR-LAOANG-RAWIS Brgy. Rawis, Laoang, Northern Samar 50,540.75 January 15, 2025 renewable upon mutual agreement of both parties

Page 6 of 7
 Exhibit 2

METROPOLITAN BANK & TRUST COMPANY

NATIONWIDE BRANCHES
UNDER LEASE
As of December 31, 2020

MONTHLY EXPIRATION TERM

BRANCHES ADDRESS RENTAL OF OF
(In Pesos) LEASE RENEWAL
169 NUEVA ECIJA-GUIMBA Faigal St., Sto. Cristo, Guimba, Nueva Ecija 83,018.92 October 15, 2024 renewable upon mutual agreement of both parties
170 NUEVA ECIJA-TALAVERA Marcos District, Maharlika Highway, Brgy. Marcos Talavera, Nueva Ecija 84,785.26 March 26, 2022 renewable upon mutual agreement of both parties
171 NUEVA VIZCAYA-BAMBANG National Highway, Banggot, Bambang, Nueva Vizcaya 82,958.30 October 15, 2029 renewable upon mutual agreement of both parties
172 OCCIDENTAL MINDORO-MAMBURAO Rizal cor. San Isidro Sts., Poblacion, Mamburao, Occidental Mindoro 33,502.39 September 30, 2024 renewable upon mutual agreement of both parties
173 ORIENTAL MINDORO-PINAMALAYAN Armando Mariano Bldg. corner Mabini St. and Quezon St., Pinamalayan Oriental Mindoro 58,535.38 July 15, 2022 renewable upon mutual agreement of both parties
174 ORMOC-COGON Lilia Ave., Cogon, Ormoc City 130,554.09 November 30, 2025 renewable upon mutual agreement of both parties
175 PAGADIAN-STA. LUCIA J.P. Rizal Avenue, Pagadian City 105,871.50 May 31, 2021 renewable upon mutual agreement of both parties
176 PALAWAN-CORON #45 Don Pedro St., Brgy. 2, Coron, Palawan 42,213.01 August 31, 2023 renewable upon mutual agreement of both parties
177 PALAWAN-EL NIDO Sea Shell Hotel, Rizal and Real Sts., Brgy. Buena Suerte, El Nido, Palawan 150,640.00 February 28, 2024 renewable upon mutual agreement of both parties
178 PAMPANGA-LUBAO VIMA Bldg., Jose Abad Santos Ave. (JASA), Sta. Cruz, Lubao, Pampanga 60,802.87 October 15, 2023 renewable upon mutual agreement of both parties
179 PANGASINAN-BAYAMBANG Rizal Avenue, Poblacion Sur, Bayambang, Pangasinan 93,079.69 November 15, 2021 renewable upon mutual agreement of both parties
180 PANGASINAN-LINGAYEN Avenida Rizal East, Lingayen, Pangasinan 127,628.16 June 15, 2025 renewable upon mutual agreement of both parties
181 PANGASINAN-MANGALDAN Casa Filomena, 546 Rizal Avenue, Mangaldan, Pangasinan 60,786.74 July 15, 2023 renewable upon mutual agreement of both parties
182 PANGASINAN-MANGATAREM Brgy. Poblacion, Mangatarem, Pangasinan 66,852.84 October 15, 2029 renewable upon mutual agreement of both parties
183 PASEO DE STA. ROSA Paseo 5, Paseo de Sta. Rosa, Greenfield City, Sta. Rosa, Laguna 142,137.88 July 31, 2020 under negotiation
184 PUERTO PRINCESA-SAN PEDRO Along National Highway, Brgy. San Pedro, Puerto Princesa, Palawan 168,430.55 August 12, 2026 renewable upon mutual agreement of both parties
185 PULILAN, BULACAN Doña Remedios Trinidad, National Highway, Sto. Cristo, Pulilan, Bulacan 93,079.69 September 15, 2021 renewable upon mutual agreement of both parties
186 QUEZON-CANDELARIA Maharlika Highway, Poblacion, Candelaria, Quezon 79,150.24 September 15, 2022 renewable upon mutual agreement of both parties
187 ROSARIO-BATANGAS Gualberto Ave., Brgy. D. Poblacion, Rosario, Batangas (beside Tan Wanam Grocery) 69,809.77 December 14, 2021 renewable upon mutual agreement of both parties
188 ROXAS-ARNALDO BLVD. Unit 10 & 11 Gaisano Arcade Comm'l Complex, Arnaldo Blvd., Roxas City 100,011.85 March 31, 2023 renewable upon mutual agreement of both parties
189 ROXAS-ISABELA No. 34 National Road cor. Gen. A. Luna St. Bantug Roxas,Isabela 104,585.00 January 11, 2025 renewable upon mutual agreement of both parties
190 SAN CARLOS, PANGASINAN Mabini St., San Carlos City, Pangasinan 67,553.01 February 28, 2021 renewable upon the option of the lessee
191 SAN FERNANDO-DOLORES MCARTHUR LK Bldg., Dolores City, San Fernando, Pampanga 85,745.46 June 30, 2021 renewable upon mutual agreement of both parties
192 SAN FERNANDO-MAC ARTHUR HI-WAY Medical Arts Bldg. Mother Theresa of Calcutta Medical Center Mac Arthur Hiway, Brgy. Maimpis San Fernando City, Pampanga 110,504.22 September 19, 2025 renewable upon mutual agreement of both parties
193 SAN FERNANDO-SINDALAN McArthur Highway, Sindalan, San Fernando Pampanga 151,248.70 December 15, 2023 renewable upon the option of the lessee
194 SAN JOSE DEL MONTE-MUZON Carriedo St., Zone 3, Brgy. Muzon, San Jose Del Monte City, Bulacan 93,663.44 May 31, 2027 renewable upon the option of the lessee
195 SAN PEDRO-LAGUNA National Highway, San Pedro, Laguna 220,500.00 May 1, 2024 renewable upon mutual agreement of both parties
196 SAN PEDRO-SHOPWISE PACITA Shopwise San Pedro, Along National Highway, Brgy. Landayan, Pacita Complex, San Pedro, Laguna 85,766.12 June 30, 2020 under negotiation
197 SANTIAGO CITY ROAD G/F and 2/F Commercial Bldg., City Road Centro, West Santiago City 63,350.00 November 30, 2025 renewable upon mutual agreement of both parties
198 SIQUIJOR-SIQUIJOR Brgy. Poblacion, Siquijor, Siquijor 27,562.50 October 13, 2029 renewable upon mutual agreement of both parties
199 SOGOD, SOUTHERN LEYTE Along J.P. Rizal Street, Sogod, Southern Leyte 101,868.10 May 30, 2024 renewable upon mutual agreement of both parties
200 SORSOGON Magsaysay cor. Nening Berenguer St., Sorsogon, Sorsogon 91,836.47 July 28, 2022 renewable upon mutual agreement of both parties
201 SOUTH COTABATO-POLOMOLOK Gaisano Grand Mall Polomolok, GL 06 & GL 07, Polomolok, South Cotabato 83,140.63 March 31, 2024 renewable upon mutual agreement of both parties
202 STA. MARIA-BAGBAGUIN Along F. Halili Ave., Bagbaguin, Sta. Maria, Bulacan 85,000.00 October 15, 2025 renewable upon mutual agreement of both parties
203 STA.CRUZ-LAGUNA 1527 P. Guevarra St., Sta. Cruz, Laguna 112,568.03 June 15, 2023 renewable upon mutual agreement of both parties
204 SUBIC BARACA Lot 83 National Highway, Baraca-Camachile, Subic, Zambales 169,785.00 July 14, 2023 renewable upon mutual agreement of both parties
205 SUBIC BAY Bldg. 640, Sampson Rd., Subic Bay Freeport Zone, Zambales, Olongapo City 89,644.15 July 15, 2021 renewable upon mutual agreement of both parties
206 SURIGAO DEL SUR-TANDAG Along National Highway, Brgy. Mabua, Tandag City, Surigao del Sur 61,644.40 October 31, 2023 renewable upon mutual agreement of both parties
207 SURIGAO-GAISANO CAPITAL MALL Gaisano Capital Mall, GF, Unit 01, KM4 Brgy. Luna, National Highway, Surigao City 71,092.07 September 16, 2023 renewable upon mutual agreement of both parties
208 TACLOBAN-MARASBARAS Marasbaras National Highway Tacloban City 125,583.71 January 31, 2030 renewable upon mutual agreement of both parties
209 TAGBILARAN-COGON JUNEVIL Bldg., Belderol Street, Cogon District, Tagbilaran City 80,086.95 July 31, 2025 renewable upon mutual agreement of both parties
210 TAGBILARAN-MAIN Alturas Mall, B. Inting St., Tagbilaran City, 6300 Bohol 102,580.00 December 31, 2020 renewable upon mutual agreement of both parties
211 TAGUM-APOKON Apokon Road, Magugpo East, Tagum City 84,092.23 September 30, 2023 renewable upon mutual agreement of both parties
212 TARLAC-CAPAS City Center, Capas Bldg., McArthur Highway, Capas, Tarlac 64,860.63 October 31, 2025 renewable upon mutual agreement of both parties
213 TAWI TAWI-BONGAO Awwal St., Bongao, Tawi-Tawi 79,853.83 November 15, 2028 renewable upon mutual agreement of both parties
214 TAYUG, PANGASINAN Bonifacio St., National Highway, Tayug, Pangasinan 60,683.33 January 31, 2026 renewable upon option of the lessee
215 TUBIGON, BOHOL Jose P. Dual cor. Salustiano Baura St., Centro, Tubigon, Bohol 66,916.25 October 15, 2021 renewable upon mutual agreement of both parties
216 TUGUEGARAO-BALZAIN Balzain Highway, Tuguegarao City, Cagayan 99,721.13 August 31, 2024 renewable upon mutual agreement of both parties
217 TUGUEGARAO-BUNTUN Buntun Highway, Tuguegarao City 90,617.23 February 28, 2026 renewable upon mutual agreement of both parties
218 URDANETA-NANCAYASAN S. Com Bldg., MacArthur Highway, Nancayasan, Urdaneta City, Pangasinan 81,682.02 May 30, 2024 renewable upon mutual agreement of both parties
219 VIGAN Quezon Avenue, Vigan Ilocos Sur 143,869.00 May 15, 2021 renewable upon mutual agreement of both parties
220 VIGAN-MARKET Nieves Commercial Ctr., Alcantara St., Vigan City 128,403.77 November 14, 2022 renewable upon mutual agreement of both parties
221 ZAMBOANGA DEL SUR-MOLAVE Along Rizal Avenue, Molave, Zamboanga Del Sur 45,946.14 March 31, 2024 renewable upon mutual agreement of both parties
222 ZAMBOANGA SIBUGAY-IPIL National Highway, Poblacion Ipil, Zamboanga Sibugay 52,766.27 August 15, 2031 renewable upon mutual agreement of both parties
223 ZAMBOANGA-CANELAR Mayor Jaldon Street, Canelar, Zamboanga City 131,354.06 August 17, 2024 renewable upon mutual agreement of both parties
224 ZAMBOANGA-GUIWAN National Highway, Brgy. Guiwan, Zamboanga City 113,138.95 September 14, 2023 renewable upon mutual agreement of both parties
225 ZAMBOANGA-LA PURISIMA GF, Senior High School Bldg. (SHS), Ateneo de Zamboanga University, La Purisima St., Zamboanga City 185,046.91 September 15, 2028 renewable upon mutual agreement of both parties
226 ZAMBOANGA-NUÑEZ EXT Nunez Extension, Zamboanga City 126,474.89 January 3, 2025 renewable upon mutual agreement of both parties

Page 7 of 7
 Exhibit 3

METROPOLITAN BANK & TRUST COMPANY

EVENTS PREVIOUSLY REPORTED UNDER
SEC FORM 17-C (CURRENT REPORT)
FOR THE YEAR ENDED DECEMBER 31, 2020 AND
INTERIM PERIOD ENDED APRIL 5, 2021

Particulars Date of Report

1 On January 3, 2020, SEC approved the merger of MCC with Metrobank. January 13, 2020
2 As a result of the release of the SEC approval of the merger between Metrobank and MCC, the January 13, 2020
appointment of officers/change in designation of personnel follows:
a. President of MCC, Ramon Jaime L.V. Del Rosario, is considered as Senior Vice-President
(SVP), Head of the Cards and Personal Credit (CPC) Sector of Metrobank
b. Hiroko Mercene Castro, SVP, CPC Head of Credit Operations Group
c. Cesar Potenciano Nicolasora, Jr., SVP, CPC Head of Finance Group
d. Harrison Chua Gue, SVP, CPC Head of Operations Group
e. Aloysius Consigna Alday, Jr., SVP, Head of Prepaid and Insurance Business Group
f. Anna Therese Rita Dela Cruz Cuenco, SVP, CPC Head of Consumer Lending Group
3 Metrobank received the approval of BSP dated January 10, 2020 to issue LTNCDs up to Php25 January 15, 2020
billion at a minimum of Php2 billion per tranche over a period of one year from BSP approval,
and at a tenor of 5.5 years up to 10 years subject to market conditions.
4 The BOD of Metrobank approved the holding of ASM on Wednesday April 22, 2020 at 2:00 January 15, 2020
p.m., with March 9, 2020 as the record date. The BOD also granted the President the authority
to change the date, time and place of the meeting as well as the Record Date as may be
required by exigencies.
5 Metrobank submitted copies of its Published Balance Sheet and Consolidated Balance Sheet as February 4, 2020
of December 31, 2019.
6 The BOD of Metrobank approved the declaration of a 5% regular cash dividend to be paid to February 19, 2020
all stockholders as of March 6, 2020 record date, with March 20, 2020 as the payment date.
7 The BOD of Metrobank on its meeting held on February 19, 2020 approved to exercise the call February 19, 2020
option on the Php6.5 billion subordinated debt (the “Note”) on August 8, 2020 (Call Option
Date). This is in accordance with the Terms and Conditions of the Note.
8 Press Release: Metrobank reports robust 27% income growth in 2019. February 20, 2020
9 Metrobank submitted a copy of the Audited Financial Statements of Metropolitan Bank & February 20, 2020
Trust Company and Subsidiaries as of December 31, 2019 and 2018 and for the years ended
December 31, 2019, 2018 and 2017 and the corresponding Management Discussion and
Analysis.
10 Press Release: Metrobank activates protocols to ensure minimal business disruption. March 16, 2020
11 The BOD of Metrobank on its meeting held on March 23, 2020 approved the Amendment of its March 24, 2020
Articles of Incorporation to Create a New Class of Shares.

Currently, the Bank’s capital structure has common and non-voting preferred shares only. The
proposal is to convert a fraction of the non-voting preferred shares.
a. Out of the 1 billion non-voting preferred shares with par value of Php20.00 or a total of
Php20.0 billion, the proposal is to carve out 6 billion preferred shares with a par value of
Php0.20 per share, or a total of Php1.2 billion.
b. The balance of Php18.8 billion will be maintained as non-voting preferred shares, with the
same original par value of Php20.00 equivalent to 940 million shares.
c. The total authorized capital will be maintained at Php140.0 billion, allocated to Php120.0
billion for common shares and Php20.0 billion for Preferred shares (voting and non-voting).
12 Metrobank informed its valued stakeholders of the postponement of the Bank’s ASM initially March 31, 2020
scheduled on April 22, 2020 due to the ongoing COVID-19 situation and the implementation of
the Enhanced Community Quarantine in various parts of the country.

The Bank supports the call of the government to combat the spread of COVID-19 and has
taken the necessary preventive measures to protect the safety and welfare of their customers,
people and all stakeholders. Furthermore, the Bank is committed to continue doing its best to
serve the Filipino people during these trying times.

Page 1of 3
 Particulars Date of Report
13 The BOD of Metrobank on its meeting held on April 22, 2020 approved May 28, 2020 as the April 23, 2020
new date of the ASM. Due to the COVID-19 situation, there will be no physical venue for the
Meeting. The meeting will be held purely on virtual mode. The registration and voting
procedures will be announced on PSE edge and posted on the Company’s website.
14 Metrobank will hold an Earnings Call on May 4, 2020 (Monday), at 4:00 p.m. to discuss the April 28, 2020
Bank’s financial results for the first quarter of 2020.
15 Press Release: Metrobank reports 1Q income of P6.1B; Boosts reserves to anticipate pandemic April 30, 2020
impact.
16 Metrobank reported the detailed instruction to stockholders if they wish to attend the Meeting May 6, 2020
via remote communication, or submit a proxy if they cannot attend the Meeting but wish to be
represented. The relevant link to the Company’s website is also provided, as well as email
addresses to where questions may be sent regarding the registration, submission of proxy and
generally, the conduct of the Meeting by the Company.
17 The Bank received BSP’s approval of the Call Option on the P6.5 Billion Subordinated Debt May 12, 2020
on August 8, 2020.
18 Metrobank submitted copies of its Published Balance Sheet and Consolidated Balance Sheet as May 22, 2020
of March 31, 2020
19 The BOD has decided not to pursue with the Amendment of Articles of Incorporation to create May 27, 2020
a new class of shares
20 Amendment on the Notice of ASM: The BOD of Metrobank has decided not to include the May 27, 2020
proposed amendment of Articles of Incorporation to create a new class of shares in the list of
items for presentation during the Annual Shareholder’s Meeting.
21 Metrobank reported the results of the ASM held on May 28, 2020 via CISCO Webex Events May 28, 2020
application. Due to the COVID-19 pandemic, no physical venue was provided for the Meeting.
The Stockholders’ approved the following items included in the Agenda:
1. Minutes of the ASM Meeting held on April 24, 2019;
2. Ratification of all Acts and Resolutions of the BOD, Management and all
Committees from April 24, 2019 to May 27, 2020;
3. Election of Directors for 2020 to 2021; and
4. Appointment of SGV & Co. as External Auditor for the year 2020 to 2021.
Votes casts during the Meeting were conducted by the Company’s Stock Transfer Agent and
validated by SGV & Co.
22 Metrobank reported the following items that were approved during the Organizational Meeting May 28, 2020
of the BOD on May 28, 2020:
1. Appointment of the Chairman, Vice-Chairman, President, Treasurer, Corporate
Secretary, Assistant Corporate Secretary, Senior Advisers and Advisers.
2. Reconstitution of the members of the Board-level Committee
23 Press Release: Metrobank closes offer period early for its Php Senior Bonds. June 5, 2020
24 Press Release: Metrobank is planning to issue a Reg S only 5.5-year USD-denominated Senior July 3, 2020
Unsecured Notes.
25 Press Release: Metrobank successfully prices US$500 million 2.125% 5.5-year Senior July 8, 2020
Unsecured Fixed Rate Notes.
26 Metrobank will hold an Earnings Call on August 4, 2020 (Tuesday), at 9:00 a.m. to discuss the July 29, 2020
Bank’s financial results for the first half of 2020.
27 Press Release: Metrobank posts 1H income of P9.1 billion; continues to build up reserves. July 31, 2020
28 Metrobank submitted copies of its Published Balance Sheet and Consolidated Balance Sheet as September 2, 2020
of June 30, 2020.
29 Designation of Mr. Hierbert A. Dimagiba is updated to SVP, Head, Analytics, Brand, October 6, 2020
Communications and Marketing Technology Group from SVP, Head, Analytics, Brand &
Communications Marketing Division.
30 The BOD of Metrobank on its regular meeting held on October 21, 2020 approved the hiring of October 21, 2020
Ms. Minda Claver A. Olonan with the rank of First Vice President as Head of Investor
Relations Department effective November 16, 2020.
31 Retirement of Ms. Marilou Bartolome-Cirilo as SVP/Head, Controllership Group effective October 21, 2020
December 1, 2020 and the hiring of Mr. Renato K. De Borja Jr. as SVP/Head, Controllership
Group effective November 16, 2020.
32 Metrobank will hold an Earnings Call on November 4, 2020 (Wednesday), at 4:00 p.m. to October 29, 2020
discuss the Bank’s financial results for the first nine months of 2020.
33 Press Release: Metrobank’s income before provisions surged 41%; 9M net profit at P11.0 October 30, 2020
billion.
34 Metrobank submitted copies of its Published Balance Sheet and Consolidated Balance Sheet as October 30, 2020
of September 30, 2020.

Page 2 of 3
 Particulars Date of Report
35 Retirement of Ms. Vivian L. Tiu as EVP/Head, Human Resource Management Group and the January 11, 2021
change in designation of Mr. Homer Gerrard L. Ortega to SVP/Head, Human Resource
Management Group effective February 1, 2021.
36 The BOD of Metrobank approved the holding of ASM on Wednesday, April 28, 2021 at 2:00 January 20, 2021
PM with March 12, 2021 as the Record Date. The meeting will be held purely on virtual mode
via Cisco Webex.
37 Retirement of Ms. Maritess B. Antonio as Head, Risk Management Group/Chief Risk Officer January 20, 2021
and the appointment of Mr. Christian D. San Juan as Head, Risk Management Group/Chief
Risk Officer effective February 1, 2021.
38 Appointment of Mr. Christian D. San Juan as Head, Risk Management Group/Chief Risk January 21, 2021
Officer. He has 23 years of banking experience and has been the Deputy Head of Metrobank’s
Risk Management Group since July 2017. Previous to that, he was the Basel Risk Officer/Head
of the Credit and Group Risk Division of Rizal Commercial and Banking Corporation. He
graduated with B.A. in Economics from the Ateneo De Manila University.
39 Metrobank submitted copies of its Published Balance Sheet and Consolidated Balance Sheet as February 2, 2021
of December 31, 2020.
40 Metrobank will hold an Earnings Call on February 22, 2021 (Monday), at 4:00 p.m. to discuss February 16, 2021
the Bank’s financial results for the full-year 2020.
41 Press Release: Metrobank reports net income at P13.8 billion; issues special dividends on February 17, 2021
strong capital position.
42 The BOD of Metrobank approved the declaration of P1.00 regular and P3.00 special cash February 17, 2021
dividend to be paid to all stockholders as of March 5, 2021 record date, with March 18, 2021 as
the payment date.
43 Metrobank submitted a copy of the Audited Financial Statements of Metropolitan Bank & February 17, 2021
Trust Company and Subsidiaries as of December 31, 2020 and 2019 and for the years ended
December 31, 2020, 2019 and 2018 and the corresponding Management Discussion and
Analysis.
44 Uploading of Notice of Meeting with detailed instructions to stockholders on how to register, April 5, 2021
join and vote at the Meeting including via proxy or in absentia. The meeting will be held via
https://conveneagm.com/ph/metrobank_asm2021

Page 3 of 3
EXHIBIT 46
 SyCip Gorres Velayo & Co. Tel: (632) 8891 0307 BOA/PRC Reg. No. 0001,
6760 Ayala Avenue Fax: (632) 8819 0872 October 4, 2018, valid until August 24, 2021
1226 Makati City ey.com/ph SEC Accreditation No. 0012-FR-5 (Group A),
Philippines November 6, 2018, valid until November 5, 2021

INDEPENDENT AUDITOR’S REPORT

The Board of Directors and Stockholders

Metropolitan Bank & Trust Company
Metrobank Plaza, Sen. Gil Puyat Avenue
Urdaneta Village, Makati City
Metro Manila, Philippines

Report on the Consolidated and Parent Company Financial Statements

Opinion

We have audited the consolidated financial statements of Metropolitan Bank & Trust Company and its
subsidiaries (the Group) and the parent company financial statements of Metropolitan Bank & Trust
Company (the Parent Company), which comprise the consolidated and parent company statements of
financial position as at December 31, 2020 and 2019, and the consolidated and parent company
statements of income, consolidated and parent company statements of comprehensive income,
consolidated and parent company statements of changes in equity and consolidated and parent company
statements of cash flows for each of the three years in the period ended December 31, 2020, and notes to
the consolidated and parent company financial statements, including a summary of significant accounting
policies.

In our opinion, the accompanying consolidated and parent company financial statements present fairly, in
all material respects, the financial position of the Group and the Parent Company as at December 31,
2020 and 2019, and their financial performance and their cash flows for each of the three years in the
period ended December 31, 2020, in accordance with Philippine Financial Reporting Standards (PFRS).

Basis for Opinion

We conducted our audits in accordance with Philippine Standards on Auditing (PSAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit
of the Consolidated and Parent Company Financial Statements section of our report. We are independent
of the Group and the Parent Company in accordance with the Code of Ethics for Professional
Accountants in the Philippines (Code of Ethics) together with the ethical requirements that are relevant to
our audit of the consolidated and parent company financial statements in the Philippines, and we have
fulfilled our other ethical responsibilities in accordance with these requirements and the Code of Ethics.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our opinion.

*SGVFSM005911*
A member firm of Ernst & Young Global Limited
 -2-

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our
audit of the consolidated and parent company financial statements of the current period. These matters
were addressed in the context of our audit of the consolidated and parent company financial statements as
a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
For each matter below, our description of how our audit addressed the matter is provided in that context.

We have fulfilled the responsibilities described in the Auditor’s Responsibilities for the Audit of the
Consolidated and Parent Company Financial Statements section of our report, including in relation to
these matters. Accordingly, our audit included the performance of procedures designed to respond to our
assessment of the risks of material misstatement of the consolidated and parent company financial
statements. The results of our audit procedures, including the procedures performed to address the
matters below, provide the basis for our audit opinion on the accompanying consolidated and parent
company financial statements.

Applicable to the audit of the consolidated and parent company financial statements

Allowance for Credit Losses

The Group’s and the Parent Company’s application of the expected credit loss (ECL) model in calculating
the allowance for credit losses on loans and receivables is significant to our audit as it involves the
exercise of significant management judgment. Key areas of judgment include: segmenting the Group’s
and the Parent Company’s credit risk exposures; determining the method to estimate ECL; defining
default; identifying exposures with significant deterioration in credit quality, taking into account
extension of payment terms and payment holidays provided as a result of the coronavirus pandemic;
determining assumptions to be used in the ECL model such as the counterparty credit risk rating, the
expected life of the financial asset, expected recoveries from defaulted accounts, and impact of any
financial support and credit enhancements extended by any party; and incorporating forward-looking
information, including the impact of the coronavirus pandemic, in calculating ECL.

Allowance for credit losses as of December 31, 2020 for the Group and the Parent Company amounted to
=55.2 billion and =
P P44.4 billion, respectively. Provision for credit losses of the Group and the Parent
Company in 2020 amounted to = P40.8 billion and =
P32.7 billion, respectively.

Refer to Notes 2, 3 and 15 of the financial statements for the disclosure on the details of the allowance for
credit losses using the ECL model.

Audit response
We obtained an understanding of the board approved methodologies and models used for the Group’s and
the Parent Company’s different credit exposures and assessed whether these considered the requirements
of PFRS 9, Financial Instruments to reflect an unbiased and probability-weighted outcome, and to
consider time value of money and the best available forward-looking information.

*SGVFSM005911*
A member firm of Ernst & Young Global Limited
 -3-

We (a) assessed the Group’s and the Parent Company’s segmentation of its credit risk exposures based on
homogeneity of credit risk characteristics; (b) tested the definition of default and significant increase in
credit risk criteria against historical analysis of accounts, credit risk management policies and practices in
place, and management’s assessment of the impact of the coronavirus pandemic on the counterparties;
(c) tested the Group’s and the Parent Company’s application of internal credit risk rating system,
including the impact of the coronavirus pandemic on the borrowers, by reviewing the ratings of sample
credit exposures; (d) assessed whether expected life is different from the contractual life by testing the
maturity dates reflected in the Group’s and the Parent Company’s records and considering management’s
assumptions regarding future collections, advances, extensions, renewals and modifications; (e) tested
loss given default by inspecting historical recoveries and related costs, write-offs and collateral
valuations, and the effects of any financial support and credit enhancements provided by any party;
(f) tested exposure at default considering outstanding commitments and repayment scheme; (g) checked
the forward-looking information used for overlay through statistical test and corroboration using publicly
available information and our understanding of the Group’s and the Parent Company’s lending portfolios
and broader industry knowledge, including the impact of the coronavirus pandemic; and (h) tested the
effective interest rate used in discounting the expected loss.

Further, we checked the data used in the ECL models by reconciling data from source system reports to
the data warehouse and from the data warehouse to the loss allowance analysis/models and financial
reporting systems. To the extent that the loss allowance analysis is based on credit exposures that have
been disaggregated into subsets of debt financial assets with similar risk characteristics, we traced or
re-performed the disaggregation from source systems to the loss allowance analysis. We also assessed
the assumptions used where there are missing or insufficient data.

We recalculated impairment provisions on a sample basis. We involved our internal specialists in the
performance of the above procedures. We reviewed the completeness of the disclosures made in the
financial statements.

Accounting for Disposals of Investment Securities under a Hold-to-collect Business Model

In 2020, the Group and the Parent Company disposed investment securities managed under the
hold-to-collect (HTC) business model with aggregate carrying amount of = P113.4 billion and
=93.9 billion, respectively. The disposals resulted in a gain of =
P P8.2 billion for the Group and =
P6.9 billion
for the Parent Company. Investment securities held under an HTC business model, which are classified
as ‘Investment securities at amortized cost’, are managed to realize cash flows by collecting contractual
payments over the life of the instrument.

The accounting for the disposals is significant to our audit because the amounts involved are material
(45.1% and 43.3% of the total investment securities at amortized cost of the Group and the Parent
Company, respectively, and 5.7% and 6.1% of the total operating income of the Group and Parent
Company, respectively). Moreover, it involves the exercise of significant judgment by management in
assessing whether the disposals are consistent with the HTC business model or that they resulted from a
change in business model. A change in business model would impact the measurement of the remaining
securities in the affected portfolios. Under PFRS 9, a change in business model is expected to be very
infrequent as it must be significant to the Group’s and the Parent Company’s operations and demonstrable
to external parties.

*SGVFSM005911*
A member firm of Ernst & Young Global Limited
 -4-

Refer to Note 8 of the financial statements for the disclosure on the disposals of investment securities at
amortized cost and change in business model.

Audit response
We obtained an understanding of the Group’s and the Parent Company’s objectives for disposals of
investment securities at amortized cost through inquiries with management and review of approved
internal documentations, including governance over the disposals. We evaluated management’s
assessment of the impact of the disposals in reference to the Group’s and the Parent Company’s business
models and the provisions of the relevant accounting standards and regulatory issuances. For disposals
resulting from change in business model of the Parent Company, we reviewed the new business model
documentation to check whether the new policies and procedures for managing the investment securities
reflect the change in the objective of the business model. We also reviewed the calculation of the gains
on the disposals and the measurement of the remaining securities in the affected portfolios. We reviewed
the reclassification adjustment made by the Parent Company based on the requirements of PFRS 9.

We reviewed the disclosures related to the disposals and change in business model based on the
requirements of PFRS 7, Financial Instruments: Disclosures, PFRS 9 and Philippine Accounting
Standard (PAS 1), Presentation of Financial Statements.

Realizability of Deferred Tax Assets

As of December 31, 2020, the deferred tax assets of the Group and the Parent Company amounted to
=14.0 billion and =
P P11.4 billion, respectively. The recognition of deferred tax assets is significant to our
audit because it requires significant judgment and is based on assumptions such as availability of future
taxable income and the timing of the reversal of the temporary differences that are affected by expected
future market or economic conditions and the expected performance of the Group and the Parent
Company. The estimation uncertainty on the Group’s and Parent Company’s expected performance has
increased as a result of the uncertainties brought about by the coronavirus pandemic.

The disclosures in relation to deferred income taxes are included in Note 28 of the financial statements.

Audit Response
We involved our internal specialist in interpreting the tax regulations, testing the temporary differences
identified by the Group and the Parent Company and the applicable tax rate. We also re-performed the
calculation of the deferred tax assets. We reviewed the management’s assessment on the availability of
future taxable income in reference to financial forecast and tax strategies. We evaluated management’s
forecast by comparing the loan portfolio and deposit growth rates to the historical performance of the
Group and Parent Company and the industry, including future market circumstances and taking into
consideration the impact associated with the coronavirus pandemic.

*SGVFSM005911*
A member firm of Ernst & Young Global Limited
 -5-

Applicable to the audit of the consolidated financial statements

Recoverability of Investments in Associates and a Joint Venture

The Group assesses the impairment of its investments in associates and a joint venture whenever events
or changes in circumstances indicate that the carrying amount of the investments may not be recoverable.
As of December 31, 2020, the Group has an investment in associate amounting to = P1.9 billion whose fair
value has declined significantly from acquisition cost. The Group performed impairment testing by
calculating both the fair value less costs to sell (FVLCTS) and value-in-use (VIU) to determine the higher
amount that should be used as the recoverable amount. We considered the impairment testing of the
Group’s investment in this associate as a key audit matter as significant judgment and estimates are
involved in the determination of the investment’s VIU.

The disclosures relating to investments in associates and a joint venture are included in Notes 3 and 11 to
the financial statements.

Audit response
We discussed with management the investee’s current business performance and prospects and how these
were reflected in the Group’s VIU calculation. We involved our internal specialist in evaluating the
methodology and assumptions used. We compared the expected production volume and capital
expenditures used in the calculation to the historical performance and plans of the investee, and the price
assumption, exchange rates and long-term growth rate to available industry, economic and financial data
including consensus market forecasts and the impact of the coronavirus pandemic. We also tested whether
the discount rate used represents current market assessment of risks associated with the investment.

Recoverability of Goodwill
As of December 31, 2020, the Group has goodwill amounting to = P5.2 billion as a result of various
business acquisitions. Under PFRS, the Group is required to annually test the amount of goodwill for
impairment. The Group performed the impairment testing using the cash generating unit’s (CGU)
FVLCTS. The annual impairment test is significant to our audit because the determination of the CGU’s
FVLCTS requires significant judgment and is based on assumptions which are subject to higher level of
estimation uncertainty due to the current economic conditions which have been impacted by the
coronavirus pandemic. The CGU’s assets include significant investments in unquoted equity shares and
their fair values were determined using price-to-earnings (P/E) ratios of comparable companies and
adjusted net asset valuation (NAV) method. Other assets of the CGU include investments in quoted
equity shares and debt financial assets, and real properties, while liabilities include unquoted debt
financial liabilities.

The disclosures relating to goodwill are included in Notes 3 and 11 to the financial statements.

*SGVFSM005911*
A member firm of Ernst & Young Global Limited
 -6-

Audit response
We involved our internal specialist in evaluating the assumptions and methodology used by the Group in
determining the FVLCTS of the CGU, in particular those relating to the use of P/E ratios of comparable
companies and adjusted NAV method in the valuation of the unquoted equity shares. We tested the fair
value of the other assets and liabilities by referring to the quoted prices of listed equity and debt
instruments, agreeing the appraised values of real estate properties to the appraisal reports, comparing the
future cash flows of unquoted debt instruments to the related contracts, and comparing the discount rates
used against prevailing interest rates for similar instruments, taking into consideration the impact
associated with the coronavirus pandemic. We also re-performed the calculation of the FVLCTS.

Other Information

Management is responsible for the other information. The other information comprises the information
included in the SEC Form 20-IS (Definitive Information Statement), SEC Form 17-A and Annual Report
for the year ended December 31, 2020, but does not include the consolidated and parent company
financial statements and our auditor’s report thereon. The SEC Form 20-IS (Definitive Information
Statement), SEC Form 17-A and Annual Report for the year ended December 31, 2020 are expected to be
made available to us after the date of this auditor’s report.

Our opinion on the consolidated and parent company financial statements does not cover the other
information and we will not express any form of assurance conclusion thereon.

In connection with our audits of the consolidated and parent company financial statements, our
responsibility is to read the other information identified above when it becomes available and, in doing
so, consider whether the other information is materially inconsistent with the consolidated and parent
company financial statements or our knowledge obtained in the audits, or otherwise appears to be
materially misstated.

Responsibilities of Management and Those Charged with Governance for the Consolidated and
Parent Company Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated and parent
company financial statements in accordance with PFRS, and for such internal control as management
determines is necessary to enable the preparation of consolidated and parent company financial
statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated and parent company financial statements, management is responsible for
assessing the Group’s and the Parent Company’s ability to continue as a going concern, disclosing, as
applicable, matters related to going concern and using the going concern basis of accounting unless
management either intends to liquidate the Group and the Parent Company or to cease operations, or has
no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s and the Parent Company’s
financial reporting process.

*SGVFSM005911*
A member firm of Ernst & Young Global Limited
 -7-

Auditor’s Responsibilities for the Audit of the Consolidated and Parent Company Financial
Statements

Our objectives are to obtain reasonable assurance about whether the consolidated and parent company
financial statements as a whole are free from material misstatement, whether due to fraud or error, and to
issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but
is not a guarantee that an audit conducted in accordance with PSAs will always detect a material
misstatement when it exists. Misstatements can arise from fraud or error and are considered material if,
individually or in the aggregate, they could reasonably be expected to influence the economic decisions of
users taken on the basis of these consolidated and parent company financial statements.

As part of an audit in accordance with PSAs, we exercise professional judgment and maintain
professional skepticism throughout the audit. We also:

 Identify and assess the risks of material misstatement of the consolidated and parent company
financial statements, whether due to fraud or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our
opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.

 Obtain an understanding of internal control relevant to the audit in order to design audit procedures
that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the Group’s and the Parent Company’s internal control.

 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting
estimates and related disclosures made by management.

 Conclude on the appropriateness of management’s use of the going concern basis of accounting and,
based on the audit evidence obtained, whether a material uncertainty exists related to events or
conditions that may cast significant doubt on the Group’s and the Parent Company’s ability to
continue as a going concern. If we conclude that a material uncertainty exists, we are required to
draw attention in our auditor’s report to the related disclosures in the consolidated and parent
company financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However,
future events or conditions may cause the Group and the Parent Company to cease to continue as a
going concern.

 Evaluate the overall presentation, structure and content of the consolidated and parent company
financial statements, including the disclosures, and whether the consolidated and parent company
financial statements represent the underlying transactions and events in a manner that achieves fair
presentation.

 Obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial statements.
We are responsible for the direction, supervision and performance of the audit. We remain solely
responsible for our audit opinion.

*SGVFSM005911*
A member firm of Ernst & Young Global Limited
 -8-

We communicate with those charged with governance regarding, among other matters, the planned scope
and timing of the audit and significant audit findings, including any significant deficiencies in internal
control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant
ethical requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.

From the matters communicated with those charged with governance, we determine those matters that
were of most significance in the audit of the consolidated and parent company financial statements of the
current period and are therefore the key audit matters. We describe these matters in our auditor’s report
unless law or regulation precludes public disclosure about the matter or when, in extremely rare
circumstances, we determine that a matter should not be communicated in our report because the adverse
consequences of doing so would reasonably be expected to outweigh the public interest benefits of such
communication.

Report on the Supplementary Information Required Under Bangko Sentral ng Pilipinas (BSP)
Circular No. 1074 and Revenue Regulations No. 15-2010

Our audits were conducted for the purpose of forming an opinion on the basic financial statements taken
as a whole. The supplementary information required under BSP Circular No. 1074 in Note 37 and
Revenue Regulations No. 15-2010 in Note 38 to the financial statements is presented for purposes of
filing with the BSP and Bureau of Internal Revenue, respectively, and is not a required part of the basic
financial statements. Such information is the responsibility of the management of the Parent Company.
The information has been subjected to the auditing procedures applied in our audit of the basic financial
statements. In our opinion, the information is fairly stated, in all material respects, in relation to the basic
financial statements taken as a whole.

The engagement partner on the audit resulting in this independent auditor’s report is
Josephine Adrienne A. Abarca.

SYCIP GORRES VELAYO & CO.

Josephine Adrienne A. Abarca

Partner
CPA Certificate No. 92126
SEC Accreditation No. 0466-AR-4 (Group A),
November 13, 2018, valid until November 12, 2021
Tax Identification No. 163-257-145
BIR Accreditation No. 08-001998-61-2018,
February 26, 2018, valid until February 25, 2021
PTR No. 8534208, January 4, 2021, Makati City

February 17, 2021

*SGVFSM005911*
A member firm of Ernst & Young Global Limited
 EXHIBIT B

METROPOLITAN BANK & TRUST COMPANY AND SUBSIDIARIES

STATEMENTS OF FINANCIAL POSITION
(In Millions)

Consolidated Parent Company

December 31
2020 2019 2020 2019
ASSETS
Cash and Other Cash Items =38,469
P =32,956
P =35,606
P =30,659
P
Due from Bangko Sentral ng Pilipinas (BSP)
(Notes 4 and 16) 304,906 219,994 262,188 195,770
Due from Other Banks (Note 4) 38,233 54,767 22,742 38,698
Interbank Loans Receivable and
Securities Purchased Under Resale
Agreements (SPURA) (Notes 4, 7 and 26) 79,394 72,174 57,205 56,152
Investment Securities at
Fair Value Through Profit or Loss
(FVTPL) (Note 8) 77,551 61,867 67,956 49,550
Fair Value Through Other Comprehensive
Income (FVOCI) (Notes 4 and 8) 569,445 202,520 542,666 188,676
Amortized Cost (Notes 4 and 8) 23,293 251,628 7,909 216,644
Loans and Receivables (Notes 4 and 9) 1,252,929 1,483,568 1,048,742 1,177,101
Property and Equipment (Note 10) 24,617 25,700 18,429 17,857
Investments in Subsidiaries (Note 11) − − 67,181 95,739
Investments in Associates and a Joint
Venture (Note 11) 6,248 6,591 565 542
Goodwill (Note 11) 5,199 5,200 – ‒
Investment Properties (Note 12) 7,667 7,762 3,369 3,291
Deferred Tax Assets (Note 28) 14,028 10,512 11,394 6,918
Other Assets (Note 14) 13,184 15,574 8,047 9,838
=2,455,163
P =2,450,813
P =2,153,999
P =2,087,435
P

LIABILITIES AND EQUITY

LIABILITIES
Deposit Liabilities (Notes 16 and 31)
Demand P515,378
= P411,873
= P467,545
= P372,303
=
Savings 795,979 665,634 755,713 630,946
Time 450,103 592,897 332,323 461,713
Long-Term Negotiable Certificates 35,755 43,740 27,330 35,330
1,797,215 1,714,144 1,582,911 1,500,292
Bills Payable and Securities Sold Under
Repurchase Agreements (SSURA)
(Notes 17 and 31) 139,614 238,281 108,651 139,072
Derivative Liabilities (Note 8) 13,465 7,427 11,813 5,994
Manager’s Checks and Demand
Drafts Outstanding 6,024 6,806 5,493 5,508
Income Taxes Payable 2,711 4,188 1,992 3,259
Accrued Interest and Other Expenses (Note 18) 9,149 10,499 6,432 6,654
Bonds Payable (Notes 19 and 31) 91,397 80,486 76,355 70,110
Subordinated Debts (Note 20) 1,167 7,660 1,167 6,494
Non-equity Non-controlling Interest (Note 21) 8,315 6,553 − –
Other Liabilities (Note 21) 52,931 56,278 34,296 30,060
2,121,988 2,132,322 1,829,110 1,767,443

(Forward)

*SGVFSM005911*
 -2-

Consolidated Parent Company

December 31
2020 2019 2020 2019
EQUITY
Equity Attributable to Equity Holders
of the Parent Company
Common stock (Note 23) P89,948
= P89,948
= P89,948
= P89,948
=
Capital paid in excess of par value (Note 23) 85,252 85,252 85,252 85,252
Treasury stock (Notes 23 and 31) (65) (72) (65) (72)
Surplus reserves (Note 24) 2,260 2,098 2,260 2,098
Surplus (Note 23) 153,282 144,154 153,282 144,154
Net unrealized gain on investment securities at
FVOCI (Note 8) 7,611 2,629 7,611 2,629
Remeasurement losses on retirement plans
(Notes 11 and 27) (4,778) (5,531) (4,778) (5,531)
Equity in other comprehensive income (losses)
of investees (Note 11) (22) 345 (22) 345
Translation adjustment and others (Note 11) (9,284) (9,269) (8,599) 1,169
324,204 309,554 324,889 319,992
Non-controlling Interest (Note 11) 8,971 8,937 − −
333,175 318,491 324,889 319,992
=2,455,163
P =2,450,813
P =2,153,999
P =2,087,435
P

See accompanying Notes to Financial Statements.

*SGVFSM005911*
METROPOLITAN BANK & TRUST COMPANY AND SUBSIDIARIES
STATEMENTS OF INCOME
(In Millions, Except Earnings Per Share)

Consolidated Parent Company

Years Ended December 31
2020 2019 2018 2020 2019 2018
INTEREST INCOME ON
Loans and receivables (Notes 9 and 31) =
P85,690 =
P95,847 =
P79,659 =
P64,281 =
P59,603 =
P46,860
Investment securities at FVOCI and
at amortized cost (Note 8) 17,093 16,573 14,610 15,285 13,778 11,592
Investment securities at FVTPL (Note 8) 1,958 1,936 1,170 1,754 1,695 1,006
Interbank loans receivable and securities purchased
under resale agreements (SPURA) (Notes 7 and 31) 876 941 1,092 406 468 441
Deposits with banks and others 2,170 886 655 1,561 689 422
107,787 116,183 97,186 83,287 76,233 60,321
INTEREST AND FINANCE CHARGES
Deposit liabilities (Notes 16 and 31) 11,326 23,407 18,968 7,724 17,293 13,447
Bills payable and securities sold under repurchase
agreements, bonds payable, subordinated
debts and others (Notes 13, 17, 19, 20, 21 and 31) 10,354 15,779 9,396 7,445 9,019 4,546
21,680 39,186 28,364 15,169 26,312 17,993
NET INTEREST INCOME 86,107 76,997 68,822 68,118 49,921 42,328
PROVISION FOR CREDIT AND IMPAIRMENT
LOSSES (Notes 3 and 15) 40,760 10,078 7,770 32,745 1,644 807
NET INTEREST INCOME AFTER PROVISION
FOR CREDIT AND IMPAIRMENT LOSSES 45,347 66,919 61,052 35,373 48,277 41,521
OTHER OPERATING INCOME
Service charges, fees and commissions
(Notes 25 and 31) 11,703 14,266 12,695 8,991 5,145 4,954
Gain on disposal of investment securities at amortized
cost (Note 8) 8,184 150 – 6,891 – –
Trading and securities gain - net (Notes 8, 21 and 31) 6,559 5,322 2,541 6,217 4,352 3,041
Foreign exchange gain (loss) - net (Note 31) 4,409 3,798 210 4,320 3,521 (66)
Leasing (Notes 12, 13 and 31) 2,007 2,122 2,252 200 210 224
Income from trust operations (Notes 24 and 31) 1,444 1,241 1,290 1,401 1,204 1,259
Dividends (Note 8) 139 172 141 28 29 23
Profit from assets sold (Notes 10, 12, 14 and 31) 15 585 1,371 106 210 623
Miscellaneous (Note 25) 669 1,398 2,410 734 83 401
35,129 29,054 22,910 28,888 14,754 10,459
OTHER OPERATING EXPENSES
Compensation and fringe benefits
(Notes 27 and 31) 24,890 23,706 22,368 18,795 16,023 15,115
Taxes and licenses (Note 28) 9,925 10,219 8,776 7,878 6,466 5,253
Depreciation and amortization
(Notes 10, 12 and 14) 5,545 5,538 4,084 2,965 2,568 1,690
Occupancy and equipment-related costs (Note 13) 2,080 1,867 3,193 1,500 1,162 1,824
Miscellaneous (Note 25) 17,680 16,576 15,235 14,056 11,086 9,573
60,120 57,906 53,656 45,194 37,305 33,455
INCOME BEFORE SHARE IN NET INCOME
OF SUBSIDIARIES, ASSOCIATES AND
A JOINT VENTURE 20,356 38,067 30,306 19,067 25,726 18,525
SHARE IN NET INCOME OF SUBSIDIARIES,
ASSOCIATES AND A JOINT VENTURE
(Note 11) 664 868 874 1,674 8,938 7,967
INCOME BEFORE INCOME TAX 21,020 38,935 31,180 20,741 34,664 26,492
PROVISION FOR INCOME TAX (Note 28) 7,046 10,061 7,745 6,910 6,609 4,484
NET INCOME =
P13,974 =
P28,874 =
P23,435 =
P13,831 =
P28,055 =
P22,008
Attributable to:
Equity holders of the Parent Company
(Note 32) =
P13,831 =
P28,055 =
P22,008
Non-controlling interest (Note 11) 143 819 1,427
=
P13,974 =
P28,874 =
P23,435
Basic/Diluted Earnings Per Share Attributable
to Equity Holders of the Parent Company
(Note 32) =
P3.08 =
P6.24 =
P5.16*

*Restated to show the effect of stock dividends issued in 2019.

See accompanying Notes to Financial Statements.

*SGVFSM005911*
METROPOLITAN BANK & TRUST COMPANY AND SUBSIDIARIES
STATEMENTS OF COMPREHENSIVE INCOME
(In Millions)

Consolidated Parent Company

Years Ended December 31
2020 2019 2018 2020 2019 2018
Net Income =
P13,974 =28,874
P =23,435
P =
P13,831 =28,055
P =22,008
P
Other Comprehensive Income for the Year,
Net of Tax
Items that may not be reclassified to profit or loss:
Change in net unrealized loss on equity securities
at FVOCI (94) (414) (351) (93) (410) (347)
Change in remeasurement gain (loss) on
retirement plans (Notes 11 and 27) 794 (2,038) 498 753 (1,940) 434
700 (2,452) 147 660 (2,350) 87
Items that may be reclassified to profit or loss:
Change in net unrealized gain (loss) on
investment in debt securities at FVOCI
(Note 8) 5,038 6,142 (2,443) 5,031 6,052 (2,324)
Change in equity in other comprehensive
income (loss) of investees (Note 11) (370) 375 (50) (367) 372 (49)
Translation adjustment and others
(Note 11) (23) (399) (309) (15) (915) (57)
4,645 6,118 (2,802) 4,649 5,509 (2,430)
Total Comprehensive Income for the Year =
P19,319 =
P32,540 =
P20,780 =
P19,140 =
P31,214 =
P19,665
Attributable to:
Equity holders of the Parent Company =
P19,140 =
P31,214 =
P19,665
Non-controlling interest 179 1,326 1,115
=
P19,319 =
P32,540 =
P20,780

See accompanying Notes to Financial Statements.

*SGVFSM005911*
METROPOLITAN BANK & TRUST COMPANY AND SUBSIDIARIES
STATEMENTS OF CHANGES IN EQUITY
(In Millions)

Consolidated
Equity Attributable to Equity Holders of the Parent Company
Net Unrealized Remeasurement Equity in Other
Capital Paid Gain (Loss) on Losses on Comprehensive Translation
Common In Excess Treasury Surplus Investment Retirement Income (Losses) Adjustment Other Equity Non-controlling
Stock of Par Value Stock Reserves Surplus Securities at Plans (Notes 11 of Investees and Others Reserve Interest Total
(Note 23) (Note 23) (Note 23) (Note 24) (Note 23) FVOCI (Note 8) and 27) (Note 11) (Note 11) Total (Note 11) (Note 11) Equity
Balance as at January 1, 2020 =89,948
P =
P85,252 (P
= 72) =2,098
P =144,154
P =
P2,629 (P
= 5,531) =
P345 (P
= 9,269) =309,554
P =
P– =8,937
P =318,491
P
Total comprehensive income (loss) for the year – – – – 13,831 4,938 753 (367) (15) 19,140 – 179 19,319
Transfer to surplus reserves – – – 162 (162) – – – – – – – –
Cash dividend (Note 23) – – – – (4,497) – – – – (4,497) – (145) (4,642)
Realized gain (loss) on sale of equity
securities at FVOCI – – – – (44) 44 – – – – – – –
Acquisition of Parent Company shares held by mutual fund
subsidiary – – (22) – – – – – – (22) – – (22)
Disposal of Parent Company shares held by mutual fund
subsidiary – – 29 – – – – – – 29 – – 29
Balance as at December 31, 2020 = 89,948
P = 85,252
P (P
= 65) = 2,260
P = 153,282
P = 7,611
P (P
= 4,778) (P
= 22) (P
= 9,284) = 324,204
P P–
= =8,971
P = 333,175
P
Balance as at January 1, 2019 =79,600
P =85,252
P (P
=67) =1,956
P =130,550
P (P
=2,994) (P
=3,591) (P
=27) (P
=7,719) =282,960
P =–
P =7,744
P =290,704
P
Issuance of stock dividend 10,348 – – – (10,348) – – – – – – – –
Total comprehensive income (loss) for the year – – – – 28,055 5,642 (1,940) 372 (915) 31,214 – 1,326 32,540
Transfer to surplus reserves – – – 142 (142) – – – – – – – –
Cash dividend (Note 23) – – – – (3,980) – – – – (3,980) – (133) (4,113)
Realized gain (loss) on sale of equity – –
securities at FVOCI – – – – 19 (19) – – – – –
Parent Company shares held by mutual fund subsidiary – – (5) – – – – – – (5) – – (5)
Acquisition of non-controlling interest (Note 11) – – – – – – – – (635) (635) – – (635)
Balance as at December 31, 2019 =89,948
P =85,252
P (P
=72) =2,098
P =144,154
P =2,629
P (P
=5,531) =345
P (P
=9,269) =309,554
P =–
P =8,937
P =318,491
P
Balance as at January 1, 2018 =63,603
P =42,139
P (P
=46) =1,810
P =111,990
P (P
=445) (P
=4,025) =22
P (P
=2,530) =212,518
P (P
=7,400) =9,417
P =214,535
P
Issuance of stock rights 15,997 43,113 – – – – – – – 59,110 – – 59,110
Total comprehensive income (loss) for the year – – – – 22,008 (2,671) 434 (49) (57) 19,665 – 1,115 20,780
Transfer to surplus reserves – – – 146 (146) – – – – – – – –
Cash dividend (Note 23) – – – – (3,180) – – – – (3,180) – (520) (3,700)
Realized gain (loss) on sale of equity securities at FVOCI – – – – (122) 122 – – – – – – –
Parent Company share held by mutual fund subsidiary – – (21) – – – – – – (21) – – (21)
Settlement of non-controlling interest acquired (Note 11) – – – – – – – – (5,132) (5,132) 7,400 (2,268) –
Balance as at December 31, 2018 =79,600
P =85,252
P (P
=67) =1,956
P =130,550
P (P
=2,994) (P
=3,591) (P
=27) (P
=7,719) =282,960
P =–
P =7,744
P =290,704
P

*SGVFSM005911*
 -2-

Parent Company
Net Unrealized Remeasurement Equity in Other
Capital Paid Gain (Loss) on Losses on Comprehensive Translation
Common In Excess Treasury Surplus Investment Retirement Income (Losses) Adjustment
Stock of Par Value Stock Reserves Surplus Securities at Plans (Notes 11 of Investees and Others Total
(Note 23) (Note 23) (Note 23) (Note 24) (Note 23) FVOCI (Note 8) and 27) (Note 11) (Note 11) Equity
Balance as at January 1, 2020 =
P89,948 =
P85,252 (P
=72) =
P2,098 =
P144,154 =
P2,629 (P
=5,531) =
P345 =
P1,169 =
P319,992
Total comprehensive income (loss) for the year – – – – 13,831 4,938 753 (367) (15) 19,140
Transfer to surplus reserves – – – 162 (162) – – – – –
Cash dividend (Note 23) – – – – (4,497) – – – – (4,497)
Share in realized gain (loss) on sale of equity securities at FVOCI – – – – (44) 44 – – – –
Acquisition of Parent Company shares held by mutual fund
subsidiary – – (22) – – – – – – (22)
Disposal of Parent Company shares held by mutual fund subsidiary – – 29 – – – – – – 29
Impact of merger (Note 11) – – – – – – – – (9,753) (9,753)
Balance as at December 31, 2020 =
P89,948 =
P85,252 (P
=65) =
P2,260 =
P153,282 =
P7,611 (P
=4,778) (P
=22) (P
=8,599) =
P324,889
Balance as at January 1, 2019 =79,600
P =85,252
P (P
=67) =1,956
P =130,550
P (P
=2,994) (P
=3,591) (P
=27) =2,084
P =292,763
P
Issuance of stock dividend 10,348 – – – (10,348) – – – – –
Total comprehensive income (loss) for the year – – – – 28,055 5,642 (1,940) 372 (915) 31,214
Transfer to surplus reserves – – – 142 (142) – – – – –
Cash dividend (Note 23) – – – – (3,980) – – – – (3,980)
Share in realized gain (loss) on sale of equity securities at FVOCI – – – – 19 (19) – – – –
Parent Company shares held by mutual fund subsidiary – – (5) – – – – – – (5)
Balance as at December 31, 2019 =89,948
P =85,252
P (P
=72) =2,098
P =144,154
P =2,629
P (P
=5,531) =345
P =1,169
P =319,992
P
Balance as at January 1, 2018 =63,603
P =42,139
P (P
=46) =1,810
P =111,990
P (P
=445) (P
=4,025) =22
P =2,141
P =217,189
P
Issuance of stock rights 15,997 43,113 – – – – – – – 59,110
Total comprehensive income (loss) for the year – – – – 22,008 (2,671) 434 (49) (57) 19,665
Transfer to surplus reserves – – – 146 (146) – – – – –
Cash dividend (Note 23) – – – – (3,180) – – – – (3,180)
Share in realized gain (loss) on sale of equity securities at FVOCI – – – – (122) 122 – – – –
Parent Company shares held by mutual fund subsidiary – – (21) – – – – – – (21)
Balance as at December 31, 2018 =79,600
P =85,252
P (P
=67) =1,956
P =130,550
P (P
=2,994) (P
=3,591) (P
=27) =2,084
P =292,763
P

See accompanying Notes to Financial Statements.

*SGVFSM005911*
METROPOLITAN BANK & TRUST COMPANY AND SUBSIDIARIES
STATEMENTS OF CASH FLOWS
(In Millions)

Consolidated Parent Company

Years Ended December 31
2020 2019 2018 2020 2019 2018
CASH FLOWS FROM OPERATING ACTIVITIES
Income before income tax =
P21,020 =
P38,935 =
P31,180 =
P20,741 =
P34,664 =
P26,492
Adjustments for:
Provision for credit and impairment losses
(Note 15) 40,760 10,078 7,770 32,745 1,644 807
Trading and securities loss (gain) on investment
securities at FVOCI (Note 8) (8,307) (4,403) 115 (8,007) (3,788) 24
Gain on disposal of investment securities at
amortized cost (Note 8) (8,184) (150) – (6,891) – –
Depreciation and amortization
(Notes 10, 12 and 14) 4,865 4,906 3,572 2,467 2,327 1,559
Unrealized market valuation loss (gain) on
financial assets and liabilities at FVTPL 2,275 1,395 (3,499) 2,323 1,612 (3,494)
Amortization of software costs (Note 14) 680 632 512 498 241 131
Share in net income of subsidiaries, associates
and a joint venture (Note 11) (664) (868) (874) (1,674) (8,938) (7,967)
Dividends (Note 8) (139) (172) (141) (28) (29) (23)
Gain on initial recognition of investment
properties and chattel properties
acquired in foreclosure (Note 25) (127) (487) (638) (15) (33) (23)
Amortization of discount on subordinated
debts, bonds payable and lease liability
(Notes 19 and 20) 49 605 45 33 342 34
Profit from assets sold (Notes 10 and 12) (15) (585) (1,371) (106) (210) (623)
Decrease (increase) in:
Investment securities at FVTPL (11,921) (22,009) 5,735 (15,217) (21,184) 3,617
Loans and receivables 189,422 (107,137) (138,128) 170,250 (63,413) (117,786)
Other assets 1,489 293 (5,785) 2,208 (1,390) (4,737)
Increase (decrease) in:
Deposit liabilities 83,071 157,391 28,791 83,179 174,301 12,044
Bills payable - deposit substitutes (53,987) 7,972 (14,952) – – –
Manager’s checks and demand
drafts outstanding (782) (759) (489) (15) (442) 110
Accrued interest and other expenses (1,350) 880 2,646 (1,683) 1,029 1,720
Other liabilities (550) 6,624 (8,732) (1,617) 4,034 (3,187)
Non-equity non-controlling interest 1,762 (194) (1,255) – – –
Net cash provided by (used in) operations 259,367 92,947 (95,498) 279,191 120,767 (91,302)
Dividends received (Note 8) 139 172 141 28 29 23
Income taxes paid (13,201) (8,715) (8,489) (12,198) (5,097) (4,886)
Net cash provided by (used in) operating activities 246,305 84,404 (103,846) 267,021 115,699 (96,165)
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions of:
Investment securities at FVOCI (Note 4) (2,098,769) (1,286,010) (786,157) (2,061,832) (1,267,741) (774,480)
Property and equipment (Note 10) (2,427) (3,722) (2,889) (1,641) (1,999) (1,473)
Investment securities at amortized cost (Note 4) – (4,488) (7,017) – (4,333) (5,037)
Investments in subsidiaries and associates (Note 11) – (9) – – (7,839) (15,011)
Software (Note 14) – – (636) – – (233)
Proceeds from sale of:
Investment securities at FVOCI
(Notes 4 and 11) 1,846,610 1,203,883 764,214 1,822,062 1,180,411 759,803
Investment properties (Note 12) 898 1,475 1,896 242 553 626
Property and equipment (Note 10) 151 955 585 251 76 278
Proceeds from:
Disposal of investment securities at amortized cost
(Note 8) 121,617 16,686 – 100,747 – –
Maturity of investment securities at amortized cost 15,164 920 4,077 15,000 469 30
Decrease (increase) in interbank loans receivable and
SPURA (Note 26) (27,873) 6,489 1,388 (25,794) 407 5,984
Cash dividends from investees (Note 11) 637 169 462 1,103 1,073 2,448
Impact of merger (Note 11) – – – 6,485 – –
Return of investment from an associate (Note 11) – – 180 – – 180
Net cash used in investing activities (143,992) (63,652) (23,897) (143,377) (98,923) (26,885)

(Forward)

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Consolidated Parent Company

Years Ended December 31
2020 2019 2018 2020 2019 2018
CASH FLOWS FROM FINANCING
ACTIVITIES (Note 26)
Settlements of bills payable (P
= 1,943,290) (P
= 4,721,604) (P
= 4,472,284) (P
= 1,906,626) (P
= 3,574,659) (P
= 3,445,236)
Availments of bills payable and SSURA 1,898,610 4,692,306 4,519,008 1,819,205 3,562,652 3,489,833
Proceeds from issuance of:
Bonds payable (Note 19) 38,869 52,499 27,826 34,219 42,135 27,826
Stock rights (Note 23) – – 59,110 – – 59,110
Notes payable (Note 21) – – 2,600 – – ‒
Repayments of:
Bonds payable (Note 19) (28,000) (3,000) – (28,000) – –
Subordinated debts (Note 20) (6,500) (19,000) – (6,500) (16,000) –
Notes payable (Note 21) (2,592) – – – – –
Cash dividends paid (Note 23) (4,642) (4,113) (3,700) (4,497) (3,980) (3,180)
Payment of principal portion of lease liabilities (Note 13) (1,409) (1,213) – (773) (748) –
Proceeds from disposal of Parent Company shares
by mutual fund subsidiaries (Note 31) 29 – 10 – – –
Acquisition of Parent Company shares by a mutual
fund subsidiary (Note 23) (22) (5) (31) – – –
Net cash provided by (used in) financing activities (48,947) (4,130) 132,539 (92,972) 9,400 128,353
NET INCREASE IN CASH AND
CASH EQUIVALENTS 53,366 16,622 4,796 30,672 26,176 5,303
CASH AND CASH EQUIVALENTS
AT BEGINNING OF YEAR
Cash and other cash items 32,956 33,091 27,631 30,659 29,280 24,975
Due from BSP 219,994 240,134 261,959 195,770 206,289 224,723
Due from other banks 54,772 45,808 31,291 38,698 35,218 19,286
Interbank loans receivable and SPURA (Note 26) 67,313 39,380 32,736 54,578 22,742 19,242
375,035 358,413 353,617 319,705 293,529 288,226
CASH AND CASH EQUIVALENTS
AT END OF YEAR
Cash and other cash items 38,469 32,956 33,091 35,606 30,659 29,280
Due from BSP 304,906 219,994 240,134 262,188 195,770 206,289
Due from other banks 38,357 54,772 45,808 22,742 38,698 35,218
Interbank loans receivable and SPURA (Note 26) 46,669 67,313 39,380 29,841 54,578 22,742
=
P428,401 =
P375,035 =
P358,413 =
P350,377 =
P319,705 =
P293,529

OPERATIONAL CASH FLOWS FROM INTEREST

Consolidated Parent Company
Years Ended December 31
2020 2019 2018 2020 2019 2018
Interest paid =
P23,813 =
P39,558 =
P25,910 =
P16,546 =
P26,207 =
P17,452
Interest received 107,165 113,745 95,315 85,255 73,717 61,129

See accompanying Notes to Financial Statements.

*SGVFSM005911*
METROPOLITAN BANK & TRUST COMPANY AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS

1. Corporate Information

Metropolitan Bank & Trust Company (the Parent Company) is a universal bank incorporated in the
Philippines on April 6, 1962. The Securities and Exchange Commission (SEC) approved the renewal
on November 19, 2007. The Parent Company’s shares were listed with the Philippine Stock
Exchange, Inc. (PSE) on February 26, 1981, as approved by the SEC in November 1980. It has a
universal banking license granted by the Bangko Sentral ng Pilipinas (BSP) on August 21, 1981.

The Parent Company and its subsidiaries (the Group) are engaged in all aspects of banking,
financing, leasing, real estate and stock brokering through a network of over 2,000 local and
international branches, subsidiaries, representative offices, remittance correspondents and
agencies. As a bank, the Parent Company, which is the ultimate parent of the Group, provides
services such as deposit products, loans and trade finance, domestic and foreign fund transfers,
treasury, foreign exchange, trading and remittances, and trust services. Its principal place of business
is at Metrobank Plaza, Sen. Gil Puyat Avenue, Urdaneta Village, Makati City, Metro Manila,
Philippines.

2. Summary of Significant Accounting Policies

Basis of Preparation
The accompanying financial statements have been prepared on a historical cost basis except for
financial assets and financial liabilities at fair value through profit or loss (FVTPL) and fair value
through other comprehensive income (FVOCI) that have been measured at fair value.

The financial statements of the Parent Company and Philippine Savings Bank (PSBank) include the
accounts maintained in the Regular Banking Unit (RBU) and Foreign Currency Deposit Unit
(FCDU). The functional currency of RBU and FCDU is Philippine Peso (PHP) and United States
Dollar (USD), respectively. For financial reporting purposes, FCDU accounts and foreign currency-
denominated accounts in the RBU are translated into their equivalents in PHP (see accounting policy
on Foreign Currency Translation). The financial statements of these units are combined after
eliminating inter-unit accounts.

Each entity in the Group determines its own functional currency and items included in the financial
statements of each entity are measured using that functional currency. The respective functional
currencies of the subsidiaries are presented under Basis of Consolidation. The financial statements
are presented in PHP, and all values are rounded to the nearest million pesos (P
=000,000), except
when otherwise indicated.

Statement of Compliance
The financial statements of the Group and the Parent Company have been prepared in compliance
with Philippine Financial Reporting Standards (PFRS).

Presentation of Financial Statements

Financial assets and financial liabilities are offset and the net amount reported in the statement of
financial position only when there is a legally enforceable right to offset the recognized amounts and
there is an intention to settle on a net basis, or to realize the assets and settle the liability
simultaneously. This is not generally the case with master netting agreements, and the related assets
and liabilities are presented gross in the statement of financial position. Income and expense are not

*SGVFSM005911*
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offset in the statement of income unless required or permitted by any accounting standard or
interpretation, and as specifically disclosed in the accounting policies of the Group.

Basis of Consolidation
The consolidated financial statements include the financial statements of the Parent Company and of
its subsidiaries and are prepared for the same reporting period as the Parent Company using
consistent accounting policies. The following are the wholly and majority-owned foreign and
domestic subsidiaries of the Parent Company in 2020 and 2019 (Note 11):

Principal Place
of Business and Effective
Country of Percentage Functional
Subsidiary Incorporation of Ownership Currency
Financial Markets:
Domestic:
First Metro Investment Corporation (FMIC) and Subsidiaries Philippines 99.27 PHP
PSBank Philippines 88.38 PHP
ORIX Metro Leasing and Finance Corporation
(ORIX Metro) and Subsidiaries Philippines 59.85 PHP
Foreign:
Metropolitan Bank (China) Ltd. (MBCL) China 100.00 Chinese Yuan
Metropolitan Bank (Bahamas) Limited
(Metrobank Bahamas)*** The Bahamas 100.00 USD
First Metro International Investment Company Limited Hong Kong
(FMIIC) and Subsidiary Hong Kong 100.00 Dollar (HKD)
Remittances:
Metro Remittance (Hong Kong) Limited (MRHL) Hong Kong 100.00 HKD
Singapore
Metro Remittance (Singapore) Pte. Ltd. (MRSPL) Singapore 100.00 Dollar
Great Britain
Metro Remittance (UK) Limited (MR UK) United Kingdom 100.00 Pound
United States of
Metro Remittance (USA), Inc. (MR USA) America (USA) 100.00 USD
Metro Remittance (Japan) Co. Ltd. (MR Japan) Japan 100.00 Japanese Yen
Metro Remittance (Italia), S.p.A. (MR Italia)**** Italy 100.00 Euro
Real Estate:
Circa 2000 Homes, Inc. (Circa)** Philippines 100.00 PHP
Others:
Metrobank Card Corporation (A Finance Company
and General Insurance Agency) (MCC)* Philippines 100.00 PHP
Philbancor Venture Capital Corporation (PVCC)** Philippines 60.00 PHP
MBTC Technology, Inc. (MTI)*** Philippines 100.00 PHP
* Effective January 3, 2020, MCC was merged into the Parent Company (Note 11)
** In process of dissolution
*** In process of liquidation
**** Fully liquidated in January 2021

All significant intra-group balances, transactions, income and expenses and profits and losses
resulting from intra-group transactions are eliminated in full at consolidation (Note 31). Subsidiaries
are fully consolidated from the date on which control is transferred to the Group. Control is achieved
where the Group is exposed, or has rights, to variable returns from its involvement with the investee
and has the ability to affect those returns through its power over the investee. Consolidation of
subsidiaries ceases when control is transferred out of the Group or the Parent Company. The results
of subsidiaries acquired or disposed of during the year are included in the consolidated statements of
income and consolidated statements of comprehensive income from the date of acquisition or up to
the date of disposal, as appropriate.

*SGVFSM005911*
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Changes in the Parent Company’s ownership interest in a subsidiary that do not result in a loss of
control are accounted for within equity. Any difference between the amount by which the non-
controlling interests are adjusted and the fair value of the consideration paid (or to be paid) or
received is recognized directly in equity included as part of ‘Translation adjustment and others’ and
attributed to the owners of the Parent Company.

When a change in ownership interest in a subsidiary occurs which results in a loss of control over the
subsidiary, the Parent Company: (a) derecognizes the assets (including goodwill) and liabilities of the
subsidiary; (b) derecognizes the carrying amount of any non-controlling interest; (c) derecognizes the
related other comprehensive income (OCI) recorded in equity and recycles the same to statement of
income or ‘Surplus’; (d) recognizes the fair value of the consideration received; (e) recognizes the
fair value of any investment retained; (f) recognizes any surplus or deficit in statement of income;
and (g) reclassifies the Parent Company’s share of components’ gains (losses) previously recognized
in OCI to profit or loss or surplus, as appropriate, as would be required if the Group had directly
disposed of the related assets or liabilities.

Entity with Significant Influence over the Group

GT Capital Holdings, Inc. (GT Capital) holds 37.15% and 36.65% interest in the Parent Company as
of December 31, 2020 and 2019, respectively (Note 31).

Non-controlling Interest
Non-controlling interest represents the portion of profit or loss and the net assets of the funds not
held by the Group and are presented separately in the consolidated statement of income, consolidated
statement of comprehensive income and within equity in the consolidated statement of financial
position, separately from equity attributable to the Parent Company. Any losses applicable to the
non-controlling interests in excess of the non-controlling interests are allocated against the interests
of the non-controlling interest even if this results in the non-controlling interest having a deficit
balance. Acquisitions of non-controlling interests are accounted for as equity transactions.

Non-equity Non-controlling Interest

The Group has seed capital investments in a number of funds where it is in a position to be able to
control those funds. These funds are consolidated.

Non-equity non-controlling interest represents the portion of net assets of the consolidated funds not
attributed, directly or indirectly, to the Parent Company and is presented separately in the liability
section in the consolidated statement of financial position. This liability is accounted for at FVTPL
and measured using net asset value per unit with changes recognized in ‘Trading and securities gain -
net’ in the consolidated statement of income.

Legal Merger between Parent Company and Subsidiary

In the parent company financial statements, the legal merger between the Parent Company and its
subsidiary, with the Parent Company as the surviving entity, is accounted for as follows:
 The acquired assets and assumed liabilities are recognized at the carrying amounts in the
consolidated financial statements as of the date of the legal merger;
 The difference between the carrying amount of the net assets of the subsidiary and the carrying
amount of the investment in the merged subsidiary before the legal merger is recognized under
“Translation adjustment and others” account in the equity section of the parent company
statement of financial position; and
 The comparative financial information in the parent company financial statements for period
prior to the legal merger is not restated. The financial position and results of operations of the

*SGVFSM005911*
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merged subsidiary are reflected in the parent company financial statements only from the date of
the legal merger.

The legal merger has no impact in the consolidated financial statements.

Changes in Accounting Policies and Disclosures

Except for these new and amended standards which were adopted as of January 1, 2020, the
accounting policies adopted are consistent with those of previous financial year.

The adoption of the following amendments did not have a significant impact on the consolidated
financial statements of the Group:
 Conceptual Framework for Financial Reporting issued on March 29, 2018
 Amendments to PFRS 3, Business Combinations - Definition of a Business
 Amendments to PFRS 7, Financial Instruments: Disclosures and PFRS 9, Financial Instruments,
Interest Rate Benchmark Reform
 Amendments to PAS 1, Presentation of Financial Statements, and PAS 8, Accounting Policies,
Changes in Accounting Estimates and Errors - Definition of Material
 Amendments to PFRS 16, Leases, COVID-19-related Rent Concessions

Significant Accounting Policies

Foreign Currency Translation

Transactions and balances
For financial reporting purposes, the foreign currency-denominated monetary assets and liabilities in
the RBU are translated in Philippine peso based on the Bankers Association of the Philippines (BAP)
closing rate prevailing at the statement of financial position date and foreign currency-denominated
income and expenses, at the prevailing exchange rates as at the date of transaction. Foreign
exchange differences arising from revaluation and translation of foreign currency-denominated assets
and liabilities are credited to or charged against operations in the year in which the rates change.
Non-monetary items that are measured in terms of historical cost in a foreign currency are translated
using the exchange rates as at the dates of the initial transactions.

Non-monetary items measured at fair value in a foreign currency are translated using the exchange
rates at the date when the fair value was determined.

FCDU, foreign branches and subsidiaries

As at the reporting date, the assets and liabilities of foreign branches and subsidiaries and FCDU of
the Parent Company and PSBank are translated into the Parent Company’s presentation currency (the
PHP) at BAP closing rate prevailing at the statement of financial position date, and their income and
expenses are translated at BAP weighted average rate. Exchange differences arising on translation
are taken to the statement of comprehensive income under ‘Translation adjustment and others’.
Upon disposal of a foreign entity or when the Parent Company ceases to have control over the
subsidiaries or upon actual remittance of FCDU profits to RBU, the deferred cumulative amount
recognized in the statement of comprehensive income is recognized in the statement of income.

Fair Value Measurement

The Group measures certain financial instruments, such as derivatives, at fair value at each statement
of financial position date. Also, fair values of financial instruments measured at amortized cost and
investment properties are disclosed in Note 5.

*SGVFSM005911*
 -5-

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an
orderly transaction between market participants at the measurement date (i.e., an exit price). The fair
value measurement is based on the presumption that the transaction to sell the asset or transfer the
liability takes place either in the principal market for the asset or liability; or in the absence of a
principal market, in the most advantageous market for the asset or liability. The principal or the most
advantageous market must be accessible to the Group.

The fair value of an asset or a liability is measured using the assumptions that market participants
would use when pricing the asset or liability, assuming that market participants act in their economic
best interest.

If an asset or a liability measured at fair value has a bid price and an ask price, the price within the
bid - ask spread that is most representative of fair value in the circumstances shall be used to measure
fair value regardless of where the input is categorized within the fair value hierarchy.

A fair value measurement of a non-financial asset takes into account a market participant’s ability to
generate economic benefits by using the asset in its highest and best use or by selling it to another
market participant that would use the asset in its highest and best use.

For assets and liabilities not listed in an active market, the Group uses valuation techniques that are
appropriate in the circumstances and for which sufficient data are available to measure fair value,
maximizing the use of relevant observable inputs and minimizing the use of unobservable inputs.

All assets and liabilities for which fair value is measured or disclosed in the financial statements are
categorized within the fair value hierarchy, described as follows, based on the lowest level input that
is significant to the fair value measurement as a whole:
 Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities
 Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is directly or indirectly observable
 Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value
measurement is unobservable

For assets and liabilities that are recognized in the financial statements on a recurring basis, the
Group determines whether transfers have occurred between Levels in the hierarchy by re-assessing
categorization (based on the lowest level input that is significant to the fair value measurement as a
whole) at the end of each reporting period. The Group determines the policies and procedures for
both recurring fair value measurement, such as financial assets and liabilities at FVTPL, and for non-
recurring measurement, such as investment properties.

External valuers are involved for valuation of significant assets, such as investment properties.
Selection criteria include market knowledge, reputation, independence and whether professional
standards are maintained.

For the purpose of fair value disclosures, the Group has determined classes of assets and liabilities on
the basis of the nature, characteristics and risks of the asset or liability and the level of the fair value
hierarchy as explained above.

*SGVFSM005911*
 -6-

Financial Instruments - Initial Recognition and Subsequent Measurement

Date of recognition
Purchases or sales of financial assets that require delivery of assets within the time frame established
by regulation or convention in the marketplace are recognized on the settlement date. Derivatives are
recognized on trade date basis. Deposits, amounts due from banks and customers and loans and
receivables are recognized when cash is received by the Group or advanced to the borrowers.

Initial recognition of financial instruments

All financial instruments are initially measured at fair value. Except for financial assets and financial
liabilities at FVTPL, the initial measurement of financial instruments includes transaction costs.

‘Day 1’ difference
Where the transaction price in a non-active market is different from the fair value from other
observable current market transactions in the same instrument or based on a valuation technique
whose variables include only data from observable market, the Group recognizes the difference
between the transaction price and fair value (a ‘Day 1’ difference) in the statement of income. In
cases where the transaction price used is made of data which is not observable, the difference
between the transaction price and model value is only recognized in the statement of income when
the inputs become observable or when the instrument is derecognized. For each transaction, the
Group determines the appropriate method of recognizing the ‘Day 1’ difference amount.

Classification and Subsequent Measurement

Financial assets are measured at FVTPL unless these are measured at FVOCI or at amortized cost.
Financial liabilities are classified as either financial liabilities at FVTPL or financial liabilities at
amortized cost. The classification of financial assets depends on the contractual terms and the
business model for managing the financial assets. Subsequent to initial recognition, the Group may
reclassify its financial assets only when there is a change in its business model for managing these
financial assets. Reclassification of financial liabilities is not allowed.

The Group determines its business model at the level that best reflects how it manages groups of
financial assets to achieve its business objective. The Group’s business model is not assessed on an
instrument-by-instrument basis, but at a higher level of aggregated portfolios. If cash flows after
initial recognition are realized in a way that is different from the Group’s original expectations, the
Group does not change the classification of the remaining financial assets held in that business
model, but incorporates such information when assessing newly originated or newly purchased
financial assets going forward.

As a second step of its classification process, the Group assesses the contractual terms of financial
assets to identify whether they pass the contractual cash flows test (SPPI test). For the purpose of the
SPPI test, principal is defined as the fair value of the financial asset at initial recognition and may
change over the life of the financial asset (for example, if there are repayments of principal or
amortization of the premium or discount). The most significant elements of interest within a lending
arrangement are typically the consideration for the time value of money and credit risk. In contrast,
contractual terms that introduce a more than de minimis exposure to risks or volatility in the
contractual cash flows that are unrelated to a basic lending arrangement do not give rise to
contractual cash flows that are SPPI. In such cases, the financial asset is required to be measured at
FVTPL.

*SGVFSM005911*
 -7-

Financial assets at FVTPL

These are recorded in the statements of financial position at fair value with changes in fair value
recognized in ‘Trading, securities and foreign exchange gain - net’. Interest earned is recorded in
‘Interest Income’ while dividend income is recorded in ‘Dividends’ when the right to receive
payment has been established. Included in this classification are debt and equity securities which
have been acquired principally for the purpose of selling or repurchasing in the near term.

Derivatives recorded at FVTPL

The Parent Company and some of its subsidiaries are counterparties to derivative contracts, such as
currency forwards, currency swaps, interest rate swaps (IRS), call options, non-deliverable forwards
(NDF) and other interest rate derivatives. These derivatives are entered into as a service to customers
and as a means of reducing or managing their respective foreign exchange and interest rate
exposures, as well as for trading purposes. Such derivative financial instruments are initially
recorded at fair value on the date at which the derivative contract is entered into and are subsequently
remeasured at fair value. Any gains or losses arising from changes in fair values of derivatives
(except those accounted for as accounting hedges) are taken directly to the statement of income and
are included in ‘Trading, securities and foreign exchange gain - net’. Derivatives are carried as
assets when the fair value is positive and as liabilities when the fair value is negative.

Investment securities at FVOCI

Investment securities at FVOCI include debt and equity securities. After initial measurement,
investment securities at FVOCI are subsequently measured at fair value. The unrealized gains and
losses arising from the fair valuation of investment securities at FVOCI are excluded, net of tax as
applicable, from the reported earnings and are included in the statement of comprehensive income as
‘Change in net unrealized gain (loss) on investment securities at FVOCI’.

Debt securities at FVOCI are those that meet both of the following conditions: (i) the asset is held
within a business model whose objective is to hold the financial assets in order to both collect
contractual cash flows and sell financial assets; and (ii) the contractual terms of the financial asset
give rise on specified dates to cash flow that are SPPI on the outstanding principal amount. The
effective yield component of debt securities at FVOCI, as well as the impact of restatement on
foreign currency-denominated debt securities at FVOCI is reported in the statement of income.
Interest earned on holding debt securities at FVOCI are reported as ‘Interest Income’ using the
effective interest rate (EIR) method. When the debt securities at FVOCI are disposed of, the
cumulative gain or loss previously recognized in the statement of comprehensive income is
recognized as ‘Trading, securities and foreign exchange gain - net’ in the statement of income. The
expected credit loss (ECL) arising from impairment of such investments are recognized in OCI with
a corresponding charge to ‘Provision for credit and impairment losses’ in the statement of income.

Equity securities designated at FVOCI are those that the Group made an irrevocable election to
present in OCI the subsequent changes in fair value. Dividends earned on holding equity securities at
FVOCI are recognized in the statement of income as ‘Dividends’ when the right of the payment has
been established, except when the Group benefits from such proceeds as a recovery part of the cost
of the instrument, in which case, such gains are recorded in OCI. Gains and losses on disposal of
these equity securities are never recycled to profit or loss, but the cumulative gain or loss previously
recognized in the statement of comprehensive income is reclassified to ‘Surplus’ or any other
appropriate equity account upon disposal. Equity securities at FVOCI are not subject to impairment
assessment.

*SGVFSM005911*
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Financial assets at amortized cost

Financial assets at amortized cost are debt financial assets that meet both of the following conditions:
(i) these are held within a business model whose objective is to hold the financial assets in order to
collect contractual cash flows; and (ii) the contractual terms give rise on specified dates to cash flows
that are SPPI on the outstanding principal amount. This accounting policy relates to the statement of
financial position captions ‘Due from BSP’, ‘Due from other banks’, ‘Interbank loans receivable and
SPURA’, ‘Investment securities at amortized cost’ and ‘Loans and receivables’.

After initial measurement, financial assets at amortized cost are subsequently measured at amortized
cost using the EIR method, less impairment in value. Amortized cost is calculated by taking into
account any discount or premium on acquisition and fees that are an integral part of the EIR. The
amortization is included in ‘Interest income’ in the statement of income. Gains and losses are
recognized in statement of income when these investments are derecognized or impaired, as well as
through the amortization process. The ECL are recognized in the statement of income under
‘Provision for credit and impairment losses’. The effects of revaluation on foreign currency-
denominated investments are recognized in the statement of income.

Financial liabilities at amortized cost

Issued financial instruments or their components, which are not designated at FVTPL, are classified
as liabilities under ‘Deposit liabilities’, ‘Bills payable and securities sold under repurchase
agreements (SSURA)’, ‘Bonds payable’, or ‘Subordinated debts’ or other appropriate financial
liability accounts, where the substance of the contractual arrangement results in the Group having an
obligation either to deliver cash or another financial asset to the holder, or to satisfy the obligation
other than by the exchange of a fixed amount of cash or another financial asset for a fixed number of
own equity shares. The components of issued financial instruments that contain both liability and
equity elements are accounted for separately, with the equity component being assigned the residual
amount after deducting from the instrument as a whole the amount separately determined as the fair
value of the liability component on the date of issue.

After initial measurement, bills payable and similar financial liabilities not qualified as and not
designated at FVTPL, are subsequently measured at amortized cost using the EIR method.
Amortized cost is calculated by taking into account any discount or premium on the issue and fees
that are an integral part of the EIR.

Financial Guarantees and Undrawn Loan Commitments

The Group issues financial guarantees and loan commitments. Financial guarantees are those issued
by the Group to creditors as allowed under existing rules and regulations whereby it guarantees third
party obligations by signing as guarantor in the contract/agreement. Undrawn loan commitments and
letters of credit are commitments under which over the duration of the commitment, the Group is
required to provide a loan with pre-specified terms to the customer. The nominal contractual value
of financial guarantees and undrawn loan commitments, where the loan agreed to be provided is on
market terms, are not recorded in the statement of financial position. These contracts are in the scope
of the ECL requirements where the Group estimates the expected portion of the undrawn loan
commitments that will be drawn over their expected life. The ECL related to financial guarantees
and undrawn loan commitments is recognized in ‘Miscellaneous liabilities’ under ‘Other liabilities’.

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Derecognition of Financial Assets and Financial Liabilities

Financial assets
A financial asset (or, where applicable, a part of a financial asset or part of a group of financial
assets) is derecognized when:
 the rights to receive cash flows from the asset have expired; or
 the Group retains the right to receive cash flows from the asset, but has assumed an obligation to
pay them in full without material delay to a third party under a “pass-through” arrangement; or
 the Group has transferred its rights to receive cash flows from the asset and either (a) has
transferred substantially all the risks and rewards of the asset, or (b) has neither transferred nor
retained the risks and rewards of the asset but has transferred the control of the asset.

Where the Group has transferred its rights to receive cash flows from an asset or has entered into a
pass-through arrangement, and has neither transferred nor retained substantially all the risks and
rewards of the asset nor transferred control of the asset, the asset is recognized to the extent of the
Group’s continuing involvement in the asset. The extent of the Group’s continuing involvement in
the transferred asset is the extent to which it is exposed to changes in the value of the transferred
asset. When the Group’s continuing involvement takes the form of guaranteeing the transferred
asset, the extent of the Group’s continuing involvement is the lower of (i) the amount of the asset and
(ii) the maximum amount of the consideration received that the Group could be required to repay
(‘the guarantee amount’). When the Group’s continuing involvement takes the form of a written or
purchased option (or both) on the transferred asset, the extent of the Group’s continuing involvement
is the amount of the transferred asset that the Group may repurchase. However, in case of a written
put option to an asset that is measured at fair value, the extent of the Group’s continuing involvement
is limited to the lower of the fair value of the transferred asset and the option exercise price. When
the Group’s continuing involvement takes the form of a cash-settled option or similar provision on
the transferred asset, the extent of the Group’s continuing involvement is measured in the same way
as that which results from non-cash settled options.

The Group derecognizes a financial asset such as a loan to a customer, when the terms and conditions
have been renegotiated to the extent that, substantially, it becomes a new loan, with the difference
recognized as a derecognition gain or loss, to the extent that an impairment loss has not already been
recorded. The newly recognized loans are classified as Stage 1 for ECL measurement purposes,
unless the new loan is deemed to be POCI.

When assessing whether or not to derecognize a loan to a customer, amongst others, the Group
considers the following factors:
 Change in currency of the loan
 Introduction of an equity feature
 Change in counterparty
 If the modification is such that the instrument would no longer meet the SPPI criterion

If the modification does not result in cash flows that are substantially different as set out below, the
modification does not result in derecognition. Based on the change in cash flows discounted at the
original EIR, the Group records a modification gain or loss, to the extent that an impairment loss has
not already been recorded. The Group considers a modification substantial based on qualitative
factors.

Financial assets are written off either partially or in their entirety only when the Group has stopped
pursuing the recovery. If a write-off is later recovered, any amounts formerly charged are credited to
‘Recovery on Charged-off Assets’ under ‘Miscellaneous Income’ in the statements of income.

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Financial liabilities
A financial liability is derecognized when the obligation under the liability is discharged, cancelled
or has expired. Where an existing financial liability is replaced by another from the same lender on
substantially different terms, or the terms of an existing liability are substantially modified, such an
exchange or modification is treated as a derecognition of the original liability and the recognition of a
new liability, and the difference in the respective carrying amounts is recognized in the statement of
income.

The Group considers a modification substantial based on qualitative factors and if it results in a
difference between the adjusted discounted present value and the original carrying amount of the
financial liability of or greater than ten percent.

Similar with financial assets, when the modification of a financial liability is not considered
substantial, the Group records a modification gain or loss based on the change in cash flows
discounted at the original EIR.

Repurchase and reverse repurchase agreements

Securities sold under agreements to repurchase at a specified future date (‘repos’) are not
derecognized from the statement of financial position. The corresponding cash received, including
accrued interest, is recognized in the statement of financial position as SSURA included in ‘Bills
payable and SSURA’ and is considered as a loan to the Group, reflecting the economic substance of
such transaction.

Conversely, securities purchased under agreements to resell at a specified future date (‘reverse
repos’) are not recognized in the statement of financial position. The corresponding cash paid
including accrued interest, is recognized in the statement of financial position as SPURA, and is
considered a loan to the counterparty. The difference between the purchase price and resale price is
treated as interest income and is accrued over the life of the agreement using the EIR method.

Reclassification of Financial Assets

The Group reclassifies its financial assets when there is a change in its business model for managing
financial assets. A change in business model occurs when the Group either begins or ceases to
perform an activity that is significant to its operations. The Group applies the reclassification
prospectively from the reclassification date (i.e. the first day of the next quarterly reporting period
following the change in business model) and does not restate any previously recognized gains, losses
or interest.

Impairment of Financial Assets

The adoption of PFRS 9 has changed the Group’s loss impairment method on financial assets by
replacing the previous incurred loss approach with a forward-looking ECL approach which covers all
loans and other debt financial assets not held at FVTPL, together with loan commitments and
financial guarantee contracts.

Overview of the ECL principles

ECL represents credit losses that reflect an unbiased and probability weighted amount which is based
on reasonable and supportable information about past events, current conditions and forecasts of
future economic conditions, and time value of money. The ECL allowance is based on the credit
losses expected to arise on a 12-month duration if there has been no SICR of the financial asset since
origination. Otherwise if a SICR is observed, then the ECL estimation is extended until the end of
the life of the financial asset. The 12-month ECL represents the losses that result from default events
on a financial asset which may happen within 12 months after the reporting date. The Lifetime ECL
on the other hand represents the losses that result from default events on a financial asset which may

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happen over its life. Both Lifetime ECLs and 12-month ECLs are calculated on either an individual
basis or a collective basis, depending on the nature of the underlying portfolio of financial
instruments.

The major portfolios of financial assets identified upon initial analysis of the Group’s credit exposure
are loan receivables, treasury accounts, and other receivables. Loan receivables may be availed by
specific individuals, corporations or organizations. Hence, these portfolios can be further segmented
to commercial and consumer portfolios. After segmentation, financial assets are grouped into
Stage 1, Stage 2, and Stage 3 as described below.

Definition of “default” and “cure”

The Group defines a financial instrument as in default, which is fully aligned with the definition of
non-performing loans i.e. credit impaired, in all cases when the borrower becomes more than 90 days
(more than 30 days in 2018) past due on its contractual payments. As a part of a qualitative
assessment of whether a customer is in default, the Group also considers a variety of instances that
may indicate unlikeliness to pay. When such events occur, the Group carefully considers whether the
event should result in treating the customer as defaulted. An instrument is considered to be no longer
in default (i.e. to have cured) when it no longer meets any of the default criteria and has exhibited a
satisfactory track record.

Treasury exposures are considered in default upon occurrence of a credit event such as but not
limited to bankruptcy of counterparty, restructuring, failure to pay on agreed settlement date, or
request for moratorium.

SICR
In order to determine whether an instrument is subject to 12-month or Lifetime ECL, the Group
assesses whether there has been a SICR since initial recognition. The criteria for determining
whether credit risk has increased significantly vary by portfolio and include quantitative and
qualitative factors. The credit risk of a particular exposure is deemed to have increased significantly
since initial recognition if, based on the Group’s internal credit assessment, the borrower or
counterparty is determined to have well-defined credit weaknesses (i.e. with internal credit rating of
6 due to financial or repayment concerns or lower). These may include adverse trends or
developments of financial, managerial, economic or political nature, or a significant weakness in
collateral. Credit weakness may be manifested by unfavorable record or unsatisfactory
characteristics or may only be potential that deserves management’s close attention and may lead to
significant losses or may result in collection or liquidation of the outstanding loan amount to be
highly improbable. For exposures without internal credit grades, if contractual payments are more
than 30 days past due, the credit risk is deemed to have increased significantly since initial
recognition. Days past due are determined by counting the number of days since the earliest elapsed
due date in respect of which full payment has not been received. In subsequent reporting periods, if
the credit risk of the financial asset improves over an observable period such that there is no longer a
SICR since initial recognition, the Group shall revert to recognizing a 12-month ECL.

Staging assessment
For non-credit-impaired financial assets:
 Stage 1 is comprised of all non-impaired financial assets which have not experienced a SICR
since initial recognition. The Group recognizes a 12-month ECL for Stage 1 financial assets.
 Stage 2 is comprised of all non-impaired financial assets which have experienced a SICR since
initial recognition. The Group recognizes a lifetime ECL for Stage 2 financial assets.

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For credit-impaired financial assets:

 Financial assets are classified as Stage 3 when there is objective evidence of impairment as a
result of one or more loss events that have occurred after initial recognition with a negative
impact on the estimated future cash flows of a financial asset or a portfolio of financial assets.
ECL for Stage 3 exposure are computed on a per account, taking into consideration the present
value of the expected recoverable cash flows from each transaction.

Financial assets that are credit-impaired on initial recognition are classified as purchased or
originated credit-impaired (POCI) assets. These are recorded at fair value at original recognition and
interest income is subsequently recognized based on a credit-adjusted EIR. ECL is only recognized
or released to the extent that there is a subsequent change in the ECLs.

Assessment of ECL on a collective basis

The Group calculates ECL either on an individual or a collective basis. The Group performs
collective impairment by grouping exposures into smaller homogenous portfolios based on a
combination of borrower and account characteristics. Accounts with similar risk attributes (i.e.
facility, security, credit rating, months-on-books, utilization and collateral type, etc.) are pooled
together for calculating provisions based on the ECL models.

ECL parameters and methodologies

ECL is a function of the probability of default (PD), exposure-at-default (EAD), and loss-given
default (LGD), with the timing of the loss also considered, and is estimated by incorporating
forward-looking economic information and through the use of experienced credit judgement.

The PD represents the likelihood that a credit exposure will not be repaid and will go into default in
either a 12-month horizon for Stage 1 or lifetime horizon for Stage 2. The PD for each individual
financial asset is modelled based on historical data and is estimated based on current market
conditions and reasonable and supportable information about future economic conditions. The
Group segmented its credit exposures based on homogenous risk characteristics and developed a
corresponding PD methodology for each portfolio. The PD methodology for each relevant portfolio
is determined based on the underlying nature or characteristic of the portfolio, behavior of the
accounts and materiality of the segment as compared to the total portfolio.

EAD consists of the amortized cost and any accrued interest receivable. For off-balance sheet and
undrawn committed amounts, EAD includes a credit conversion factor which is an estimate of any
further amount to be drawn at the time of default. For the credit card business, which was merged
with the Parent Company in 2020, EAD is modelled based on historical data on card limit utilization.

LGD is the amount that may not be recovered in the event of default and is modelled based on
historical cash flow recovery and reasonable and supportable information about future economic
conditions, where appropriate. LGD takes into consideration the amount and quality of any collateral
held.

The Group applies a simplified ECL approach for its accounts receivables wherein the Group uses a
provisioning matrix that considers historical changes in the behavior of the portfolio to predict
conditions over the span of a given observation period.

The Parent Company offers credit card facilities (previously under MCC), in which it has the right to
cancel and/or reduce the facilities with one-day notice. It does not limit its exposure to credit losses
to the contractual notice period, but instead, calculates ECL over a period that reflects its
expectations of the customers’ behavior, their likelihood of default, and its future risk mitigation
procedures, which could include reducing or cancelling the facilities. Based on past experience and

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expectations, the period over which ECL is calculated for these products is two years. The interest
rate used to discount the ECL for credit cards is based on contractual interest rate. These rates are
also used to discount future recoveries over a period of five years as these cover the cost of securing
an equivalent fund. The contractual interest rate is used as discounting factor since the Parent
Company estimates that this rate is reflective of the EIR.

Forward-looking information
The Group incorporates forward-looking information into both its assessment of whether the credit
risk of a financial asset has increased significantly since its initial recognition and its measurement of
ECL. A broad range of forward-looking information are considered as economic inputs, such as
growth of the gross domestic product, inflation rates, unemployment rates, interest rates and BSP
statistical indicators. The inputs and models used for calculating ECL may not always capture all
characteristics of the market at the date of the financial statements. To reflect this, qualitative
adjustments or overlays are occasionally made as temporary adjustments when such differences are
significantly material.

In 2019, after model reviews and validation, the Parent Company relied on the following as
economic inputs in measuring ECL:
 Treasury Bill (T-Bill) Rates
 Philippine Stock Exchange (PSE) All Shares Index
 GDP growth
 External debt
 PSE Financials Index
 GDP Financial intermediation
 Government expenditure

In 2020, the Parent Company expanded its set of macroeconomic overlays to better capture the
characteristics of specific financial asset classes (e.g. mortgage and auto loan exposures) and industry
clusters (e.g. essential industries, secondary needs). The following economic inputs were determined
to be statistically significant in measuring ECL:
 GDP Growth
 Inflation rate
 Unemployment rate
 Minimum wage
 USDPHP exchange rate
 Unified R2-BV ALWTI Crude Oil Price
 Consumer confidence index

Debt investment securities measured at FVOCI

The ECL for debt securities at FVOCI do not reduce the carrying amount of these financial assets in
the statement of financial position, which remains at fair value. Instead, an amount equal to the
allowance that would arise if the assets were measured at amortized cost is recognized in ‘Net
unrealized gain (loss) on investment securities at FVOCI’ as an accumulated impairment amount,
with a corresponding charge to profit or loss. The accumulated loss recognized in OCI is recycled to
profit or loss upon derecognition of these financial assets.

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Restructured Loans
Where possible, the Group seeks to restructure loans rather than to take possession of collateral. This
may involve extending the payment arrangements and the agreement of new loan conditions. Once
the terms have been renegotiated, the loan is no longer considered past due. Management
continuously reviews and monitors restructured loans until derecognition to ensure that all criteria are
met and that future payments are likely to occur. The loans continue to be subject to an individual or
collective impairment assessment, calculated using the loan’s original EIR. The difference between
the recorded value of the original loan and the present value of the restructured cash flows,
discounted at the original EIR, is recognized in ‘Provision for credit and impairment losses’ in the
statement of income. When the loan has been restructured but not derecognized, the Group also
reassesses whether there has been a SICR and considers whether the assets should be classified as
Stage 3. If the restructuring terms are substantially different, the loan is derecognized and a new
‘asset’ is recognized at fair value using the revised EIR.

Collateral Valuation of Financial Assets

Collateral, unless repossessed, is not recorded in the Group’s statement of financial position.
However, the fair value of collateral affects the calculation of ECLs. It is generally assessed, at a
minimum, at inception and re-assessed every other year. However, some collaterals, for example,
cash or securities relating to margining requirements, are valued daily.

Revenue Recognition
Revenue from contracts with customers is recognized upon transfer of services to the customer at an
amount that reflects the consideration to which the Group expects to be entitled in exchange for those
services.

The Group assesses its revenue arrangements against specific criteria in order to determine if it is
acting as a principal or agent. The Group concluded that it is acting as a principal in all of its
revenue arrangements except for certain brokerage transactions. The following specific recognition
criteria must also be met before revenue is recognized.

Fee and commission income

The Group earns fee and commission income from a diverse range of services it provides to its
customers, which are divided into the following two categories:

a. Fee income earned from services that are provided over a certain period of time
Fees earned for the provision of services over a period of time are accrued over that period as the
customer simultaneously receives and consumes the benefits provided by the Group. Using an
output method, revenue is recognized if the Group has a right to invoice the customer for
services directly corresponding to performance completed to date. These fees include investment
fund fees, custodian fees, fiduciary fees, asset management fees, and income from trust
operations.

b. Fee income from providing transaction services

Fees arising from negotiating or participating in the negotiation of a transaction for a third party -
such as commission income, underwriting fees, corporate finance fees, advisory fees and
brokerage fees for the arrangement of the acquisition of shares or other securities or the purchase
or sale of businesses are recognized on completion of the underlying transaction. Fees or
components of fees that are linked to a certain performance are recognized after fulfilling the
corresponding criteria.

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Discounts earned, membership fees and awards revenue on credit cards

The following table provides information about the nature and timing of the satisfaction of
performance obligations for the Parent Company’s credit card business (under MCC prior to merger -
see Note 11), including significant payment terms, and the related revenue recognition policies.

Type of Nature and timing of satisfaction of performance Revenue recognition

product/service obligations, including significant payment terms under PFRS 15
Discounts earned Charges arising from credit availments by the Parent Recognized as revenue upon receipt from member
Company’s and other credit companies’ cardholders when establishments of charges arising from credit availments
the Parent Company is acting as an acquirer. These by the Parent Company’s cardholders and other credit
discounts are computed based on certain agreed rates. companies’ cardholders when the Parent Company is
These also include interchange income from transactions acting as an acquirer.
processed by other acquirers through VISA and
Mastercard and fees from cash advance transactions of
cardholders.
Membership fees Periodically charged to cardholders upfront. Deferred and recorded under ‘Deferred revenue’ and
and dues recognized on a straight-line basis over the period the
fee entitles the cardholders to use the card.
Awards revenue The Parent Company operates a loyalty points program, The Parent Company allocates a portion of the
which allows customers to accumulate points when they consideration received from discounts earned and
purchase from member establishments using the issued interchange fees from credit cards to the reward points
card of the Parent Company. The points accumulate and based on the estimated stand-alone selling prices. The
do not expire. amount allocated to the loyalty program is deferred, and
is recognized as revenue when loyalty points are
redeemed or the likelihood of the customer redeeming
the loyalty points becomes remote.

Revenues outside the scope of PFRS 15

Interest income
For all financial instruments measured at amortized cost and interest-bearing financial instruments
classified as investment securities at FVOCI investments, interest income is recorded at the EIR,
which is the rate that exactly discounts estimated future cash receipts through the expected life of the
financial instrument or a shorter period, where appropriate, to the net carrying amount of the
financial asset. The calculation takes into account all contractual terms of the financial instrument
(for example, prepayment options), including any fees or incremental costs that are directly
attributable to the instrument and are an integral part of the EIR. The adjusted carrying amount is
calculated based on the original EIR. The change in carrying amount is recorded as ‘Interest
income’. Loan commitment fees that are likely to be drawn down are deferred (together with any
incremental costs) and recognized as an adjustment to the EIR of the loan.

Under PFRS 9, when a financial asset becomes credit-impaired and is, therefore, regarded as Stage 3
(as discussed in “Impairment of Financial Assets” above), the Group calculates interest income by
applying the EIR to the net amortized cost of the financial asset. If the financial asset cures and is no
longer credit-impaired, the Group reverts to calculating interest income on a gross basis.

Purchases by credit cardholders, collectible on an installment basis, are recorded at the cost of the
items purchased plus a certain percentage of cost. The excess over cost is credited to ‘Unearned
discount’ and is shown as a deduction from ‘Loans and receivables’ in the consolidated statement of
financial position. The unearned discount is taken up to interest income over the installment terms
and is computed using the EIR method.

Recovery on charged-off assets

Income arising from collections on accounts or recoveries from impairment of items previously
written off are recognized in the year of recovery.

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Leasing income - Finance lease

The excess of aggregate lease rentals plus the estimated residual value over the cost of the leased
equipment constitutes the unearned lease income. Residual values represent estimated proceeds from
the disposal of equipment at the time lease is estimated. The unearned lease income is amortized
over the term of the lease, commencing on the month the lease is executed using the EIR method.

Dividend income
Dividend income is recognized when the Group’s right to receive payment is established.

Gain on disposal of investment securities at amortized cost

Results arising from gains and losses from disposal of investment securities at amortized cost.

Trading and securities gain - net

Results arising from trading activities include all gains and losses from changes in fair value for
financial assets and financial liabilities at FVTPL and gains and losses from disposal of debt
securities at FVOCI.

Rental income
Rental income arising on leased properties is accounted for on a straight-line basis over the lease
terms on ongoing leases and is recorded in the statement of income under ‘Leasing’.

Income on direct financing leases and receivables financed

Income on loans and receivables financed with short-term maturities is recorded in ‘Interest income’
and is recognized using the EIR method. Interest and finance fees on finance leases and loans and
receivables financed with long-term maturities and the excess of the aggregate lease rentals plus the
estimated terminal value of the leased equipment over its cost are credited to unearned discount and
amortized over the term of the note or lease using the EIR method.

Gain on sale of investment in associate

Upon loss of significant influence over an associate, the Group measures and recognizes any retained
investment at its fair value. Any difference between the carrying amount of the associate upon loss
of significant influence and the fair value of the retained investment and proceeds from disposal is
recognized in profit or loss.

Gain on sale of non-current asset held for sale

The gain or loss arising from the sale of non-current asset held for sale is included in profit or loss
when the item is derecognized. The gain or loss arising from the derecognition of non-current asset
held for sale is determined as the difference between the net disposal proceeds and its carrying
amount on the date of the transaction.

Cash and Cash Equivalents

For purposes of reporting cash flows, cash and cash equivalents include cash and other cash items,
amounts due from BSP and other banks, and interbank loans receivable and SPURA with original
maturities of three months or less from dates of placements and that are subject to insignificant risk
of changes in value.

Property and Equipment

Land is stated at cost less any impairment in value and depreciable properties including buildings,
furniture, fixtures and equipment and leasehold improvements are stated at cost less accumulated
depreciation and amortization, and any impairment in value. Such cost includes the cost of replacing
part of the property and equipment when that cost is incurred, if the recognition criteria are met but
excludes repairs and maintenance costs. Building under construction (BUC) is stated at cost and

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includes cost of construction and other direct costs. BUC is not depreciated until such time that the
relevant asset is completed and put into operational use.

Depreciation is calculated on the straight-line method over the estimated useful life of the
depreciable assets. Leasehold improvements are amortized over the shorter of the terms of the
covering leases and the estimated useful lives of the improvements. The range of estimated useful
lives of property and equipment follows:

Buildings 25 to 50 years
Furniture, fixtures and equipment 2 to 5 years
Leasehold improvements 5 to 20 years

The depreciation and amortization method and useful life are reviewed periodically to ensure that the
method and period of depreciation and amortization are consistent with the expected pattern of
economic benefits from items of property and equipment.

An item of property and equipment is derecognized upon disposal or when no future economic
benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the asset
(calculated as the difference between the net disposal proceeds and the carrying amount of the asset)
is included in the statement of income under ‘Profit from assets sold’ in the year the asset is
derecognized.

Investments in Subsidiaries, Associates and a Joint Venture (JV)

Investment in subsidiaries
Subsidiaries pertain to all entities over which the Group has control. Control is achieved when the
Group is exposed, or has rights, to variable returns from its involvement with the investee and has the
ability to affect those returns through its power over the investee. When the Group has less than a
majority of the voting or similar rights of an investee, the Group considers all relevant facts and
circumstances in assessing whether it has power over an investee, including:
 the contractual arrangement with the other vote holders of the investee;
 rights arising from other contractual arrangements; and
 the Group’s voting rights.

Investment in associates
Associates pertain to all entities over which the Group and the Parent Company have significant
influence. Significant influence is the power to participate in the financial and operating policy
decisions of the investee, but is not control or joint control over those policies. Investment in
associates is accounted for under the equity method of accounting.

Investment in a JV
A JV is a type of joint arrangement whereby the parties that have joint control of the arrangement
have rights to the net assets of the JV. Joint control is the contractually agreed sharing of control of
an arrangement, which exists only when decisions about the relevant activities require unanimous
consent of the parties sharing control. Investment in a JV is accounted for under the equity method
of accounting. The Group’s investment in a JV represents the 30% interest of PSBank in Sumisho
Motor Finance Corporation (SMFC) (Note 11).

Upon loss of significant influence over the associate or joint control over the JV, the Group and the
Parent Company measure and recognize any retained investment at its fair value. Any difference
between the carrying amount of the associate or JV upon loss of significant influence or joint control

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and the fair value of the retained investment and proceeds from disposal is recognized in the
statement of income.

Under the equity method, investments in associates and a JV are carried in the statement of financial
position at cost plus post-acquisition changes in the Group’s and the Parent Company’s share of the
net assets of the associate or JV less any impairment in value. Post-acquisition changes in the share
of net assets of the associate or a JV include the share in the: (a) income or losses; and (b) unrealized
gain or loss on investment securities, remeasurement of retirement plans and others. Dividends
received are treated as a reduction in the carrying values of the investments. Goodwill relating to the
associate and a JV is included in the carrying value of the investment and is not amortized. When the
Group and the Parent Company increase its ownership interest in an associate or a JV that continues
to be accounted for under the equity method, the cost for the additional interest is added to the
existing carrying amount of the associate or JV and the existing interest in the associate or JV is not
remeasured. The share in an associate or a JV’s post-acquisition profits or losses is recognized in the
statement of income as ‘Share in net income of subsidiaries, associates and a joint venture’ while its
share of post-acquisition movements in the associate or JV’s equity reserves is recognized directly in
the statement of comprehensive income. When the share of losses in an associate or a JV equals or
exceeds its interest in the associate or JV, including any other unsecured receivables, the Group and
the Parent Company do not recognize further losses, unless it incurred obligations or made payments
on behalf of the associate or JV which is recognized as miscellaneous liabilities. Profits and losses
resulting from transactions between the Group or the Parent Company and an associate or JV are
eliminated to the extent of the Group or the Parent Company’s interest in the associate or JV.

Investments in subsidiaries in the separate financial statements are accounted for under the equity
method similarly as investments in associates and JV. Equity in other comprehensive income
(losses) of subsidiaries and changes therein are included in remeasurement losses on retirement plan,
net unrealized gain on investment securities at FVOCI, and translation adjustments and others as
appropriate together with the Parent Company in the separate statement of financial position and
statement of comprehensive income.

Investment Properties
Investment properties are measured initially at cost, including transaction costs. An investment
property acquired through an exchange transaction is measured at fair value of the asset acquired
unless the fair value of such an asset cannot be measured in which case the investment property
acquired is measured at the carrying amount of asset given up. The difference between the fair value
of the asset received and the carrying amount of the asset given up is recorded as ‘Gain on initial
recognition of investment properties’ under ‘Miscellaneous income’. Foreclosed properties are
classified under ‘Investment properties’ upon: a.) entry of judgment in case of judicial foreclosure;
b.) execution of the Sheriff’s Certificate of Sale in case of extra-judicial foreclosure; or
c.) notarization of the Deed of Dacion in case of dation in payment (dacion en pago). Subsequent to
initial recognition, investment properties are carried at cost less accumulated depreciation (for
depreciable investment properties) and impairment in value.

Investment properties are derecognized when they have either been disposed of or when the
investment property is permanently withdrawn from use and no future benefit is expected from its
disposal. Any gains or losses on the retirement or disposal of an investment property are recognized
in the statement of income under ‘Profit from assets sold’ in the year of retirement or disposal.

Expenditures incurred after the investment properties have been put into operations, such as repairs
and maintenance costs, are normally charged to operations in the year in which the costs are incurred.
Depreciation is calculated on a straight-line basis using the remaining useful lives from the time of

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acquisition of the investment properties based on appraisal reports but not to exceed 50 years for
buildings and condominium units.

Transfers are made to investment properties when, and only when, there is a change in use evidenced
by ending of owner occupation, commencement of an operating lease to another party or ending of
construction or development. Transfers are made from investment properties when, and only when,
there is a change in use evidenced by commencement of owner occupation or commencement of
development with a view to sale.

Interest in Joint Operations

The Group is a party to joint operations whereby it contributed parcels of land for development into
residential and commercial units. In respect of the Group’s interest in the joint operations, the Group
recognizes the following: (a) the assets that it controls and the liabilities that it incurs; and (b) the
expenses that it incurs and its share of the income that it earns from the sale of units by the joint
operations. The assets contributed to the joint operations are measured at the lower of cost or net
realizable value. Net realizable value is the estimated selling price in the ordinary course of business
less estimated costs necessary to make the sale (Note 14).

Chattel Mortgage Properties

Chattel mortgage properties comprise of repossessed vehicles. Chattel mortgage properties are stated
at cost less accumulated depreciation and impairment in value. Depreciation is calculated on a
straight-line basis using the remaining useful lives from the time of acquisition of the vehicles. The
useful lives of chattel mortgage properties are estimated to be five years.

Subordinated Notes
Subordinated notes issued by Special Purpose Vehicles (SPV) (presented as ‘Investment in SPVs’
under ‘Other assets’) are stated at amortized cost reduced by an allowance for credit losses. The
allowance for credit losses is determined based on the difference between the outstanding principal
amount and the recoverable amount which is the present value of the future cash flow expected to be
received as payment for the subordinated notes.

Intangible Assets
Software costs
Software costs (presented under ‘Other assets’) are capitalized on the basis of the cost incurred to
acquire and bring to use the specific software. These costs are amortized over three to five years on a
straight-line basis. Costs associated with maintaining the computer software programs are
recognized as expense when incurred. Software costs are carried at cost less accumulated
amortization.

Exchange trading right

Exchange trading right (included in ‘Miscellaneous assets’ presented under ‘Other assets’) is a result
of the PSE conversion plan to preserve access of First Metro Securities Brokerage Corporation
(FMSBC), a subsidiary of FMIC, to the trading facilities and continue transacting business in the
PSE. The exchange trading right has an indefinite useful life as there is no foreseeable limit to the
period over which this asset is expected to generate net cash inflows. It is carried at the amount
allocated from the original cost to the exchange membership seat (after a corresponding allocation
was made to the value of the PSE shares) less any allowance for impairment losses. FMSBC does
not intend to sell the exchange trading right in the near future.

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Goodwill
Goodwill acquired in a business combination is initially measured at cost being the excess of the cost
of the business combination over the Group’s interest in the net fair value of the acquiree’s
identifiable assets, liabilities and contingent liabilities. With respect to investments in associates and
a JV, goodwill is included in the carrying amounts of the investments. Following initial recognition,
goodwill is measured at cost net of impairment losses (see accounting policy on “Impairment of
Non-financial Assets”).

Customized System Development Cost

Customized system development cost consists of payments for customization of various banking
systems. This account will be reclassified to appropriate accounts upon completion and will be
depreciated and amortized from the time the asset is ready for its intended use (Note 14).

Impairment of Non-financial Assets

Property and equipment, investments in subsidiaries, associates and a JV, investment properties,
chattel mortgage properties, intangible assets with finite useful lives and other assets
At each statement of financial position date, the Group assesses whether there is any indication that
its non-financial assets may be impaired. When an indicator of impairment exists or when an annual
impairment testing for an asset is required, the Group makes a formal estimate of recoverable
amount. Recoverable amount is the higher of an asset’s fair value less costs to sell (FVLCTS) and its
value in use (VIU) and is determined for an individual asset, unless the asset does not generate cash
inflows that are largely independent of those from other assets or groups of assets, in which case the
recoverable amount is assessed as part of the cash generating unit to which it belongs. Where the
carrying amount of an asset exceeds its recoverable amount, the asset is considered impaired and is
written down to its recoverable amount. In assessing VIU, the estimated future cash flows are
discounted to their present value using a pre-tax discount rate that reflects current market
assessments of the time value of money and the risks specific to the asset. An impairment loss is
charged to operations in the year in which it arises.

An assessment is made at each statement of financial position date as to whether there is any
indication that previously recognized impairment losses may no longer exist or may have decreased.
If such indication exists, the recoverable amount is estimated. A previously recognized impairment
loss is reversed only if there has been a change in the estimates used to determine the asset’s
recoverable amount since the last impairment loss was recognized. If that is the case, the carrying
amount of the asset is increased to its recoverable amount. That increased amount cannot exceed the
carrying amount that would have been determined, net of depreciation and amortization, had no
impairment loss been recognized for the asset in prior years. Such reversal is recognized in the
statement of income. After such a reversal, the depreciation and amortization expense is adjusted in
future years to allocate the asset’s revised carrying amount, less any residual value, on a systematic
basis over its remaining life.

Intangible assets with indefinite useful lives and customized system development cost not yet
available for use
Intangible assets with indefinite useful lives such as exchange trading right and customized system
development cost not yet available for use are tested for impairment annually at statement of
financial position date either individually or at the cash generating unit level, as appropriate.

Goodwill
Goodwill is reviewed for impairment, annually or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired. Impairment is determined for
goodwill by assessing the recoverable amount of the cash generating unit (CGU) (or group of CGUs)
to which the goodwill relates. Where the recoverable amount of the CGU (or group of CGUs) is less

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than the carrying amount of the CGU (or group of CGUs) to which goodwill has been allocated, an
impairment loss is recognized immediately in the statement of income. The Group uses the higher of
FVLCTS and VIU using cash flow projections from financial budgets approved by senior
management in determining the recoverable amount.

Leases
Group as lessee
Policies applicable beginning January 1, 2019
The Group assesses at contract inception whether a contract is, or contains a lease. A contract
contains a lease if it conveys the right to control the use of an identified asset for a period of time in
exchange for consideration. The Group applies a single recognition and measurement approach for
all leases, except for short-term leases and leases of low-value assets. The Group recognizes lease
liabilities to make lease payments and ROU assets representing the right-of-use the underlying assets.

ROU assets
The Group recognizes ROU assets (included in ‘Property and Equipment’) at the commencement
date of the lease (i.e. the date the underlying asset is available for use). ROU assets are measured at
cost less any accumulated depreciation and impairment losses, and adjusted for any remeasurement
of lease liabilities. The cost of ROU assets includes the amount of lease liabilities recognized and
lease payments made at or before the commencement date less any lease incentives received. ROU
assets are depreciated on a straight line basis over the shorter of the lease term and the estimated
useful lives of the assets, as follows:

Office space 1 to 29 years

ATM site and equipment 1 to 5 years

Lease liabilities
At the commencement date of the lease, the Group recognizes lease liabilities measured at the
present value of lease payments to be made over the lease term. In calculating the present value of
lease payments, the Group uses its incremental borrowing rate at the lease commencement date
because the interest rate implicit in the lease is not readily determinable. After the commencement
date, the amount of lease liabilities is increased to reflect the accretion of interest (included in
‘Interest expense on bills payable and SSURA, bonds payable, subordinated debt and others) and
reduced for the lease payments made. In addition, the carrying amount of lease liabilities is
remeasured if there is a modification, a change in the lease term or a change in the lease payments.

The Group’s lease liabilities are included in Other Liabilities (Note 21).

Short-term leases and leases of low-value assets

The Group applies the short-term lease recognition exemption to its short-term leases of office spaces
and ATM sites (i.e., those leases that have a lease term of 12 months or less from the commencement
date and do not contain a purchase option). It also applies the lease of low-value assets recognition
exemption to leases of ATM site and other equipment that are considered to be of low value (i.e.,
those with value of less than =
P250,000). Lease payments on short-term leases of low-value assets are
recognized as expense on a straight-line basis over the lease term.

Residual value of leased assets and deposits on lease contracts

The residual value of leased assets, which approximates the amount of guaranty deposit paid by the
lessee at the inception of the lease, is the estimated proceeds from the sale of the leased asset at the
end of the lease term. At the end of the lease term, the residual value of the leased asset is generally
applied against the guaranty deposit of the lessee when the lessee decides to buy the leased asset.

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Policies applicable prior to January 1, 2019

The determination of whether an arrangement is, or contains a lease is based on the substance of the
arrangement and requires an assessment of whether the fulfillment of the arrangement is dependent
on the use of a specific asset or assets and the arrangement conveys a right to use the asset. A
reassessment is made after inception of the lease only if one of the following applies:
(a) there is a change in contractual terms, other than a renewal or extension of the arrangement;
(b) a renewal option is exercised or extension granted, unless that term of the renewal or extension
was initially included in the lease term;
(c) there is a change in the determination of whether fulfillment is dependent on a specified asset; or
(d) there is a substantial change to the asset.

Where a reassessment is made, lease accounting shall commence or cease from the date when the
change in circumstances gives rise to the reassessment for scenarios (a), (c) or (d) above, and at the
date of renewal or extension period for scenario (b).

Finance leases, which transfer to the Group substantially all the risks and benefits incidental to the
ownership of the leased item, are capitalized at the inception of the lease at the fair value of the
leased property or, if lower, at the present value of the minimum lease payments and included in
‘Property and equipment’ with the corresponding liability to the lessor included in ‘Other liabilities’.
Lease payments are apportioned between the finance charges and reduction of the lease liability so as
to achieve a constant rate of interest on the remaining balance of the liability. Finance charges are
recorded directly to ‘Interest expense’.

Capitalized leased assets are depreciated over the shorter of the estimated useful lives of the assets or
the respective lease terms, if there is no reasonable certainty that the Group will obtain ownership by
the end of the lease term.

Leases where the lessor retains substantially all the risk and benefits of ownership of the assets are
classified as operating leases. Operating lease payments are recognized as an expense in the
statement of income under ‘Occupancy and equipment-related cost’ on a straight-line basis over the
lease term. Contingent rental payables are recognized as expense in the year in which they are
incurred. Any prepaid rent and accrued rent were recognized under ‘Prepaid expenses’ lodged in
‘Other assets’ and ‘Accrued other expenses’ lodged in ‘Accrued interest and other expenses’,
respectively.

Group as lessor
Finance leases, where the Group transfers substantially all the risks and benefits incidental to the
ownership of the leased item to the lessee, are included in the statement of financial position under
‘Loans and receivables’. All income resulting from the receivable is included in ‘Interest income’ in
the statement of income.

Leases where the Group does not transfer substantially all the risks and benefits of ownership of the
assets are classified as operating leases. Initial direct costs incurred in negotiating operating leases
are added to the carrying amount of the leased asset and recognized over the lease term on the same
basis as the rental income. Contingent rents are recognized as revenue in the year in which they are
earned.

Retirement Cost
The Group has a non-contributory defined benefit retirement plan except for FMIIC and its
subsidiary which follow the defined contribution retirement benefit plan and the Mandatory
Provident Fund Scheme (MPFS). The retirement cost of the Parent Company and most of its
subsidiaries is determined using the projected unit credit method. Under this method, the current

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service cost is the present value of retirement benefits payable in the future with respect to services
rendered in the current year. The net defined benefit liability or asset is the aggregate of the present
value of the defined benefit obligation (DBO) at the end of the reporting period reduced by the fair
value of plan assets (if any), adjusted for any effect of limiting a net defined benefit asset to the asset
ceiling. The asset ceiling is the present value of any economic benefits available in the form of
refunds from the plan or reductions in future contributions to the plan. The cost of providing benefits
under the defined benefit plans is actuarially determined using the projected unit credit method.

Defined benefit costs comprise the following:

 Service cost
 Net interest on the net defined benefit liability or asset
 Remeasurements of net defined benefit liability or asset

Service costs which include current service costs, past service costs and gains or losses on non-
routine settlements are recognized as expense in profit or loss. Past service costs are recognized
when plan amendment or curtailment occurs. These amounts are calculated periodically by
independent qualified actuaries. Net interest on the net defined benefit liability or asset is the change
during the year in the net defined benefit liability or asset that arises from the passage of time which
is determined by applying the discount rate based on government bonds to the net defined benefit
liability or asset. Net interest on the net defined benefit liability or asset is recognized as expense or
income in profit or loss. Retirement expense is presented under ‘Compensation and fringe benefits’
in the statement of income. Remeasurements comprising actuarial gains and losses, return on plan
assets and any change in the effect of the asset ceiling (excluding net interest on defined benefit
liability) are recognized immediately in OCI in the period in which they arise. Remeasurements are
not reclassified to profit or loss in subsequent periods. Plan assets are assets that are held by a long-
term employee benefit fund or qualifying insurance policies. Plan assets are not available to the
creditors of the Group, nor can they be paid directly to the Group. Fair value of plan assets is based
on market price information. When no market price is available, the fair value of plan assets is
estimated by discounting expected future cash flows using a discount rate that reflects both the risk
associated with the plan assets and the maturity or expected disposal date of those assets (or, if they
have no maturity, the expected period until the settlement of the related obligations). If the fair value
of the plan assets is higher than the present value of the DBO, the measurement of the resulting
defined benefit asset is limited to the present value of economic benefits available in the form of
refunds from the plan or reductions in future contributions to the plan.

The Group’s right to be reimbursed of some or all of the expenditure required to settle a DBO is
recognized as a separate asset at fair value when and only when reimbursement is virtually certain.
Payments to the defined contribution retirement benefit plans and the MPFS are recognized as
expenses when employees have rendered service entitling them to the contributions.

Equity
When the shares are sold at a premium, the difference between the proceeds and par value is credited
to ‘Capital paid in excess of par value’, net of direct costs incurred related to the equity issuance. If
‘Capital paid in excess of par value’ is not sufficient, the excess is charged against surplus. When the
Group issues more than one class of stock, a separate account is maintained for each class of stock
and the number of stocks issued.

Surplus represents accumulated earnings of the Group less dividends declared.

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Own equity instruments which are reacquired or Parent Company’s shares acquired by its
subsidiaries (treasury stock) are recognized at cost and deducted from equity. No gain or loss is
recognized in the profit or loss on the purchase, sale, issue or cancellation of the Parent Company’s
own equity instruments. Any difference between the carrying amount and the consideration, if
reissued, is recognized in ‘Capital paid in excess of par value’. Voting rights related to treasury
stocks are nullified and no dividends are allocated. When the stocks are retired, the Common stock
account is reduced by its par value and the excess of cost over par value upon retirement is debited to
capital paid in excess of par value at the time the stocks were issued and to surplus for the remaining
balance.

Provisions
Provisions are recognized when the Group has a present obligation (legal or constructive) as a result
of a past event and it is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation and a reliable estimate can be made of the amount of the obligation.
Where the Group expects some or all of a provision to be reimbursed, for example, under an
insurance contract, the reimbursement is recognized as a separate asset but only when the
reimbursement is virtually certain. The expense relating to any provision is presented in the
statement of income, net of any reimbursement. If the effect of the time value of money is material,
provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects
current market assessments of the time value of money and, where appropriate, the risks specific to
the liability. Where discounting is used, the increase in the provision due to the passage of time is
recognized as ‘Interest expense’.

Contingent Liabilities and Contingent Assets

Contingent liabilities are not recognized in the financial statements but are disclosed unless the
possibility of an outflow of resources embodying economic benefits is remote. Contingent assets are
not recognized but are disclosed in the financial statements when an inflow of economic benefits is
probable.

Income Taxes
Current taxes
Current tax assets and liabilities for the current and prior periods are measured at the amount
expected to be recovered from or paid to the taxing authorities. The tax rates and tax laws used to
compute the amount are those that are enacted or substantively enacted at the statement of financial
position date. Effective January 1, 2019, management periodically evaluates positions taken in the
tax returns with respect to situations in which applicable tax regulations are subject to interpretations
and establishes provisions where appropriate.

Deferred taxes
Deferred tax is provided on temporary differences at the statement of financial position date between
the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes.

Deferred tax liabilities are recognized for all taxable temporary differences, except:
a. Where the deferred tax liability arises from the initial recognition of goodwill or of an asset or
liability in a transaction that is not a business combination and, at the time of the transaction,
affects neither the accounting profit nor taxable profit or loss.
b. In respect of taxable temporary differences associated with investments in subsidiaries, where the
timing of the reversal of the temporary differences can be controlled and it is probable that the
temporary differences will not reverse in the foreseeable future.

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Deferred tax assets are recognized for all deductible temporary differences, carryforward of unused
tax credits from the excess of minimum corporate income tax (MCIT) over the regular income tax,
and unused net operating loss carryover (NOLCO), to the extent that it is probable that taxable
income will be available against which the deductible temporary differences and carryforward of
unused tax credits from MCIT and unused NOLCO can be utilized except:
a. Where the deferred tax asset relating to the deductible temporary difference arises from the initial
recognition of an asset or liability in a transaction that is not a business combination and, at the
time of the transaction, affects neither the accounting profit nor taxable profit or loss.
b. In respect of deductible temporary differences associated with investments in subsidiaries,
deferred tax assets are recognized only to the extent that it is probable that the temporary
differences will reverse in the foreseeable future and taxable profit will be available against
which the temporary differences can be utilized.

The carrying amount of deferred tax assets is reviewed at each statement of financial position date
and reduced to the extent that it is no longer probable that sufficient future taxable profit will be
available to allow all or part of the deferred income tax asset to be utilized. Unrecognized deferred
tax assets are reassessed at each statement of financial position date and are recognized to the extent
that it has become probable that future taxable income will allow the deferred tax asset to be
recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year
when the asset is realized or the liability is settled, based on tax rates (and tax laws) that have been
enacted or substantively enacted at the statement of financial position date.

Current tax and deferred tax relating to items recognized directly in equity are recognized in OCI and
not in the statement of income.

Deferred tax assets and deferred tax liabilities are offset if a legally enforceable right exists to set off
current tax assets against current tax liabilities and deferred taxes relate to the same taxable entity
and the same taxation authority.

Earnings Per Share

Basic earnings per share is computed by dividing net income for the year attributable to equity
holders of the Parent Company by the weighted average number of common shares outstanding
during the year after giving retroactive effect to stock dividends declared and stock rights exercised
during the year. The Group does not have dilutive potential common shares.

Dividends on Common Shares

Cash dividends on common shares are recognized as a liability and deducted from the equity when
approved by the Board of Directors (BOD) of the Parent Company while stock dividends are
deducted from equity when approved by BOD and shareholders of the Parent Company. Dividends
declared during the year but are paid or issued after the statement of financial position date are dealt
with as a subsequent event.

Debt Issuance Costs

Issuance, underwriting and other related costs incurred in connection with the issuance of debt
instruments are deferred and amortized over the terms of the instruments using the EIR method.
Unamortized debt issuance costs are included in the related carrying amount of the debt instrument in
the statement of financial position.

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Capital Securities Issuance Costs

Issuance, underwriting and other related costs incurred in connection with the issuance of the capital
securities are treated as a reduction of equity against ‘Capital paid in excess of par value’.

Events after the Statement of Financial Position Date

Post year-end events that provide additional information about the Group’s position at the statement
of financial position date (adjusting event) are reflected in the financial statements. Post year-end
events that are not adjusting events, if any, are disclosed when material to the financial statements.

Segment Reporting
The Group’s operating businesses are organized and managed separately according to the nature of
the products and services provided, with each segment representing a strategic business unit that
offers different products and serves different markets. Financial information on business segments is
presented in Note 6.

Fiduciary Activities
Assets and income arising from fiduciary activities together with related undertakings to return such
assets to customers are excluded from the financial statements where the Parent Company and
PSBank act in a fiduciary capacity such as nominee, trustee or agent.

Standards Issued but not yet Effective

The list below consists of standards and interpretations issued, which the Group reasonably expects
to be applicable at a future date. The Group intends to adopt these standards when they become
effective. Except as otherwise indicated, the Group does not expect the adoption of these new and
amended standards and interpretations to have significant impact on its financial statements.

Effective beginning on or after January 1, 2021

 Amendments to PFRS 9, PFRS 7, PFRS 4 and PFRS 16, Interest Rate Benchmark Reform -
Phase 2
The amendments provide the following temporary reliefs which address the financial reporting
effects when an interbank offered rate (IBOR) is replaced with an alternative nearly risk-free
interest rate (RFR):
o Practical expedient for changes in the basis for determining the contractual cash flows as a
result of IBOR reform
o Relief from discontinuing hedging relationships
o Relief from the separately identifiable requirement when an RFR instrument is designated as
a hedge of a risk component

The Group shall also disclose information about:

o The about the nature and extent of risks to which the entity is exposed arising from financial
instruments subject to IBOR reform, and how the entity manages those risks; and
o Their progress in completing the transition to alternative benchmark rates, and how the entity
is managing that transition

The amendments are effective for annual reporting periods beginning on or after
January 1, 2021 and apply retrospectively, however, the Group is not required to restate prior
periods.

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Effective beginning on or after January 1, 2022

Amendments to PFRS 3, Reference to the Conceptual Framework

The amendments added an exception to the recognition principle of PFRS 3, Business Combinations
to avoid the issue of potential ‘day 2’ gains or losses arising for liabilities and contingent liabilities
that would be within the scope of PAS 37, Provisions, Contingent Liabilities and Contingent Assets
or Philippine-IFRIC 21, Levies, if incurred separately. It also clarified that contingent assets do not
qualify for recognition at the acquisition date. The Group applies these amendments prospectively
for annual reporting periods beginning on or after January 1, 2022.

Amendments to PAS 16 , Plant and Equipment: Proceeds before Intended Use

The amendments prohibit entities deducting from the cost of an item of property, plant and
equipment, any proceeds from selling items produced while bringing that asset to the location and
condition necessary for it to be capable of operating in the manner intended by management.
Instead, an entity recognizes the proceeds from selling such items, and the costs of producing those
items, in profit or loss.

The amendment are effective for annual reporting periods beginning on or after January 1, 2022 and
must be applied retrospectively to items of property, plant and equipment made available for use on
or after the beginning of the earliest period presented when the entity first applies the amendment.

Amendments to PAS 37, Onerous Contract – Costs of Fulfilling a Contract

The amendments specify which costs an entity needs to include when assessing whether a contract is
onerous or loss-making. The amendments apply a “directly related cost approach”. The costs that
relate directly to a contract to provide goods or services include both incremental costs and an
allocation of costs directly related to contract activities. General and administrative costs do not
relate directly to a contract and are excluded unless they are explicitly chargeable to the counterparty
under the contract. The amendments are effective for annual reporting periods beginning on or after
January 1, 2022. The Group will apply these amendments to contracts for which it has not yet
fulfilled all its obligations at the beginning of the annual reporting period in which it first applies the
amendments.

Annual Improvements to PFRSs 2018-2020 Cycle

Amendments to PFRS 1, First-time Adoption of Philippines Financial Reporting Standards,
Subsidiary as a first-time adopter
The amendments permit a subsidiary, joint venture or associate that elects to apply paragraph D16(a)
of PFRS 1 to measure cumulative translation differences using the amounts reported by the parent,
based on the parent’s date of transition to PFRS. The amendment is effective for annual reporting
periods beginning on or after January 1, 2022 with earlier adoption permitted

Amendments to PFRS 9, Financial Instruments, Fees in the ’10 per cent’ test for derecognition
financial liabilities
The amendment clarifies the fees that an entity includes when assessing whether the terms of a new
or modified financial liability are substantially different from the terms of the original financial
liability. These fees include only those paid or received between the borrower and the lender,
including fees paid or received by either the borrower or lender on the other’s behalf. An entity
applies the amendment to financial liabilities that are modified or exchanged on or after the
beginning of the annual reporting period in which the entity first applies the amendment. The
amendment is effective for annual reporting periods beginning on or after January 1, 2022 with
earlier adoption permitted. The Group will apply the amendments to financial liabilities that are
modified or exchanged on or after the beginning of the annual reporting period in which the entity
first applies the amendment.

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Amendments to PAS 41, Agriculture, Taxation in fair value measurements

The amendment removes the requirement in paragraph 22 of PAS 41 that entities exclude cash flows
for taxation when measuring the fair value of assets within the scope of PAS 41. An entity applies
the amendment prospectively to fair value measurements on or after the beginning of the first annual
reporting period beginning on or after January 1, 2022 with earlier adoption permitted.

Effective beginning on or after January 1, 2023

PFRS 17, Insurance Contracts

PFRS 17 provides updated information about the obligation, risks and performance of insurance
contracts, increases transparency in financial information reported by insurance companies, and
introduces consistent accounting for all insurance contracts based on a current measurement model.
The standard is effective for annual periods beginning on or after January 1, 2023. Early application
is permitted but only if the entity also applies PFRS 9 and PFRS 15.

Amendments to PAS 1, Classification of Liabilities as Current and Non-Current

The amendments clarify the following to specify the requirements for classifying liabilities as current
or non-current:
 What is meant by a right to defer settlement;
 That a right to defer must exist at the end of the reporting period;
 That classification is unaffected by the likelihood that an entity will exercise its deferral right;
 That only if an embedded derivative in a convertible liability is itself an equity instrument would
the terms of a liability not impact its classification.

Deferred effectivity
Amendments to PFRS 10, Consolidated Financial Statements and PAS 28, Investments in Associates
and Joint Ventures - Sale or Contribution of Assets between an Investor and its Associate or Joint
Venture
The amendments address the conflict between PFRS 10 and PAS 28 in dealing with the loss of
control of a subsidiary that is sold or contributed to an associate or joint venture. The amendments
clarify that a full gain or loss is recognized when a transfer to an associate or joint venture involves a
business as defined in PFRS 3. Any gain or loss resulting from the sale or contribution of assets that
does not constitute a business, however, is recognized only to the extent of unrelated investor’s
interests in the associate or joint venture. On January 13, 2016, the Financial Reporting Standards
Council postponed the original effective date of January 1, 2016 of the said amendments until the
International Accounting Standards Board has completed its broader review of the research project
on equity accounting that may result in the simplification of accounting for such transactions and of
other aspects of accounting for associates and joint ventures.

3. Significant Accounting Judgments and Estimates

The preparation of the financial statements in compliance with PFRS requires the Group to make
estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses
and the disclosures of contingent assets and contingent liabilities. Future events may occur which
can cause the assumptions used in arriving at the estimates to change. The effects of any change in
estimates are reflected in the financial statements as they become reasonably determinable.
Judgments and estimates are continually evaluated and are based on historical experience and other
factors, including expectations of future events that are believed to be reasonable under the
circumstances. The following are the critical judgments and key assumptions that have a significant

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risk of material adjustment to the carrying amounts of assets and liabilities within the next financial
year:

Judgments
a. Classification of financial assets
The Group classifies its financial assets depending on the business model for managing those
financial assets and whether the contractual terms of the financial asset are SPPI on the principal
amount outstanding. The Group performs the business model assessment based on observable
factors such as:
 How the performance of the business model and the financial assets held within that business
model are evaluated and reported to the Group’s key management personnel
 Risks that affect the performance of the business model (and the financial assets held within
that business model) and, in particular, the way those risks are managed
 Compensation of business units whether based on the fair value of the assets managed or on
the contractual cash flows collected
 Expected frequency, value and timing of sales

In performing the SPPI test, the Group applies judgment and considers relevant factors such as
the currency in which the financial asset is denominated, the period for which the interest rate is
set, contingent events that would change the amount and timing of cash flows, leverage features,
prepayment and extension terms and other features that may modify the consideration for the
time value of money.

In 2020, the Parent Company disposed investment securities at amortized cost and assessed that
this resulted from a change in business model. PSBank also disposed investment securities at
amortized cost and assessed that the disposal was not inconsistent with the hold-to-collect (HTC)
business model (see Note 8).

In 2019, FMIC disposed all of its investment securities at amortized cost and assessed that this
resulted from unanticipated market changes that are significant to its operations (see Note 8).

b. Consolidation of subsidiaries
The determination whether the Group has control over an investee company requires significant
judgment. The Group considers that the following criteria are all met, including: (a) an investor
has the power over an investee; (b) the investor has exposure, or rights, to variable returns from
its involvement with the investee; and (c) the investor has the ability to use its power over the
investee to affect the amount of the investor’s return.

In accordance with PFRS 10, the Group included the accounts of First Metro Save and Learn
Balance Fund, Inc. (FMSALBF), First Metro Save and Learn Equity Fund, Inc. (FMSALEF),
First Metro Save and Learn Fixed Income Fund, Inc. (FMSLFIF), First Metro Philippine Equity
Exchange Traded Fund, Inc. (FMPETF), First Metro Save and Learn F.O.C.C.U.S. Dynamic
Fund, Inc. and First Metro Save and Learn Money Market Fund, Inc., collectively the “Funds”,
in its consolidated financial statements. The Group re-assessed the control conclusion for these
Funds. Although the ownership is less than half of the voting power of these investees, the
Group has control due to its power to direct the relevant activities of the Funds through First
Metro Asset Management Inc. (FAMI), a subsidiary of FMIC, which acts as the fund manager of
the Funds. Further, the Group has the exposure to variable returns from its investments and its
ability to use its power over the Funds to affect their returns.

*SGVFSM005911*
 - 30 -

c. Existence of significant influence over an associate with less than 20.00% ownership
As discussed in Note 11, there are instances that an investor exercises significant influence even
if its ownership is less than 20.00%. The Group applies significant judgment in assessing
whether it holds significant influence over an investee and considers the following:
(a) representation in the board of directors or equivalent governing body of the investee;
(b) participation in policy-making processes, including participation in decisions about dividends
or other distributions; (c) material transactions between the investor and the investee;
(d) interchange of managerial personnel; (e) joint voting agreement with other investors; or
(f) provision of essential technical information.

d. Fair value of financial instruments

Where the fair values of financial assets and financial liabilities recorded in the statement of
financial position or disclosed in the notes to financial statements cannot be derived from active
markets, these are determined using internal valuation techniques using generally accepted
market valuation models. The inputs to these models are taken from observable markets where
possible, but where this is not feasible, a degree of judgment is required in establishing fair
values. These judgments may include considerations of liquidity and volatility for longer dated
derivatives (Note 5).

e. Leases
Group as lessor
Operating leases
The Group has entered into commercial property leases on its investment properties portfolio and
over various items of furniture, fixtures and equipment. The Group has determined, based on an
evaluation of the terms and conditions of the arrangements (i.e., the lease does not transfer
ownership of the asset to the lessee by the end of the lease term, the lessee has no option to
purchase the asset at a price that is expected to be sufficiently lower than the fair value at the date
the option is exercisable and the lease term is not for the major part of the asset’s economic life),
that it retains all the significant risks and rewards of ownership of these properties which are
leased out on operating leases.

Finance leases
The Group has entered into leases on its transportation and office equipment portfolio. The
Group has determined that it has transferred all the significant risks and rewards of ownership of
the properties to the lessees, that at the inception of the lease, the present value of the minimum
lease payments amounts to at least substantially all of the fair value of the lease asset.

Group as lessee
The Group determines the lease term as the non-cancellable term of the lease, together with any
periods covered by an option to extend the lease if it is reasonably certain to be exercised, or any
periods covered by an option to terminate the lease, if it is reasonably certain not to be exercised.

Extension and termination options

The Group has several lease contracts that include extension and termination options. The Group
applies judgment in evaluating whether it is reasonably certain whether or not to exercise the
option to renew or terminate the lease. That is, it considers all relevant factors such as leasehold
improvements and location that create an economic incentive for it to exercise either the renewal
or termination. After the commencement date, the Group reassess the lease term if there is a
significant event or change in circumstances that is within its control and affects its ability to
exercise or not to exercise the option to renew or to terminate.

*SGVFSM005911*
 - 31 -

Estimating the IBR for lease liabilities

The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its
IBR to measure lease liabilities. The IBR for lease liabilities is the rate of interest that the Group
would have to pay to borrow over a similar term, and with a similar security, the funds necessary
to obtain an asset of a similar value to the ROU asset in a similar economic environment. The
Group estimates the IBR for lease liabilities using observable inputs (by reference to prevailing
risk-free rates) adjusted to take into account the entity’s credit risk (i.e., credit spread).

f. Contingencies
The Group is currently involved in legal proceedings. The estimate of the probable cost for the
resolution of claims has been developed in consultation with and the aid of the outside legal
counsel handling the Group’s defense in this matter and is based upon an analysis of potential
results. It is probable, however, that future results of operations could be materially affected by
changes in the estimates or in the effectiveness of the strategies relating to these proceedings
(Note 30).

Estimates
a. Credit losses on financial assets
The Group reviews its debt financial assets subject to ECL at least on a semi-annual basis with
updating provisions made during the intervals as necessary based on the continuing analysis and
monitoring of individual accounts by credit officers, as in the case in 2020 when quarterly
reviews and ECL adjustments were made in response to the changing credit environment brought
about by the COVID-19 pandemic. The measurement of credit losses under PFRS 9 across all
categories of such financial assets requires judgment, in particular, the estimation of the amount
and timing of future cash flows and collateral values when determining credit losses and the
assessment of a SICR. These estimates are driven by a number of factors, changes in which can
result in different levels of allowances.

The Group’s ECL calculations are outputs of complex models with a number of underlying
assumptions regarding the choice of variable inputs and their interdependencies. Elements of the
ECL models that are considered accounting judgments and estimates include, among others:
 Segmentation of the portfolio, where the appropriate model or ECL approach is used
 Criteria for assessing if there has been a SICR and so allowances for debt financial assets
should be measured on a lifetime ECL basis and the qualitative assessment. In 2019, Stage 2
included those accounts “Watchlisted” due to financial and repayment concerns, which were
previously under Stage 1, and aligned the definition of default (previously more than 30 days
past due) with the BSP’s definition of non-performing loans, i.e., more than 90 days past
due. In 2020, exposures that were granted payment reprieve strictly as provided for by laws
and relevant regulations were retained under Stage 1, while exposures that were granted
extended reprieve, provided not impaired or not non-performing under relevant rules, were
included under Stage 2. The Parent Company likewise performed quarterly reviews of its
credit exposures to determine the occurrence of SICR notwithstanding said reprieves.
Exposures belonging to sectors widely determined to be most at-risk and non-essential
(e.g., tourism, entertainment and leisure, hotels and restaurants, airlines), and projected to
experience significant revenue and liquidity strain in the event of prolonged economic
inactivity, were also included under Stage 2.
 Segmentation of debt financial assets when their ECL is assessed on a collective basis

*SGVFSM005911*
 - 32 -

 Development of ECL models, including the various formulas and the choice of inputs. In
2019, the Parent Company recalibrated its lifetime PD models and loss rates (for portfolios to
which the loss rate approach is applied). In 2020, the Company further recalibrated its PD
and overlay models following the conclusion of validation of the same by an independent
external party.
 Determination of associations between macroeconomic scenarios and economic inputs, such
as unemployment levels and collateral values, and the effect on PDs, EADs and LGDs
 Selection of forward-looking macroeconomic scenarios and their probability weightings, to
derive the economic inputs into the ECL models

The gross carrying amounts of financial assets subject to ECL as of December 31, 2020 and 2019
are disclosed in Note 4, while the related allowances for expected credit losses are disclosed in
Note 15. In 2020 and 2019, provision for credit losses on these financial assets amounted to
=40.8 billion and =
P P9.6 billion, respectively, for the Group and =
P32.7 billion and =
P1.6 billion,
respectively, for the Parent Company (Note 15). With the merger of MCC into the Parent
Company in 2020 (Note 11), the Parent Company’s provision for credit losses in 2020 includes
the provision for credit losses on credit card receivables .

b. Recognition of deferred income taxes

Deferred tax assets are recognized for all unused tax losses and deductible temporary differences
to the extent that it is probable that taxable profit will be available against which the losses can
be utilized. Significant management judgment is required to determine the amount of deferred
tax assets that can be recognized, based upon the likely timing and level of future taxable profits
together with future tax planning strategies. The estimates of future taxable income indicate that
certain temporary differences will be realized in the future. The Group and the Parent Company
have considered the impact of the COVID-19 pandemic on future taxable income and on the
recognition of deferred tax assets. The recognized net deferred tax assets and unrecognized
deferred tax assets for the Group and the Parent Company are disclosed in Note 28.

c. Present value of retirement liability

The cost of defined retirement pension plan is determined using actuarial valuations. The
actuarial valuation involves making assumptions about discount rates, future salary increases,
mortality rates and future pension increases. Due to the complexities involved in the valuation
and the long-term nature of these plans, such estimates are subject to significant uncertainty. The
assumed discount rates were determined using the market yields on Philippine government bonds
with terms consistent with the expected employee benefit payout as of the statement of financial
position date. The present values of the retirement liability of the Group and the Parent
Company are disclosed in Note 27.

d. Impairment of non-financial assets

The Group assesses impairment on non-financial assets (property and equipment, investments in
subsidiaries, associates and a JV, investment properties, software costs, chattel mortgage
properties and other assets) whenever events or changes in circumstances indicate that the
carrying amount of an asset may not be recoverable. The factors that the Group considers
important which could trigger an impairment review include the following: a) significant
underperformance relative to expected historical or projected future operating results;
b) significant changes in the manner of use of the acquired assets or the strategy for overall
business; and c) significant negative industry or economic trends.

*SGVFSM005911*
 - 33 -

The Group uses the higher of FVLCTS and VIU in determining the recoverable amount of the
asset. As of December 31, 2020 and 2019, there has been a significant and prolonged decline in
the fair value of an associate. In 2019, the VIU was used as the recoverable amount while in
2020, it was based on FVLCTS as it was higher than the VIU. The FVLCTS was based on the
quoted price of the shares less expected selling costs. The VIU calculation is most sensitive to
the following assumptions: (a) production volume; (b) price; (c) exchange rates; (d) capital
expenditures and (e) long-term growth rates. In 2020, the Group considered the impact of the
COVID-19 pandemic in determining the VIU. Based on the Group’s impairment testing as of
December 31, 2020 and 2019, allowance for impairment loss on investment on this associate
amounted to = P439.2 million.

The carrying values of the property and equipment, investments in subsidiaries, associates and a
JV, investment properties, software costs, chattel mortgage properties, and other assets of the
Group and the Parent Company are disclosed in Notes 10, 11, 12 and 14, respectively.

Goodwill
Goodwill is reviewed for impairment, annually or more frequently if events or changes in
circumstances indicate that the carrying value may be impaired. Impairment is determined for
goodwill by assessing the recoverable amount of the CGU (or group of CGUs) to which the
goodwill relates. Where the recoverable amount of the CGU (or group of CGUs) is less than the
carrying amount of the CGU (or group of CGUs) to which goodwill has been allocated, an
impairment loss is recognized immediately in the statement of income. The recoverable amount
of the CGU is determined based on FVLCTS.

The fair value of the CGU is determined using the cost approach, specifically the adjusted Net
Asset Value (NAV) method. This method requires the measurement of the fair value of the
individual assets and liabilities recognized in the CGU, as well as the fair value of any
unrecognized assets and liabilities at the measurement date. The resulting net fair values of the
assets and liabilities represent the fair value of the CGU. In determining the fair value of the
CGU’s net assets, the Group used the discounted cash flow method for unquoted debt financial
assets/liabilities at the appropriate market rate, the price-to-earnings (P/E) valuation and adjusted
NAV model for unquoted equity investments, and the appraisal reports for the valuation of real
properties. Fair values of listed debt and equity securities are based on their quoted market
prices. The Group applied the P/E valuation model by reference to P/E ratios of listed
comparable companies of the investee company. The FVLCTS calculation of the CGU is most
sensitive to the P/E ratios of listed comparable companies of the investee company. Based on the
sensitivity analysis performed, a one percent (1%) reduction in the P/E ratio used will result in
impairment of the goodwill. The Group considered the impact of the COVID-19 pandemic in
determining the recoverable amount. As of December 31, 2020 and 2019, the Group’s goodwill
amounted to = P5.2 billion (Note 11).

*SGVFSM005911*
 - 34 -

4. Financial Risk and Capital Management

Introduction
The Group has exposure to the following risks from its use of financial instruments: (a) credit;
(b) liquidity; and (c) market risks.

Risk management framework

The Board of Directors (BOD) has overall responsibility for the oversight of the Parent Company’s
risk management process. On the other hand, the risk management processes of the subsidiaries are
the separate responsibilities of their respective BOD. Supporting the BOD in this function are certain
Board-level committees such as Risk Oversight Committee (ROC), Audit Committee (AC) and
senior management committees through the Executive Committee and Asset and Liability Committee
(ALCO) among others.

The ROC, which is composed primarily of independent members of the BOD, is responsible for
overseeing the Parent Company’s risk infrastructure, the adequacy and relevance of risk policies, and
the compliance to defined risk appetite and levels of exposure. The ROC is assisted in this
responsibility by the Risk Management Group (RSK). The RSK undertakes the implementation and
execution of the Parent Company’s Risk Management framework which involves the identification,
assessment, control, monitoring and reporting of risks.

The Parent Company and its subsidiaries manage their respective financial risks separately. The
subsidiaries have their own risk management processes but are structured similar to that of the Parent
Company. To a certain extent, the respective risk management programs and objectives are the same
across the Group. The risk management policies adopted by the subsidiaries and affiliates are
aligned with the Parent Company’s risk policies. To further promote compliance with PFRS and
Basel III, the Parent Company created a Risk Management Coordinating Council (RMCC) composed
of risk officers of the Parent Company and its financial institution subsidiaries.

Credit Risk
Credit risk is the risk of financial loss to the Group if a counterparty to a financial instrument fails to
meet its contractual obligations. The Group manages and controls credit risk by setting limits on the
amount of risk it is willing to accept for individual counterparties, related groups of borrowers,
market segments, and industry concentrations, and by monitoring exposures in relation to such limits,
among others. The same is true for treasury-related activities. Each business unit is responsible for
the quality of its credit portfolio and for monitoring and controlling all credit risks in its portfolio.
Regular reviews and audits of business units and credit processes are undertaken by the RSK and
Internal Audit Group, respectively.

Management of credit risk

The Group faces potential credit risks every time it extends funds to borrowers, commits funds to
counterparties, guarantees the paying performance of its clients, invests funds to issuers
(e.g., investment securities issued by either sovereign or corporate entities) or enter into either
market-traded or over-the-counter derivatives, either through implied or actual contractual
agreements (i.e., on- or off-balance sheet exposures). The Parent Company manages its credit risk at
various levels (i.e., strategic level, portfolio level down to individual obligor or transaction) by
adopting a credit risk management environment that has the following components:
 Formulating credit policies in consultation with business units, covering collateral requirements,
credit/financial assessment, risk grading and reporting and compliance with regulatory
requirements;
 Establishment of authorization limits for the approval and renewal of credit facilities;

*SGVFSM005911*
 - 35 -

 Limiting concentrations of exposure to counterparties and industries (for loans), and by issuer
(for investment securities);
 Utilizing the Internal Credit Risk Rating System (ICRRS) in order to categorize exposures
according to their risk profile. The risk grading system is used for determining impairment
provisions against credit exposures. The current risk grading framework consists of ten grades
reflecting varying degrees of risk of default and the availability of collateral or other credit risk
mitigation; and
 Monitoring compliance with approved exposure limits.

Borrowers, counterparties or group of related accounts across the Group are aggregated and managed
by the Parent Company’s Institutional Banking Sector as the “Control Unit”. Group Limits for
conglomerates are set-up and approved to guide subsidiaries and affiliates of the Group.
Consolidated exposures are regularly reported to senior management and the ROC.

Credit risk at initial recognition

The Group uses internal credit assessment and approvals at various levels to determine the credit risk
of exposures at initial recognition. Assessment can be quantitative or qualitative and depends on the
materiality of the facility or the complexity of the portfolio to be assessed.

Modification
In certain circumstances, the Group modifies the original terms and conditions of a credit exposure to
form a new loan agreement or payment schedule. The modifications can be given depending on the
borrower’s or counterparty’s current or expected financial difficulty. The modifications may include,
but are not limited to, change in interest rate and terms, principal amount, maturity date, date and
amount of periodic payments and accrual of interest and charges.

On March 24, 2020, Republic Act No. 11469 or the “Bayanihan to Heal as One Act” (Bayanihan 1)
was enacted declaring a state of national emergency over the entire country to control the spread of
the Coronavirus Disease 2019 (COVID-19). Among the provisions of Bayanihan 1 is the
implementation of a 30-day grace period for all loans with principal and/or interest falling due within
the period of the Enhanced Community Quarantine without incurring interest on interest, on
penalties, fees and other charges. Further, on September 11, 2020, Republic Act No. 11494 or the
“Bayanihan to Recover as One Act” (Bayanihan 2) was enacted and part of the provisions of the
Bayanihan 2 is the implementation of a one-time 60-day grace period to be granted for the payment
of all existing, current and outstanding loans falling due, or any part thereof, on or before
December 31, 2020, without incurring interest on interest, penalties, fees and other charges, thereby
extending the maturity of said loans. In addition, Bayanihan 2 allows loans to be settled on a
staggered basis without interest on interests, penalties, fees or other charges until December 31, 2020
or as may be agreed upon by both parties.

The impact of loan modifications as a result of the Bayanihan 1 and Bayanihan 2 Acts amounted to a
loss of =
P1.7 billion for the Group and =
P1.2 billion for the Parent Company. For the year ended
December 31, 2020, the net impact of the loan modifications (i.e., after subsequent accretion of the
modified loans) amounted to a loss of =P461.3 million, for the Group and nil for the Parent Company.

*SGVFSM005911*
 - 36 -

Maximum exposure to credit risk

An analysis of the maximum credit risk exposure (net of allowance for ECL) relating to financial
assets with collateral or credit enhancements is shown below:
Consolidated
2020 2019
Financial Financial
Effect of Effect of
Maximum Collateral Maximum Collateral
Exposure to Fair Value or Credit Net Exposure to Fair Value or Credit Net
Credit Risk of Collateral Enhancement Exposure Credit Risk of Collateral Enhancement Exposure
Interbank loans receivable and
SPURA =
P18,614 =
P18,614 =
P18,614 P–
= =401
P =401
P =401
P =–
P
Loans and receivables - net
Receivables from customers
Commercial loans 269,534 827,714 239,564 29,970 341,616 856,065 299,588 42,028
Auto loans 95,625 161,750 92,087 3,538 116,069 202,470 115,636 433
Residential mortgage loans 103,367 188,025 98,305 5,062 109,093 207,864 93,723 15,370
Trade loans 34,314 34,216 33,440 874 61,260 59,907 59,785 1,475
Others 268 300 262 6 796 738 702 94
503,108 1,212,005 463,658 39,450 628,834 1,327,044 569,434 59,400
Accrued interest receivable 6,386 5,540 5,540 846 3,507 3,370 3,370 137
Sales contract receivable 79 272 76 3 142 414 100 42
509,573 1,217,817 469,274 40,299 632,483 1,330,828 572,904 59,579
Total =
P528,187 =
P1,236,431 =
P487,888 =
P40,299 =632,884
P =1,331,229
P =573,305
P =59,579
P

Parent Company
2020 2019
Financial Financial
Effect of Effect of
Maximum Collateral Maximum Collateral
Exposure to Fair Value or Credit Net Exposure to Fair Value or Credit Net
Credit Risk of Collateral Enhancement Exposure Credit Risk of Collateral Enhancement Exposure
Interbank loans receivable and
SPURA =
P15,819 =
P15,819 =
P15,819 =
P– =–
P =–
P =–
P =–
P
Loans and receivables - net
Receivables from customers
Commercial loans 249,523 794,103 227,841 21,682 296,577 806,784 264,137 32,440
Auto loans 20,543 56,052 20,213 330 23,674 63,917 23,330 344
Residential mortgage loans 53,810 113,501 53,600 210 56,977 114,374 56,780 197
Trade loans 34,314 34,216 33,440 874 61,260 59,907 59,785 1,475
Others 268 300 262 6 796 738 703 93
358,458 998,172 335,356 23,102 439,284 1,045,720 404,735 34,549
Accrued interest receivable 1,787 1,776 1,776 11 1,659 1,656 1,656 3
Sales contract receivable 54 189 54 – 100 187 100 –
360,299 1,000,137 337,186 23,113 441,043 1,047,563 406,491 34,552
Total =
P376,118 =
P1,015,956 =
P353,005 =
P23,113 =441,043
P =1,047,563
P =406,491
P =34,552
P

The maximum exposure to credit risks for the other financial assets is limited to their carrying values
as of December 31, 2020 and 2019.

Collaterals on loans and receivables includes real estate and chattel mortgages, guarantees, and other
registered securities over assets. Generally, collateral is not held over loans and advances to banks
except for reverse repurchase agreements and certain due from other banks. Collateral usually is not
held against investment securities, and no such collateral was held as of December 31, 2020 and
2019. Estimates of fair values of the collateral are based on the value of collateral assessed at the
time of borrowing and are regularly updated according to internal lending policies and regulatory
guidelines. The Group is not permitted to sell or repledge the collateral in the absence of default by
the counterparty.

*SGVFSM005911*
 - 37 -

The following tables show the effect of rights of set-off associated with the recognized financial assets
and financial liabilities.

Effect of Remaining Rights

Gross of Set-Off (including rights to
Amounts set-off financial collateral)
Gross Offset in Net Amount Not Meeting Offsetting
Carrying accordance Presented in Criteria
Amounts with the Statement of Fair Value of
(before Offsetting Financial Financial Financial Net
offsetting) Criteria Position Instruments Collateral Exposure
Financial assets recognized by type
Consolidated
2020
Derivative assets =
P220,808 =
P208,971 =
P11,837 =
P1,487 P
=– =
P10,350
SPURA 26,653 – 26,653 – 26,653 –
=
P247,461 =
P208,971 =
P38,490 =
P1,487 =
P26,653 =
P10,350
2019
Derivative assets =233,601
P =225,128
P P8,473
= =1,634
P =‒
P =6,839
P
SPURA 39,686 ‒ 39,686 ‒ 39,686 ‒
=273,287
P =225,128
P =48,159
P =1,634
P =39,686
P =6,839
P
Parent Company
2020
Derivative assets =
P220,795 =
P208,971 =
P11,824 =
P1,474 =
P‒ =
P10,350
SPURA 15,819 ‒ 15,819 ‒ 15,819 ‒
=
P236,614 =
P208,971 =
P27,643 =
P1,474 =
P15,819 =
P10,350
2019
Derivative assets =233,601
P =225,128
P P8,473
= =1,634
P =‒
P =6,839
P
SPURA 36,921 ‒ 36,921 ‒ 36,921 ‒
=270,522
P =225,128
P =45,394
P =1,634
P =36,921
P =6,839
P
Financial liabilities recognized by type
Consolidated
2020
Derivative liabilities =
P239,694 =
P226,244 =
P13,450 =
P3,121 P
=– =
P10,329
SSURA 93,059 – 93,059 – 93,059 –
=
P332,753 =
P226,244 =
P106,509 =
P3,121 =
P93,059 =
P10,329
2019
Derivative liabilities =
P236,188 =
P228,780 =
P7,408 =
P1,634 =
P– =
P5,774
SSURA 91,492 – 91,492 – 91,428 64
=327,680
P =228,780
P =98,900
P =1,634
P =91,428
P =5,838
P
Parent Company
2020
Derivative liabilities =
P227,226 =
P215,423 =
P11,803 =
P1,474 P
=– =
P10,329
SSURA 93,059 – 93,059 – 93,059 –
=
P320,285 =
P215,423 =
P104,862 =
P1,474 =
P93,059 =
P10,329
2019
Derivative liabilities =216,963
P =210,986
P P5,977
= =1,634
P =‒
P =4,343
P
SSURA 90,780 ‒ 90,780 ‒ 90,716 64
=307,743
P =210,986
P =96,757
P =1,634
P =90,716
P =4,407
P

Excessive risk concentration

Credit risk concentrations can arise whenever a significant number of borrowers have similar
characteristics and are affected similarly by changes in economic or other conditions. The Parent
Company analyzes the credit risk concentration to an individual borrower, related group of accounts,
industry, internal rating buckets, and security. For risk concentration monitoring purposes, the
financial assets are broadly categorized into (1) loans and receivables and (2) trading and financial
investment securities. To mitigate risk concentration, the Parent Company constantly checks for
breaches in regulatory and internal limits.

*SGVFSM005911*
 - 38 -

Concentration of risks of financial assets with credit risk exposure

Below is an analysis of concentrations of credit risk at the reporting date based on carrying amount:
Consolidated
Loans and
Loans and Advances to Investment
Receivables* Banks** Securities*** Others**** Total
2020
Concentration by Industry
Financial and insurance activities =
P142,620 =
P422,671 =
P87,277 =
P12,427 =
P664,995
Activities of households as employers and
undifferentiated goods and services and
producing activities of households for own use 247,398 – – 206,006 453,404
Real estate activities 226,455 – 255 592 227,302
Wholesale and retail trade, repair of motor vehicles,
motorcycles 176,730 – 150 23,460 200,340
Manufacturing 170,635 – 1,101 22,662 194,398
Transportation and storage, information and
communication 100,883 – – 2,167 103,050
Electricity, gas, steam and air-conditioning supply
and water supply, sewerage, waste management
and remediation activities 94,714 – 1,901 791 97,406
Construction 47,397 – – 15,362 62,759
Accommodation and food service activities 29,705 – – 26 29,731
Agricultural, forestry and fishing 28,182 – – 280 28,462
Others***** 43,453 – 500,376 12,997 556,826
1,308,172 422,671 591,060 296,770 2,618,673
Less allowance for credit losses 55,243 138 22 9,678 65,081
=
P1,252,929 =
P422,533 =
P591,038 =
P287,092 =
P2,553,592
Concentration by Location
Philippines =
P1,250,718 =
P332,031 =
P510,114 =
P272,474 =
P2,365,337
Asia 57,256 62,458 63,070 24,144 206,928
Europe 50 21,761 7,065 – 28,876
USA 134 4,488 9,861 151 14,634
Others 14 1,933 950 1 2,898
1,308,172 422,671 591,060 296,770 2,618,673
Less allowance for credit losses 55,243 138 22 9,678 65,081
=
P1,252,929 =
P422,533 =
P591,038 =
P287,092 =
P2,553,592
2019
Concentration by Industry
Financial and insurance activities =241,154
P =346,941
P =69,197
P =221,912
P =879,204
P
Wholesale and retail trade, repair of motor vehicles,
motorcycles 233,963 – 154 25,268 259,385
Manufacturing 218,319 – 1,010 19,620 238,949
Real estate activities 232,781 – 5 1,105 233,891
Transportation and storage, information and
communication 111,277 – 293 3,017 114,587
Electricity, gas, steam and air-conditioning supply
and water supply, sewerage, waste management
and remediation activities 101,210 – 1,812 1,781 104,803
Activities of households as employers and
undifferentiated goods and services and
producing activities of households for own use 82,359 – – 185 82,544
Construction 64,442 – – 10,326 74,768
Agricultural, forestry and fishing 41,102 – – 508 41,610
Accommodation and food service activities 35,310 – – 19 35,329
Others***** 142,633 – 380,043 3,040 525,716
1,504,550 346,941 452,514 286,781 2,590,786
Less allowance for credit losses 24,223 6 26 9,681 33,936
=1,480,327
P =346,935
P =452,488
P =277,100
P =2,556,850
P
Concentration by Location
Philippines =1,450,466
P =256,774
P =379,799
P =280,584
P =2,367,623
P
Asia 53,781 57,586 44,213 6,071 161,651
USA 237 13,369 17,778 125 31,509
Europe 51 16,897 7,561 – 24,509
Others 15 2,315 3,163 1 5,494
1,504,550 346,941 452,514 286,781 2,590,786
Less allowance for credit losses 24,223 6 26 9,681 33,936
=1,480,327
P =346,935
P =452,488
P =277,100
P =2,556,850
P

*SGVFSM005911*
 - 39 -

Parent Company
Loans and
Loans and Advances to Investment
Receivables* Banks** Securities*** Others**** Total
2020
Concentration by Industry
Financial and insurance activities =
P140,606 =
P342,140 =
P55,867 =
P12,204 =
P550,817
Activities of households as employers and
undifferentiated goods and services and
producing activities of households for own use 159,696 – – 206,006 365,702
Manufacturing 164,804 – 1,006 22,662 188,472
Wholesale and retail trade, repair of motor vehicles,
motorcycles 162,513 – 150 23,460 186,123
Real estate activities 179,030 – – 558 179,588
Transportation and storage, information and
communication 89,498 – – 2,167 91,665
Electricity, gas, steam and air-conditioning supply
and water supply, sewerage, waste management
and remediation activities 87,868 – 1,711 791 90,370
Construction 37,585 – – 15,340 52,925
Accommodation and food service activities 29,322 – – 26 29,348
Agricultural, forestry and fishing 25,050 – – 280 25,330
Others***** 17,204 – 491,331 629 509,164
1,093,176 342,140 550,065 284,123 2,269,504
Less allowance for credit losses 44,434 5 – 9,678 54,117
=
P1,048,742 =
P342,135 =
P550,065 =
P274,445 =
P2,215,387
Concentration by Location
Philippines =
P1,074,007 =
P279,718 =
P484,802 =
P271,256 =
P2,109,783
Asia 18,984 34,520 47,392 12,717 113,613
Europe 45 21,739 7,065 – 28,849
USA 134 4,314 9,861 150 14,459
Others 6 1,849 945 – 2,800
1,093,176 342,140 550,065 284,123 2,269,504
Less allowance for credit losses 44,434 5 – 9,678 54,117
=
P1,048,742 =
P342,135 =
P550,065 =
P274,445 =
P2,215,387
2019
Concentration by Industry
Financial and insurance activities =160,968
P =290,621
P =30,010
P =11,938
P =493,537
P
Wholesale and retail trade, repair of motor vehicles,
motorcycles 215,828 ‒ 154 25,268 241,250
Manufacturing 210,633 ‒ 1,009 19,620 231,262
Real estate activities 182,336 ‒ ‒ 660 182,996
Transportation and storage, information and
communication 96,581 ‒ 293 3,017 99,891
Electricity, gas, steam and air-conditioning supply
and water supply, sewerage, waste management
and remediation activities 95,041 ‒ 1,672 1,780 98,493
Activities of households as employers and
undifferentiated goods and services and
producing activities of households for own use 81,911 ‒ ‒ 185 82,096
Construction 50,120 ‒ ‒ 10,273 60,393
Agricultural, forestry and fishing 37,474 ‒ ‒ 509 37,983
Accommodation and food service activities 34,869 ‒ ‒ 19 34,888
Others***** 22,021 ‒ 371,682 1,844 395,547
1,187,782 290,621 404,820 75,113 1,958,336
Less allowance for credit losses 13,922 1 ‒ 9,681 23,604
=1,173,860
P =290,620
P =404,820
P =65,432
P =1,934,732
P
Concentration by Location
Philippines =1,168,082
P =233,721
P =339,445
P =68,951
P =1,810,199
P
Asia 19,410 24,558 36,879 6,038 86,885
USA 230 13,198 17,778 124 31,330
Europe 46 16,885 7,560 ‒ 24,491
Others 14 2,259 3,158 ‒ 5,431
1,187,782 290,621 404,820 75,113 1,958,336
Less allowance for credit losses 13,922 1 ‒ 9,681 23,604
=1,173,860
P =290,620
P =404,820
P =65,432
P =1,934,732
P
* Excludes statutory receivables in 2019 which are not considered financial assets.
** Comprised of due from BSP, due from other banks and interbank loans receivable and SPURA.
*** Comprised of debt securities at FVOCI and investment securities at amortized cost.
**** Comprised of applicable accounts under other assets, financial guarantees and loan commitments and other credit-related liabilities.
***** Includes government-issued debt securities.

*SGVFSM005911*
 - 40 -

Credit quality per class of financial assets

The credit quality of financial assets is assessed and managed using external and internal ratings
(applying ICRRS).

The ICRRS contains the following:

a. Borrower Risk Rating (BRR) - an assessment of the credit worthiness of the borrower (or
guarantor) without considering the type or amount of the facility and security arrangements. It is
an indicator of the probability that a borrower cannot meet its credit obligations when they fall
due. The components of the assessment is described below:

Credit Factor
Component Description Weight
Financial Condition Refers to the financial condition of the borrower based on audited financial statements 40.00%
as indicated by certain financial ratios. The Financial Factor Evaluation is conducted
manually.
Industry Analysis Refers to the prospects of the industry as well as the company’s performance and 30.00%
position in the industry.
Management Quality Refers to the management’s ability to run the company successfully. 30.00%

b. Facility Risk Factor (FRF) - determined for each individual facility considering the term of the
facility, security arrangement and quality of documentation. This factor can downgrade or
upgrade the BRR based on the elements relating to cover (collateral including pledged cash
deposits and guarantee), quality of documentation and structure of transactions.

c. Adjusted Borrower Risk Rating - combination of BRR and FRF.

Loans and receivables

The credit quality is generally monitored using the 10-grade ICRRS which is integrated in the credit
process. Validation of the individual borrower’s risk rating is performed by the Credit Group to
maintain accurate and consistent risk ratings across the credit portfolio. For commercial loans, the
credit quality with the corresponding ICRRS Grade and description follows:

High Grade
1 - Excellent
An excellent rating is given to a borrower with a very low probability of going into default and with
high degree of stability, substance and diversity. Borrower has access to raise substantial amounts of
funds through public market at any time; very strong debt service capacity and has conservative
balance sheet ratios. Track record in profit terms is very good. Borrower exhibits highest quality
under virtually all economic conditions.

2 - Strong
This rating is given to borrowers with low probability of going into default in the coming year.
Normally has a comfortable degree of stability, substance and diversity. Under normal market
conditions, borrower has good access to public markets to raise funds. Have a strong market and
financial position with a history of successful performance. Overall debt service capacity is deemed
very strong; critical balance sheet ratios are conservative. Concerned multinationals or local
corporations are well capitalized.

Standard Grade
3 - Good
This rating is given to smaller corporations with limited access to public capital markets or to
alternative financial markets during favorable economic and/or market conditions. As it bears
characteristics of some degree of stability and substance, probability of default is quite low.
However, susceptibility to cyclical changes and more concentration of business risk, by product or

*SGVFSM005911*
 - 41 -

market, may be present. Typical is the combination of comfortable asset protection and an
acceptable balance sheet structure. Debt service capacity is strong.

4 - Satisfactory
A ‘satisfactory’ rating is given to a borrower where clear risk elements exist and probability of
default is somewhat greater. Due to volatility of earnings and overall performance, borrower
normally has limited access to public markets. Borrower should be able to withstand normal
business cycles, but any prolonged unfavorable economic period would create deterioration beyond
acceptable levels. With the combination of reasonable sound asset and cash flow protection, the debt
service capacity is adequate. Reported profits in the past year and is expected to report a profit in the
current year.

5 - Acceptable
An ‘acceptable’ rating is given to a borrower whose risk elements are sufficiently pronounced
although borrower should still be able to withstand normal business cycles. Any prolonged
unfavorable economic and/or market period would create an immediate deterioration beyond
acceptable levels. Risk is still acceptable as there is sufficient cash flow either historically or
expected in the future from new business or projected finance transaction; an existing borrower
where the nature of the exposure represents a higher risk because of extraordinary developments but
for which a decreasing risk within an acceptable period can be expected.

Substandard Grade
6 - Watchlist
This rating is given to a borrower that belongs to an unfavorable industry or has company-specific
risk factors which represent a concern. Operating performance and financial strength may be
marginal and it is uncertain if borrower can attract alternative course of finance. Borrower finds it
hard to cope with any significant economic downturn and a default in such a case is more than a
possibility. Borrower which incurs net losses and has salient financial weaknesses specifically in
profitability. Credit exposure is not at risk of loss at the moment but performance of the borrower
has weakened which, unless present trends are reversed, could lead to losses.

7 - Especially Mentioned
This rating is given to a borrower that exhibits potential weaknesses that deserve management’s close
attention. These potential weaknesses, if left uncorrected, may affect the repayment of the loan and
thus, increase credit risk of the Group.

Impaired
8 - Substandard
These are loans or portions thereof which appear to involve a substantial and unreasonable degree of
risk to the Group because of unfavorable record or unsatisfactory characteristics. There exists the
possibility of future losses to the Group unless given closer supervision. Borrower has well-defined
weaknesses or weaknesses that jeopardize loan liquidation. Such well-defined weaknesses may
include adverse trends or development of financial, managerial, economic or political nature, or a
significant weakness in collateral.

9 - Doubtful
This rating is given to a nonperforming borrower whose loans or portions thereof have the
weaknesses inherent in those classified as Substandard, with the added characteristics that existing
facts, conditions, and values make collection or liquidation in full, highly improbable and in which
substantial loss is probable.

*SGVFSM005911*
 - 42 -

10 - Loss
This rating is given to a borrower whose loans or portions thereof are considered uncollectible or
worthless and of such little value that their continuance as bankable assets is not warranted although
the loans may have some recoveries or salvage value. The amount of loss is difficult to measure and
it is not practical or desirable to defer writing off these basically worthless assets even though partial
recovery may be obtained in the future.

The credit quality of consumer loan applicants are currently evaluated using quantitative and
qualitative criteria. For booked consumer loans, the description of credit quality is as follows:

High Grade
Good credit rating
This rating is given to a good repeat client with very satisfactory track record of its loan repayment
(paid at least 50.00%) and whose account did not turn past due during the entire term of the loan.

Standard Grade
Good
A good rating is given to accounts which did not turn past due for 90 days and over.

Limited
This rating is given to borrowers who have average track record on loan repayment (paid less than
50.00%) and whose account did not turn past due for 90 days and over.

Substandard Grade
Poor
A poor rating is given to accounts who reached 90 days past due regardless of the number of times
and the number of months past due.

Poor litigation
This rating is given to accounts that were past due for 180 days and over and are currently being
handled by lawyers.

Impaired
Poor repossessed
This rating is given to accounts whose collaterals were repossessed.

Poor written-off
This rating is given to accounts that were recommended for write-off.

Investment securities
In ensuring quality investment portfolio, the Group uses the credit risk rating from the published data
providers like Moody’s, Standard & Poor’s (S&P) or other reputable rating agencies. The following
indicates the levels of equivalent credit quality and its relevant external rating:

Credit Quality External Rating

High grade Aaa Aa1 Aa2 A1 A2 A3 Baa1 Baa2 Baa3
Standard grade Ba1 Ba2 Ba3 B1 B2
Substandard grade B3 Caa1 Caa2 Caa3 Ca C
Impaired D

The Group considers a debt security to have low credit risk when its credit risk rating is equivalent to
those rated by external rating agencies as ‘Investment grade’ (i.e., those under High grade in the table
above).

*SGVFSM005911*
 - 43 -

The following tables show the credit quality of loans and advances to banks, gross of allowance for
credit losses, as of December 31, 2020 and 2019. All loans and advances to banks are classified as
Stage 1 in 2020 and 2019.

Consolidated Parent Company

2020 2019 2020 2019
Due from BSP
High grade P
= 304,906 =
P219,994 P
= 262,188 =
P195,770
Due from other banks
High grade 36,830 53,472 22,110 38,671
Standard grade 715 941 607 –
Unrated 812 359 25 27
38,357 54,772 22,742 38,698
Interbank loans receivable and SPURA
High grade 75,829 71,646 53,632 55,624
Unrated 3,579 529 3,578 529
79,408 72,175 57,210 56,153
Total loans and advances to banks
High grade 417,565 345,112 337,930 290,065
Standard grade 715 941 607 –
Unrated 4,391 888 3,603 556
P
= 422,671 =
P346,941 P
= 342,140 =
P290,621

As of December 31, 2020 and 2019, availments of interbank loans and SPURA amounted to
=79.4 billion and =
P P72.2 billion, respectively, for the Group and = P57.2 billion and =P56.2 billion,
respectively, for the Parent Company while maturities of interbank loans and SPURA amounted to
=72.2 billion and =
P P50.7 billion, respectively, for the Group and = P56.2 billion and =P24.7 billion,
respectively, for the Parent Company. As of December 31, 2020 and 2019, net increase/(decrease) in
due from BSP amounted to = P84.9 billion and (P=20.1 billion), respectively, for the Group, and
=66.4 billion and (P
P =10.5 billion), respectively, for the Parent Company and net increase/(decrease) in
due from other banks amounted to (P =16.4 billion) and =P9.0 billion, respectively, for the Group, and
(P
=16.0 billion) and P=3.5 billion, respectively, for the Parent Company.

The following tables show the credit quality of investment securities, gross of allowance for credit
losses, as of December 31, 2020 and 2019.
Consolidated
Stage 1 Stage 3 Total
2020
Debt securities at FVOCI
Private
High grade =
P33,739 =
P– =
P33,739
Standard grade 2,956 – 2,956
Unrated 248 – 248
36,943 – 36,943
Treasury bills
High grade 81,497 – 81,497
Treasury notes and bonds
High grade 342,355 – 342,355
Government
High grade 76,900 – 76,900
Standard grade 1 – 1
76,901 – 76,901
BSP
High grade 30,049 – 30,049
Total debt securities at FVOCI
High grade 564,540 – 564,540
Standard grade 2,957 – 2,957
Unrated 248 – 248
567,745 – 567,745

*SGVFSM005911*
 - 44 -

Consolidated
Stage 1 Stage 3 Total
Investment securities at amortized cost
Private
High grade =
P3,219 =
P– =
P3,219
Standard grade 400 – 400
Unrated 6 – 6
3,625 – 3,625
Treasury bills
High grade 294 – 294
Treasury notes and bonds
High grade 243 – 243
Government
High grade 19,036 – 19,036
Standard grade 117 – 117
19,153 – 19,153
Total investment securities at amortized cost
High grade 22,792 – 22,792
Standard grade 517 – 517
Unrated 6 – 6
23,315 – 23,315
Total debt investment securities
High grade 587,332 – 587,332
Standard grade 3,474 – 3,474
Unrated 254 – 254
=
P591,060 =
P– =
P591,060
2019
Debt securities at FVOCI
Private
High grade =
P32,793 =
P– =
P32,793
Standard grade 3,163 – 3,163
Unrated 243 – 243
36,199 – 36,199
Treasury notes and bonds
High grade 111,791 – 111,791
Government
High grade 52,841 – 52,841
Sub-standard grade – 29 29
52,841 29 52,870
Total debt securities at FVOCI
High grade 197,425 – 197,425
Standard grade 3,163 – 3,163
Sub-standard grade – 29 29
Unrated 243 – 243
200,831 29 200,860
Investment securities at amortized cost
Private
High grade 331 – 331
Standard grade 3,543 – 3,543
Unrated 6 – 6
3,880 – 3,880
Treasury notes and bonds
High grade 227,442 – 227,442
Government
High grade 20,110 – 20,110
Standard grade 122 – 122
20,232 – 20,232
Treasury bills
High grade 100 – 100
Total investment securities at amortized cost
High grade 247,983 – 247,983
Standard grade 3,665 – 3,665
Unrated 6 – 6
251,654 – 251,654
Total debt investment securities
High grade 445,408 – 445,408
Standard grade 6,828 – 6,828
Substandard grade – 29 29
Unrated 249 – 249
=
P452,485 =
P29 =
P452,514

*SGVFSM005911*
 - 45 -

Parent Company
Stage 1 Stage 3 Total
2020
Debt securities at FVOCI
Private
High grade =
P18,789 =
P– =
P18,789
Unrated 248 – 248
19,037 – 19,037
Treasury notes and bonds
High grade 339,258 – 339,258
Government
High grade 72,315 – 72,315
Treasury bills
High grade 81,497 – 81,497
BSP
High grade 30,049 – 30,049
Total debt securities at FVOCI
High grade 541,908 – 541,908
Unrated 248 – 248
542,156 – 542,156
Investment securities at amortized cost
Government
High grade 7,909 – 7,909
Total debt investment securities
High grade 549,817 – 549,817
Unrated 248 – 248
=
P550,065 =
P– =
P550,065
2019
Debt securities at FVOCI
Private
High grade =
P25,827 =
P– =
P25,827
Standard grade 254 – 254
Unrated 243 – 243
26,324 – 26,324
Treasury notes and bonds
High grade 109,203 – 109,203
Government
High grade 52,620 – 52,620
Sub-standard grade – 29 29
52,620 29 52,649
Total debt securities at FVOCI
High grade 187,650 – 187,650
Standard grade 254 – 254
Sub-standard grade – 29 29
Unrated 243 – 243
188,147 29 188,176
Investment securities at amortized cost
Treasury notes and bonds
High grade 208,514 – 208,514
Government
High grade 8,130 – 8,130
Total investment securities at amortized cost
High grade 216,644 – 216,644
Total debt investment securities
High grade 404,294 – 404,294
Standard grade 254 – 254
Sub-standard grade – 29 29
Unrated 243 – 243
=
P404,791 =
P29 =
P404,820

As of December 31, 2020 and 2019, purchases of investment in debt securities at FVOCI amounted
to =
P2.1 trillion and P
=1.3 trillion, respectively, for the Group and the Parent Company while proceeds
from disposals/maturities amounted to = P1.8 trillion and P
=1.2 trillion, respectively, for the Group and
Parent Company. Other movements, which include reclassification from investment securities at
amortized cost (see Note 8), amortization of premiums/discounts, mark-to-market and foreign
exchange revaluations, resulted in an increase in carrying value of debt securities at FVOCI as of
December 31, 2020 and 2019 amounting to = P114.8 billion and =P8.6 billion, respectively, for the
Group and an increase in carrying value of = P90.2 billion and =
P9.2 billion, respectively, for the Parent
Company.

*SGVFSM005911*
 - 46 -

As of December 31, 2020 and 2019, purchases of investment securities at amortized cost amounted
to nil and P
=4.5 billion, respectively, for the Group and nil and =P4.3 billion, respectively, for the
Parent Company while proceeds from maturities and disposals amounted to = P136.8 billion and
=17.6 billion, respectively, for the Group and =
P P115.7 billion and =
P468.8 million, respectively, for the
Parent Company. Other movements, which include reclassification to investment securities at
FVOCI (Note 8), amortization of premiums/discounts, mark-to-market and foreign exchange
revaluations, resulted in a decrease in carrying value of investment securities at amortized cost as of
December 31, 2020 and 2019 amounting to = P99.7 billion and =P651.2 million, respectively, for the
Group and a decrease in carrying value of = P99.9 billion and =
P0.1 billion, respectively, for the Parent
Company.

The credit quality of receivables from customers, net of unearned discount and capitalized interest, as
of December 31, 2020 and 2019 follow:
Consolidated
Stage 1 Stage 2 Stage 3 Total
2020
Commercial loans
High grade =
P230,890 =
P2,294 =
P– =
P233,184
Standard grade 376,173 27,274 – 403,447
Sub-standard grade 169,468 108,553 – 278,021
Non-performing individually impaired – – 14,492 14,492
776,531 138,121 14,492 929,144
Auto loans
High grade 59,355 17,734 – 77,089
Standard grade 9,057 3,729 – 12,786
Sub-standard grade 2,583 1,787 – 4,370
Non-performing individually impaired – – 5,767 5,767
70,995 23,250 5,767 100,012
Residential mortgage loans
High grade 38,585 13,791 – 52,376
Standard grade 20,545 10,990 – 31,535
Sub-standard grade 10,623 7,584 – 18,207
Non-performing individually impaired – – 3,688 3,688
69,753 32,365 3,688 105,806
Trade loans
High grade 4,687 – – 4,687
Standard grade 19,659 1,971 – 21,630
Sub-standard grade 6,183 4,192 – 10,375
Non-performing individually impaired – – 376 376
30,529 6,163 376 37,068
Credit card
Standard grade 75,539 – – 75,539
Sub-standard grade – 921 – 921
Non-performing individually impaired – – 5,273 5,273
75,539 921 5,273 81,733
Other loans
High grade 11,709 1,154 – 12,863
Standard grade 11,037 263 – 11,300
Sub-standard grade 8 1,856 – 1,864
Unrated 9 – – 9
Non-performing individually impaired – – 2,506 2,506
22,763 3,273 2,506 28,542
Total receivables from customers
High grade 345,226 34,973 – 380,199
Standard grade 512,010 44,227 – 556,237
Sub-standard grade 188,865 124,893 – 313,758
Unrated 9 – – 9
Non-performing individually impaired – – 32,102 32,102
= 1,046,110
P = 204,093
P = 32,102
P = 1,282,305
P
2019
Commercial loans
High grade =
P320,456 =
P662 =
P– =
P321,118
Standard grade 540,388 1,670 – 542,058
Sub-standard grade 52,925 133,775 – 186,700

(Forward)

*SGVFSM005911*
 - 47 -

Consolidated
Stage 1 Stage 2 Stage 3 Total
Unrated =
P93 =
P– =
P– =
P93
Non-performing individually impaired – – 10,652 10,652
913,862 136,107 10,652 1,060,621
Auto loans
High grade 83,179 6,418 – 89,597
Standard grade 20,186 5,245 – 25,431
Sub-standard grade 12 8 – 20
Non-performing individually impaired – – 3,360 3,360
103,377 11,671 3,360 118,408
Residential mortgage loans
High grade 42,893 8,595 – 51,488
Standard grade 53,176 1,186 – 54,362
Sub-standard grade 1,506 292 – 1,798
Non-performing individually impaired – – 2,351 2,351
97,575 10,073 2,351 109,999
Trade loans
High grade 8,530 – – 8,530
Standard grade 47,930 17 – 47,947
Sub-standard grade 4,636 2,142 – 6,778
Non-performing individually impaired – – 105 105
61,096 2,159 105 63,360
Credit card
Standard grade 83,481 – – 83,481
Sub-standard grade – 2,040 – 2,040
Non-performing individually impaired – – 1,509 1,509
83,481 2,040 1,509 87,030
Other loans
High grade 14,705 241 – 14,946
Standard grade 21,733 2,117 – 23,850
Sub-standard grade 54 712 – 766
Unrated 13 – – 13
Non-performing individually impaired – – 1,494 1,494
36,505 3,070 1,494 41,069
Total receivables from customers
High grade 469,763 15,916 – 485,679
Standard grade 766,894 10,235 – 777,129
Sub-standard grade 59,133 138,969 – 198,102
Unrated 106 – – 106
Non-performing individually impaired – – 19,471 19,471
=
P1,295,896 =
P165,120 =
P19,471 =
P1,480,487

Parent Company
Stage 1 Stage 2 Stage 3 POCI Total
2020
Commercial loans
High grade =
P187,014 =
P– =
P– =
P– =
P187,014
Standard grade 368,056 26,699 – – 394,755
Sub-standard grade 169,374 107,305 – – 276,679
Non-performing individually impaired – – 9,344 3,013 12,357
724,444 134,004 9,344 3,013 870,805
Auto loans
High grade 8,129 – – – 8,129
Standard grade 8,625 1,330 – – 9,955
Sub-standard grade 2,583 652 – – 3,235
Non-performing individually impaired – – 193 – 193
19,337 1,982 193 – 21,512
Residential mortgage loans
High grade 7,562 – – – 7,562
Standard grade 20,544 8,767 – – 29,311
Sub-standard grade 10,623 7,223 – – 17,846
Non-performing individually impaired – – 672 – 672
38,729 15,990 672 – 55,391
Trade loans
High grade 3,795 – – – 3,795
Standard grade 19,659 1,971 – – 21,630
Sub-standard grade 6,182 4,192 – – 10,374
Non-performing individually impaired – – 376 – 376
29,636 6,163 376 – 36,175

*SGVFSM005911*
 - 48 -

Parent Company
Stage 1 Stage 2 Stage 3 POCI Total
Credit card
Standard grade =
P75,539 =
P– =
P– =
P– =
P75,539
Sub-standard grade – 921 – – 921
Non-performing individually impaired – – 5,273 – 5,273
75,539 921 5,273 – 81,733
Other loans
High grade 11,024 – – – 11,024
Standard grade 503 – – – 503
Non-performing individually impaired – – 41 – 41
11,527 – 41 – 11,568
Total receivables from customers
High grade 217,524 – – – 217,524
Standard grade 492,926 38,767 – – 531,693
Sub-standard grade 188,762 120,293 – – 309,055
Non-performing individually impaired – – 15,899 3,013 18,912
=
P899,212 =
P159,060 =
P15,899 =
P3,013 =
P1,077,184
2019
Commercial loans
High grade =
P275,842 =
P– =
P– =
P– =
P275,842
Standard grade 538,993 1,200 – – 540,193
Sub-standard grade 52,898 133,472 – – 186,370
Non-performing individually impaired – – 6,753 2,992 9,745
867,733 134,672 6,753 2,992 1,012,150
Auto loans
High grade 3,804 – – – 3,804
Standard grade 20,162 54 – – 20,216
Sub-standard grade 12 8 – – 20
Non-performing individually impaired – – 142 – 142
23,978 62 142 – 24,182
Residential mortgage loans
High grade 1,843 – – – 1,843
Standard grade 53,176 225 – – 53,401
Sub-standard grade 1,506 292 – – 1,798
Non-performing individually impaired – – 478 – 478
56,525 517 478 – 57,520
Trade loans
High grade 7,824 – – – 7,824
Standard grade 47,930 17 – – 47,947
Sub-standard grade 4,636 2,142 – – 6,778
Non-performing individually impaired – – 105 – 105
60,390 2,159 105 – 62,654
Other loans
High grade 14,120 – – – 14,120
Standard grade 376 – – – 376
Sub-standard grade 6 – – – 6
Non-performing individually impaired – – 40 – 40
14,502 – 40 – 14,542
Total receivables from customers
High grade 303,433 – – – 303,433
Standard grade 660,637 1,496 – – 662,133
Sub-standard grade 59,058 135,914 – – 194,972
Non-performing individually impaired – – 7,518 2,992 10,510
=
P1,023,128 =
P137,410 =
P7,518 =
P2,992 =
P1,171,048

Movements during 2020 and 2019 for receivables from customers follows:
Consolidated
Receivables from Customers
Stage 1 Stage 2 Stage 3 Total
2020
Commercial loans
Balance at January 1, 2020 = 913,862
P = 136,107
P = 10,652
P = 1,060,621
P
New assets originated 329,947 – – 329,947
Assets derecognized or repaid (402,535) (54,982) (1,646) (459,163)
Amounts written-off – – (73) (73)
Transfers to/(from) Stage 1 (62,621) – – (62,621)
Transfers to/(from) Stage 2 – 56,996 – 56,996
Transfers to/(from) Stage 3 – – 5,625 5,625
Others (2,122) – (66) (2,188)
Balance at December 31, 2020 776,531 138,121 14,492 929,144

*SGVFSM005911*
 - 49 -

Consolidated
Receivables from Customers
Stage 1 Stage 2 Stage 3 Total
Auto loans
Balance at January 1, 2020 =
P103,377 =
P11,671 =
P3,360 =
P118,408
New assets originated 32,459 – – 32,459
Assets derecognized or repaid (38,516) (9,936) (1,383) (49,835)
Amounts written-off – – (746) (746)
Transfers to/(from) Stage 1 (26,137) – – (26,137)
Transfers to/(from) Stage 2 – 21,584 – 21,584
Transfers to/(from) Stage 3 – – 4,553 4,553
Others (188) (69) (17) (274)
Balance at December 31, 2020 70,995 23,250 5,767 100,012
Residential mortgage loans
Balance at January 1, 2020 97,575 10,073 2,351 109,999
New assets originated 12,067 – – 12,067
Assets derecognized or repaid (12,229) (3,418) (376) (16,023)
Amounts written-off – – (84) (84)
Transfers to/(from) Stage 1 (27,565) – – (27,565)
Transfers to/(from) Stage 2 – 25,762 – 25,762
Transfers to/(from) Stage 3 – – 1,804 1,804
Others (95) (52) (7) (154)
Balance at December 31, 2020 69,753 32,365 3,688 105,806
Trade loans
Balance at January 1, 2020 61,096 2,159 105 63,360
New assets originated 35,992 – – 35,992
Assets derecognized or repaid (59,979) (2,313) – (62,292)
Transfers to/(from) Stage 1 (6,589) – – (6,589)
Transfers to/(from) Stage 2 – 6,317 – 6,317
Transfers to/(from) Stage 3 – – 272 272
Others 9 – (1) 8
Balance at December 31, 2020 30,529 6,163 376 37,068
Credit card
Balance at January 1, 2020 83,481 2,040 1,509 87,030
New assets originated 8,687 – – 8,687
Assets derecognized or repaid (702) (4,686) (123) (5,511)
Amounts written-off – – (8,473) (8,473)
Transfers to/(from) Stage 1 (15,927) – – (15,927)
Transfers to/(from) Stage 2 – 3,567 – 3,567
Transfers to/(from) Stage 3 – – 12,360 12,360
Balance at December 31, 2020 75,539 921 5,273 81,733
Other loans
Balance at January 1, 2020 36,505 3,070 1,494 41,069
New assets originated 12,206 – – 12,206
Assets derecognized or repaid (22,250) (1,857) (311) (24,418)
Amounts written-off – – (315) (315)
Transfers to/(from) Stage 1 (3,698) – – (3,698)
Transfers to/(from) Stage 2 – 2,060 – 2,060
Transfers to/(from) Stage 3 – – 1,638 1,638
Balance at December 31, 2020 22,763 3,273 2,506 28,542
Total receivables from customers
Balance at January 1, 2020 1,295,896 165,120 19,471 1,480,487
New assets originated 431,358 – – 431,358
Assets derecognized or repaid (536,211) (77,192) (3,839) (617,242)
Amounts written-off – – (9,691) (9,691)
Transfers to/(from) Stage 1 (142,537) – – (142,537)
Transfers to/(from) Stage 2 – 116,286 – 116,286
Transfers to/(from) Stage 3 – – 26,252 26,252
Others (2,396) (121) (91) (2,608)
Balance at December 31, 2020 =
P1,046,110 =
P204,093 =
P32,102 =
P1,282,305
2019
Commercial loans
Balance at January 1, 2019 =
P966,389 =
P8,621 =
P10,907 =
P985,917
New assets originated 533,499 – – 533,499
Assets derecognized or repaid (440,204) (12,696) (3,570) (456,470)
Amounts written-off – – (294) (294)
Transfers to/(from) Stage 1 (143,955) – – (143,955)
Transfers to/(from) Stage 2 – 140,182 – 140,182
Transfers to/(from) Stage 3 – – 3,773 3,773
Others (1,867) – (164) (2,031)
Balance at December 31, 2019 913,862 136,107 10,652 1,060,621

*SGVFSM005911*
 - 50 -

Consolidated
Receivables from Customers
Stage 1 Stage 2 Stage 3 Total
Auto loans
Balance at January 1, 2019 =
P96,751 =
P19,202 =
P4,019 =
P119,972
New assets originated 44,354 – – 44,354
Assets derecognized or repaid (34,357) (8,527) (2,876) (45,760)
Amounts written-off (1) (45) (112) (158)
Transfers to/(from) Stage 1 (3,370) – – (3,370)
Transfers to/(from) Stage 2 – 1,041 – 1,041
Transfers to/(from) Stage 3 – – 2,329 2,329
Balance at December 31, 2019 103,377 11,671 3,360 118,408
Residential mortgage loans
Balance at January 1, 2019 94,695 10,678 2,574 107,947
New assets originated 21,914 – – 21,914
Assets derecognized or repaid (16,607) (2,462) (793) (19,862)
Amounts written-off – – – –
Transfers to/(from) Stage 1 (2,427) – – (2,427)
Transfers to/(from) Stage 2 – 1,857 – 1,857
Transfers to/(from) Stage 3 – – 570 570
Balance at December 31, 2019 97,575 10,073 2,351 109,999
Trade loans
Balance at January 1, 2019 62,751 276 99 63,126
New assets originated 63,143 – – 63,143
Assets derecognized or repaid (62,673) (232) – (62,905)
Transfers to/(from) Stage 1 (2,122) – – (2,122)
Transfers to/(from) Stage 2 – 2,115 – 2,115
Transfers to/(from) Stage 3 – – 7 7
Others (3) – (1) (4)
Balance at December 31, 2019 61,096 2,159 105 63,360
Credit card
Balance at January 1, 2019 67,776 1,692 1,186 70,654
New assets originated 22,868 – – 22,868
Amounts written-off – – (6,492) (6,492)
Transfers to/(from) Stage 1 (7,163) – – (7,163)
Transfers to/(from) Stage 2 – 348 – 348
Transfers to/(from) Stage 3 – – 6,815 6,815
Balance at December 31, 2019 83,481 2,040 1,509 87,030
Other loans
Balance at January 1, 2019 37,015 2,670 920 40,605
New assets originated 30,574 – – 30,574
Assets derecognized or repaid (28,522) (690) (628) (29,840)
Amounts written-off (1) (96) (866) (963)
Transfers to/(from) Stage 1 (2,559) – – (2,559)
Transfers to/(from) Stage 2 – 1,186 – 1,186
Transfers to/(from) Stage 3 – – 1,373 1,373
Others (2) – 695 693
Balance at December 31, 2019 36,505 3,070 1,494 41,069
Total receivables from customers
Balance at January 1, 2019 1,325,377 43,139 19,705 1,388,221
New assets originated 716,352 – – 716,352
Assets derecognized or repaid (582,363) (24,607) (7,867) (614,837)
Amounts written-off (2) (141) (7,764) (7,907)
Transfers to/(from) Stage 1 (161,596) – – (161,596)
Transfers to/(from) Stage 2 – 146,729 – 146,729
Transfers to/(from) Stage 3 – – 14,867 14,867
Others (1,872) – 530 (1,342)
Balance at December 31, 2019 =
P1,295,896 =
P165,120 =
P19,471 =
P1,480,487

Parent Company
Receivables from Customers
Stage 1 Stage 2 Stage 3 POCI Total
2020
Commercial loans
Balance at January 1, 2020 =
P867,733 =
P134,672 =
P6,753 =
P2,992 =
P1,012,150
New assets originated 316,641 – – – 316,641
Assets derecognized or repaid (400,065) (53,799) (1,549) – (455,413)
Accounts written off – – (1) – (1)
Transfers to/(from) Stage 1 (57,360) – – – (57,360)
Transfers to/(from) Stage 2 – 53,131 – – 53,131
Transfers to/(from) Stage 3 – – 4,229 – 4,229
Others (2,505) – (88) 21 (2,572)
Balance at December 31, 2020 724,444 134,004 9,344 3,013 870,805

*SGVFSM005911*
 - 51 -

Parent Company
Receivables from Customers
Stage 1 Stage 2 Stage 3 POCI Total
Auto loans
Balance at January 1, 2020 =
P23,978 =
P62 =
P142 =
P– =
P24,182
New assets originated 7,351 – – – 7,351
Assets derecognized or repaid (9,023) (977) (21) – (10,021)
Transfers to/(from) Stage 1 (2,969) – – – (2,969)
Transfers to/(from) Stage 2 – 2,897 – – 2,897
Transfers to/(from) Stage 3 – – 72 – 72
Balance at December 31, 2020 19,337 1,982 193 – 21,512
Residential mortgage loans
Balance at January 1, 2020 56,525 517 478 – 57,520
New assets originated 7,911 – – – 7,911
Assets derecognized or repaid (7,829) (2,076) (135) – (10,040)
Transfers to/(from) Stage 1 (17,878) – – – (17,878)
Transfers to/(from) Stage 2 – 17,549 – – 17,549
Transfers to/(from) Stage 3 – – 329 – 329
Balance at December 31, 2020 38,729 15,990 672 – 55,391
Trade loans
Balance at January 1, 2020 60,390 2,159 105 – 62,654
New assets originated 35,813 – – – 35,813
Assets derecognized or repaid (59,979) (2,312) – – (62,291)
Transfers to/(from) Stage 1 (6,588) – – – (6,588)
Transfers to/(from) Stage 2 – 6,316 – – 6,316
Transfers to/(from) Stage 3 – – 272 – 272
Others – – (1) – (1)
Balance at December 31, 2020 29,636 6,163 376 – 36,175
Credit card
Balance at January 1, 2020 – – – – –
Impact of merger (Note 11) 83,481 2,040 1,509 – 87,030
New assets originated 8,687 – – – 8,687
Assets derecognized or repaid (702) (4,686) (123) – (5,511)
Amounts written-off – – (8,473) – (8,473)
Transfers to/(from) Stage 1 (15,927) – – – (15,927)
Transfers to/(from) Stage 2 – 3,567 – – 3,567
Transfers to/(from) Stage 3 – – 12,360 – 12,360
Balance at December 31, 2020 75,539 921 5,273 – 81,733
Other loans
Balance at January 1, 2020 14,502 – 40 – 14,542
New assets originated 7,829 – – – 7,829
Assets derecognized or repaid (10,803) – – – (10,803)
Transfers to/(from) Stage 1 (1) – – – (1)
Transfers to/(from) Stage 3 – – 1 – 1
Balance at December 31, 2020 11,527 – 41 – 11,568
Total receivables from customers
Balance at January 1, 2020 1,023,128 137,410 7,518 2,992 1,171,048
Impact of merger (Note 11) 83,481 2,040 1,509 – 87,030
New assets originated 384,232 – – – 384,232
Assets derecognized or repaid (488,401) (63,850) (1,828) – (554,079)
Amounts written-off – – (8,474) – (8,474)
Transfers to/(from) Stage 1 (100,723) – – – (100,723)
Transfers to/(from) Stage 2 – 83,460 – – 83,460
Transfers to/(from) Stage 3 – – 17,263 – 17,263
Others (2,505) – (89) 21 (2,573)
Balance at December 31, 2020 =
P899,212 =
P159,060 =
P15,899 =
P3,013 =
P1,077,184
2019
Commercial loans
Balance at January 1, 2019 =
P930,074 =
P7,347 =
P6,920 =
P3,309 =
P947,650
New assets originated 505,051 – – – 505,051
Assets derecognized or repaid (423,882) (12,287) (3,007) (247) (439,423)
Amounts written-off – – (233) – (233)
Transfers to/(from) Stage 1 (142,769) – – – (142,769)
Transfers to/(from) Stage 2 – 139,612 – – 139,612
Transfers to/(from) Stage 3 – – 3,157 – 3,157
Others (741) – (84) (70) (895)
Balance at December 31, 2019 867,733 134,672 6,753 2,992 1,012,150

*SGVFSM005911*
 - 52 -

Parent Company
Receivables from Customers
Stage 1 Stage 2 Stage 3 POCI Total
Auto loans
Balance at January 1, 2019 =
P29,150 =
P350 =
P181 =
P– =
P29,681
New assets originated 8,710 – – – 8,710
Assets derecognized or repaid (14,066) (87) (51) – (14,204)
Amounts written-off – – (5) – (5)
Transfers to/(from) Stage 1 184 – – – 184
Transfers to/(from) Stage 2 – (201) – – (201)
Transfers to/(from) Stage 3 – – 17 – 17
Balance at December 31, 2019 23,978 62 142 – 24,182
Residential mortgage loans
Balance at January 1, 2019 55,239 1,787 948 – 57,974
New assets originated 11,842 – – – 11,842
Assets derecognized or repaid (11,750) (265) (281) – (12,296)
Transfers to/(from) Stage 1 1,194 – – – 1,194
Transfers to/(from) Stage 2 – (1,005) – – (1,005)
Transfers to/(from) Stage 3 – – (189) – (189)
Balance at December 31, 2019 56,525 517 478 – 57,520
Trade loans
Balance at January 1, 2019 62,687 276 99 – 63,062
New assets originated 62,499 – – – 62,499
Assets derecognized or repaid (62,673) (232) – – (62,905)
Transfers to/(from) Stage 1 (2,123) – – – (2,123)
Transfers to/(from) Stage 2 – 2,115 – – 2,115
Transfers to/(from) Stage 3 – – 7 – 7
Others – – (1) – (1)
Balance at December 31, 2019 60,390 2,159 105 – 62,654
Other loans
Balance at January 1, 2019 12,530 – 41 – 12,571
New assets originated 9,633 – – – 9,633
Assets derecognized or repaid (7,644) – (18) – (7,662)
Transfers to/(from) Stage 1 (17) – – – (17)
Transfers to/(from) Stage 3 – – 17 – 17
Balance at December 31, 2019 14,502 – 40 – 14,542
Total receivables from customers
Balance at January 1, 2019 1,089,680 9,760 8,189 3,309 1,110,938
New assets originated 597,735 – – – 597,735
Assets derecognized or repaid (520,015) (12,871) (3,357) (247) (536,490)
Amounts written-off – – (238) – (238)
Transfers to/(from) Stage 1 (143,531) – – – (143,531)
Transfers to/(from) Stage 2 – 140,521 – – 140,521
Transfers to/(from) Stage 3 – – 3,009 – 3,009
Others (741) – (85) (70) (896)
Balance at December 31, 2019 =
P1,023,128 =
P137,410 =
P7,518 =
P2,992 =
P1,171,048

The credit quality of other receivables, gross of allowance for credit losses, as of December 31, 2020
and 2019 follows:

Consolidated
Stage 1 Stage 2 Stage 3 Total
2020
Unquoted debt securities
Standard grade =
P65 =
P– =
P– =
P65
Non-performing individually impaired – – 386 386
65 – 386 451
Accrued interest receivable
High grade 7,837 1,064 – 8,901
Standard grade 1,499 249 – 1,748
Sub-standard grade 797 854 – 1,651
Unrated 13 – – 13
Non-performing individually impaired – – 1,414 1,414
10,146 2,167 1,414 13,727
Sales contract receivables
High grade 4 – – 4
Unrated 54 – – 54
Non-performing individually impaired – – 24 24
58 – 24 82

*SGVFSM005911*
 - 53 -

Consolidated
Stage 1 Stage 2 Stage 3 Total
Other receivables
Standard grade =
P– =
P296 =
P– =
P296
Unrated 31 – – 31
Non-performing individually impaired – – 2 2
31 296 2 329
Total other receivables
High grade 7,841 1,064 – 8,905
Standard grade 1,564 545 – 2,109
Sub-standard grade 797 854 – 1,651
Unrated 98 – – 98
Non-performing individually impaired – – 1,826 1,826
=
P10,300 =
P2,463 =
P1,826 =
P14,589
2019
Unquoted debt securities
High grade =
P630 =
P– =
P– =
P630
Non-performing individually impaired – – 386 386
630 – 386 1,016
Accrued interest receivable
High grade 8,404 134 – 8,538
Standard grade 2,517 153 – 2,670
Sub-standard grade 285 745 – 1,030
Unrated 12 – – 12
Non-performing individually impaired – – 855 855
11,218 1,032 855 13,105
Sales contract receivables
High grade 23 – – 23
Unrated 100 – – 100
Non-performing individually impaired – – 22 22
123 – 22 145
Other receivables
High grade 3 – – 3
Standard grade 261 – – 261
Unrated 65 – – 65
Non-performing individually impaired – – 2 2
329 – 2 331
Total other receivables
High grade 9,060 134 – 9,194
Standard grade 2,778 153 – 2,931
Sub-standard grade 285 745 – 1,030
Unrated 177 – – 177
Non-performing individually impaired – – 1,265 1,265
=
P12,300 =
P1,032 =
P1,265 =
P14,597

Parent Company
Stage 1 Stage 2 Stage 3 Total
2020
Unquoted debt securities
Non-performing individually impaired =
P– =
P– =
P386 =
P386
Accrued interest receivable
High grade 4,993 – – 4,993
Standard grade 1,468 81 – 1,549
Sub-standard grade 796 765 – 1,561
Unrated 11 – – 11
Non-performing individually impaired – – 421 421
7,268 846 421 8,535
Sales contract receivables
Unrated 54 – – 54
Non-performing individually impaired – – 2 2
54 – 2 56
Other receivables
Unrated 9 – – 9
Non-performing individually impaired – – 2 2
9 – 2 11
Total other receivables
High grade 4,993 – – 4,993
Standard grade 1,468 81 – 1,549
Sub-standard grade 796 765 – 1,561
Unrated 74 – – 74
Non-performing individually impaired – – 811 811
=
P7,331 =
P846 =
P811 =
P8,988

*SGVFSM005911*
 - 54 -

Parent Company
Stage 1 Stage 2 Stage 3 Total
2019
Unquoted debt securities
Non-performing individually impaired =
P– =
P– =
P386 =
P386
Accrued interest receivable
High grade 6,600 – – 6,600
Standard grade 2,468 5 – 2,473
Sub-standard grade 285 741 – 1,026
Unrated 10 – – 10
Non-performing individually impaired – – 394 394
9,363 746 394 10,503
Sales contract receivables
Unrated 100 – – 100
Non-performing individually impaired – – 2 2
100 – 2 102
Other receivables
Unrated 10 – – 10
Non-performing individually impaired – – 2 2
10 – 2 12
Total other receivables
High grade 6,600 – – 6,600
Standard grade 2,468 5 – 2,473
Sub-standard grade 285 741 – 1,026
Unrated 120 – – 120
Non-performing individually impaired – – 784 784
=
P9,473 =
P746 =
P784 =
P11,003

Movements during 2020 and 2019 for other receivables follow:

Consolidated
Stage 1 Stage 2 Stage 3 Total
2020
Balance at January 1, 2020 =
P12,300 =
P1,032 =
P1,265 =
P14,597
New assets originated 11,574 – – 11,574
Assets derecognized or repaid (10,677) (532) (373) (11,582)
Transfers to/(from) Stage 1 (2,897) – – (2,897)
Transfers to/(from) Stage 2 – 1,963 – 1,963
Transfers to/(from) Stage 3 – – 934 934
Balance at December 31, 2020 =
P10,300 =
P2,463 =
P1,826 =
P14,589
2019
Balance at January 1, 2019 =
P10,489 =
P370 =
P1,351 =
P12,210
New assets originated 8,985 – – 8,985
Assets derecognized or repaid (5,522) (366) (709) (6,597)
Amounts written-off – – (1) (1)
Transfers to/(from) Stage 1 (1,652) – – (1,652)
Transfers to/(from) Stage 2 – 1,028 – 1,028
Transfers to/(from) Stage 3 – – 624 624
Balance at December 31, 2019 =
P12,300 =
P1,032 =
P1,265 =
P14,597

Parent Company
Stage 1 Stage 2 Stage 3 Total
2020
Balance at January 1, 2020 =
P9,473 =
P746 =
P784 =
P11,003
New assets originated 5,575 – – 5,575
Assets derecognized or repaid (7,321) (243) (26) (7,590)
Transfers to/(from) Stage 1 (396) – – (396)
Transfers to/(from) Stage 2 – 343 – 343
Transfers to/(from) Stage 3 – – 53 53
Balance at December 31, 2020 =
P7,331 =
P846 =
P811 =
P8,988

*SGVFSM005911*
 - 55 -

Parent Company
Stage 1 Stage 2 Stage 3 Total
2019
Balance at January 1, 2019 =
P7,564 =
P30 =
P911 =
P8,505
New assets originated 7,575 – – 7,575
Assets derecognized or repaid (4,487) (219) (370) (5,076)
Amounts written-off – – (1) (1)
Transfers to/(from) Stage 1 (1,179) – – (1,179)
Transfers to/(from) Stage 2 – 935 – 935
Transfers to/(from) Stage 3 – – 244 244
Balance at December 31, 2019 =
P9,473 =
P746 =
P784 =
P11,003

The credit risk exposure on the accounts receivable (excluding statutory receivables which are not
considered financial assets) of the Group and the Parent Company based on their aging as of
December 31, 2020 and 2019 follows:
Consolidated Parent Company
Age of accounts receivables 2020 2019 2020 2019
Up to 1 month =
P6,992 =
P5,775 =
P3,396 =
P2,191
> 1 to 2 months 114 76 34 41
> 2 to 3 months 28 36 16 26
More than 3 months 4,144 3,579 3,558 3,473
Total gross carrying amount =
P11,278 =
P9,466 =
P7,004 =
P5,731

The maximum exposure and credit quality of loan commitments and financial guarantees as of
December 31, 2020 and 2019 follows:
Consolidated
Stage 1 Stage 2 Stage 3 Total
2020
High grade =
P11,389 =
P– =
P– =
P11,389
Standard grade 201,587 1,790 – 203,377
Substandard grade – – 2,480 2,480
Unrated 66,062 2,401 16 68,479
= 279,038
P = 4,191
P = 2,496
P = 285,725
P
2019
Standard grade =
P210,260 =
P– =
P– =
P210,260
Unrated 62,768 1,460 – 64,228
=
P273,028 =
P1,460 =
P– =
P274,488

Parent Company
Stage 1 Stage 2 Stage 3 Total
2020
Standard grade =
P201,545 =
P1,790 =
P– =
P203,335
Substandard grade – – 2,480 2,480
Unrated 66,062 2,401 16 68,479
=
P267,607 =
P4,191 =
P2,496 =
P274,294
2019
Unrated =
P62,768 =
P1,460 =
P– =
P64,228

Movements during 2020 and 2019 for loan commitments and financial guarantees follow:
Consolidated
Stage 1 Stage 2 Stage 3 Total
2020
Balance at January 1, 2020 =
P273,028 =
P1,460 =
P– =
P274,488
New assets originated or purchased 46,625 – – 46,625
Assets derecognized or repaid (29,274) (3,633) (2,481) (35,388)
Transfers to/(from) Stage 1 (11,341) – – (11,341)
Transfers to/(from) Stage 2 – 6,364 – 6,364
Transfers to/(from) Stage 3 – – 4,977 4,977
Balance at December 31, 2020 =
P279,038 =
P4,191 =
P2,496 =
P285,725
2019
Balance at January 1, 2019 =
P257,795 =
P84 =
P– =
P257,879
New assets originated or purchased 47,799 – – 47,799
Assets derecognized or repaid (30,939) (251) – (31,190)

(Forward)

*SGVFSM005911*
 - 56 -

Consolidated
Stage 1 Stage 2 Stage 3 Total
Transfers to/(from) Stage 1 (P
= 1,627) =
P– =
P– (P
= 1,627)
Transfers to/(from) Stage 2 – 1,627 – 1,627
Balance at December 31, 2019 =
P273,028 =
P1,460 =
P– =
P274,488

Parent Company
Stage 1 Stage 2 Stage 3 Total
2020
Balance at January 1, 2020 P62,768
= = 1,460
P =–
P P64,228
=
Impact of merger 209,766 – – 209,766
New assets originated or purchased 35,194 – – 35,194
Assets derecognized or repaid (28,780) (3,633) (2,481) (34,894)
Transfers to/(from) Stage 1 (11,341) – – (11,341)
Transfers to/(from) Stage 2 – 6,364 – 6,364
Transfers to/(from) Stage 3 – – 4,977 4,977
Balance at December 31, 2020 =
P267,607 =
P4,191 =
P2,496 =
P274,294
2019
Balance at January 1, 2019 =
P69,513 =
P84 =
P– =
P69,597
New assets originated or purchased 25,821 – – 25,821
Assets derecognized or repaid (30,939) (251) – (31,190)
Transfers to/(from) Stage 1 (1,627) – – (1,627)
Transfers to/(from) Stage 2 – 1,627 – 1,627
Balance at December 31, 2019 =
P62,768 =
P1,460 =
P– =
P64,228

Breakdown of restructured receivables from customers by class are shown below:

Consolidated Parent Company

2020 2019 2020 2019
Commercial loans =
P4,346 =2,048
P =
P3,614 =2,044
P
Residential mortgage loans 59 95 7 11
Auto loans 7 16 ‒ ‒
Others 174 276 ‒ ‒
=
P4,586 =2,435
P =
P3,621 =2,055
P

As of December 31, 2020 and 2019, an analysis by past due status of receivables from customers
wherein the SICR is based only on the past due information is as follows:

Consolidated
Number of days past due
Within
30 days 31-60 days 61-90 days 91-180 days Over 180 days Total
22020
Auto loans =
P890 =
P287 =
P189 =
P1,161 =
P3,255 =
P5,782
Residential mortgage loans 704 220 104 572 2,139 3,739
Credit card – 974 922 5,273 – 7,169
=
P1,594 =
P1,481 =
P1,215 =
P7,006 =
P5,394 =
P16,690
22019
Auto loans =419
P =165
P =330
P =1,392
P =1,132
P =3,438
P
Residential mortgage loans 807 328 187 422 1,035 2,779
Credit card – 1,175 865 1,509 – 3,549
=1,226
P =1,668
P =1,382
P =3,323
P =2,167
P =9,766
P

Parent Company
Number of days past due
Within
30 days 31-60 days 61-90 days 91-180 days Over 180 days Total
22020
Auto loans =
P2 =
P2 =
P2 =
P4 =
P181 =
P191
Residential mortgage loans 27 22 18 43 607 717
Credit card – 974 922 5,273 – 7,169
=
P29 =
P998 =
P942 =
P5,320 =
P788 =
P8,077
22019
Auto loans =
P61 =
P20 =
P8 =
P11 =
P121 =
P221
Residential mortgage loans 322 84 39 105 357 907
=
P383 =
P104 =
P47 =
P116 =
P478 =
P1,128

*SGVFSM005911*
 - 57 -

Liquidity Risk
Liquidity risk is the current and prospective risk to earnings or capital arising from the inability to
meet obligations when they come due. This may be caused by the inability to liquidate assets or to
obtain funding to meet liquidity needs.

The Group manages its liquidity risk by holding adequate stock of high quality liquid assets,
analyzing net funding requirements over time, diversifying funding sources and contingency
planning.

To measure the prospective liquidity needs, the Group uses Maximum Cumulative Outflow (MCO),
a liquidity gap tool to project short-term as well as long-term cash flow expectations on a business-
as-usual condition.

The MCO is generated by distributing the cash flows of the Group’s assets, liabilities and off-balance
sheet items to time bands based on cash flow expectations such as contractual maturity, nature of the
account, behavioral patterns, projections on business strategies, and/or optionality of certain
products. The incorporation of behavioral cash flow assumptions and business projections or targets
results in a dynamic gap report which realistically captures the behavior of the products and creates a
forward-looking cash flow projection.

Cash flows from assets are considered as cash inflows, while cash flows from liabilities are
considered cash outflows. The net cash flows are determined for each given time period. If the
inflows exceed the outflows, the Group is said to have a positive liquidity gap or excess funds for the
given time bucket. Conversely, if the outflows exceed the inflows, the Group is said to have a
negative liquidity gap or funding need for the given time bucket.

The MCO is monitored regularly to ensure that it remains within the set limits. The Parent Company
generates and monitors daily its MCO, while the subsidiaries generate the report at least monthly.
The liquidity profile of the Group is reported monthly to the Parent Company’s ALCO and ROC.

To supplement the business-as-usual scenario parameters reflected in the MCO report, the Group
also conducts liquidity stress testing to determine the impact of extreme factors, scenarios and/or
events to the Group’s liquidity profile. Liquidity stress testing exercise is performed quarterly on a
per firm basis, and at least annually on the Group-wide level.

Financial assets
Analysis of debt securities into maturity groupings is based on the expected date on which these
assets will be realized. For other financial assets, the analysis into maturity groupings is based on the
remaining period from the end of the reporting period to the contractual maturity date or, if earlier,
the expected date the assets will be realized.

Financial liabilities
The maturity groupings are based on the remaining period from the end of the reporting period to the
contractual maturity date. When a counterparty has a choice of when the amount is paid, the liability
is allocated to the earliest period in which the Group can be required to pay.

*SGVFSM005911*
 - 58 -

The table below summarizes the maturity profile of financial instruments and gross-settled
derivatives based on contractual undiscounted cash flows.
Consolidated
Up to 1 to 3 to 6 to Beyond
On demand 1 month 3 months 6 months 12 months 1 year Total
2020
Financial Assets
Cash and other cash items =
P38,469 =
P– =
P– =
P– =
P– =
P– =
P38,469
Due from BSP 304,906 – – – – – 304,906
Due from other banks 32,858 2,926 2,491 73 15 – 38,363
Interbank loans receivable
and SPURA 8,040 37,348 19,961 7,636 6,502 – 79,487
Investment securities at FVTPL
FVTPL investments 6,416 56 54,947 247 376 2,290 64,332
Derivative assets
Trading:
Receive – 55,125 38,586 17,521 22,010 87,816 221,058
Pay – (54,325) (37,826) (17,026) (20,678) (79,260) (209,115)
– 800 760 495 1,332 8,556 11,943
Investment securities at FVOCI – 45,802 8,572 25,666 84,796 432,711 597,547
Investment securities at amortized
cost – 55 3,033 164 344 24,093 27,689
Loans and receivables
Receivables from customers 76,042 207,770 177,373 70,980 92,321 876,411 1,500,897
Unquoted debt securities – – – – – 435 435
Accrued interest receivable 11,667 528 196 696 450 190 13,727
Accounts receivable 10,130 533 85 9 28 493 11,278
Sales contract receivable 10 3 12 22 4 35 86
Other receivables 9 320 – – – – 329
Other assets
Returned checks and other
cash items 250 – – – – – 250
Residual values of leased assets 103 40 51 65 143 528 930
Miscellaneous 56 4 3 4 6 175 248
=
P488,956 =
P296,185 =
P267,484 =
P106,057 =
P186,317 P
= 1,345,917 =
P2,690,916
Financial Liabilities
Non-derivative liabilities
Deposit liabilities
Demand =
P515,378 =
P– =
P– =
P– =
P– =
P– =
P515,378
Savings 795,979 – – – – – 795,979
Time 2 285,744 105,265 27,748 16,987 16,174 451,920
LTNCD – 13 103 295 6,840 32,596 39,847
1,311,359 285,757 105,368 28,043 23,827 48,770 1,803,124
Bills payable and SSURA – 73,338 34,887 3,403 15,600 13,531 140,759
Manager's checks and demand
drafts outstanding 6,024 – – – – – 6,024
Accrued interest payable 39 704 692 66 161 72 1,734
Accrued other expenses 3,843 1,623 256 – 165 – 5,887
Bonds payable – 22 215 763 33,777 63,575 98,352
Subordinated debts – – 19 19 37 1,319 1,394
Non-equity non-controlling interest 8,315 – – – – – 8,315
Other liabilities
Bills purchased - contra 10,994 – – – – – 10,994
Accounts payable 7,629 10,319 – 2,073 – 6 20,027
Marginal deposits – – 5,600 – – – 5,600
Outstanding acceptances – 405 468 289 166 – 1,328
Deposits on lease contracts 12 214 118 101 236 777 1,458
Dividends payable – 90 – – – – 90
Lease liability 27 87 188 276 493 2,851 3,922
Miscellaneous 181 – – – – – 181
1,348,423 372,559 147,811 35,033 74,462 130,901 2,109,189
Derivative liabilities*
Trading:
Pay – 76,203 30,594 13,130 13,537 95,048 228,512
Receive – (74,804) (30,218) (12,872) (12,769) (84,933) (215,596)
– 1,399 376 258 768 10,115 12,916
Loan commitments and financial
guarantees 212,711 6,907 20,983 8,531 26,218 10,375 285,725
=
P1,561,134 =
P380,865 =
P169,170 =
P43,822 =
P101,448 =
P151,391 =
P2,407,830

*SGVFSM005911*
 - 59 -

Consolidated
Up to 1 to 3 to 6 to Beyond
On demand 1 month 3 months 6 months 12 months 1 year Total
2019
Financial Assets
Cash and other cash items =
P32,956 =
P– =
P– =
P– =
P– =
P– =
P32,956
Due from BSP 219,994 – – – – – 219,994
Due from other banks 51,867 26 2,724 164 4 – 54,785
Interbank loans receivable
and SPURA 175 66,185 3,632 2,196 – – 72,188
Investment securities at FVTPL
FVTPL investments – 12,310 38,502 – – 38 50,850
Derivative assets
Trading:
Receive – 53,050 27,989 29,617 14,099 3,018 127,773
Pay – (53,625) (28,447) (30,201) (14,307) (3,151) (129,731)
– (575) (458) (584) (208) (133) (1,958)
Investment securities at FVOCI – 546 2,799 5,049 2,940 230,995 242,329
Investment securities at amortized
cost – 15,370 150 312 9,766 317,901 343,499
Loans and receivables
Receivables from customers 60,348 276,769 178,037 129,824 103,398 994,261 1,742,637
Unquoted debt securities – 10 1 161 18 980 1,170
Accrued interest receivable 11,220 1,276 251 52 306 – 13,105
Accounts receivable 7,761 259 21 11 1,413 1 9,466
Sales contract receivable 9 – 19 13 26 86 153
Other receivables 15 316 – – – – 331
Other assets
Returned checks and other
cash items 407 – – – – – 407
Miscellaneous 8 – 1 4 8 172 193
=
P384,760 =
P372,492 =
P225,679 =
P137,202 =
P117,671 =
P1,544,301 =
P2,782,105
Financial Liabilities
Non-derivative liabilities
Deposit liabilities
Demand =
P411,873 =
P– =
P– =
P– =
P– =
P– =
P411,873
Savings 665,634 – – – – – 665,634
Time – 394,827 125,808 23,838 30,119 21,280 595,872
LTNCD – 34 104 8,375 590 40,253 49,356
1,077,507 394,861 125,912 32,213 30,709 61,533 1,722,735
Bills payable and SSURA – 91,394 50,379 22,665 26,319 51,687 242,444
Manager's checks and demand
drafts outstanding p6,806 – – – – – 6,806
Accrued interest payable 766 1,295 1,199 171 339 146 3,916
Accrued other expenses 3,395 792 1 – 180 – 4,368
Bonds payable – – 442 1,098 30,283 56,468 88,291
Subordinated debts – – 54 104 6,623 1,394 8,175
Non-equity non-controlling interest 6,553 – – – – – 6,553
Other liabilities
Bills purchased - contra 14,089 – – – – – 14,089
Accounts payable 5,089 9,964 – 2,384 – – 17,437
Marginal deposits 6,138 – 236 – – – 6,374
Outstanding acceptances – 488 378 324 398 23 1,611
Deposits on lease contracts 36 54 83 121 291 1,140 1,725
Notes payable – – – 1,881 1,028 – 2,909
Dividends payable 90 – – – – – 90
Lease liability 59 125 225 341 644 3,593 4,987
Miscellaneous 3 – – – – – 3
1,120,531 498,973 178,909 61,302 96,814 175,984 2,132,513
Derivative liabilities*
Trading:
Pay – 84,202 26,452 17,814 17,521 2,097 148,086
Receive – (83,588) (26,100) (17,699) (17,462) (1,930) (146,779)
– 614 352 115 59 167 1,307
Loan commitments and financial
guarantees 218,613 6,182 16,531 12,967 12,457 7,738 274,488
=
P1,339,144 =
P505,769 =
P195,792 =
P74,384 =
P109,330 =
P183,889 =
P2,408,308

*SGVFSM005911*
 - 60 -

Parent Company
Up to 1 to 3 to 6 to Beyond
On demand 1 month 3 months 6 months 12 months 1 year Total
2020
Financial Assets
Cash and other cash items =
P35,606 =
P– =
P– =
P– =
P– =
P– =
P35,606
Due from BSP 262,188 – – – – – 262,188
Due from other banks 17,365 2,892 2,491 – – – 22,748
Interbank loans receivable and
SPURA – 30,046 14,679 6,061 6,502 – 57,288
Investment securities at FVTPL
FVTPL investments – – 54,689 – – 43 54,732
Derivative assets
Trading:
Receive – 55,124 38,586 17,521 22,005 87,805 221,041
Pay – (54,325) (37,826) (17,027) (20,677) (79,260) (209,115)
– 799 760 494 1,328 8,545 11,926
Investment securities at FVOCI – 34,441 5,884 24,898 83,149 422,227 570,599
Investment securities at amortized
cost – – 2,902 – 82 5,569 8,553
Loans and receivables
Receivables from customers 65,906 202,697 166,484 57,835 55,240 665,268 1,213,430
Unquoted debt securities – – – – – 370 370
Accrued interest receivable 8,535 – – – – – 8,535
Accounts receivable 7,004 – – – – – 7,004
Sales contract receivable 6 1 12 22 3 15 59
Other receivables 11 – – – – – 11
Other assets
Returned checks and other
cash items 239 – – – – – 239
=
P396,860 =
P270,876 =
P247,901 =
P89,310 =
P146,304 P
= 1,102,037 =
P2,253,288
Financial Liabilities
Non-derivative liabilities
Deposit liabilities
Demand =
P467,545 =
P– =
P– =
P– =
P– =
P– =
P467,545
Savings 755,713 – – – – – 755,713
Time – 217,790 82,984 21,569 9,575 566 332,484
LTNCD – 13 103 295 6,840 23,176 30,427
1,223,258 217,803 83,087 21,864 16,415 23,742 1,586,169
Bills payable and SSURA – 65,195 30,371 375 8,555 4,451 108,947
Manager’s checks and demand
drafts outstanding 5,493 – – – – – 5,493
Accrued interest payable 33 444 390 73 59 72 1,071
Accrued other expenses 3,834 – – – – – 3,834
Bonds payable – 22 215 763 22,971 58,486 82,457
Subordinated debts – – 19 19 37 1,319 1,394
Other liabilities
Bills purchased - contra 10,990 – – – – – 10,990
Accounts payable 1,838 9,153 – – – – 10,991
Outstanding acceptances – 405 468 289 166 – 1,328
Marginal deposits – – 398 – – – 398
Lease liability 19 52 101 143 263 1,670 2,248
1,245,465 293,074 115,049 23,526 48,466 89,740 1,815,320
Derivative liabilities*
Trading:
Pay – 76,203 30,594 13,130 13,537 95,048 228,512
Receive – (74,804) (30,218) (12,872) (12,769) (84,933) (215,596)
– 1,399 376 258 768 10,115 12,916
Loan commitments and financial
guarantees 212,669 6,906 20,983 8,531 14,830 10,375 274,294
=
P1,458,134 =
P301,379 =
P136,408 =
P32,315 =
P64,064 =
P110,230 =
P2,102,530
2019
Financial Assets
Cash and other cash items =
P30,659 =
P– =
P– =
P– =
P– =
P– =
P30,659
Due from BSP 195,770 – – – – – 195,770
Due from other banks 34,495 1,498 2,717 – – – 38,710
Interbank loans receivable
and SPURA – 55,708 426 33 – – 56,167
Investment securities at FVTPL
FVTPL investments – – 38,502 – – 38 38,540

(Forward)

*SGVFSM005911*
 - 61 -

Parent Company
Up to 1 to 3 to 6 to Beyond
On demand 1 month 3 months 6 months 12 months 1 year Total
Derivative assets
Trading:
Receive =
P– =
P53,050 =
P27,989 =
P29,617 =
P14,099 =
P3,018 =
P127,773
Pay – (53,625) (28,447) (30,201) (14,307) (3,151) (129,731)
– (575) (458) (584) (208) (133) (1,958)
Investment securities at FVOCI – 381 1,574 2,914 2,022 220,905 227,796
Investment securities at amortized
cost – 15,017 – – 7,605 275,365 297,987
Loans and receivables
Receivables from customers 10,053 276,409 160,093 105,231 49,435 722,173 1,323,394
Unquoted debt securities – – – – – 482 482
Accrued interest receivable 10,503 – – – – – 10,503
Accounts receivable 5,731 – – – – – 5,731
Sales contract receivable 5 – 19 12 25 49 110
Other receivables 12 – – – – – 12
Other assets
Returned checks and other cash
items 378 – – – – – 378
=
P287,606 =
P348,438 =
P202,873 =
P107,606 =
P58,879 P
=1,218,879 =
P2,224,281
Financial Liabilities
Non-derivative liabilities
Deposit liabilities
Demand =
P372,303 =
P– =
P– =
P– =
P– =
P– =
P372,303
Savings 630,946 – – – – – 630,946
Time – 318,644 114,318 18,571 9,812 1,248 462,593
LTNCD – 34 104 8,375 590 30,606 39,709
1,003,249 318,678 114,422 26,946 10,402 31,854 1,505,551
Bills payable and SSURA – 73,962 17,763 13,313 13,299 22,656 140,993
Manager’s checks and demand
drafts outstanding 5,508 – – – – – 5,508
Accrued interest payable – 1,058 835 170 272 146 2,481
Accrued other expenses 2,124 – – – – – 2,124
Bonds payable – – 442 1,097 29,930 45,694 77,163
Subordinated debts – – 36 85 6,585 – 6,706
Other liabilities
Bills purchased - contra 14,080 – – – – – 14,080
Accounts payable – 8,269 – – – – 8,269
Outstanding acceptances – 488 378 324 398 23 1,611
Marginal deposits – – 236 – – – 236
Lease liability 59 62 121 181 340 1,981 2,744
1,025,020 402,517 134,233 42,116 61,226 102,354 1,767,466
Derivative liabilities*
Trading:
Pay – 80,750 26,452 17,814 18,566 – 143,582
Receive – (80,276) (26,100) (17,699) (18,487) – (142,562)
– 474 352 115 79 – 1,020
Loan commitments and financial
guarantees 8,776 6,169 16,531 12,557 12,457 7,738 64,228
=
P1,033,796 =
P409,160 =
P151,116 =
P54,788 =
P73,762 =
P110,092 =
P1,832,714
*Does not include derivatives embedded in financial and non-financial contracts.

Market Risk
Market risk is the possibility of loss to future earnings, fair values, or future cash flows that may
result from changes in the price of a financial instrument. The value of a financial instrument may
change as a result of changes in interest rates, foreign exchange rates, and other market factors.
Market risk originates from holdings in foreign currencies, debt securities, and derivatives
transactions.

Depending on the business model for the product, i.e., whether they belong to the trading book or
banking book, the Group applies different tools and processes to manage market risk exposures.
Risk limits, approved by the BOD, are enforced to monitor and control this risk. RSK, as an
independent body under the ROC, performs daily market risk analyses to ensure compliance to
policies and limits, while Treasury Group manages the asset/liability risks arising from both banking
book and trading operations in financial markets. The ALCO, chaired by the President, manages
market risks within the parameters approved by the BOD.

*SGVFSM005911*
 - 62 -

As part of group supervision, the Parent Company regularly coordinates with subsidiaries to monitor
their compliance to their respective risk tolerances and to ensure alignment of risk management
practices. Each subsidiary has its own risk management unit responsible for monitoring its market
risk exposures. The Parent, however, requires regular submission of market risk profiles which are
presented to ALCO and ROC in both individual and consolidated forms to provide senior
management and ROC a holistic perspective, and ensure alignment of strategies and risk appetite
across the Group.

Market risk - trading book

In measuring the potential loss in its trading portfolio, the Parent Company uses VaR. VaR is an
estimate of the potential decline in the value of a portfolio, under normal market conditions, for a
given “confidence level” over a specified holding period. The Parent Company measures and
monitors the Trading Book VaR daily, and this value is compared against the set VaR limit.
Meanwhile, the Group VaR is monitored and reported monthly.

VaR methodology assumptions and parameters

Historical Simulation (HS) is used to compute the VaR. This method assumes that market rates
volatility in the future will follow the same movement that occurred within the 260-day historical
period. In calculating VaR, a 99.00% confidence level and a one-day holding period are assumed.
This means that, statistically, within a one-day horizon, the trading losses will exceed VaR in 1 out of
100 trading days.

Like any other model, the HS method has its own limitations. To wit, it cannot predict volatility
levels which did not happen in the specified historical period. The validity of the VaR model is
verified through a daily backtesting analysis, which examines how frequently both actual and
hypothetical daily losses exceed VaR. The result of the daily backtesting analysis is reported to the
ALCO and ROC monthly.

A summary of the VaR levels of the trading portfolio of the Parent Company appears below:

Rates and FX Fixed Income FX Options

As of December 31, 2020
December 29 P
=182.03 P
=286.09 P
=9.26
Average 236.42 223.21 25.78
Highest 320.70 399.15 65.58
Lowest 177.83 61.27 4.60

As of December 31, 2019

December 27 P
=189.27 P
=139.49 P
=9.18
Average 146.87 141.22 12.26
Highest 223.46 269.07 42.02
Lowest 57.91 32.93 2.12

Rates and Foreign Exchange (FX) VaR is the correlated VaR of the following products: FX spot,
outright forward, non-deliverable forwards, FX swaps, interest rate swaps, and cross-currency swaps.
The Fixed Income VaR is the correlated VaR of these products: peso and foreign currency bonds,
bond forwards and credit default swaps (CDS).

Subsidiaries with trading books perform daily mark-to-market valuation and VaR calculations for
their exposures. Risk exposures are bounded by a system of risk limits and monitoring tools to
effectively manage the risks.

*SGVFSM005911*
 - 63 -

The table below summarizes the VaR levels of FMIC and PSBank:

FMIC PSBank
Bonds Bonds
Equities PHP USD PHP FX
As of December 31, 2020
December 29 =
P0 P
= 3.22 =P0 =
P0.00 =
P0.85
Average 9.48 2.74 4.98 0.90
Highest 72.34 6.84 27.43 1.63
Lowest 1.88 0.18 0.00 0.00

As of December 31, 2019

December 27 =
P– =
P9.05 =
P0.18 =
P0.00 =
P0.98
Average 0.99 30.26 3.63 0.00 0.75
Highest 9.42 89.66 11.34 0.00 1.33
Lowest 0.64 4.86 0.18 0.00 0.01

The limitations of the VaR methodology are recognized by supplementing VaR limits with other
position and sensitivity limit structures and by doing stress testing analysis. These processes address
potential product concentration risks, monitor portfolio vulnerability and give the management an
early advice if an actual loss goes beyond what is deemed to be tolerable to the Group and the Parent
Company, even before the VaR limit is hit.

Stress testing is performed by the Parent Company on a quarterly basis and the results are reported to
the ALCO and, subsequently, to the ROC and BOD. On a Group-wide perspective, stress testing is
done, at least, annually. The results are reported by the Parent Company’s Risk Management Group
to the BOD through ROC.

Market risk - banking book

The Group has in place their own risk management system and processes to quantify and manage
market risks in the banking book. To the extent applicable, these are generally aligned with the
Parent’s framework/tools.

The Group assesses interest rate risk in the banking book using measurement tools such as Interest
Rate Repricing Gap, Earnings-at-Risk (EaR), Delta Economic Value of Equity (ΔEVE), and
Sensitivity Analysis.

Interest Rate Repricing Gap is a tool that distributes rate-sensitive assets and liabilities into pre-
defined tenor buckets according to time remaining to their maturity (if fixed rate) or repricing (if
floating rate). Items lacking definitive repricing schedule (e.g., current and savings account) and
items with actual maturities that could vary from contractual maturities (e.g., securities with
embedded options) are assigned to repricing tenor buckets based on analysis of historical patterns,
past experience and/or expert judgment.

EaR measures the possible decline in the Group’s net interest income as a result of adverse interest
rate movements, given the current repricing profile. It is a tool used to evaluate the sensitivity of the
accrual portfolio to changes in interest rates in the adverse direction over the next twelve (12)
months.

EaR methodology assumptions and parameters

The Group calculates EaR using Historical Simulations (HS) approach, with one-year horizon and
using five years data. EaR is then derived as the 99th percentile biggest drop in net interest income.

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The table below shows the EaR profile of the Parent Company and certain subsidiaries as of
December 31, 2020 and 2019:

Parent
Company FMIC PSBank ORIX Metro MCC* Group
2020 (P
=2,795.47) (P
=13.57) (P
=405.28) (P
=72.42) P
=– (P
=2,598.13)
2019 (2,892.41) (88.73) (1,411.33) (97.92) (140.61) (2,498.06)
* Merged into the Parent Company effective January 3, 2020 (Note 11)

The Parent Company generates and monitors daily its EaR exposure while the subsidiaries generate
their EaR reports at least monthly.

The Parent Company employs the Delta EVE model to measure the overall change in the economic
value of the bank at one point. It reflects the changes in the net present value of its banking book at
different interest rate shocks and stress scenarios. ΔEVE is calculated by slotting the notional
repricing cash flows arising from rate-sensitive assets and liabilities into pre-defined tenor buckets.
The present value of the net repricing cash flows is then calculated using various interest rate
scenarios prescribed by Basel as well as scenarios internally developed by the Parent Company.

For 2020, the ΔEVE of the Parent Company ranges from (P =5.26 billion) to (P
=25.09 billion). As of
December 29, 2020, the ΔEVE stood at (P =25.09 billion) or 11.24% of CETI Capital. Metrobank has
adequate capital to support potential change in value of equity even at worst stress scenario.

Aside from the tools above, the Parent Company and its subsidiaries perform regular sensitivity and
stress testing analyses on their banking books to broaden their forward-looking analysis. This way,
management can craft strategies to address and/or arrest probable risks, if necessary.

Foreign currency risk

Foreign exchange risk is the probability of loss to earnings or capital arising from changes in foreign
exchange rates. Foreign currency liabilities generally consist of foreign currency deposits in the
Group’s FCDU account. Foreign currency deposits are generally used to fund the Group’s foreign
currency-denominated loan and investment portfolio in the FCDU. Banks are required by the BSP to
match the foreign currency liabilities with the foreign currency assets held in FCDUs. Outside the
FCDU, the Group has additional foreign currency assets and liabilities in its foreign branch network.
The Group’s policy is to maintain foreign currency exposure within acceptable limits and within
existing regulatory guidelines.

The following table sets forth, for the year indicated, the impact of reasonably possible changes in
the USD exchange rate and other currencies per Philippine peso on pre-tax income and equity:
Consolidated Parent Company
2020 2019 2020 2019
Effect on Effect on Effect on Effect on
Change in profit Change in profit Change in profit Change in profit
currency before Effect on currency before Effect on currency before Effect on currency before Effect on
Currency rate in % tax equity rate in % tax equity rate in % tax equity rate in % tax equity
USD +1.00% 30.17 4.88 +1.00% (12.81) 5.04 +1.00% 136.27 1.61 +1.00% 107.32 1.21
EUR +1.00% 12.53 0.00 +1.00% (36.41) 0.00 +1.00% 12.43 – +1.00% (36.41) –
JPY +1.00% (88.01) 0.00 +1.00% 9.37 0.00 +1.00% (87.96) – +1.00% 9.37 –
GBP +1.00% 23.40 0.00 +1.00% 8.16 0.00 +1.00% 23.69 – +1.00% 8.16 –
Others +1.00% (181.19) 0.00 +1.00% (162.34) 0.00 +1.00% (182.31) – +1.00% (162.34) –
USD -1.00% (30.28) (4.88) -1.00% 12.81 (5.04) -1.00% (136.27) (1.61) -1.00% (107.32) (1.21)
EUR -1.00% (12.43) 0.00 -1.00% 36.41 0.00 -1.00% (12.43) – -1.00% 36.41 –
JPY -1.00% 87.96 0.00 -1.00% (9.37) 0.00 -1.00% 87.96 – -1.00% (9.37) –
GBP -1.00% 23.69 0.00 -1.00% (8.16) 0.00 -1.00% (23.69) – -1.00% (8.16) –
Others -1.00% 182.31 0.00 -1.00% 162.34 0.00 -1.00% 182.31 – -1.00% 162.34 –

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Information relating to the Parent Company’s currency derivatives is included in Note 8. As of

December 31, 2020 and 2019, the Parent Company has outstanding foreign currency spot
transactions (in equivalent peso amounts) of =P12.3 billion and =
P21.24 billion, respectively (sold), and
=4.0 billion and =
P P13.85 billion, respectively (bought).

The impact on the Parent Company’s equity already excludes the impact on transactions affecting the
profit and loss.

Capital Management
The primary objectives of the Group’s capital management are to ensure that it complies with
externally imposed capital requirements and maintains strong credit ratings and healthy capital ratios
in order to support its business and to maximize shareholders’ value.

The Group manages its capital structure and makes adjustments to it in the light of changes in
economic conditions and the risk characteristics of its activities. In order to maintain or adjust the
capital structure, the Group may adjust the amount of dividend payment to shareholders, return
capital structure, or issue capital securities. No changes were made in the objectives, policies and
processes from the previous year.

BSP Reporting
Regulatory Qualifying Capital
Under existing BSP regulations, the determination of the compliance with regulatory requirements
and ratios is based on the amount of the “unimpaired capital” (regulatory net worth) as reported to
the BSP, which is determined on the basis of regulatory accounting policies that differ from PFRS in
some respects.

The Group complied with BSP Circular No. 781, Basel III Implementing Guidelines on Minimum
Capital Requirements, which provides the implementing guidelines on the revised risk-based capital
adequacy framework particularly on the minimum capital and disclosure requirements for universal
banks and commercial banks, as well as their subsidiary banks and quasi-banks, in accordance with
the Basel III standards. The Circular sets out a minimum Common Equity Tier 1 (CET1) ratio of
6.00% and Tier 1 capital ratio of 7.50%; capital conservation buffer of 2.50% comprised of CET1
capital and Total Capital Adequacy Ratio (CAR) of 10.00%. These ratios shall be maintained at all
times. Further, BSP Circular No. 856 covers the implementing guidelines on the framework for
dealing with domestic systemically important banks (DSIBs) in accordance with the Basel III
standards. Banks identified as DSIBs shall be required to have higher loss absorbency, on top of the
minimum CET1 capital and capital conservation buffer. Compliance with this requirement was
phased-in starting January 1, 2017, with full compliance on January 1, 2019.

The details of CAR, as reported to the BSP, as of December 31, 2020 and 2019 follow:

Consolidated Parent Company

2020 2019 2020 2019
Tier 1 capital P
=320,958 =310,100
P P
=312,194 =310,971
P
CET1 Capital 320,958 310,100 312,194 310,971
Less: Required deductions 33,250 33,812 91,562 127,872
Net Tier 1 Capital 287,708 276,288 220,632 183,099
Tier 2 capital 13,075 22,032 10,691 17,271
Total Qualifying Capital P
=300,783 P
=298,320 P
=231,323 =200,370
P
Credit Risk-Weighted Assets P
=1,256,895 P
=1,487,360 P
=1,019,586 =1,143,218
P
Market Risk-Weighted Assets 70,526 72,042 65,607 66,166
Operational Risk-Weighted Assets 165,001 146,694 99,592 86,437
Total Risk-Weighted Assets 1,492,422 1,706,096 1,184,785 1,295,821

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Consolidated Parent Company

2020 2019 2020 2019
CET1 Ratio* 19.28% 16.19% 18.62% 14.13%
Tier 1 capital ratio 19.28% 16.19% 18.62% 14.13%
Total capital ratio 20.15% 17.49% 19.52% 15.46%
* of which capital conservation buffer in 2020 and 2019 is 13.28% and 10.19%, respectively, for the Group and 12.62% and 8.13%, respectively,
for the Parent Company

Qualifying capital and risk-weighted assets (RWA) are computed based on BSP regulations. Under
Basel III, the regulatory qualifying capital of the Parent Company consists of CET1 capital, which
comprises paid-up common stock, additional paid-in capital, retained earnings including current year
profit, retained earnings reserves, OCI and non-controlling interest less required regulatory
deductions. The other component of regulatory capital is Tier 2 (supplementary) capital, which
includes unsecured subordinated debts and general loan loss provision. RWA consist of total assets
excluding cash on hand, due from BSP, loans covered by hold-out on or assignment of deposits,
loans or acceptances under letters of credit to the extent covered by margin deposits and other non-
risk items determined by the Monetary Board (MB) of the BSP. Operational RWA are computed
using the Basic Indicator Approach.

The Group and its individually regulated operations have complied with all externally imposed
capital requirements throughout the year.

The Internal Capital Adequacy Assessment Process (ICAAP) supplements the BSP’s risk-based
capital adequacy framework. In compliance with this, the Group has adopted and developed its
ICAAP framework to ensure that appropriate level and quality of capital are maintained by the
Group. Under this framework, the assessment of risks extends beyond the Pillar 1 set of credit,
market and operational risks and onto other risks deemed material by the Group. The level and
structure of capital are assessed and determined in light of the Group’s business environment, plans,
performance, risks and budget as well as regulatory edicts.

Basel III Leverage Ratio (BLR)

BSP Circular Nos. 881 and 990 cover the implementing guidelines on the BLR framework designed
to act as a supplementary measure to the risk-based capital requirements and shall not be less than
5.00%. The monitoring period has been set every quarter starting December 31, 2014 and extended
until June 30, 2018. Effective July 1, 2018, the monitoring of the leverage ratio was implemented as
a Pillar I minimum requirement.

The details of the BLR, as reported to the BSP, as of December 31, 2020 and 2019 follow:

Consolidated Parent Company

2020 2019 2020 2019
Tier 1 Capital P
=287,708 P
=276,288 P
=220,632 P
=183,099
Exposure Measure = 2,520,462
P =2,532,633
P P
=2,167,207 =2,055,498
P
BLR 11.41% 10.91% 10.18% 8.91%

Under the framework, BLR is defined as the capital measure divided by the exposure measure.
Capital measure is Tier 1 capital. Exposure measure is the sum of on-balance sheet exposures,
derivative exposures, security financing exposures and off-balance sheet items.

Liquidity Coverage Ratio (LCR)

BSP Circular No. 905 provides the implementing guidelines on LCR and disclosure standards that
are consistent with the Basel III framework. The LCR is the ratio of high-quality liquid assets to
total net cash outflows which should not be lower than 100.00%. Compliance with the LCR
minimum requirement commenced on January 1, 2018 with the prescribed minimum ratio of 90.00%

*SGVFSM005911*
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for 2018 and 100.00% effective January 1, 2019. As of December 31, 2020 and 2019, the LCR in
single currency as reported to the BSP, was at 303.47% and 245.10%, respectively for the Group, and
321.18% and 279.11%, respectively for the Parent Company.

Net Stable Funding Ratio (NSFR)

On June 6, 2018, the BSP issued BSP Circular No.1007 covering the implementing guidelines on the
adoption of the Basel III Framework on Liquidity Standards – NSFR. The NSFR is aimed to
promote long-term resilience against liquidity risk by requiring banks to maintain a stable funding
profile in relation to the composition of its assets and off-balance sheet activities. It complements the
LCR, which promotes short term resilience of a bank's liquidity profile. Banks shall maintain an
NSFR of at least 100 percent (100%) at all times. The implementation of the minimum NSFR shall
be phased in to help ensure that covered banks can meet the standard through reasonable measures
without disrupting credit extension and financial market activities. An observation period was set
from July 1 to December 31, 2018. Effective, January 1, 2019, banks shall comply with the
prescribed minimum ratio of 100%. As of December 31, 2020 and 2019, the NSFR as reported to the
BSP, was at 169.94% and 148.53%, respectively for the Group, and 173.27% and 150.61%,
respectively for the Parent Company.

5. Fair Value Measurement

Financial Instruments
The methods and assumptions used by the Group and the Parent Company in estimating the fair
values of financial assets and financial liabilities are:

Cash and other cash items, due from BSP and other banks and interbank loans receivable and
SPURA
Carrying amounts approximate fair values in view of the relatively short-term maturities of these
instruments.

Trading and investment securities

Fair values of debt and equity securities are generally based on quoted market prices. Where the debt
securities are not quoted or the market prices are not readily available, the Group and the Parent
Company obtained valuations from independent parties offering pricing services, used adjusted
quoted market prices of comparable investments, or applied discounted cash flow methodologies. For
equity securities that are not quoted, remeasurement to their fair values is not material to the financial
statements.

Derivative instruments
Fair values are estimated based on quoted market prices, prices provided by independent parties, or
prices derived using acceptable valuation models. The models utilize published underlying rates
(e.g. interest rates, FX rates, CDS rates, FX volatilities and spot and forward FX rates) and are
implemented through validated calculation engines.

Loans and receivables

Fair values of the Group’s loans and receivables are estimated using the discounted cash flow
methodology, using current incremental lending rates for similar types of loans. Where the
instrument reprices on a quarterly basis or has a relatively short maturity, the carrying amounts
approximate fair values.

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Liabilities
Fair values are estimated using the discounted cash flow methodology using the Group’s current
borrowing rate for similar borrowings with maturities consistent with those remaining for the liability
being valued, if any. The carrying amounts of demand and savings deposit liabilities and other short-
term liabilities approximate fair values considering that these are either due and demandable or with
short-term maturities.

Non-Financial Assets
Investment properties
Fair value of investment properties is determined based on valuations performed by independent and
in-house appraisers using valuation technique with significant inputs that are not based on observable
market data (Level 3). The valuation of investment properties was based on the Sales Comparison
Approach and considered recent sales of similar or substitute properties in the same areas where the
investment properties are located, taking into account the economic conditions prevailing at the time
of the valuation. Other factors considered were the location and shape of the properties,
environmental issues, development controls such as the height restrictions, building coverage and
floor area ratio restrictions, among others. The fair value of investment properties is based on its
highest and best use, which is their current use.

The following tables summarize the carrying amounts and fair values of assets and liabilities,
analyzed among those whose fair value is based on:
 Quoted market prices in active markets for identical assets or liabilities (Level 1);
 Those involving inputs other than quoted prices included in Level 1 that are observable for the
asset or liability, either directly (as prices) or indirectly (derived from prices) (Level 2); and
 Those with inputs for the asset or liability that are not based on observable market data
(unobservable inputs) (Level 3).
Consolidated
Carrying Total Fair
Value Level 1 Level 2 Level 3 Value
2020
Assets Measured at Fair Value
Financial Assets
Investment securities at FVTPL
FVTPL investments
Debt securities
Treasury notes and bonds =
P35,828 =
P35,828 =
P– =
P– =
P35,828
Government 14,531 14,531 – – 14,531
Private 6,540 6,540 – – 6,540
Treasury bills 2,346 2,346 – – 2,346
BSP 2 2 – – 2
59,247 59,247 – – 59,247
Equity securities 6,458 6,458 – – 6,458
Derivative assets
Cross-currency swaps 8,708 – 8,708 – 8,708
Currency forwards 2,092 – 2,092 – 2,092
Interest rate swaps 1,038 – 1,038 – 1,038
Put option 7 – 7 – 7
Call option 1 – 1 – 1
11,846 – 11,846 – 11,846
77,551 65,705 11,846 – 77,551
Investment securities at FVOCI
Debt securities
Treasury notes and bonds 342,355 342,355 – – 342,355
Treasury bills 81,497 81,497 – – 81,497
Government 76,901 76,199 702 – 76,901
Private 36,943 21,274 15,669 – 36,943
BSP 30,049 30,049 – – 30,049
567,745 551,374 16,371 – 567,745
Equity securities 1,700 1,498 202 – 1,700
569,445 552,872 16,573 – 569,445
=
P646,996 =
P618,577 =
P28,419 =
P– =
P646,996

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Consolidated
Carrying Total Fair
Value Level 1 Level 2 Level 3 Value
Assets for which Fair Values are Disclosed
Financial Assets
Investment securities at amortized cost
Government =
P19,134 =
P20,446 =
P322 =
P– =
P20,768
Private 3,622 2,491 1,207 – 3,698
Treasury bills 294 266 – – 266
Treasury notes and bonds 243 284 – – 284
23,293 23,487 1,529 – 25,016
Loans and receivables - net
Receivables from customers
Commercial loans 898,309 – – 891,872 891,872
Residential mortgage loans 103,216 – – 130,681 130,681
Auto loans 95,735 – – 117,075 117,075
Credit card 72,001 – – 72,001 72,001
Trade loans 36,166 – – 36,166 36,166
Others 26,478 – – 28,738 28,738
1,231,905 – – 1,276,533 1,276,533
Unquoted debt securities 65 – – 70 70
Sales contract receivable 79 – – 81 81
1,232,049 – – 1,276,684 1,276,684
Other assets 208 – – 276 276
1,255,550 23,487 1,529 1,276,960 1,301,976
Non-Financial Assets
Investment properties 7,667 – – 14,493 14,493
Residual value of leased assets 930 – – 790 790
8,597 – – 15,283 15,283
=
P1,264,147 =
P23,487 =
P1,529 =
P1,292,243 =
P1,317,259
Liabilities Measured at Fair Value
Financial Liabilities
Financial liabilities at FVTPL
Derivative liabilities
Cross-currency swaps = 7,401
P =–
P = 7,401
P =–
P = 7,401
P
Interest rate swaps 4,834 – 4,834 – 4,834
Currency forwards 1,215 – 1,215 – 1,215
Call option 10 – 10 – 10
Put option 4 – 4 – 4
Credit default swaps 1 – 1 – 1
Non-equity non-controlling interest 8,315 – 8,315 – 8,315
=
P21,780 =
P– =
P21,780 =
P– =
P21,780
Liabilities for which Fair Values are Disclosed
Financial Liabilities
Deposit liabilities
Time =
P450,103 =
P– =
P– =
P451,759 =
P451,759
LTNCD 35,755 27,527 9,355 – 36,882
485,858 27,527 9,355 451,759 488,641
Bills payable and SSURA 139,614 – – 140,415 140,415
Bonds payable 91,397 93,946 – – 93,946
Subordinated debts 1,167 – – 1,232 1,232
Other liabilities
Deposits on lease contracts 1,458 – – 1,169 1,169
=
P719,494 =
P121,473 =
P9,355 =
P594,575 =
P725,403
2019
Assets Measured at Fair Value
Financial Assets
Investment securities at FVTPL
FVTPL investments
Debt securities
Treasury notes and bonds =
P24,145 =
P24,145 =
P– =
P– =
P24,145
Government 13,048 13,048 – – 13,048
Private 7,935 7,935 – – 7,935
Treasury bills 1,662 1,662 – – 1,662
BSP 2 2 – – 2
46,792 46,792 – – 46,792
Equity securities 6,585 6,585 – – 6,585
Derivative assets
Cross-currency swaps 6,007 – 6,007 – 6,007
Currency forwards 1,756 – 1,756 – 1,756
Interest rate swaps 711 – 711 – 711

(Forward)

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Consolidated
Carrying Total Fair
Value Level 1 Level 2 Level 3 Value
Put option =
P10 =
P– =
P10 =
P– =
P10
Call option 6 – 6 – 6
8,490 – 8,490 – 8,490
61,867 53,377 8,490 – 61,867
Investment securities at FVOCI
Debt securities
Treasury notes and bonds 111,791 110,346 1,445 – 111,791
Government 52,870 52,495 375 – 52,870
Private 36,199 28,487 7,712 – 36,199
200,860 191,328 9,532 – 200,860
Equity securities 1,660 1,454 206 – 1,660
202,520 192,782 9,738 – 202,520
=
P264,387 =
P246,159 =
P18,228 =
P– =
P264,387
Assets for which Fair Values are Disclosed
Financial Assets
Investment securities at amortized cost
Treasury notes and bonds =
P227,438 =
P200,742 =
P11,585 =
P– =
P212,327
Government 20,213 20,554 338 – 20,892
Private 3,877 2,482 1,367 – 3,849
Treasury bills 100 101 – – 101
251,628 223,879 13,290 – 237,169
Loans and receivables - net
Receivables from customers
Commercial loans 1,049,544 – – 1,039,249 1,039,249
Auto loans 116,434 – – 137,168 137,168
Residential mortgage loans 109,292 – – 133,645 133,645
Credit card 82,449 – – 82,449 82,449
Trade loans 63,093 – – 63,093 63,093
Others 39,812 – – 40,858 40,858
1,460,624 – – 1,496,462 1,496,462
Unquoted debt securities 630 – – 647 647
Sales contract receivable 142 – – 146 146
1,461,396 – – 1,497,255 1,497,255
Other assets 185 – – 257 257
1,713,209 223,879 13,290 1,497,512 1,734,681
Non-Financial Assets
Investment properties 7,762 – – 14,283 14,283
Residual value of leased assets 1,135 – – 1,001 1,001
8,897 – – 15,284 15,284
=
P1,722,106 =
P223,879 =
P13,290 =
P1,512,796 =
P1,749,965
Liabilities Measured at Fair Value
Financial Liabilities
Financial liabilities at FVTPL
Derivative liabilities
Cross-currency swaps =
P3,772 =
P– =
P3,772 =
P– =
P3,772
Interest rate swaps 2,235 – 2,235 – 2,235
Currency forwards 1,401 – 1,401 – 1,401
Call option 12 – 12 – 12
Put option 6 – 6 – 6
Credit default swaps 1 – 1 – 1
Non-equity non-controlling interest 6,553 – 6,553 – 6,553
=
P13,980 =
P– =
P13,980 =
P– =
P13,980
Liabilities for which Fair Values are Disclosed
Financial Liabilities
Deposit liabilities
Time =
P592,897 =
P– =
P– =
P594,991 =
P594,991
LTNCD 43,740 35,122 9,042 – 44,164
636,637 35,122 9,042 594,991 639,155
Bills payable and SSURA 238,281 – – 243,017 243,017
Bonds payable 80,486 82,297 – – 82,297
Subordinated debts 7,660 6,502 – 1,195 7,697
Other liabilities
Deposits on lease contracts 1,725 – – 1,440 1,440
Notes payable 2,592 – – 2,677 2,677
=
P967,381 =
P123,921 =
P9,042 =
P843,320 =
P976,283

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Parent Company
Carrying Total Fair
Value Level 1 Level 2 Level 3 Value
2020
Assets Measured at Fair Value
Financial Assets
Investment securities at FVTPL
FVTPL investments
Debt securities
Treasury notes and bonds =
P34,052 =
P34,052 =
P– =
P– =
P34,052
Government 14,220 14,220 – – 14,220
Private 5,962 5,962 – – 5,962
Treasury bills 1,848 1,848 – – 1,848
BSP 2 2 – – 2
56,084 56,084 – – 56,084
Equity securities 43 43 – – 43
Derivative assets
Cross-currency swaps 8,706 – 8,706 – 8,706
Currency forwards 2,080 – 2,080 – 2,080
Interest rate swaps 1,038 – 1,038 – 1,038
Put option 4 – 4 – 4
Call option 1 – 1 – 1
11,829 – 11,829 – 11,829
67,956 56,127 11,829 – 67,956
Investment securities at FVOCI
Debt securities
Treasury notes and bonds 339,258 339,258 – – 339,258
Treasury bills 81,497 81,497 – – 81,497
Government 72,315 72,199 116 – 72,315
BSP 30,049 30,049 – – 30,049
Private 19,037 18,501 536 – 19,037
542,156 541,504 652 – 542,156
Equity securities 510 421 89 – 510
542,666 541,925 741 – 542,666
=
P610,622 =
P598,052 =
P12,570 =
P– =
P610,622
Assets for which Fair Values are Disclosed
Financial Assets
Investment securities at amortized cost
Government =
P7,909 =
P8,310 =
P– =
P– =
P8,310
Loans and receivables - net
Receivables from customers
Commercial loans 842,636 – – 832,318 832,318
Credit card 72,001 – – 72,001 72,001
Residential mortgage loans 53,812 – – 54,145 54,145
Trade loans 35,273 – – 35,273 35,273
Auto loans 20,932 – – 21,045 21,045
Others 11,521 – – 11,521 11,521
1,036,175 – – 1,026,303 1,026,303
Sales contract receivable 54 – – 54 54
1,036,229 – – 1,026,357 1,026,357
1,044,138 8,310 – 1,026,357 1,034,667
Non-Financial Assets
Investment properties 3,369 – – 7,440 7,440
=
P1,047,507 =
P8,310 =
P– =
P1,033,797 =
P1,042,107
Liabilities Measured at Fair Value
Financial Liabilities
Financial liabilities at FVTPL
Derivative liabilities
Cross-currency swaps =
P5,766 =
P– =
P5,766 =
P– =
P5,766
Interest rate swaps 4,834 – 4,834 – 4,834
Currency forwards 1,203 – 1,203 – 1,203
Call option 10 – 10 – 10
=
P11,813 =
P– =
P11,813 =
P– =
P11,813
Liabilities for which Fair Values are Disclosed
Financial Liabilities
Deposit liabilities
Time =
P332,323 =
P– =
P– =
P332,323 =
P332,323
LTNCD 27,330 18,562 9,355 – 27,917
359,653 18,562 9,355 332,323 360,240
Bills payable and SSURA 108,651 – – 108,669 108,669
Bonds payable 76,355 78,607 – – 78,607
Subordinated debts 1,167 – – 1,232 1,232
=
P545,826 =
P97,169 =
P9,355 =
P442,224 =
P548,748

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Parent Company
Carrying Total Fair
Value Level 1 Level 2 Level 3 Value
2019
Assets Measured at Fair Value
Financial Assets
Investment securities at FVTPL
FVTPL investments
Debt securities
Private =
P7,213 =
P7,213 =
P– =
P– =
P7,213
Government 12,838 12,838 – – 12,838
Treasury notes and bonds 20,210 20,210 – – 20,210
Treasury bills 761 761 – – 761
BSP 2 2 – – 2
41,024 41,024 – – 41,024
Equity securities 38 38 – – 38
Derivative assets
Cross-currency swaps 6,007 – 6,007 – 6,007
Currency forwards 1,755 – 1,755 – 1,755
Interest rate swaps 711 – 711 – 711
Put option 9 – 9 – 9
Call option 6 – 6 – 6
8,488 – 8,488 – 8,488
49,550 41,062 8,488 – 49,550
Investment securities at FVOCI
Debt securities
Treasury notes and bonds 109,203 109,203 – – 109,203
Private 26,324 25,766 558 – 26,324
Government 52,649 52,494 155 – 52,649
188,176 187,463 713 – 188,176
Equity securities 500 439 61 – 500
188,676 187,902 774 – 188,676
=
P238,226 =
P228,964 =
P9,262 =
P– =
P238,226
Assets for which Fair Values are Disclosed
Financial Assets
Investment securities at amortized cost
Treasury notes and bonds =
P208,514 =
P193,267 =
P– =
P– =
P193,267
Government 8,130 8,223 – – 8,223
216,644 201,490 – – 201,490
Loans and receivables – net
Receivables from customers
Commercial loans 1,002,413 – – 989,097 989,097
Auto loans 24,038 – – 24,243 24,243
Residential mortgage loans 57,176 – – 57,635 57,635
Trade loans 62,387 – – 62,387 62,387
Others 14,505 – – 14,505 14,505
1,160,519 – – 1,147,867 1,147,867
Sales contract receivable 100 – – 100 100
1,160,619 – – 1,147,967 1,147,967
1,377,263 201,490 – 1,147,967 1,349,457
Non-Financial Assets
Investment properties 3,291 – – 7,179 7,179
=
P1,380,554 =
P201,490 =
P– =
P1,155,146 =
P1,356,636
Liabilities Measured at Fair Value
Financial Liabilities
Financial liabilities at FVTPL
Derivative liabilities
Cross-currency swaps =
P2,341 =
P– =
P2,341 =
P– =
P2,341
Currency forwards 1,401 – 1,401 – 1,401
Interest rate swaps 2,234 – 2,234 – 2,234
Credit default swaps 1 – 1 – 1
Call option 12 – 12 – 12
Put option 5 – 5 – 5
=
P5,994 =
P– =
P5,994 =
P– =
P5,994
Liabilities for which Fair Values are Disclosed
Financial Liabilities
Deposit liabilities
Time =
P461,713 =
P– =
P– =
P461,713 =
P461,713
LTNCD 35,330 26,536 9,042 – 35,578
497,043 26,536 9,042 461,713 497,291

(Forward)

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Parent Company
Carrying Total Fair
Value Level 1 Level 2 Level 3 Value
Bills payable and SSURA =
P139,072 =
P– =
P– =
P139,223 =
P139,223
Bonds payable 70,110 71,741 – – 71,741
Subordinated debts 6,494 6,502 – – 6,502
=
P712,719 =
P104,779 =
P9,042 =
P600,936 =
P714,757

When fair values of listed equity and debt securities, as well as publicly traded derivatives at the
reporting date are based on quoted market prices or binding dealer price quotations, without any
adjustments for transaction costs, the instruments are included within Level 1 of the hierarchy.

For all other financial instruments, fair value is determined using valuation techniques. Valuation
techniques include net present value techniques, comparison to similar instruments for which market
observable prices exist and other revaluation models. Instruments included in Level 3 include those
for which there is currently no active market.

As of December 31, 2019, the fair value hierarchy of FVOCI debt and equity securities amounting to
=1.4 billion and =
P P1.2 million, respectively, were transferred from Level 1 to Level 2 due to absence
of an active market.

6. Segment Information

The Group’s operating businesses are recognized and managed separately according to the nature of
services provided and the different markets served with segment representing a strategic business
unit. Operating segments are reported in accordance with internal reporting to the Senior
Management who is responsible for allocating resources to the segments and assessing its
performance.

The Group’s business segments follow:

 Consumer Banking - principally providing consumer type loans and support for effective
sourcing and generation of consumer business;
 Corporate Banking - principally handling loans and other credit facilities and deposit and current
accounts for corporate and institutional customers;
 Investment Banking - principally arranging structured financing, and providing services relating
to privatizations, initial public offerings, mergers and acquisitions; and providing advisory
services primarily aimed to create wealth to individuals and institutions;
 Treasury - principally providing money market, trading and treasury services, as well as the
management of the Group’s funding operations by use of treasury bills, government securities
and placements and acceptances with other banks, through treasury and corporate banking;
 Branch Banking - principally handling branch deposits and providing loans and other loan
related businesses for domestic middle market clients; and
 Others - principally handling other services including but not limited to remittances, leasing,
account financing, and other support services. Other operations of the Group comprise the
operations and financial control groups.

Segment assets are those operating assets that are employed by a segment in its operating activities
and that either are directly attributable to the segment or can be allocated to the segment on a
reasonable basis. Segment liabilities are those operating liabilities that result from the operating
activities of a segment and that either are directly attributable to the segment or can be allocated to
the segment on a reasonable basis.

*SGVFSM005911*
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Interest income is reported net, as management primarily relies on the net interest income as
performance measure, not the gross income and expense. The Group has no significant customers
which contributes 10.00% or more of the consolidated revenue net of interest expense. Transactions
between segments are conducted at estimated market rates on an arm’s length basis. Interest is
charged/credited to business segments based on a pool rate which approximates the cost of funds.

The following table presents revenue and income information of operating segments presented in
accordance with PFRS and segment assets and liabilities:
Consumer Corporate Investment Branch
Banking Banking Banking Treasury Banking Others Total
2020
Results of Operations
Net interest income (expense)
Third party =
P20,371 =
P42,058 =
P– =
P12,497 =
P7,127 =
P4,054 =
P86,107
Intersegment (451) (29,487) – (16,694) 46,632 – –
Net interest income after intersegment
transactions 19,920 12,571 – (4,197) 53,759 4,054 86,107
Non-interest income 5,084 786 118 18,581 4,430 6,130 35,129
Revenue - net of interest expense 25,004 13,357 118 14,384 58,189 10,184 121,236
Non-interest expense 27,062 25,306 9 4,648 21,398 22,457 100,880
Income (loss) before share in net income
of subsidiaries, associates and a JV (2,058) (11,949) 109 9,736 36,791 (12,273) 20,356
Share in net income of subsidiaries,
associates and a JV – 38 – – – 626 664
Provision for income tax (574) (398) – (3,838) 110 (2,346) (7,046)
Non-controlling interest in net income of
consolidated subsidiaries – – – – – (143) (143)
Net income (loss) (P
= 2,632) (P
= 12,309) =
P109 =
P5,898 =
P36,901 (P
= 14,136) =
P13,831
Statement of Financial Position
Total assets =
P193,530 =
P906,031 =
P– =
P869,277 =
P181,470 =
P304,855 =
P2,455,163
Total liabilities =
P87,922 =
P874,214 =
P– =
P840,692 =
P289,001 =
P30,159 =
P2,121,988
Other Segment Information
Capital expenditures =
P279 =
P92 =
P– =
P58 =
P28 =
P2,502 =
P2,959
Depreciation and amortization =
P726 =
P197 =
P– =
P52 =
P2,143 =
P2,427 =
P5,545
Provision for credit and impairment losses = 19,005
P = 20,278
P =–
P =–
P = 37
P = 1,440
P = 40,760
P
2019
Results of Operations
Net interest income (expense)
Third party =
P17,710 =
P53,360 =
P– =
P7,885 (P
= 5,702) =
P3,744 =
P76,997
Intersegment (663) (41,061) – 2,746 38,978 – –
Net interest income after intersegment
transactions 17,047 12,299 – 10,631 33,276 3,744 76,997
Non-interest income 6,476 2,042 441 7,983 5,116 6,996 29,054
Revenue - net of interest expense 23,523 14,341 441 18,614 38,392 10,740 106,051
Non-interest expense 15,359 6,977 49 2,519 22,747 20,333 67,984
Income (loss) before share in net income
of subsidiaries, associates and a JV 8,164 7,364 392 16,095 15,645 (9,593) 38,067
Share in net income of subsidiaries,
associates and a JV – 106 – – – 762 868
Provision for income tax (2,178) (471) – (3,344) (137) (3,931) (10,061)
Non-controlling interest in net income of
consolidated subsidiaries – – – – – (819) (819)
Net income (loss) =
P5,986 =
P6,999 =
P392 =
P12,751 =
P15,508 (P
= 13,581) =
P28,055
Statement of Financial Position
Total assets =
P119,984 =
P1,199,477 =
P– =
P624,354 =
P162,413 =
P344,585 =
P2,450,813
Total liabilities =
P76,840 =
P1,039,196 =
P– =
P633,147 =
P266,212 =
P116,927 =
P2,132,322
Other Segment Information
Capital expenditures =
P649 =
P538 =
P– =
P95 =
P35 =
P3,455 =
P4,772
Depreciation and amortization =
P623 =
P175 =
P– =
P70 =
P2,451 =
P2,219 =
P5,538
Provision for credit and impairment losses =
P6,853 =
P1,766 =
P– =
P– =
P350 =
P1,109 =
P10,078

*SGVFSM005911*
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Consumer Corporate Investment Branch

Banking Banking Banking Treasury Banking Others Total
2018
Results of Operations
Net interest income (expense)
Third party =
P17,881 =
P40,602 =
P– =
P9,444 (P
= 1,997) =
P2,892 =
P68,822
Intersegment (476) (30,190) – 1,761 27,639 1,266 –
Net interest income after intersegment
transactions 17,405 10,412 – 11,205 25,642 4,158 68,822
Non-interest income 6,892 1,078 347 1,748 4,771 8,074 22,910
Revenue - net of interest expense 24,297 11,490 347 12,953 30,413 12,232 91,732
Non-interest expense 14,523 4,877 26 2,418 23,203 16,379 61,426
Income (loss) before share in net income
of subsidiaries, associates and a JV 9,774 6,613 321 10,535 7,210 (4,147) 30,306
Share in net income of subsidiaries,
associates and a JV – 77 – – – 797 874
Provision for income tax (2,212) (455) – (2,637) (88) (2,353) (7,745)
Non-controlling interest in net income of
consolidated subsidiaries – – – – – (1,427) (1,427)
Net income (loss) =
P7,562 =
P6,235 =
P321 =
P7,898 =
P7,122 (P
= 7,130) =
P22,008
Statement of Financial Position
Total assets =
P221,884 =
P1,043,630 =
P– =
P464,751 =
P153,913 =
P359,515 =
P2,243,693
Total liabilities =
P75,848 =
P999,803 =
P– =
P488,041 =
P259,621 =
P129,676 =
P1,952,989
Other Segment Information
Capital expenditures =
P488 =
P62 =
P– =
P108 =
P60 =
P2,807 =
P3,525
Depreciation and amortization =
P586 =
P130 =
P– =
P28 =
P1,557 =
P1,783 =
P4,084
Provision for credit and impairment losses =
P6,607 =
P669 =
P– =
P126 =
P172 =
P196 =
P7,770

Non-interest income consists of service charges, fees and commissions, profit from assets sold,
trading and securities gain - net, foreign exchange gain (loss) - net, income from trust operations,
leasing, dividends and miscellaneous income. Non-interest expense consists of compensation and
fringe benefits, taxes and licenses, provision for credit and impairment losses, depreciation and
amortization, occupancy and equipment-related costs, amortization of software costs, and
miscellaneous expenses.

Geographical Information
The Group operates in four geographic markets: Philippines, Asia other than Philippines, USA and
Europe (Note 2).

The following tables show the distribution of Group’s external net operating income and non-current
assets allocated based on the location of the customers and assets, respectively, for the years ended
December 31:

Asia
(Other than
Philippines Philippines) USA Europe Total
2020
Interest income =
P104,707 =
P3,065 =
P15 P
=– =
P107,787
Interest expense 20,641 1,033 6 – 21,680
Net interest income 84,066 2,032 9 – 86,107
Non-interest income 33,796 868 428 37 35,129
Provision for credit and impairment losses 40,544 214 2 – 40,760
Total external net operating income =
P77,318 =
P2,686 =
P435 =
P37 =
P80,476
Non-current assets =
P31,945 =
P661 =
P15 =
P3 =
P32,624
2019
Interest income =113,173
P =2,966
P =44
P =–
P =116,183
P
Interest expense 37,882 1,291 13 – 39,186
Net interest income 75,291 1,675 31 – 76,997
Non-interest income 27,493 1,108 406 47 29,054
Provision for credit and impairment losses 9,871 207 – – 10,078
Total external net operating income =
P92,913 =
P2,576 =
P437 =
P47 =
P95,973
Non-current assets =32,636
P =672
P =16
P =4
P =33,328
P

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Asia
(Other than
Philippines Philippines) USA Europe Total
2018
Interest income =94,670
P =2,461
P =55
P =–
P =97,186
P
Interest expense 27,269 1,075 20 – 28,364
Net interest income 67,401 1,386 35 – 68,822
Non-interest income 21,189 1,065 602 54 22,910
Provision for credit and impairment losses 7,576 194 – – 7,770
Total external net operating income =81,014
P =2,257
P =637
P =54
P =83,962
P
Non-current assets =31,635
P =653
P =15
P =5
P =32,308
P

Non-current assets consist of property and equipment, investment properties, chattel properties
acquired in foreclosure, software costs and assets held under joint operations.

7. Interbank Loans Receivable and Securities Purchased Under Resale Agreements

This account consists of:

Consolidated Parent Company

2020 2019 2020 2019
Interbank loans receivable - net (Note 31) P
=52,741 =32,488
P P
=41,386 =19,231
P
SPURA 26,653 39,686 15,819 36,921
P
=79,394 =72,174
P P
=57,205 =56,152
P

As of December 31, 2020 and 2019, the allowance for credit losses for interbank loans receivable
amounted to =P13.6 million and = P0.7 million, respectively, for the Group and =
P4.6 million and
=0.7 million, respectively, for the Parent Company (Note 15).
P

In 2020, 2019 and 2018, the interest rates of the interbank loans receivables ranged from 0.00% to
4.65%, 0.00% to 4.60%, and 0.00% to 5.40%, respectively, for the Group and 0.00% to 3.45%,
0.00% to 4.00%, and 0.00% to 3.54%, respectively, for the Parent Company.

8. Trading and Investment Securities

This account consists of:

Consolidated Parent Company

2020 2019 2020 2019
Investment securities at:
FVTPL P
=77,551 P61,867
= P
=67,956 P49,550
=
FVOCI (Note 29) 569,445 202,520 542,666 188,676
Amortized cost (Note 29) 23,293 251,628 7,909 216,644
P
=670,289 =516,015
P P
=618,531 =454,870
P

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Investment securities at FVTPL consist of the following:

Consolidated Parent Company

2020 2019 2020 2019
HFT investments
Debt securities
Treasury notes and bonds P
=35,828 P
=24,145 P
=34,052 P
=20,210
Government 14,531 13,048 14,220 12,838
Private 6,540 7,935 5,962 7,213
Treasury bills 2,346 1,662 1,848 761
BSP 2 2 2 2
59,247 46,792 56,084 41,024
Equity securities 6,458 6,585 43 38
65,705 53,377 56,127 41,062
Derivative assets 11,846 8,490 11,829 8,488
P
=77,551 =61,867
P P
=67,956 P
=49,550

The following are the fair values of the Parent Company’s derivative financial instruments recorded
as ‘Derivative assets/liabilities’, together with the notional amounts. The notional amount is the
amount or quantity of a derivative’s underlying asset, and is the basis upon which changes in the
value are measured. The notional amounts indicate the volume of transactions outstanding as of
December 31, 2020 and 2019 and are not indicative of either market risk or credit risk.

Average
Derivative Derivative Notional Forward Rate
Assets Liabilities Amount (in every USD 1)
December 31, 2020
Freestanding derivatives:
Currency forwards
BOUGHT:
USD =
P1 =
P931 USD 2,073 =
P48.6578
CNY 1 0 CNY 232 CNY 0.1532
EUR 133 – EUR 186 EUR 1.2173
THB 4 0 THB 264 THB 0.0330
TWD 17 59 TWD 3,116 TWD 0.0348
GBP 13 2 GBP 25 GBP 1.3445
AUD 4 – AUD 27 AUD 0.7572
JPY 16 – JPY 5,756 JPY 0.0096
SGD 6 – SGD 38 SGD 0.7502
CAD 0 12 CAD 58 CAD 0.7849
CHF 1 – CHF 9 CHF 1.1269
SOLD:
USD 1,853 1 USD 1,805 =
P49.1599
CNY – 15 CNY 729 CNY 0.1529
JPY 29 59 JPY 23,180 JPY 0.0096
EUR 1 120 EUR 163 EUR 1.2134
MXN – – MXN 1 MXN 0.0464
THB – 3 THB 261 THB 0.0331
CHF 1 0 CHF 12 CHF 1.1310
HKD – – HKD 79 HKD 0.1290
SGD – 0 SGD 14 SGD 0.7541
TRY – 0 TRY 1 TRY 0.1269
DKK – 0 DKK 2 DKK 0.1635
CAD – 1 CAD 12 CAD 0.7793
AUD – 0 AUD 5 AUD 0.7625
Interest rate swaps - PHP 768 594 =
P41,485
Interest rate swaps – FX 270 4,240 USD 2,181
Cross-currency swaps – PHP 7,670 7 =
P68,124
Cross-currency swaps - FX 835 5,508 USD 1,953
Cross-currency swaps - EUR 107 211 EUR 93
Cross-currency swaps - JPY 94 40 JPY 9,590
Credit default swaps - USD – 0 USD 1
Over-the-counter FX options 5 10 USD 193
=
P11,829 =
P11,813

*SGVFSM005911*
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Average
Derivative Derivative Notional Forward Rate
Assets Liabilities Amount (in every USD 1)
December 31, 2019
Freestanding derivatives:
Currency forwards
BOUGHT:
USD =
P13 =
P992 USD 1,932 =
P51.2254
CNY 24 81 CNY 1,010 CNY 0.1435
EUR 1 94 EUR 57 EUR 1.1493
THB 1 – THB 113 THB 0.0330
TWD – 77 TWD 2,591 TWD 0.0328
JPY – 57 JPY 9,049 JPY 0.0093
HKD 22 4 HKD 2,341 HKD 0.1281
SOLD:
USD 1,550 1 USD 1,911 =
P51.6015
CNY 42 51 CNY 2,028 CNY 0.1426
JPY 59 1 JPY 9,287 JPY 0.0093
EUR 40 4 EUR 66 EUR 1.1283
MXN – 0 MXN 1 MXN 0.0526
THB 0 2 THB 189 THB 0.0330
CHF – 1 CHF 13 CHF 1.0207
NZD – 1 NZD 2 NZD 0.6605
HKD 3 33 HKD 2,405 HKD 0.1281
SGD – 2 SGD 48 SGD 0.7381
TRY – 0 TRY 1 TRY 0.1681
DKK – 0 DKK 2 DKK 0.1490
Interest rate swaps - PHP 329 157 =
P24,258
Interest rate swaps – FX 382 2,077 USD 2,091
Cross-currency swaps - PHP 3,559 119 =
P61,247
Cross-currency swaps - FX 2,422 1,907 USD 1,728
Cross-currency swaps - EUR 25 276 EUR 75
Cross-currency swaps - JPY 1 39 JPY 1,500
Credit default swaps - USD – 1 USD 1
Over-the-counter FX options 15 17 USD 436
=
P8,488 =
P5,994

As of December 31, 2020 and 2019, the Group’s derivative assets include currency forwards, FX
options and interest rate options entered into by the subsidiaries amounting to =
P17.1 million and
=1.5 million, respectively. As of December 31, 2020 and 2019, the Group’s derivative liabilities
P
include currency forwards, cross-currency swaps and FX options entered into by the subsidiaries
amounting to =P1.7 billion and =P1.4 billion, respectively.

Investment securities at FVOCI as of December 31, 2020 and 2019 consist of the following:

Consolidated Parent Company

2020 2019 2020 2019
Debt securities
Treasury notes and bonds (Note 17) =
P342,355 =111,791
P =
P339,258 =109,203
P
Treasury bills 81,497 – 81,497 –
Government (Note 17) 76,901 52,870 72,315 52,649
Private 36,943 36,199 19,037 26,324
BSP 30,049 – 30,049 –
567,745 200,860 542,156 188,176
Equity securities 1,700 1,660 510 500
=
P569,445 =
P202,520 =
P542,666 =
P188,676

The equity securities are irrevocably designated at FVOCI as these are held for long term-strategic
purpose rather than for trading. These equity securities include golf club shares and non-marketable
equity securities. In 2020, as part of its risk management, the Group disposed equity securities at
FVOCI with total carrying value of = P85.0 million and recognized a loss on disposal charged against
‘Surplus’ of =
P44.2 million. Dividends recognized for the disposed equity securities amounted to
=
P0.5 million in 2020.

*SGVFSM005911*
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Outstanding equity securities at FVOCI as of December 31, 2020 and 2019 generated dividends
amounting to =
P45.7 million and = P40.0 million, respectively for the Group and =
P26.4 million and
=11.3 million, respectively, for the Parent Company.
P

As of December 31, 2020 and 2019, the ECL on debt securities at FVOCI (included in ‘Net
unrealized gain on investment securities at FVOCI’) amounted to =P141.0 million and = P148.3 million
respectively, for the Group and =
P141.0 million and =
P144.9 million, respectively, for the Parent
Company (Note 15).

As of December 31, 2020 and 2019, investment securities at FVOCI include floating and fixed rate
private notes with total carrying value of USD11.2 million and USD11.0 million, respectively (with
peso equivalent of =P536.0 million and =P558.2 million, respectively) which are pledged by the Parent
Company’s New York Branch in compliance with the regulatory requirements of the Federal Deposit
Insurance Corporation and the Office of the Controller of the Currency in New York.

The movements in net unrealized gains/(losses), including share in net unrealized gains/(losses) of
subsidiaries (Note 11), presented under ‘Equity’ in the statements of financial position are as follows:

Consolidated Parent Company

2020 2019 2020 2019
Balance at beginning of the year =
P2,575 (P
=3,134) =
P2,629 (P
=2,994)
Unrealized gains recognized in OCI* 14,089 10,201 13,830 9,495
Amounts realized in surplus 44 (19) 44 (19)
Amounts realized in profit or loss (8,307) (4,403) (8,007) (3,788)
8,401 2,645 8,496 2,694
Tax (Note 28) (838) (70) (885) (65)
Balance at end of the year =
P7,563** =2,575**
P =
P7,611 =2,629
P
* Includes impact of ECL (Note 15)
** Includes share of non-controlling interest in unrealized losses amounting to =
P 48.0 million and =
P54.0 million as of December 31, 2020 and 2019,
respectively.

Investment securities at amortized cost as of December 31, 2020 and 2019 consist of the following:

Consolidated Parent Company

2020 2019 2020 2019
Government (Notes 17 and 19) P
=19,153 =20,232
P P
=7,909 P8,130
=
Private 3,625 3,880 – –
Treasury bills 294 100 – –
Treasury notes and bonds (Note 17) 243 227,442 – 208,514
23,315 251,654 7,909 216,644
Less allowance for credit losses (Note 15) 22 26 – –
P
=23,293 =251,628
P P
=7,909 =216,644
P

In May 2020, the BOD of the Parent Company approved the change in business model for its debt
securities carried at amortized cost in line with its revised balance sheet risk strategy. The Parent
Company considered the pandemic a Black Swan scenario as it is unprecedented in all aspects, with
the full economic and banking industry impact still unknown. This called for the Parent Company to
recalibrate its balance sheet risk strategy given the drastic change in the economic landscape. The
revised balance sheet strategy provides a framework for the Parent Company to assess the
appropriate mix of assets, liabilities and capital under five economic scenarios, with the objective of
ensuring reliable liquidity and steady stream of accruals. Upon assessment of the current economic
environment, maturity profile and credit quality of loans, CASA placements and maturity profile of
the investment securities portfolio, the Parent Company deemed that the existing business model is
no longer appropriate since its objective of supporting a stable growth of deposit liabilities with core
holdings of investment securities can no longer be met due to the effect of the global health crisis
over the foreseeable future. This resulted to disposal of investment securities at amortized cost in

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June 2020 with total carrying value of P=93.9 billion. Trading gains recognized from the disposal
amounted to = P6.9 billion. On July 1, 2020, the remaining debt securities with total carrying value of
=100.3 billion and fair value of P
P =103.9 billion were reclassified to investment securities at FVOCI.
As of December 31, 2020, the carrying value of the debt securities reclassified to investment
securities at FVOCI as of December 31, 2020 amounted to = P56.9 billion with net unrealized gain of
=
P1.6 billion.

In 2020, PSBank sold investment securities classified as investment securities at amortized cost with
total carrying amount of P=19.6 billion resulting in gain on disposal of investment securities at
amortized cost totaling =P1.3 billion. The sale was made as there were changes in PSBank’s funding
requirements given its assessment on the impact of a prolonged pandemic. In aggregate, the sale in
2020 is not inconsistent with PSBank’s HTC business model as the sale was considered infrequent
even if significant in value. Accordingly, the remaining investment securities in the affected HTC
portfolio continue to be measured at amortized cost. Further, PSBank assessed that the sale did not
reflect a change in PSBank’s objectives for the HTC business model.

In August 2019, the BOD of FMIC approved the disposal of its debt securities portfolio at amortized
cost with total face value of =
P15.1 billion and the abandonment of the related HTC business models
due to external changes that are significant to its operations. Of the =
P15.1 billion disposal, the Parent
Company purchased P =6.6 billion and subsequently sold securities totaling =P2.5 billion in 2020 and
=4.1 billion in 2019. In 2020 and 2019, trading gains/(losses) (included in ‘Trading and securities
P
gain - net’) recognized from the disposal amounted to = P77.1 million and =P172.8 million, respectively
for the Group, and =P77.1 million and =P32.1 million, respectively for the Parent Company. The
outstanding balances of these securities in the Parent Company books amounted to = P13.5 million
(classified as ‘Investment Securities at FVTPL’) as of December 31, 2020 and = P124.5 million
(classified as ‘Investment Securities at FVTPL’) and P =2.4 billion (classified as ‘Investment
Securities at Amortized Cost’) as of December 31, 2019 (Note 31).

Interest income on investment securities at FVOCI and at amortized cost consists of:

Consolidated Parent Company

2020 2019 2018 2020 2019 2018
Investment securities at amortized cost =
P4,808 =11,035
P =11,147
P =
P3,797 =9,105
P =8,916
P
Investment securities at FVOCI 12,285 5,538 3,463 11,488 4,673 2,676
=
P17,093 =16,573
P =14,610
P =
P15,285 =13,778
P =11,592
P

In 2020, 2019 and 2018, foreign currency-denominated trading and investment securities bear
nominal annual interest rates ranging from 0.10% to 10.63%, 0.10% to 10.63% and from 0.10% to
11.63% for the Group and the Parent Company while peso-denominated trading and investment
securities bear nominal annual interest rates ranging from 2.38% to 18.25%, 3.25% to 18.25% and
2.13% to 18.25%, respectively, for the Group and from 2.38% to 18.25%, 3.25% to 18.25% and
3.25% to 18.25%, respectively, for the Parent Company.

Trading and securities gain - net consists of:

Consolidated Parent Company

2020 2019 2018 2020 2019 2018
Investment securities at FVTPL =
P1,898 =3,362
P (P
=1,668) =
P1,951 =2,774
P (P
=570)
Derivative assets/liabilities – net (3,761) (2,213) 3,639 (3,741) (2,210) 3,635
Debt securities at FVOCI 8,307 4,403 (115) 8,007 3,788 (24)
6,444 5,552 1,856 =
P6,217 =4,352
P =3,041
P
Income (loss) attributable to non-
equity non-controlling interests
(Note 21) 115 (230) 685
=
P6,559 =5,322
P =2,541
P

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Trading gains (losses) on debt securities at FVOCI represent realized gains/losses previously
reported in OCI.

9. Loans and Receivables

This account consists of:

Consolidated Parent Company
2020 2019 2020 2019
Receivables from customers (Note 31)
Commercial loans P
=931,263 =1,063,146
P P
=871,029 =1,012,387
P
Auto loans 100,286 118,409 21,512 24,182
Residential mortgage loans 105,960 109,999 55,391 57,520
Credit card (Note 11) 92,643 86,785 92,643 –
Trade loans 37,068 63,360 36,175 62,655
Others 30,081 43,937 11,568 14,542
1,297,301 1,485,636 1,088,318 1,171,286
Less unearned discounts and capitalized
interest 14,996 5,149 11,134 238
1,282,305 1,480,487 1,077,184 1,171,048
Accrued interest receivable (Note 31) 13,727 13,105 8,535 10,503
Accounts receivable (Note 31) 11,278 12,707 7,004 8,972
Unquoted debt securities - private 451 1,016 386 386
Sales contract receivable 82 145 56 102
Other receivables 329 331 11 12
1,308,172 1,507,791 1,093,176 1,191,023
Less allowance for credit losses
(Note 15) 55,243 24,223 44,434 13,922
P
=1,252,929 =1,483,568
P P
=1,048,742 =1,177,101
P

Receivables from customers consist of:

Consolidated Parent Company
2020 2019 2020 2019
Loans and discounts P
=1,250,163 =1,409,451
P P
=1,042,054 =1,095,627
P
Less unearned discounts and capitalized
interest 14,996 5,149 11,134 238
1,235,167 1,404,302 1,030,920 1,095,389
Customers’ liabilities under letters of
credit (LC)/trust receipts 36,092 62,016 35,200 61,454
Bills purchased (Note 21) 11,046 14,169 11,064 14,205
P
=1,282,305 =1,480,487
P P
=1,077,184 =1,171,048
P

Receivables from customers - others of the Group include notes receivables financed and lease
contract receivables amounting to =
P14.4 billion and P =0.9 billion, respectively, as of December 31,
2020 and =P24.3 billion and =
P1.5 billion, respectively, as of December 31,2019 (Note 13).

Interest income on loans and receivables consists of:

Consolidated Parent Company
2020 2019 2018 2020 2019 2018
Receivables from customers (Note 31) =
P63,705 =72,697
P =60,071
P =
P46,314 =56,345
P =44,980
P
Receivables from cardholders 15,972 15,161 13,527 15,972 – –
Lease contract receivables 3,897 4,680 4,162 – – –
Customers’ liabilities under LC/trust receipts 1,840 3,073 1,711 1,840 3,073 1,711
Others 276 236 188 155 185 169
=
P85,690 =95,847
P =79,659
P =
P64,281 =59,603
P =46,860
P

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As of December 31, 2020 and 2019, 81.95% and 82.47%, respectively, of the total receivables from
customers of the Group, and 91.41% and 99.92%, respectively, of the total receivables from
customers of the Parent Company are subject to periodic interest repricing. In 2020 and 2019, the
remaining peso receivables from customers earn annual fixed interest rates ranging from 4.70% to
24.00% and from 4.70% to 45.00%, respectively, while foreign currency-denominated receivables
from customers earn annual fixed interest rates ranging from 1.05% to 24.00% in 2020 and from
1.32% to 45.00% in 2019.

10. Property and Equipment

The composition and movements in the account follow:

Consolidated
Furniture,
Fixtures and Leasehold
Land Buildings Equipment Improvements BUC ROU Assets Total
2020
Cost
Balance at beginning of year =
P5,802 =
P15,395 =
P18,236 =
P4,730 =
P319 =
P4,816 =
P49,298
Additions – 30 1,705 73 619 1,204 3,631
Disposals/early termination – (3) (1,180) (78) – (559) (1,820)
Reclassification/others – 687 (39) 114 (863) (62) (163)
Balance at end of year 5,802 16,109 18,722 4,839 75 5,399 50,946
Accumulated depreciation and
amortization
Balance at beginning of year – 6,407 12,326 3,567 – 1,290 23,590
Depreciation and amortization – 573 2,156 349 – 1,267 4,345
Disposals/early termination – – (1,052) (78) – (432) (1,562)
Reclassification/others – 10 (18) (36) – (8) (52)
Balance at end of year – 6,990 13,412 3,802 – 2,117 26,321
Allowance for impairment losses – 8 – – – – 8
Net book value at end of year =
P5,802 =
P9,111 =
P5,310 =
P1,037 =
P75 =
P3,282 =
P24,617
2019
Cost
Balance at beginning of year =5,824
P =14,952
P =17,542
P =4,588
P P261
= =4,162
P =47,329
P
Additions – 47 2,851 128 696 679 4,401
Disposals/early termination – (4) (2,132) (28) – (34) (2,198)
Reclassification/others (22) 400 (25) 42 (638) 9 (234)
Balance at end of year 5,802 15,395 18,236 4,730 319 4,816 49,298
Accumulated depreciation and
amortization
Balance at beginning of year – 5,820 12,039 3,346 – – 21,205
Depreciation and amortization – 604 2,166 382 – 1,301 4,453
Disposals/early termination – (4) (1,864) (24) – (25) (1,917)
Reclassification/others – (13) (15) (137) – 14 (151)
Balance at end of year – 6,407 12,326 3,567 – 1,290 23,590
Allowance for impairment losses – 8 – – – – 8
Net book value at end of year =5,802
P =8,980
P =5,910
P =1,163
P =319
P =3,526
P =25,700
P

Parent Company
Furniture,
Fixtures and Leasehold
Land Buildings Equipment Improvements BUC ROU Assets Total
2020
Cost
Balance at beginning of year =
P4,381 =
P13,679 =
P7,775 =
P2,953 =
P319 =
P2,577 =
P31,684
Impact of merger (Note 11) 284 389 602 78 – 80 1,433
Additions – 17 1,003 2 619 816 2,457
Disposals/early termination – – (229) (78) – (429) (736)
Reclassification/others – 691 (6) 137 (863) (39) (80)
Balance at end of year 4,665 14,776 9,145 3,092 75 3,005 34,758
Accumulated depreciation and
amortization
Balance at beginning of year – 5,623 5,373 2,121 – 702 13,819
Impact of merger (Note 11) – 206 357 77 – 27 667
Depreciation and amortization – 531 978 208 – 703 2,420
Disposals – – (198) (78) – (314) (590)
Reclassification/others – 11 (7) (16) – 17 5
Balance at end of year – 6,371 6,503 2,312 – 1,135 16,321
Allowance for impairment losses – 8 – – – – 8
Net book value at end of year =
P4,665 =
P8,397 =
P2,642 =
P780 =
P75 =
P1,870 =
P18,429

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Parent Company
Furniture,
Fixtures and Leasehold
Land Buildings Equipment Improvements BUC ROU Assets Total
2019
Cost
Balance at beginning of year =4,381
P =13,238
P P7,334
= =2,776
P P261
= =2,225
P =30,215
P
Additions – 1 1,294 8 696 338 2,337
Disposals/early termination – – (852) (1) – – (853)
Reclassification/others – 440 (1) 170 (638) 14 (15)
Balance at end of year 4,381 13,679 7,775 2,953 319 2,577 31,684
Accumulated depreciation and
amortization
Balance at beginning of year – 5,072 5,367 1,911 – – 12,350
Depreciation and amortization – 547 824 220 – 687 2,278
Disposals – – (821) (1) – – (822)
Reclassification/others – 4 3 (9) – 15 13
Balance at end of year – 5,623 5,373 2,121 – 702 13,819
Allowance for impairment losses – 8 – – – – 8
Net book value at end of year =4,381
P =8,048
P =2,402
P =832
P =319
P =1,875
P =17,857
P

As of December 31, 2020 and 2019, the cost of fully depreciated property and equipment still in use
amounted to = P6.5 billion and P=6.2 billion, respectively, for the Group and =
P3.9 billion and
=2.4 billion, respectively, for the Parent Company.
P

11. Investments in Subsidiaries, Associates and a Joint Venture

Investments in subsidiaries consist of:

2020 2019
Acquisition cost
PSBank P13,076
= P13,076
=
FMIC 11,751 11,751
MBCL 10,079 10,079
Circa 837 837
MR USA 365 365
ORIX Metro 265 265
MR Japan 102 102
MR UK 31 31
MRHL 26 26
MRSPL 17 17
MCC – 15,149
Others 291 291
36,840 51,989
Accumulated equity in net income
Balance at beginning of year 44,276 36,457
Share in net income 1,652 8,892
Dividends (1,103) (1,073)
Impact of merger of MCC with Parent Company (14,411) –
Balance at end of year 30,414 44,276
Equity in net unrealized loss on investment securities
at FVOCI (258) (537)
Equity in net unrealized gain on remeasurement of
retirement plan and translation adjustment and others 252 98
Excess of share in net losses of subsidiaries over cost
included in ‘Miscellaneous liabilities’ (Note 21) 99 35
Equity in realized loss on sale of equity securities at FVOCI (166) (122)
(Forward)

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2020 2019
Carrying value
FMIC P19,787
= P19,647
=
MBCL 12,425 12,051
PSBank 30,377 30,294
Circa 254 250
ORIX Metro 3,557 3,529
MR USA 130 49
MR Japan 79 74
MR UK 39 49
MRHL 129 142
MRSPL 150 154
MCC – 29,233
Others 254 267
=67,181
P =95,739
P

The following subsidiaries have material non-controlling interests as of December 31, 2020 and
2019:

Country of Incorporation Effective Ownership of

and Principal Place of Principal Non-Controlling Interest
Business Activities 2020 2019
ORIX Metro Philippines Leasing, Financing 40.15% 40.15%
PSBank Philippines Banking 11.62% 11.62%

The following table presents financial information of subsidiaries with material non-controlling
interests as of December 31, 2020 and 2019.

2020 2019
ORIX ORIX
PSBank Metro PSBank Metro
Statement of Financial Position
Total assets =
P219,479 =
P44,623 =224,907
P =52,821
P
Total liabilities 184,933 35,733 190,450 43,998
Non-controlling interest 5,197 3,586 5,187 3,562
Statement of Income
Gross income 20,134 6,708 20,656 7,745
Operating income 16,570 4,605 14,602 5,248
Net income 1,106 32 3,028 1,147
Net income attributable to non-controlling interest 129 13 352 460
Total comprehensive income 1,343 68 3,401 710
Statement of Cash Flows
Net cash provided by (used in) operating activities 12,585 8,110 (35,641) 771
Net cash provided by (used in) investing activities 21,756 (211) 12,614 (791)
Net cash provided by (used in) financing activities (3,023) (3,625) 10,752 (2,662)
Net increase (decrease) in cash and cash equivalents 31,318 4,274 (12,275) (2,682)
Cash and cash equivalents at beginning of year 10,235 7,573 22,510 10,255
Cash and cash equivalents at end of year 41,553 11,847 10,235 7,573

Investment in PSBank
On January 11, 2019, PSBank concluded its P =8.0 billion SRO, involving 142,856,925 common
shares priced at =
P56.0 per share and listed at the PSE on January 18, 2019. This was approved by the
BOD of PSBank on October 15, 2018 and noted by the BSP on October 19, 2018. The Parent
Company exercised its rights to purchase thus increasing its ownership in PSBank to 88.38%
(Note 2).

Investment in FMIC
In line with its transformation initiative, the BOD of FMIC approved the proposal to return its quasi
banking license with the BSP on November 24, 2020.

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Investment in MCC
On October 18, 2017, with the approval of the Parent Company’s BOD, the Parent Company has
entered into an agreement with its JV partner ANZ Funds Pty. Ltd. (ANZ) to:
a. Purchase 20% of MCC for a consideration of = P7.4 billion upon the approval of the BSP of the
transaction, and;
b. Grant ANZ the option to sell the remaining 20% of MCC to the Parent Company at the same
consideration of =P7.4 billion (“Put Option”) which can be exercised at any time within the period
beginning July 10, 2018 until September 2018 (“Option Exercise Period”). If in the ordinary
course of business, MCC pays dividend to the stockholders during the Option Exercise Period,
ANZ will exercise the Put Option by serving an exercise notice (“Exercise Notice”) to the Parent
Company within ten (10) banking days of receiving that dividend (“Dividend Exercise Period”).
If ANZ fails to serve an Exercise Notice by the end of the Dividend Exercise Period, the Put
Option is deemed exercised by ANZ on the end of the Dividend Exercise Period.

On December 28, 2017, the BSP approved the acquisition of 40% of MCC. With this BSP approval,
the purchase of the 20% stake in MCC was deemed completed for accounting purposes in the
financial statements as of December 31, 2017 and the acquisition was completed on January 8, 2018
(“first tranche”) while the remaining 20% was completed on September 4, 2018 (“second tranche”).
In the consolidated financial statements, the Group recognized equity reserves (included in
‘Translation adjustment and others’) for the difference between the acquisition price and the acquired
non-controlling interest amounting to =P4.7 billion (for the first tranche) and =
P5.1 billion (for the
second tranche).

On March 13, 2019, the respective BODs of the Parent Company and MCC approved the proposal to
merge MCC into the Parent Company which will unlock the value of MCC and help realize the
following objectives: (1) improve synergy and cross-sell; (2) increase the profitability and improve
capital efficiency; and (3) enable the Parent Company to be more competitive in the credit card
business. This was ratified by the stockholders of the Parent Company on April 24, 2019, and was
approved by the BSP on October 23, 2019. The SEC approved the merger of MCC into the Parent
Company effective January 3, 2020.

As of January 3, 2020, the following are the assets and liabilities of MCC:

Assets
Due from BSP =5,994
P
Due from Other Banks 744
Interbank Loans and SPURA 175
Investment Securities at FVOCI 28
Loans and Receivables 83,422
Property and Equipment 766
Investment Properties 1
Deferred Tax Assets 2,088
Other Assets 1,030
Total Assets =94,248
P
Liabilities
Bills Payable and SSURA =65,389
P
Derivative Liabilities 307
Income Taxes Payable 608
Accrued Interest and Other Expenses 1,478
Subordinated Debts 1,166
Other Liabilities 5,819
Total Liabilities =74,767
P

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The difference between the carrying value of the investment in MCC and the net assets of MCC
amounting to =P9.8 billion was recognized under ‘Translation adjustments and others’ in the statement
of financial position by the Parent Company.

Investment in MR USA
On August 17, 2017, the New York State Department of Financial Services has approved the merger
of MR USA and Metro Remittance Center, Inc. (MRCI) with MR USA being the surviving entity.
The merger, as agreed upon by both parties, took effect on December 31, 2017, MRCI’s two wholly-
owned subsidiaries, Metro Remittance (Canada), Inc. and MB Remittance Center Hawaii, Ltd.
became subsidiaries of MR USA. On August 1, 2019, the BOD of MR USA approved the
reclassification of the business type of MR USA from a Money Transmission Business to a Holding
Company.

Investment in Metrobank Bahamas

On April 17, 2018, Metrobank Bahamas has advised The Central Bank of The Bahamas (CBTB) of
its intention to discontinue its operations effective June 30, 2018. On October 11 and
October 12, 2018, it has surrendered its securities and banking licenses, respectively, to CBTB and
has been placed into a voluntary liquidation. On June 30, 2019, the Register General’s Department
advised that the Metrobank Bahamas has been removed from the Register of Companies as of
April 8, 2019.

As of December 31, 2020 and 2019, the carrying amount of goodwill of the Group amounted to
=5.2 billion, of which =
P P5.0 billion pertains to the goodwill arising from the acquisition of the then
Solidbank Corporation which was merged with FMIC.

Investments in associates and a JV consist of:

Consolidated Parent Company
2020 2019 2020 2019
Acquisition cost:
Lepanto Consolidated Mining Company (LCMC)
(13.35% effectively owned) =
P2,527 =
P2,527
SMFC (26.52% effectively owned)* 610 610
Northpine Land, Inc. (NLI) (20.00% owned) 232 232 =
P232 =
P232
Taal Land Inc. (TLI) (35.00% owned) 178 178 178 178
Cathay International Resources Corporation (CIRC)
(34.49% effectively owned) 175 175
Philippine AXA Life Insurance Corporation (PALIC)
(27.97% owned) 172 172
SMBC Metro Investment Corporation (SMBC Metro)
(30.00% owned) 180 180 180 180
Others 42 42
4,116 4,116 590 590
Accumulated equity in net income:
Balance at beginning of year 2,821 2,122 205 159
Share in net income 664 868 22 46
Dividends (637) (169) – –
Balance at end of year 2,848 2,821 227 205
Equity in other comprehensive income (losses) (22) 348 3 2
Return of investment - SMBC Metro (180) (180) (180) (180)
Allowance for impairment losses (Note 15) (514) (514) (75) (75)
Carrying value
LCMC 1,421 1,546
SMFC 741 756
NLI 496 474 496 474
TLI 21 21 21 21
CIRC 129 177
PALIC 3,357 3,535
SMBC Metro 48 47 48 47
Others 35 35
=
P6,248 =
P6,591 =
P565 =
P542
* Represents investment in a JV of the Group and effective ownership interest of the Parent Company through PSBank.

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Investment of FMIC in LCMC

FMIC has the ability to exercise significant influence through a 5-year agreement with Philex Mining
Corporation to jointly vote their 16.7% ownership. As of December 31, 2020 and 2019, LCMC-A
shares are trading at =
P0.160 per share and =P0.091 per share, respectively and LCMC-B shares are
trading at =
P0.156 per share and =P0.101 per share, respectively. As of December 31, 2020 and 2019,
there has been a significant decline in the fair value of the shares compared to the acquisition cost. In
2019, the Group recognized impairment loss on the investment in LCMC amounting to
=439.2 million (Note 3).
P

Investment in NLI
On November 27, 2019, the stockholders of NLI approved the shortening of its corporate term to end
on December 31, 2021. Following this, the Company is no longer expected to continue its operations
for the foreseeable future. Consequently, the management of NLI plans to reduce its workforce and
scale-down its business operations with the objective of ceasing business operations by
December 31, 2021.

Investment in SMBC Metro

On March 2, 2018, the Board of Liquidating Trustees of SMBC Metro declared the liquidation of its
entire paid-up capital to its stockholders on record as of December 31, 2017 due to the expiration of
its corporate term on the same date. On March 28, 2018, the Parent Company received a total
amount of =P180.0 million representing partial liquidation.

The following tables present financial information of significant associates and a JV:
Statements of Financial Position Statements of Income and Other Comprehensive Income
Total
Total Total Gross Operating Net Income Comprehensive
Assets Liabilities Income Income (Loss) (Loss) OCI Income
December 31, 2020
PALIC =
P154,063 =
P142,153 =
P18,355 =
P4,099 =
P2,898 (P
= 670) =
P2,228
LCMC 16,546 10,257 1,104 (548) (546) – (546)
NLI 3,748 1,369 392 95 112 – 112
SMFC 7,644 5,278 1,595 269 128 - 128
CIRC 2,240 1,585 117 (176) (123) – (123)

December 31, 2019

PALIC =
P141,938 =
P129,320 =
P17,813 =
P4,017 =
P2,669 =
P– =
P2,669
LCMC 16,664 9,426 1,566 (639) (642) – (642)
NLI 3,825 1,556 516 245 222 – 222
SMFC 7,125 4,606 1,465 510 353 (7) 346
CIRC 2,131 608 233 59 (71) – (71)

Major assets of significant associates and a JV include the following:

2020 2019
PALIC
Cash and cash equivalents P
=4,711 =4,734
P
Loans and receivables - net 2,113 940
Investment securities at FVTPL 1,924 1,960
Investment securities at FVOCI 18,163 16,282
Investment in unit-linked funds 58 58
Property and equipment 735 614
LCMC
Inventories 523 538
Investments and advances 568 579
Mine exploration cost 6,808 6,720
Property, plant and equipment - net 6,682 6,956

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2020 2019
NLI
Cash and cash equivalents P
=411 =406
P
Real estate properties 1770 1,956
Receivables - net 1,422 1,214
SMFC
Cash and cash equivalents 813 209
Receivables - net 6,509 6,637
CIRC
Cash and cash equivalents 95 140
Receivables - net 548 520
Property, plant and equipment - net 1,188 1,275
Condominium units for sale/inventories 280 109

Dividends declared by investee companies of the Parent Company follow:

Subsidiary/Associate Date of Declaration Per Share Total Amount Record Date Payment Date
2020
Subsidiaries
Cash Dividend
PSBank January 16, 2020 =
P0.75 =
P287 January 31, 2020 February 17, 2020
PSBank April 21, 2020 0.75 320 May 7, 2020 May 21, 2020
PSBank July 23, 2020 0.75 320 August 7, 2020 August 24, 2020
PSBank October 22, 2020 0.75 320 November 9, 2020 November 23, 2020
2019
Subsidiaries
Cash Dividend
PSBank January 17, 2019 =
P0.75 =
P287 February 1, 2019 February 18, 2019
PSBank April 15, 2019 0.75 287 May 3, 2019 May 15, 2019
PSBank July 19, 2019 0.75 287 August 5, 2019 August 19, 2019
PSBank October 14, 2019 0.75 287 October 29, 2019 November 13, 2019
Stock Dividend
ORIX Metro November 27, 2019 =
P100.00 =
P932 November 27, 2019 January 31, 2020

Dividends declared by significant investee companies of PSBank and FMIC follow:

Subsidiary/Associate Date of Declaration Per Share Total Amount Record Date Payment Date
2020
Associates
Cash Dividend
PALIC November 16, 2020 =
P207.00 =
P2,070 November 16, 2020 December 23, 2020
SMFC June 26,2020 8.88 178 June 26,2020 July 17, 2020
2019
Associates
Cash Dividend
PALIC November 6, 2019 =
P40.90 =
P409 October 24, 2019 December 17, 2019
Travel Services, Inc. (TSI) March 20, 2019 34.00 47 December 31, 2018 December 13, 2019
SMFC June 21, 2019 6.56 131 June 21, 2019 July 19, 2019
Stock Dividend
ORIX Metro November 27, 2019 =
P100.00 =
P932 November 27, 2019 January 31, 2020

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12. Investment Properties

This account consists of foreclosed real estate properties and investments in real estate:
Consolidated
2020 2019
Buildings and Buildings and
Land Improvements Total Land Improvements Total
Cost
Balance at beginning of year =
P5,718 =
P4,651 =
P10,369 P5,360
= =4,857
P =10,217
P
Additions 251 451 702 1,009 644 1,653
Disposals (343) (522) (865) (673) (877) (1,550)
Reclassification/others 12 3 15 22 27 49
Balance at end of year 5,638 4,583 10,221 5,718 4,651 10,369
Accumulated depreciation and
amortization
Balance at beginning of year – 1,117 1,117 – 1,148 1,148
Depreciation and amortization – 131 131 – 140 140
Disposals – (108) (108) – (188) (188)
Reclassification/others – – – – 17 17
Balance at end of year – 1,140 1,140 – 1,117 1,117
Allowance for impairment losses
(Note 15)
Balance at beginning of year 1,298 192 1,490 1,313 256 1,569
Provision for (reversal of) impairment loss (3) – (3) (8) 8 –
Disposals (9) (24) (33) (6) (65) (71)
Reclassification/others (40) – (40) (1) (7) (8)
Balance at end of year 1,246 168 1,414 1,298 192 1,490
Net book value at end of year =
P4,392 =
P3,275 =
P7,667 =4,420
P =3,342
P =7,762
P

Parent Company
2020 2019
Buildings and Buildings and
Land Improvements Total Land Improvements Total
Cost
Balance at beginning of year =
P3,571 =
P1,418 =
P4,989 =3,099
P =1,453
P =4,552
P
Impact of merger (Note 11) 1 – 1 – – –
Additions 83 140 223 758 111 869
Disposals (109) (103) (212) (286) (148) (434)
Reclassification/others 14 – 14 – 2 2
Balance at end of year 3,560 1,455 5,015 3,571 1,418 4,989
Accumulated depreciation and
amortization
Balance at beginning of year – 642 642 – 665 665
Depreciation and amortization – 39 39 – 39 39
Disposals – (46) (46) – (64) (64)
Reclassification/others – – – – 2 2
Balance at end of year – 635 635 – 642 642
Allowance for impairment losses
(Note 15)
Balance at beginning of year 1,016 40 1,056 1,022 40 1,062
Disposals (5) (1) (6) (5) (2) (7)
Reclassification/others (39) – (39) (1) 2 1
Balance at end of year 972 39 1,011 1,016 40 1,056
Net book value at end of year =
P2,588 =
P781 =
P3,369 =2,555
P =736
P =3,291
P

As of December 31, 2020 and 2019, foreclosed investment properties still subject to redemption
period by the borrowers amounted to P=661.4 million and = P1.0 billion, respectively, for the Group and
=57.6 million and =
P P150.8 million, respectively, for the Parent Company.

As of December 31, 2020 and 2019, aggregate market value of investment properties amounted to
=14.5 billion and =
P P14.3 billion, respectively, for the Group and =P7.4 billion and =P7.2 billion,
respectively, for the Parent Company, of which = P8.4 billion and P
=8.1 billion, respectively for the
Group and = P7.3 billion and P
=7.1 billion, respectively for the Parent Company were determined by
independent external appraisers. Information about the fair value measurement of investment
properties are also presented in Note 5.

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Rental income on investment properties (included in ‘Leasing income’ in the statements of income)
in 2020, 2019 and 2018 amounted to P=88.1 million, P
=85.1 million and =
P67.3 million, respectively,
for the Group. In 2018, rental income on investment properties amounted to =
P1.0 million for the
Parent Company (Note 13).

Direct operating expenses on investment properties that generated rental income (included under
‘Litigation expenses’) in 2020, 2019 and 2018 amounted to = P0.1 million, P
=0.1 million and
=
P0.4 million, respectively, for the Group. In 2018, direct operating expenses on investment
properties that generated rental income amounted to =P0.3 million for the Parent Company. Direct
operating expenses on investment properties that did not generate rental income (included under
‘Litigation expenses’) in 2020, 2019 and 2018 amounted to P =156.0 million, P
=286.4 million and
=257.9 million, respectively, for the Group and =
P P63.3 million, P=90.6 million and =
P102.5 million,
respectively, for the Parent Company (Note 25).

Net gains from sale of investment properties (included in ‘Profit from assets sold’ in the statements
of income) in 2020, 2019 and 2018 amounted to = P229.4 million, =P605.4 million and = P883.3 million,
respectively, for the Group and =
P81.7 million, P
=189.5 million and P =322.4 million, respectively, for
the Parent Company (Note 31).

13. Leases

Group as a Lessee
As of December 31, 2020 and 2019, 59.77% and 59.69% of the Parent Company’s branch sites are
under lease arrangements. Also, some of its subsidiaries lease the premises occupied by their Head
Offices and most of their branches. The lease contracts are for periods ranging from 1 to 29 years
and some are renewable at the Group’s option under certain terms and conditions. Various lease
contracts include escalation clauses, which bear an annual rent increase of 2% to 20%. As of
December 31, 2020 and 2019, the Group has no contingent rent payable.

The carrying amounts of lease liabilities (included in ‘Other Liabilities’ in Note 21) are as follows:

Consolidated Parent Company

2020 2019 2020 2019
Balance at beginning of year P
=4,038 =4,530
P P
=2,160 =2,407
P
Impact of merger (Note 11) – – 55 –
Additions 1,204 657 816 338
Expiry/termination (126) (31) (100) –
Accretion of interest 252 319 127 170
Payments (1,409) (1,436) (773) (754)
Others (37) (1) (37) (1)
P
=3,922 =4,038
P P
=2,248 =2,160
P

With the adoption of PFRS 16, the Group and the Parent Company recognized the following:

Consolidated Parent Company

2020 2019 2020 2019
Interest expense on lease liabilities P
=252 =319
P P
=127 =170
P
Rent expense from short-term leases and
leases of low-value assets 872 736 708 414

Prior to PFRS 16 adoption, rent expense (included in ‘Occupancy and equipment-related costs’ in the
statements of income) in 2018 amounted to =P2.4 billion for the Group and =
P1.3 billion for the
Parent Company.

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Future minimum rentals payable under non-cancelable leases follows:

Consolidated Parent Company

2020 2019 2020 2019
Within one year P
=1,213 =1,553
P P
=705 =824
P
After one year but not more than
five years 2,593 3,075 1,606 1,659
More than five years 666 903 457 595
P
=4,472 =5,531
P P
=2,768 =3,078
P

As of December 31, 2020 and 2019, the Group and the Parent Company have undiscounted potential
future rental payments arising from extension options expected not to be exercised and thus, not
included in the calculation of lease liability amounting to =
P95.0 million and =
P89.3 million,
respectively, for the Group, and =P89.1 million for the Parent Company. In addition, as of
December 31, 2020 and 2019, the Group has undiscounted potential future rental payments
amounting to nil and =P6.6 million, respectively, which were not included in the calculation of lease
liability due to expected exercise of pre-termination options.

Group as a Lessor
The Group has entered into commercial property leases on its investment property portfolio,
consisting of the Group’s available office spaces and investment properties and lease agreements
over various items of machinery and equipment which are non-cancelable and have remaining
non-cancelable lease terms of between one to six years. In 2020, 2019 and 2018, leasing income
amounted to =P2.0 billion, =
P2.1 billion and =
P2.3 billion, respectively, for the Group and
=200.3 million, P
P =210.5 million and = P223.6 million, respectively, for the Parent Company.

Future minimum rentals receivable under non-cancelable operating leases follows:

Consolidated Parent Company

2020 2019 2020 2019
Within one year P
=928 =875
P P
=86 =86
P
After one year but not more than
five years 3,263 776 84 121
More than five years 172 ‒ ‒ ‒
P
=4,363 =1,651
P P
=170 =207
P

Finance Leases
Lease contract receivables under finance leases, which are accounts of ORIX Metro, are due in
monthly installments with terms ranging from one to six years. These are broken down as follows
(Note 9):

2020 2019
Within one year P
=826 =820
P
After one year but not more than five years 3,153 4,881
Greater than five years 172 171
P
=4,151 =5,872
P

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14. Other Assets

This account consists of:

Consolidated Parent Company

2020 2019 2020 2019
Investment in SPVs P
=8,857 =8,857
P P
=8,857 =8,857
P
Customized system development cost 2,914 1,616 2,914 1,616
Software costs - net 1,877 2,080 1,343 1,011
Chattel properties acquired in
foreclosure - net 1,527 1,093 21 32
Residual value of leased assets 930 1,135 ‒ ‒
Creditable withholding tax 889 1,692 276 1,150
Prepaid expenses 738 730 373 193
Documentary and postage stamps on
hand 389 486 321 339
Returned checks and other cash items 250 407 238 378
Assets held under joint operations
(Note 31) 219 219 219 219
Interoffice float items 13 1,643 4 1,654
Miscellaneous (Note 27) 4,872 5,927 3,763 4,671
23,475 25,885 18,329 20,120
Less allowance for impairment losses 10,291 10,311 10,282 10,282
P
=13,184 =15,574
P P
=8,047 =9,838
P

Investment in SPVs represents subordinated notes issued by Cameron Granville 3 Asset

Management, Inc. and LNC 3 Asset Management, Inc. with face amount of = P9.4 billion and
=2.6 billion, respectively. These notes are non-interest bearing and payable over five (5) years
P
starting April 1, 2006, with rollover of two (2) years at the option of the note issuers. These were
received by the Parent Company on April 1, 2006 in exchange for the subordinated note issued by
Asia Recovery Corporation (ARC) in 2003 with face amount of = P11.9 billion. The subordinated note
issued by ARC represents payment on the non-performing assets (NPAs) sold by the Parent
Company to ARC in 2003. The related deed of absolute sale was formalized on September 17, 2003
and approved by the BSP on November 28, 2003, having qualified as a true sale. The subordinated
notes have gross carrying amount of = P8.9 billion and are fully provided with allowance for
impairment losses.

Movements in software costs account follow:

Consolidated Parent Company

2020 2019 2020 2019
Cost
Balance at beginning of year P
=6,063 P
=5,164 P
=2,710 P
=2,165
Impact of merger (Note 11) – – 1,336 –
Additions 532 1,050 369 606
Others (50) (151) – (61)
Balance at end of year 6,545 6,063 4,415 2,710
Accumulated amortization
Balance at beginning of year 3,983 3,364 1,699 1,500
Impact of merger (Note 11) – – 865 –
Amortization 680 632 498 241
Others 5 (13) 10 (42)
Balance at end of year 4,668 3,983 3,072 1,699
Net book value at end of year P
=1,877 P
=2,080 P
=1,343 P
=1,011

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Movements in chattel properties acquired in foreclosure follow:

Consolidated Parent Company

2020 2019 2020 2019
Cost
Balance at beginning of year P
=1,310 P
=1,036 P
=57 P
=49
Additions 4,243 3,750 10 29
Disposals/others (3,767) (3,476) (27) (21)
Balance at end of year 1,786 1,310 40 57
Accumulated depreciation
and amortization
Balance at beginning of year 208 192 23 22
Depreciation and amortization 389 313 8 10
Disposals/others (346) (297) (14) (9)
Balance at end of year 251 208 17 23
Allowance for impairment losses 8 9 2 2
Net book value at end of year P
=1,527 =1,093
P P
=21 P
=32

Assets held under joint operations are parcels of land and former branch sites of the Parent Company
which were contributed to separate joint operations with FLI and Federal Land Orix Corporation
(Note 31). These are carried at costs which are lower than the net realizable values.

15. Allowance for Credit and Impairment Losses

An analysis of changes in the ECL allowances in 2020 and 2019 is as follows:

Consolidated
Interbank Investment Securities at FVOCI Investment
Due from Loans Securities at
Other Banks Receivable Stage 1 Stage 3 Total Amortized Cost
2020
ECL allowance, January 1, 2020 =
P5 =
P1 =
P118 =
P30 =
P148 =
P26
New assets originated 124 14 14 – 14 –
Assets derecognized or repaid (5) (1) (23) (30) (53) –
Transfers to/(from) Stage 1 – – – – – –
Transfers to/(from) Stage 3 – – – – – –
Changes in assumptions – – 32 – 32 (4)
ECL allowance, December 31, 2020 =
P124 =
P14 =
P141 =
P– =
P141 =
P22
2019
ECL allowance, January 1, 2019 =
P6 =
P12 =
P248 =
P– =
P248 =
P48
New assets originated 5 1 176 – 176 1
Assets derecognized or repaid (6) (12) (87) – (87) –
Transfers to/(from) Stage 1 – – (2) – (2) –
Transfers to/(from) Stage 3 – – – 30 30 –
Changes in assumptions – – (217) – (217) (23)
ECL allowance, December 31, 2019 =
P5 =
P1 =
P118 =
P30 =
P148 =
P26

Consolidated
Receivables from Customers
Stage 1 Stage 2 Stage 3 Total
2020
Commercial loans
ECL allowance, January 1, 2020 =
P2,972 =
P820 =
P7,285 =
P11,077
New assets originated 7,225 – – 7,225
Assets derecognized or repaid (234) (319) (694) (1,247)
Amounts written off – – (73) (73)
Transfers to/(from) Stage 1 (2,661) – – (2,661)
Transfers to/(from) Stage 2 – 7,747 – 7,747
Transfers to/(from) Stage 3 – – 2,060 2,060
Changes in assumptions 3,751 1,180 1,776 6,707
ECL allowance, December 31, 2020 11,053 9,428 10,354 30,835

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Consolidated
Receivables from Customers
Stage 1 Stage 2 Stage 3 Total
Auto loans
ECL allowance, January 1, 2020 =
P733 =
P539 =
P702 =
P1,974
New assets originated 325 – – 325
Assets derecognized or repaid (4) (1) (8) (13)
Amounts written off – – (746) (746)
Transfers to/(from) Stage 1 1,266 – – 1,266
Transfers to/(from) Stage 2 – (218) – (218)
Transfers to/(from) Stage 3 – – (823) (823)
Changes in assumptions (879) 984 2,407 2,512
ECL allowance, December 31, 2020 1,441 1,304 1,532 4,277
Residential mortgage loans
ECL allowance, January 1, 2020 124 186 397 707
New assets originated 96 – – 96
Assets derecognized or repaid (8) (11) (29) (48)
Amounts written off – – (84) (84)
Transfers to/(from) Stage 1 311 – – 311
Transfers to/(from) Stage 2 – 635 – 635
Transfers to/(from) Stage 3 – – (361) (361)
Changes in assumptions 17 471 846 1,334
ECL allowance, December 31, 2020 540 1,281 769 2,590
Trade loans
ECL allowance, January 1, 2020 149 11 107 267
New assets originated 745 – – 745
Assets derecognized or repaid (83) (7) – (90)
Transfers to/(from) Stage 1 (436) – – (436)
Transfers to/(from) Stage 2 – 221 – 221
Transfers to/(from) Stage 3 – – 269 269
Changes in assumptions (65) (4) (5) (74)
ECL allowance, December 31, 2020 310 221 371 902
Credit card
ECL allowance, January 1, 2020 1,392 1,683 1,506 4,581
New assets originated 198 – – 198
Assets derecognized or repaid (17) (58) (55) (130)
Amounts written off – – (5,996) (5,996)
Transfers to/(from) Stage 1 90 – – 90
Transfers to/(from) Stage 2 – (525) – (525)
Transfers to/(from) Stage 3 – – 435 435
Changes in assumptions 847 1,580 8,652 11,079
ECL allowance, December 31, 2020 2,510 2,680 4,542 9,732
Other loans
ECL allowance, January 1, 2020 257 258 742 1,257
New assets originated 1,272 – – 1,272
Assets derecognized or repaid (29) (184) (269) (482)
Amounts written off – – (315) (315)
Transfers to/(from) Stage 1 (920) – – (920)
Transfers to/(from) Stage 2 – 519 – 519
Transfers to/(from) Stage 3 – – 401 401
Changes in assumptions (15) (265) 612 332
ECL allowance, December 31, 2020 565 328 1,171 2,064
Total receivables from customers
ECL allowance, January 1, 2020 5,627 3,497 10,739 19,863
New assets originated 9,861 – – 9,861
Assets derecognized or repaid (375) (580) (1,055) (2,010)
Amounts written off – – (7,214) (7,214)
Transfers to/(from) Stage 1 (2,350) – – (2,350)
Transfers to/(from) Stage 2 – 8,379 – 8,379
Transfers to/(from) Stage 3 – – 1,981 1,981
Changes in assumptions 3,656 3,946 14,288 21,890
ECL allowance, December 31, 2020 =
P16,419 =
P15,242 =
P18,739 =
P50,400
2019
Commercial loans
ECL allowance, January 1, 2019 =
P2,093 =
P781 =
P5,639 =
P8,513
New assets originated 3,408 – – 3,408
Assets derecognized or repaid (762) (497) (631) (1,890)
Amounts written off – – (293) (293)
Transfers to/(from) Stage 1 (1,730) – – (1,730)
Transfers to/(from) Stage 2 – 724 – 724
Transfers to/(from) Stage 3 – – 1,878 1,878
Changes in assumptions (37) (188) 692 467
ECL allowance, December 31, 2019 2,972 820 7,285 11,077

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Consolidated
Receivables from Customers
Stage 1 Stage 2 Stage 3 Total
Auto loans
ECL allowance, January 1, 2019 =
P538 =
P1,077 =
P1,048 =
P2,663
New assets originated 1,466 – – 1,466
Assets derecognized or repaid (1,147) (134) (708) (1,989)
Amounts written off (1) (45) (111) (157)
Transfers to/(from) Stage 1 (122) – – (122)
Transfers to/(from) Stage 2 – (358) – (358)
Transfers to/(from) Stage 3 – – 424 424
Changes in assumptions (1) (1) 49 47
ECL allowance, December 31, 2019 733 539 702 1,974
Residential mortgage loans
ECL allowance, January 1, 2019 122 280 466 868
New assets originated 51 – – 51
Assets derecognized or repaid (21) (31) (56) (108)
Transfers to/(from) Stage 1 (17) – – (17)
Transfers to/(from) Stage 2 – (61) – (61)
Transfers to/(from) Stage 3 – – 2 2
Changes in assumptions (11) (2) (15) (28)
ECL allowance, December 31, 2019 124 186 397 707
Trade loans
ECL allowance, January 1, 2019 224 21 95 340
New assets originated 96 – – 96
Assets derecognized or repaid (52) (16) – (68)
Transfers to/(from) Stage 1 (12) – – (12)
Transfers to/(from) Stage 2 – 7 – 7
Transfers to/(from) Stage 3 – – 5 5
Changes in assumptions (107) (1) 7 (101)
ECL allowance, December 31, 2019 149 11 107 267
Credit card
ECL allowance, January 1, 2019 917 1,841 1,328 4,086
New assets originated 58 – – 58
Amounts written off – – (4,758) (4,758)
Transfers to/(from) Stage 1 427 – – 427
Transfers to/(from) Stage 2 – (65) – (65)
Transfers to/(from) Stage 3 – – 5,043 5,043
Changes in assumptions (10) (93) (107) (210)
ECL allowance, December 31, 2019 1,392 1,683 1,506 4,581
Other loans
ECL allowance, January 1, 2019 148 289 722 1,159
New assets originated 609 – – 609
Assets derecognized or repaid (349) (27) (223) (599)
Amounts written off (1) (96) (866) (963)
Transfers to/(from) Stage 1 (306) – – (306)
Transfers to/(from) Stage 2 – 171 – 171
Transfers to/(from) Stage 3 – – 444 444
Changes in assumptions 156 (79) 665 742
ECL allowance, December 31, 2019 257 258 742 1,257
Total receivables from customers
ECL allowance, January 1, 2019 4,042 4,289 9,298 17,629
New assets originated 5,688 – – 5,688
Assets derecognized or repaid (2,331) (705) (1,618) (4,654)
Amounts written off (2) (141) (6,028) (6,171)
Transfers to/(from) Stage 1 (1,760) – – (1,760)
Transfers to/(from) Stage 2 – 418 – 418
Transfers to/(from) Stage 3 – – 7,796 7,796
Changes in assumptions (10) (364) 1,291 917
ECL allowance, December 31, 2019 =
P5,627 =
P3,497 =
P10,739 =
P19,863

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Consolidated
Other Receivables
Stage1 Stage 2 Stage 3 Total
2020
ECL allowance, January 1, 2020 =
P5 =
P12 =
P1,198 =
P1,215
New assets originated 902 – – 902
Assets derecognized or repaid (241) (8) (175) (424)
Amounts written off – – – –
Transfers to/(from) Stage 1 (194) – – (194)
Transfers to/(from) Stage 2 – 29 – 29
Transfers to/(from) Stage 3 – – 180 180
Changes in assumptions 2 – (44) (42)
ECL allowance, December 31, 2020 =
P474 =
P33 =
P1,159 =
P1,666
2019
ECL allowance, January 1, 2019 =
P194 =
P80 =
P1,039 =
P1,313
New assets originated 262 ‒ ‒ 262
Assets derecognized or repaid (29) (40) (178) (247)
Amounts written off ‒ ‒ (1) (1)
Transfers to/(from) Stage 1 (386) ‒ ‒ (386)
Transfers to/(from) Stage 2 ‒ (20) ‒ (20)
Transfers to/(from) Stage 3 ‒ ‒ 273 273
Changes in assumptions (36) (8) 65 21
ECL allowance, December 31, 2019 =
P5 =
P12 =
P1,198 =
P1,215

Consolidated
Loan Commitments and Financial Guarantees
Stage1 Stage 2 Stage 3 Total
2020
ECL allowance, January 1, 2020 =
P825 =
P7 =
P– =
P832
New assets originated or purchased 270 – – 270
Assets derecognized or repaid (38) (30) – (68)
Transfers to/(from) Stage 1 (145) – – (145)
Transfers to/(from) Stage 2 – 146 – 146
Changes in assumptions 263 183 – 446
ECL allowance, December 31, 2020 =
P1,175 =
P306 =
P– =
P1,481
2019
ECL allowance, January 1, 2019 =
P943 =
P3 =
P– =
P946
New assets originated or purchased 41 – – 41
Assets derecognized or repaid (14) – – (14)
Transfers to/(from) Stage 1 (3) – – (3)
Transfers to/(from) Stage 2 – 4 – 4
Changes in assumptions (142) – – (142)
ECL allowance, December 31, 2019 =
P825 =
P7 =
P– =
P832

Parent Company
Investment Securities at FVOCI Investment
Interbank Securities at
Due from Loans Amortized
Other Banks Receivable Stage 1 Stage 3 Total Cost
2020
ECL allowance, January 1, 2020 =
P– =
P1 =
P115 =
P30 =
P145 =
P–
New assets originated – 5 14 – 14 –
Assets derecognized or repaid – (1) (23) (30) (53) –
Transfers to/(from) Stage 1 – – – – – –
Transfers to/(from) Stage 3 – – – – – –
Changes in assumptions – – 35 – 35 –
ECL allowance, December 31, 2020 =
P– =
P5 =
P141 =
P– =
P141 =
P–
2019
ECL allowance, January 1, 2019 =
P– =
P12 =
P244 =
P– =
P244 =
P48
New assets originated – 1 177 – 177 –
Assets derecognized or repaid – (12) (87) – (87) –
Transfers to/(from) Stage 1 – – (2) – (2) –
Transfers to/(from) Stage 3 – – – 30 30 –
Changes in assumptions – – (217) – (217) (48)
ECL allowance, December 31, 2019 =
P– =
P1 =
P115 =
P30 =
P145 =
P–

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Parent Company
Receivables from Customers
Stage 1 Stage 2 Stage 3 POCI Total
2020
Commercial loans
ECL allowance, January 1, 2020 =
P2,086 =
P718 =
P3,942 =
P2,991 =
P9,737
New assets originated 5,887 – – – 5,887
Assets derecognized or repaid (230) (190) (613) – (1,033)
Amounts written off – – (1) – (1)
Transfers to/(from) Stage 1 (2,182) – – – (2,182)
Transfers to/(from) Stage 2 – 7,613 – – 7,613
Transfers to/(from) Stage 3 – – 1,714 – 1,714
Changes in assumptions 3,963 1,024 1,425 22 6,434
ECL allowance, December 31, 2020 9,524 9,165 6,467 3,013 28,169
Auto loans
ECL allowance, January 1, 2020 19 6 119 – 144
New assets originated 83 – – – 83
Assets derecognized or repaid (4) (1) (8) – (13)
Amounts written off – – – – –
Transfers to/(from) Stage 1 (4) – – – (4)
Transfers to/(from) Stage 2 – 170 – – 170
Transfers to/(from) Stage 3 – – 59 – 59
Changes in assumptions 128 – 13 – 141
ECL allowance, December 31, 2020 222 175 183 – 580
Residential mortgage loans
ECL allowance, January 1, 2020 70 21 253 – 344
New assets originated 82 – – – 82
Assets derecognized or repaid (8) (11) (29) – (48)
Transfers to/(from) Stage 1 (37) – – – (37)
Transfers to/(from) Stage 2 – 804 – – 804
Transfers to/(from) Stage 3 – – 82 – 82
Changes in assumptions 327 14 11 – 352
ECL allowance, December 31, 2020 434 828 317 – 1,579
Trade loans
ECL allowance, January 1, 2020 149 11 107 – 267
New assets originated 745 – – – 745
Assets derecognized or repaid (84) (7) – – (91)
Transfers to/(from) Stage 1 (437) – – – (437)
Transfers to/(from) Stage 2 – 221 – – 221
Transfers to/(from) Stage 3 – – 269 – 269
Changes in assumptions (63) (4) (5) – (72)
ECL allowance, December 31, 2020 310 221 371 – 902
Credit card
ECL allowance, January 1, 2020 – – – – –
Impact of merger (Note 11) 1,392 1,683 1,506 – 4,581
New assets originated 198 – – – 198
Assets derecognized or repaid (17) (58) (55) – (130)
Amounts written off – – (5,996) – (5,996)
Transfers to/(from) Stage 1 91 – – – 91
Transfers to/(from) Stage 2 – (525) – – (525)
Transfers to/(from) Stage 3 – – 434 – 434
Changes in assumptions 846 1,579 8,654 – 11,079
ECL allowance, December 31, 2020 2,510 2,679 4,543 – 9,732
Other loans
ECL allowance, January 1, 2020 1 – 36 – 37
New assets originated 5 – – – 5
Assets derecognized or repaid – – – – –
Transfers to/(from) Stage 3 – – 1 – 1
Changes in assumptions 3 – 1 – 4
ECL allowance, December 31, 2020 9 – 38 – 47
Total receivables from customers
ECL allowance, January 1, 2020 2,325 756 4,457 2,991 10,529
Impact of merger 1,392 1,683 1,506 – 4,581
New assets originated 7,000 – – – 7,000
Assets derecognized or repaid (343) (267) (705) – (1,315)
Amounts written off – – (5,997) – (5,997)
Transfers to/(from) Stage 1 (2,569) – – – (2,569)
Transfers to/(from) Stage 2 – 8,283 – – 8,283
Transfers to/(from) Stage 3 – – 2,559 – 2,559
Changes in assumptions 5,204 2,613 10,099 22 17,938
ECL allowance, December 31, 2020 = 13,009
P = 13,068
P = 11,919
P = 3,013
P = 41,009
P

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Parent Company
Receivables from Customers
Stage 1 Stage 2 Stage 3 POCI Total
2019
Commercial loans
ECL allowance, January 1, 2019 =
P1,563 =
P700 =
P2,604 =
P2,656 =
P7,523
New assets originated 2,889 – – – 2,889
Assets derecognized or repaid (678) (488) (381) (95) (1,642)
Amounts written off – – (233) – (233)
Transfers to/(from) Stage 1 (1,489) – – – (1,489)
Transfers to/(from) Stage 2 – 629 – – 629
Transfers to/(from) Stage 3 – – 1,651 – 1,651
Changes in assumptions (199) (123) 301 430 409
ECL allowance, December 31, 2019 2,086 718 3,942 2,991 9,737
Auto loans
ECL allowance, January 1, 2019 66 86 85 – 237
New assets originated 7 – – – 7
Assets derecognized or repaid (53) (18) (15) – (86)
Amounts written off – – (5) – (5)
Transfers to/(from) Stage 1 (1) – – – (1)
Transfers to/(from) Stage 2 – (62) – – (62)
Transfers to/(from) Stage 3 – – 6 – 6
Changes in assumptions – – 48 – 48
ECL allowance, December 31, 2019 19 6 119 – 144
Residential mortgage loans
ECL allowance, January 1, 2019 68 106 300 – 474
New assets originated 10 – – – 10
Assets derecognized or repaid (1) (13) (22) – (36)
Transfers to/(from) Stage 1 4 – – – 4
Transfers to/(from) Stage 2 – (70) – – (70)
Transfers to/(from) Stage 3 – – (11) – (11)
Changes in assumptions (11) (2) (14) – (27)
ECL allowance, December 31, 2019 70 21 253 – 344
Trade loans
ECL allowance, January 1, 2019 223 22 95 – 340
New assets originated 96 – – – 96
Assets derecognized or repaid (51) (17) – – (68)
Transfers to/(from) Stage 1 (12) – – – (12)
Transfers to/(from) Stage 2 – 7 – – 7
Transfers to/(from) Stage 3 – – 5 – 5
Changes in assumptions (107) (1) 7 – (101)
ECL allowance, December 31, 2019 149 11 107 – 267
Other loans
ECL allowance, January 1, 2019 1 – 40 – 41
New assets originated 14 – – – 14
Assets derecognized or repaid (1) – (18) – (19)
Transfers to/(from) Stage 1 (14) – – – (14)
Transfers to/(from) Stage 3 – – 13 – 13
Changes in assumptions 1 – 1 – 2
ECL allowance, December 31, 2019 1 – 36 – 37
Total receivables from customers
ECL allowance, January 1, 2019 1,921 914 3,124 2,656 8,615
New assets originated 3,016 – – – 3,016
Assets derecognized or repaid (784) (536) (436) (95) (1,851)
Amounts written off – – (238) – (238)
Transfers to/(from) Stage 1 (1,512) – – – (1,512)
Transfers to/(from) Stage 2 – 504 – – 504
Transfers to/(from) Stage 3 – – 1,664 – 1,664
Changes in assumptions (316) (126) 343 430 331
ECL allowance, December 31, 2019 =
P2,325 =
P756 =
P4,457 =
P2,991 =
P10,529

Parent Company
Other Receivables
Stage1 Stage 2 Stage 3 Total
2020
ECL allowance, January 1, 2020 =
P5 =
P5 =
P804 =
P814
New assets originated 109 – – 109
Assets derecognized or repaid (4) (1) (17) (22)
Transfers to/(from) Stage 1 (106) – – (106)
Transfers to/(from) Stage 2 – 17 – 17
Transfers to/(from) Stage 3 – – 104 104
Changes in assumptions 2 1 (45) (42)
ECL allowance, December 31, 2020 =
P6 =
P22 =
P846 =
P874

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Parent Company
Other Receivables
Stage1 Stage 2 Stage 3 Total
2019
ECL allowance, January 1, 2019 =
P188 =
P54 =
P672 =
P914
New assets originated 218 – – 218
Assets derecognized or repaid (12) (44) (150) (206)
Amounts written off – – (1) (1)
Transfers to/(from) Stage 1 (353) – – (353)
Transfers to/(from) Stage 2 – 3 – 3
Transfers to/(from) Stage 3 – – 218 218
Changes in assumptions (36) (8) 65 21
ECL allowance, December 31, 2019 =
P5 =
P5 =
P804 =
P814

Parent Company
Loan Commitments and Financial Guarantees
Stage 1 Stage 2 Stage 3 Total
2020
ECL allowance, January 1, 2020 =
P49 =
P7 =
P– =
P56
Impact of merger 776 – – 776
New assets originated 270 – – 270
Assets derecognized or repaid (38) (30) – (68)
Transfers to/(from) Stage 1 (145) – – (145)
Transfers to/(from) Stage 2 – 146 – 146
Changes in assumptions 263 183 – 446
ECL allowance, December 31, 2020 =
P1,175 =
P306 =
P– =
P1,481
2019
ECL allowance, January 1, 2019 =
P28 =
P2 =
P– =
P30
New assets originated 41 – – 41
Assets derecognized or repaid (14) – – (14)
Transfers to/(from) Stage 1 (4) – – (4)
Transfers to/(from) Stage 2 – 5 – 5
Changes in assumptions (2) – – (2)
ECL allowance, December 31, 2019 =
P49 =
P7 =
P– =
P56

The amounts of “transfers to/(from)” include the changes in the ECL on the exposures transferred
from one stage to another during the year.

As of December 31, 2020 and 2019, the ECL allowances on loan commitments and financial
guarantees are included in ‘Miscellaneous liabilities’ under ‘Other liabilities’ (Note 21).

The increase in the ECL allowances was driven by the adoption of supplemental SICR rules to
account for the effect of the COVID-19 pandemic on the credit risk exposures, anticipatory credit
downgrades, adjustments to projected recovery rates resulting to increasing LGDs and significantly
depressed macroeconomic indicators.

The ECL allowance on accounts receivables of the Group and the Parent Company based on their
aging as of December 31, 2020 and 2019 follows:
Consolidated Parent Company
Age of accounts receivables 2020 2019 2020 2019
Up to 1 month =
P218 =
P563 =
P99 =
P62
> 1 to 2 months 12 15 12 15
> 2 to 3 months 4 9 4 7
More than 3 months 2,943 2,558 2,436 2,495
Total ECL =
P3,177 =
P3,145 =
P2,551 =
P2,579

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Below is the breakdown of provision for (reversal of) credit and impairment losses:

Consolidated Parent Company

2020 2019 2018 2020 2019 2018
Financial assets and other credit-related
exposures:
Loans and receivables =
P40,751 =9,627
P =7,676
P =
P32,741 =1,645
P =748
P
Investment securities at FVOCI (13) 11 94 ‒ ‒ 92
Interbank loans receivable 13 (1) (17) 4 (1) (17)
Due from other banks 7 – 4 ‒ ‒ –
Investment securities at amortized
cost – – 49 ‒ ‒ 49
Loan commitments and financial
guarantees – 1 (65) ‒ ‒ (65)
40,758 9,638 7,741 32,745 1,644 807
Non-financial assets:
Investment properties (3) – 27 ‒ ‒ –
Investments in associates and a
joint venture – 439 ‒ ‒ ‒ –
Other assets 5 1 2 ‒ ‒ –
2 440 29 ‒ ‒ ‒
=
P40,760 =10,078
P =7,770
P =
P32,745 =1,644
P =807
P

With the foregoing level of allowance for credit and impairment losses, management believes that the
Group has sufficient allowance to take care of any losses that the Group may incur from the non-
collection or non-realization of its receivables and other risk assets.

16. Deposit Liabilities

The LTNCDs of the Group and the Parent Company consist of the following:

BSP Approval Interest Rate Issue Date Maturity Date 2020 2019
Parent Company
September 18, 2014 4.00% October 24,2014 April 24, 2020 =‒
P =8,000
P
September 18, 2014 4.25% November 21, 2014 November 21, 2021 6,250 6,250
August 12, 2016 3.50% September 19, 2016 September 19, 2023 8,650 8,650
August 12, 2016 3.88% July 20, 2017 July 20, 2024 3,750 3,750
July 19, 2018 5.38% October 4, 2018 April 4, 2024 8,680 8,680
27,330 35,330
PSBank
December 8, 2016 3.50% January 30, 2017 April 30, 2022 3,369 3,363
July 13, 2018 5.00% August 9, 2018 February 9, 2024 5,056 5,047
8,425 8,410
=
P35,755 =43,740
P

On September 18, 2019, the BOD of the Parent Company approved the issuance of PHP LTNCDs of
up to =
P25.0 billion in one or more tranches of at least =
P2.0 billion per tranche, and tenors of 5.5 years
up to 10 years, subject to market conditions. On January 10, 2020, the BSP approved the Parent
Company’s application to issue up to =P25.0 billion LTNCD over a period of one year from BSP
approval.

As of December 31, 2020 and 2019, 18.59% and 34.25%, respectively, of the total interest-bearing
deposit liabilities of the Group and 14.47% and 31.94%, respectively, of the total interest-bearing
deposit liabilities of the Parent Company are subject to periodic interest repricing. In 2020, 2019 and
2018 the remaining peso deposit liabilities (excluding LTNCDs above) earn annual fixed interest
rates ranging from 0.00% to 6.59%, while the remaining foreign currency-denominated deposit
liabilities of the Parent Company earn annual fixed interest rates ranging from 0.00% to 2.50%, from
0.00% to 3.00%, and from 0.00% to 2.50%, respectively.

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Interest expense on deposit liabilities consists of:

Consolidated Parent Company

2020 2019 2018 2020 2019 2018
CASA P
=2,193 =2,388
P =2,351
P P
=1,861 =1,987
P P1,948
=
Time 7,457 19,126 15,240 4,581 13,806 10,353
LTNCD 1,676 1,893 1,377 1,282 1,500 1,146
P
=11,326 =23,407
P =18,968
P P
=7,724 =17,293
P =13,447
P

Reserve Requirement
In 2020, BSP Circular Nos. 1082 and 1092 were issued reducing the reserve requirements against
deposit and deposit substitute liabilities. As of December 31, 2020, non-FCDU deposit liabilities of
the Parent Company and deposit substitutes of FMIC and ORIX Metro are subject to required
reserves of 12% from 14% effective reserve week April 3, 2020 while non-FCDU deposit liabilities
of PSBank are subject to required reserves of 3% from 4% effective reserve week July 31, 2020.
Reserves requirement for peso-denominated LTNCDs are still at 4%. The required reserves can be
kept in the form of deposits maintained in the demand deposit accounts with the BSP and any
government securities used as compliance until they mature. Also in 2020, BSP Circular No. 1100
was issued allowing banks to use peso denominated loans that are granted after March 15, 2020 to
(1) micro-small-and-medium-enterprises (MSMEs) and (2) large enterprises (excluding banks and
non-bank financial institutions with quasi-banking functions that met the conditions enumerated in
the said circular) as alternative compliance with the reserve requirements. The Parent Company,
PSBank, FMIC and ORIX Metro were in compliance with the reserve requirements as of
December 31, 2020 and 2019.

The total statutory and liquidity reserves (included in ‘Due from BSP’ account) as reported to the
BSP are as follows:

2020 2019
Parent Company P
=141,288 =166,770
P
PSBank 5,492 6,815
ORIX Metro 542 1,235
FMIC 433 1,255
MCC – 5,994
P
=147,755 =182,069
P

17. Bills Payable and Securities Sold Under Repurchase Agreements

This account consists of borrowings from:

Consolidated Parent Company

2020 2019 2020 2019
SSURA P
=93,059 P
=91,492 P
=93,059 P
=90,780
Local banks 21,981 29,793 4,209 2,080
Foreign banks 17,364 55,799 11,383 46,212
Deposit substitutes 7,210 61,197 ‒ ‒
P
=139,614 P
=238,281 P
=108,651 P
=139,072

Interbank borrowings with foreign and local banks are mainly short-term borrowings. Deposit
substitutes pertain to borrowings from the public.

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The following are the carrying values of government debt securities (Note 8) pledged and transferred
under SSURA transactions of the Group and the Parent Company:
Consolidated Parent Company
2020 2019 2020 2019
Transferred Transferred Transferred Transferred
Securities SSURA Securities SSURA Securities SSURA Securities SSURA
Investment securities at FVTPL =
P4,804 =
P4,708 P‒
= P‒
= =
P4,804 =
P4,708 P‒
= P‒
=
Investment securities at
amortized cost 4,535 4,680 71,073 53,635 4,535 4,680 71,073 53,635
Investment securities at FVOCI 108,065 83,671 46,678 37,857 108,065 83,671 45,965 37,145
=
P117,404 =
P93,059 =117,751
P =91,492
P =
P117,404 =
P93,059 =117,038
P =90,780
P

The Group’s peso borrowings are subject to annual fixed interest rates ranging from 0.25% to 6.50%,
from 0.88% to 7.25% and from 0.88% to 7.45% in 2020, 2019 and 2018, respectively, while the
Group’s foreign currency-denominated borrowings are subject to annual fixed interest rates ranging
from 0.21% to 7.00%, from 1.30% to 4.28% and from 1.38% to 8.00% in 2020, 2019 and 2018,
respectively.

Interest expense on bills payable (included in the ‘Interest expense on bills payable and SSURA,
bonds payable, subordinated debts and others’ in the statements of income) in 2020, 2019 and 2018
amounted to = P4.0 billion, =
P10.4 billion and =
P7.2 billion, respectively, for the Group and =
P2.1 billion,
=4.2 billion and =
P P2.8 billion, respectively, for the Parent Company.

18. Accrued Interest and Other Expenses

This account consists of:

Consolidated Parent Company

2020 2019 2020 2019
Accrued interest (Note 31) P
=1,734 =3,916
P P
=1,071 =2,481
P
Accrued other expenses 7,415 6,583 5,361 4,173
P
=9,149 =10,499
P P
=6,432 =6,654
P

Accrued other expenses include accruals for compensation and fringe benefits, rentals, percentage
and other taxes, professional fees, advertising and information technology expenses and other
expenses.

19. Bonds Payable

This account consists of the following scripless fixed rate bonds:

Carrying Value
Issue Date Maturity Date Interest Rate Face Value 2020 2019
Parent Company
Fixed Rated Bonds
November 9, 2018 November 9, 2020 7.15% =10,000
P =
P‒ P9,962
=
December 17, 2018 November 9, 2020 7.15% 18,000 ‒ 17,952
April 11, 2019 April 11, 2022 6.30% 17,500 17,433 17,384
July 3, 2019 July 3, 2021 5.50% 11,250 11,227 11,178
October 24, 2019 April 24, 2023 4.50% 13,750 13,671 13,634
June 24, 2020 September 24, 2021 3.00% 10,500 10,444 ‒

USD Senior Unsecured Notes

July 15, 2020 January 15, 2026 2.125% US$500 23,580 ‒
76,355 70,110
(Forward)

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Carrying Value
Issue Date Maturity Date Interest Rate Face Value 2020 2019
Fixed Rated Bonds
PSBank
July 24, 2019 July 24, 2021 5.60% =6,300
P =
P6,283 =6,255
P
February 4, 2020 February 4, 2023 4.50% 4,650 4,619 ‒
ORIX Metro
November 15, 2019 November 15, 2021 4.55% 4,160 4,140 4,121
=
P91,397 =80,486
P

Specific terms of these bonds follow:

Parent Company
 P=10.0 billion fixed rate bonds issued on November 9, 2018 with issue price at 100% face value,
which bear an interest rate of 7.15% per annum, payable quarterly in arrears on February 9, May
9, August 9 and November 9 of each year, commencing on February 9, 2019. These bonds
matured on November 9, 2020.
 P=18.0 billion fixed rate bonds (Additional Bonds) issued on December 17, 2018 with issue price
at 100.26% plus an amount corresponding to accrued interest from, and including, November 9,
2018, but excluding the new issue date. The interest of the bonds for the entire term are payable
quarterly in arrears on February 9, May 9, August 9 and November 9 of each year, commencing
on February 9, 2019. These bonds matured on November 9, 2020.
 P=17.5 billion fixed rate bonds issued on April 11, 2019 with issue price at 100% face value,
which bear an interest rate of 6.30% per annum, payable quarterly in arrears on January 11, April
11, July 11 and October 11 of each year, commencing on July 11, 2019. The bonds will mature
on April 11, 2022. Total bond issuance costs amounted to = P148.47 million.
 P=11.25 billion fixed rate bonds issued on July 3, 2019 with issue price at 100% face value, which
bear an interest rate of 5.50% per annum, payable quarterly in arrears on January 3, April 3, July
3 and October 3 of each year, commencing on July 3, 2019. The bonds will mature on July 3,
2021. Total bond issuance costs amounted to = P94.55 million.
 P=13.75 billion fixed rate bonds issued on October 24, 2019 with issue price at 100% face value,
which bear an interest rate of 4.50% per annum, payable quarterly in arrears on January 24, April
24, July 24 and October 24 of each year, commencing on October 24, 2019. The bonds will
mature on April 24, 2023. Total bond issuance costs amounted to P =122.1 million.
 P=10.5 billion fixed rate bonds issued on June 24, 2020 with issue price at 100% face value, which
bear an interest rate of 3.00% per annum, payable quarterly in arrears on March 24, June 24,
September 24 and December 24, of each year, commencing on September 24, 2020. The bonds
will mature on September 24, 2021. Total bond issuance costs amounted to = P91.5 million.
 US$500 million senior unsecured notes issued on July 15, 2020 with issue price at 99.096% face
value, which bear an interest rate of 2.125% per annum, payable semi-annually in arrears on
January 15 and July 15 of each year, commencing on January 15, 2021. The bonds will mature
on January 15, 2026. Total bond issuance costs amounted to = P484.9 million.

PSBank
 P=6.30 billion fixed rate bonds issued on July 24, 2019 with issue price at 100% face value,
which bear an interest rate of 5.60% per annum, payable quarterly in arrears on January 24, April
24, July 24 and October 24 of each year, commencing on July 24, 2019. The bonds will mature
on July 24, 2021. Total bond issuance costs amounted to =P56.9 million.
 P=4.65 billion fixed rate bonds issued on February 4, 2020 with issue price at 100% face value,
which bear an interest rate of 4.50% per annum, payable quarterly in arrears on February 4,
May 4, August 4 and November 4 of each year, commencing on May 4, 2020. The bonds will
mature on February 4, 2023. Total bond issuance costs amounted to = P42.7 million.

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ORIX Metro
 P=4.16 billion fixed rate bonds issued on November 15, 2019 with issue price at 100% face value,
which bear an interest rate of 4.55% per annum, payable quarterly in arrears on February 15,
May 15, August 15 and November 15 of each year, commencing on November 15, 2019. The
bonds will mature on November 15, 2021. Total bond issuance costs amounted to = P44.2 million.

Interest expense on bonds payable (included in ‘Interest expense on bills payable and SSURA, bonds
payable, subordinated debts and others’) in 2020, 2019 and 2018 amounted to = P5.5 billion,
3.6 billion and =
P336.7 million, respectively for the Group and =
P4.8 billion, =
P3.4 billion and
=163.9 million for the Parent Company. As of December 31, 2020 and 2019, unamortized bond
P
issue costs amounted to =
P724.9 million and = P474.2 million for the Group, and =P657.0 million and
=389.9 million for the Parent Company.
P

Reserve Requirement
Peso-denominated bonds are subject to reserves equivalent to 3% in 2020 and 2019. The Parent
Company, PSBank and ORIX Metro were in compliance with such requirements as of December 31,
2020 and 2019.

20. Subordinated Debts

This account consists of the following Peso Notes:

Carrying Value Market Value

Maturity Date Face Value 2020 2019 2020 2019
Parent Company
2025 August 8, 2025 =6,500
P =‒
P =6,494
P =‒
P =6,502
P
2023* December 20, 2023 1,170 1,167 ‒ 1,232 ‒
7,670 1,167 6,494 1,232 6,502
MCC - 2023 December 20, 2023 1,170 ‒ 1,166 ‒ 1,195
=8,840
P =
P1,167 =7,660
P =
P1,232 =7,697
P
*Impact of merger of MCC into the Parent Company (Note 11)

On April 15, 2013, of the BOD of the Parent Company approved the issuance of Basel III-compliant
Tier 2 capital notes of up to USD500 million in one or more tranches, issued as part of its regulatory
capital compliance and to proactively manage its capital base for growth and refinancing of maturing
capital securities which was also approved by the BSP on July 26, 2013 and the amendment to the
terms and conditions on January 30, 2014. Specifically, the BSP approved the issuance of up to
USD500 million equivalent in either USD or PHP or combination in one or more tranches over the
course of one (1) year. The Peso Notes issued by the Parent Company are unsecured and
subordinated obligations and will rank pari passu and without any preference among themselves and
at least equally with all its other present and future unsecured and subordinated obligations. These
Peso Notes have a term of 10.25 and 11 years and are redeemable at the option of the Parent
Company (but not the holders) on the call option date in whole but not in part at redemption price
equal to 100.00% of the principal amount together with accrued and unpaid interest on the call option
date, upon prior approval of the BSP and at least 30-banking day prior written notice to the
Noteholders of record, subject to the following conditions: (1) the capital adequacy of the Issuer is at
least equal to the required minimum ratio; (2) the note is simultaneously replaced with the issues of
new capital which are neither smaller in size nor lower in quality than the original issue.
Furthermore, upon the occurrence of a Tax Redemption Event or a Regulatory Redemption Event,
the Parent Company may, upon prior approval of the BSP and at least a 30-banking day prior written
notice to the Noteholders on record, redeem all and not less than all of the outstanding Notes prior to
the stated maturity by paying the Noteholder the Redemption Option Amount which, (a) in the case

*SGVFSM005911*
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of a Tax Redemption Event is an amount equal to 100.00% of the face value of the Note plus accrued
Interest at the Interest Rate relating to the then current Interest Period up to but excluding the date of
such redemption, and (b) in the case of a Regulatory Redemption Event is an amount equal to
101.00% of the face value of the Note plus accrued Interest at the Interest Rate relating to the then
current Interest Period up to but excluding the date of such redemption. The Notes have a loss
absorption feature which are subject to a Non-Viability Write-Down in case of the occurrence of a
Non-Viability Trigger Event, subject to certain conditions as set out in “Terms and Conditions of the
Notes - Loss Absorption Measure”, when the Issuer is considered non-viable as determined by the
BSP. Non-Viability is a deviation from a certain level of CET1 Ratio or the inability of the Issuer to
continue business (closure) or any other event as determined by the BSP, whichever comes earlier.
A Non-Viability Trigger Event shall be deemed to have occurred if the BSP notifies the Issuer in
writing that it has determined that a: (i) a Write-Down (as defined in “Terms and Conditions of the
Notes”) of the Notes and other capital instruments of the Issuer is necessary because, without such
Write-Down, the Issuer would become non-viable, (ii) public sector injection of capital, or equivalent
support, is necessary because, without such injection or support, the Issuer would become non-viable,
or (iii) Write-Down of the Notes and other capital instruments of the Issuer is necessary because, as a
result of the closure of the Issuer, the Issuer has become non-viable.

Each Noteholder may not exercise or claim any right of set-off in respect of any amount owed to it
by the Parent Company arising under or in connection with the Peso Notes and to the fullest extent
permitted by applicable law, waive and be deemed to have waived all such rights of set-off. These
Notes are not deposits and are not insured by the Philippine Deposit Insurance Corporation.

Specific terms of these Basel III-compliant Peso Notes follow:

Parent Company
2025 Peso Notes - issued on August 8, 2014 at 100.00% of the principal amount of P =6.5 billion
 Bear interest at 5.25% per annum from August 8, 2014 to but excluding August 8, 2020. Interest
will be payable quarterly in arrears on February 8, May 8, August 8 and November 8 of each
year, commencing on November 8, 2014. Unless the Notes are previously redeemed, the initial
interest rate will be reset at equivalent of the five-year PDST-R2 as of reset date plus a spread of
1.67% per annum and such interest will be payable commencing on August 8, 2020 (call option
date) up to and including August 8, 2025. As approved by the BSP on May 7, 2020, on August 8,
2020, the Parent Company redeemed the Notes ahead of its maturity.

2023 Peso Notes - issued by MCC on December 20, 2013 at 100.00% of the principal amount of
=1.2 billion (absorbed by the Parent Company on January 3, 2020 relative to the merger as discussed
P
in Note 11)
 Bear interest at 6.21% per annum payable quarterly in arrears every 20th of March, June,
September and December each year, commencing on March 20, 2014.
 Basel III - compliant unsecured subordinated notes qualified as Tier 2 capital as approved by the
BSP on February 17, 2013.
 In case of insolvency or liquidation of MCC, the notes will be subordinated in the right of
payment of principal and interest to all depositors and other creditors of MCC, except those
creditors expressed to rank equally with, or behind holders of the notes.
 If a non-viability trigger event occurs, MCC shall immediately write down some or all of the
notes in accordance with the BSP’s determination.
 Subject to the written approval of the BSP, MCC may redeem all and not less than the entire
outstanding 2023 Notes, at a redemption price equal to the face value together with the accrued
and unpaid interest based on the interest rate.

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As of December 31, 2020 and 2019, the Group are in compliance with the terms and conditions upon
which these subordinated notes have been issued.

In 2020, 2019 and 2018, interest expense on subordinated debts included in ‘Interest expense on bills
payable and SSURA, bonds payable, subordinated debts and others’ amounted to P =285.6 million,
=
P983.0 million and =P1.5 billion (including amortization of debt issue cost and premium of
=
P7.1 million, P
=41.9 million and =P38.2 million), respectively, for the Group, and =
P285.6 million,
=784.2 million and =
P P1.2 billion, respectively (including amortization of debt issue cost and premium
of P
=7.1 million, P
=22.5 million and =P34.4 million, respectively) for the Parent Company.

21. Non-equity Non-controlling Interest and Other Liabilities

Non-equity Non-controlling Interest

This account arises when mutual funds are consolidated and where the Group holds less than
100.00% of the investment in these funds. When this occurs, the Group acquires a liability in respect
of non-controlling interests in the funds of which the Group has control. Such non-controlling
interests are distinguished from equity non-controlling interests in that the Group does not hold an
equity stake in such funds. Further, income (loss) attributable to non-equity non-controlling interests
amounting to = P115.0 million, (P=229.8 million), and =
P684.8 million in 2020, 2019 and 2018,
respectively, is included under ‘Trading and securities gain - net’ in the statements of income
(Note 8).

Other Liabilities
This account consists of:

Consolidated Parent Company

2020 2019 2020 2019
Accounts payable P
=20,027 =17,436
P P
=10,991 =8,269
P
Bills purchased - contra (Note 9) 10,994 14,089 10,990 14,080
Marginal deposits 5,600 6,374 398 236
Lease liability (Note 13) 3,922 4,038 2,248 2,160
Other credits 1,512 1,800 1,333 853
Deposits on lease contracts 1,458 1,725 ‒ ‒
Outstanding acceptances 1,328 1,611 1,328 1,611
Deferred revenues (Note 25) 1,304 1,486 1,304 63
Withholding taxes payable 390 742 327 448
Retirement liability (Note 27) 214 938 ‒ ‒
Notes payable ‒ 2,592 ‒ ‒
Deferred tax liabilities (Note 28) ‒ 108 ‒ ‒
Miscellaneous (Notes 11 and 15) 6,182 3,339 5,377 2,340
P
=52,931 =56,278
P P
=34,296 =30,060
P

Notes payable represent unsecured notes issued by ORIX Metro on October 29, 2018 and matured on
April 29, 2020 and October 29, 2020 with annual interest rates of 7.02% and 7.45%, respectively.

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In 2020 and 2019, interest expense on notes payable included in ‘Interest expense on bills payable
and SSURA, bonds payable, subordinated debts and others’ amounted to P =104.3 million and
=188.8 million, respectively.
P

Deferred revenues include deferral and release of loyalty points program transactions and
membership fees and dues for credit card business.

As of December 31, 2020 and 2019, miscellaneous liabilities of the Group include dividends payable
amounting to =
P89.6 million and =
P90.0 million, respectively.

22. Maturity Profile of Assets and Liabilities

The following tables present the assets and liabilities by contractual maturity and settlement dates:
Consolidated
2020 2019
Due Within Due Beyond Due Within Due Beyond
One Year One Year Total One Year One Year Total
Financial Assets - at gross
Cash and other cash items =
P38,469 =
P– =
P38,469 P32,956
= P–
= P32,956
=
Due from BSP 304,906 – 304,906 219,994 – 219,994
Due from other banks 38,357 – 38,357 54,772 – 54,772
Interbank loans receivable and SPURA (Note 7) 79,408 – 79,408 72,175 – 72,175
Investment securities at FVTPL (Note 8) 77,508 43 77,551 61,867 – 61,867
Investment securities at FVOCI (Note 8) 171,275 398,170 569,445 16,418 186,102 202,520
Investment securities at amortized cost (Note 8) 4,537 18,778 23,315 24,075 227,579 251,654
Loans and receivables (Note 9)
Receivables from customers 616,486 680,815 1,297,301 697,171 788,465 1,485,636
Unquoted debt securities 65 386 451 150 866 1,016
Accrued interest receivable 13,726 1 13,727 13,102 3 13,105
Accounts receivable 11,173 105 11,278 9,382 84 9,466
Sales contract receivable 48 34 82 62 83 145
Other receivables 211 118 329 313 18 331
Other assets (Note 14)
Investments in SPVs 8,857 – 8,857 8,857 – 8,857
Interoffice float items 4 9 13 1,643 – 1,643
Returned checks and other cash items 250 – 250 407 – 407
Other investments – 26 26 – 31 31
1,365,280 1,098,485 2,463,765 1,213,344 1,203,231 2,416,575
Non-Financial Assets - at gross
Investments in associates and a JV (Note 11) – 6,762 6,762 – 7,105 7,105
Property and equipment (Note 10) – 50,946 50,946 – 49,298 49,298
Investment properties (Note 12) – 10,221 10,221 – 10,369 10,369
Deferred tax assets (Note 28) – 14,028 14,028 – 10,512 10,512
Goodwill (Note 11) – 5,199 5,199 – 5,200 5,200
Assets held under joint operations (Note 14) – 219 219 – 219 219
Accounts receivable (Note 9) – – – – 3,241 3,241
Residual value of leased asset 402 528 930 390 745 1,135
Other assets (Note 14) 2,016 16,091 18,107 2,908 14,885 17,793
2,418 103,994 106,412 3,298 101,574 104,872
=
P1,367,698 =
P1,202,479 2,570,177 =1,216,642
P =1,304,805
P 2,521,447
Less:
Unearned discounts and capitalized interest
(Note 9) 14,996 5,149
Accumulated depreciation and amortization
(Notes 10, 12 and 14) 32,380 28,898
Allowance for credit and impairment losses
(Notes 10, 11, 12, 14, and 15) 67,638 36,587
=
P2,455,163 =2,450,813
P
Financial Liabilities
Deposit liabilities
Demand =
P515,378 =
P– =
P515,378 P411,873
= P–
= P411,873
=
Savings 795,979 – 795,979 665,634 – 665,634
Time 426,752 23,351 450,103 565,982 26,915 592,897
LTNCD (Note 16) 6,250 29,505 35,755 8,000 35,740 43,740
1,744,359 52,856 1,797,215 1,651,489 62,655 1,714,144

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Consolidated
2020 2019
Due Within Due Beyond Due Within Due Beyond
One Year One Year Total One Year One Year Total
Bills payable and SSURA (Note 17) =
P126,471 =
P13,143 =
P139,614 =195,762
P =42,519
P =238,281
P
Derivative liabilities (Note 8) 11,839 1,626 13,465 6,322 1,105 7,427
Manager’s checks and demand drafts outstanding 6,024 – 6,024 6,806 – 6,806
Accrued interest and other expenses 7,621 – 7,621 8,412 43 8,455
Bonds payable (Note 19) 32,094 59,303 91,397 27,914 52,572 80,486
Subordinated debts (Note 20) – 1,167 1,167 6,494 1,166 7,660
Non-equity non-controlling interest (Note 21) 8,315 – 8,315 6,553 – 6,553
Other liabilities (Note 21)
Bills purchased – contra 10,994 – 10,994 14,089 – 14,089
Accounts payable 19,737 290 20,027 17,226 210 17,436
Marginal deposits 5,600 – 5,600 6,374 – 6,374
Lease liability 1,051 2,871 3,922 779 3,259 4,038
Notes payable – – – – 2,592 2,592
Outstanding acceptances 1,328 – 1,328 1,588 23 1,611
Deposits on lease contracts 684 774 1,458 627 1,098 1,725
Dividends payable 90 – 90 90 – 90
1,976,207 132,030 2,108,237 1,950,525 167,242 2,117,767
Non-Financial Liabilities
Retirement liability (Note 21 and 27) – 214 214 – 938 938
Income taxes payable 2,711 – 2,711 4,188 – 4,188
Accrued other expenses 1,528 – 1,528 2,044 – 2,044
Withholding taxes payable (Note 21) 390 – 390 742 – 742
Deferred tax and other liabilities (Notes 21 and 28) 7,396 1,512 8,908 4,735 1,908 6,643
12,025 1,726 13,751 11,709 2,846 14,555
=
P1,988,232 =
P133,756 =
P2,121,988 =1,962,234
P =170,088
P =2,132,322
P

Parent Company
2020 2019
Due Within Due Beyond Due Within Due Beyond
One Year One Year Total One Year One Year Total
Financial Assets - at gross
Cash and other cash items =
P35,606 =
P– =
P35,606 P30,659
= P–
= P30,659
=
Due from BSP 262,188 – 262,188 195,770 – 195,770
Due from other banks 22,742 – 22,742 38,698 – 38,698
Interbank loans receivable and SPURA (Note 7) 57,210 – 57,210 56,153 – 56,153
Investment securities at FVTPL (Note 8) 67,913 43 67,956 7,551 41,999 49,550
Investment securities at FVOCI (Note 8) 147,766 394,900 542,666 8,262 180,414 188,676
Investment securities at amortized cost (Note 8) 2,950 4,959 7,909 22,420 194,224 216,644
Loans and receivables (Note 9)
Receivables from customers 569,996 518,322 1,088,318 596,047 575,239 1,171,286
Unquoted debt securities – 386 386 – 386 386
Accrued interest receivable 8,534 1 8,535 10,500 3 10,503
Accounts receivable 7,004 – 7,004 5,731 – 5,731
Sales contract receivable 42 14 56 55 47 102
Other receivables 11 – 11 12 – 12
Other assets (Note 14)
Investments in SPVs 8,857 – 8,857 8,857 – 8,857
Interoffice float items 4 – 4 1,654 – 1,654
Returned checks and other cash items 238 – 238 378 – 378
1,191,061 918,625 2,109,686 982,747 992,312 1,975,059
Non-Financial Assets - at gross
Investments in subsidiaries (Note 11) – 67,181 67,181 – 95,739 95,739
Investments in associates (Note 11) – 640 640 – 617 617
Property and equipment (Note 10) – 34,758 34,758 – 31,684 31,684
Investment properties (Note 12) – 5,015 5,015 – 4,989 4,989
Deferred tax assets (Note 28) – 11,394 11,394 – 6,918 6,918
Assets held under joint operations (Note 14) – 219 219 – 219 219
Accounts receivable (Note 9) – – – – 3,241 3,241
Other assets (Note 14) 970 11,132 12,102 1,682 9,054 10,736
970 130,339 131,309 1,682 152,461 154,143
=
P1,192,031 =
P1,048,964 2,240,995 =984,429
P =1,144,773
P 2,129,202
Less:
Unearned discounts and capitalized interest
(Note 9) 11,134 238
Accumulated depreciation and amortization
(Notes 10, 12 and 14) 20,045 16,183
Allowance for credit and impairment losses
(Notes 10, 11, 12, 14, and 15) 55,817 25,346
=
P2,153,999 =2,087,435
P

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Parent Company
2020 2019
Due Within Due Beyond Due Within Due Beyond
One Year One Year Total One Year One Year Total
Financial Liabilities
Deposit liabilities
Demand =
P467,545 =
P– =
P467,545 P372,303
= P–
= P372,303
=
Savings 755,713 – 755,713 630,946 – 630,946
Time 331,788 535 332,323 460,529 1,184 461,713
LTNCD (Note 16) 6,250 21,080 27,330 8,000 27,330 35,330
1,561,296 21,615 1,582,911 1,471,778 28,514 1,500,292
Bills payable and SSURA (Note 17) 104,256 4,395 108,651 117,755 21,317 139,072
Derivative liabilities (Note 8) 11,813 – 11,813 5,994 – 5,994
Manager’s and demand drafts outstanding 5,493 – 5,493 5,508 – 5,508
Accrued interest and other expenses 4,904 – 4,904 4,567 43 4,610
Bonds payable (Note 19) 21,671 54,684 76,355 27,914 42,196 70,110
Subordinated debts (Note 20) – 1,167 1,167 6,494 – 6,494
Other liabilities (Note 21)
Bills purchased – contra 10,990 – 10,990 14,080 – 14,080
Accounts payable 10,991 – 10,991 8,269 – 8,269
Marginal deposits 398 – 398 236 – 236
Lease liability 578 1,670 2,248 615 1,545 2,160
Outstanding acceptances 1,328 – 1,328 1,588 23 1,611
1,733,718 83,531 1,817,249 1,664,798 93,638 1,758,436
Non-Financial Liabilities
Income taxes payable 1,992 – 1,992 3,259 – 3,259
Accrued other expenses 1,528 – 1,528 2,044 – 2,044
Withholding taxes payable (Note 21) 327 – 327 448 – 448
Other liabilities (Note 21) 6,681 1,333 8,014 2,403 853 3,256
10,528 1,333 11,861 8,154 853 9,007
=
P1,744,246 =
P84,864 =
P1,829,110 =1,672,952
P =94,491
P =1,767,443
P

23. Capital Stock

As of December 31, 2020 and 2019, this account consists of (amounts in millions, except par value
and number of shares):

Shares Amount
2020 2019 2020 2019
Authorized
Common stock – P =20.00 par value 6,000,000,000 6,000,000,000
Preferred stock – P
=20.00 par value 1,000,000,000 1,000,000,000
Common stock issued and outstanding
Balance at beginning of year 4,497,415,555 3,980,015,036 P
=89,948 P79,600
=
Issuance of stock dividend – 517,400,519 – 10,348
Balance at the end of year 4,497,415,555 4,497,415,555 P
=89,948 =89,948
P

As of December 31, 2020 and 2019, treasury shares totaling 1,134,147 and 959,257, respectively,
represent shares of the Parent Company held by FMIC’s mutual fund subsidiary (Note 31).

Preferred shares are non-voting except as provided by law; have preference over Common Shares in
the distribution of dividends; subject to such terms and conditions as may be determined by the BOD
and to the extent permitted by applicable law, may or may not be redeemable; and shall have such
other features as may be determined by the BOD at the time of issuance.

On March 15, 2013, the BOD of the Parent Company approved (a) the amendment of the Articles of
Incorporation (AOI) to increase the authorized capital stock and (b) the declaration of 30.00% stock
dividend, which were ratified by the stockholders representing at least 2/3 of the outstanding capital
stock on April 15, 2013. These were subsequently approved by the BSP on May 15, 2013 and by the
SEC on August 13, 2013. Following this, the authorized capital stock of the Parent Company
increased from =P50.0 billion to P
=100.0 billion consisting of 4.0 billion Common Shares and
1.0 billion Preferred Shares, both with par value of =
P20.00 per share. The 30.00% stock dividend

*SGVFSM005911*
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equivalent to 633,415,049 common shares amounting to P=12.7 billion represents at least the
minimum 25.00% subscribed and paid-up capital for the increase in the authorized capital stock
referred to above which was issued/paid on September 16, 2013 with record date on September 3,
2013. On September 10, 2013, the PSE approved the listing of such additional common shares.

On January 21, 2015, the Parent Company’s BOD approved the Stock Rights Offer (SRO) by way of
issuance from the unissued portion of the authorized capital stock which was noted by BSP with the
issuance of a letter of no objection to the Rights Issue on February 17, 2015. On February 24, 2015,
the SEC confirmed the exemption of this issuance of = P32.0 billion worth of common shares from the
registration requirements under Section 8 of the SRC. On February 25, 2015, the PSE approved the
listing of up to 500.0 million common shares to cover the SRO to all stockholders of record as of
March 18, 2015. On April 7, 2015, following regulatory approvals, the Parent Company concluded
the =P32.0 billion SRO, involving 435,371,720 common shares with par value of = P20.00 priced at
=73.50 per share and listed with the PSE on the same date. The difference between the issued price
P
and the par value is recognized as ‘Capital paid in excess of par value’.

On January 17, 2018, the Parent Company’s BOD approved the SRO by way of issuance of up to a
maximum of 819,827,214 common shares to raise additional capital of up to = P60.0 billion. This was
noted by the BSP with the issuance of a letter of no objection to the rights issue on January 29, 2018.
On April 4, 2018, following the regulatory approvals, the Parent Company concluded the
=60.0 billion SRO, involving 799,842,250 common shares with par value of =
P P20.00 priced at
=75.00 per share and listed on the PSE on April 12, 2018. Transaction costs on the SRO amounting
P
to =
P878.2 million were charged against ‘Capital paid in excess of par value’.

On February 13, 2019, the BOD of the Parent Company approved (a) the amendment of the AOI to
increase the authorized capital stock from =
P100.0 billion to =P140.0 billion and (b) the declaration of a
13% stock dividend equivalent to 517,401,955 shares amounting to = P10.3 billion representing the
minimum 25% subscription and paid-up capital for the increase in the authorized capital stock which
were ratified by the stockholders representing at least 2/3 of the outstanding capital stock on April
24, 2019. These were approved by the BSP on August 8, 2019 and by the SEC on October 4, 2019.
Following this, the authorized capital stock of the Parent Company increased from P =100.0 billion to
=140.0 billion consisting of 6.0 billion common shares and 1.0 billion preferred shares, both with par
P
value of =
P20.0 per share. On October 16, 2019, the Parent Company received the SEC Order fixing
the Record Date of the 13% stock dividend on October 31, 2019. The 13% stock dividend was
issued on November 26, 2019 with record date on October 31, 2019. On November 19, 2019, the
PSE approved the listing of such stock dividend.

All issued and outstanding shares of the Parent Company are listed with the PSE (Note 1). As of
December 31, 2020 and 2019, there are 2,999 and 2,986 holders, respectively, of the listed shares of
the Parent Company, with share price closed at =P49.05 and =
P66.30 a share, respectively.

The history of share issuances during the last ten years follows:

Year Issuance Listing Date Number of Shares Issued

2019 Stock dividend November 26, 2019 517,400,519
2018 Stock rights April 12, 2018 799,842,250
2015 Stock rights April 7, 2015 435,371,720
2013 Stock dividend September 16, 2013 633,415,049
2011 Stock rights January 24, 2011 200,000,000

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Details of the Parent Company’s cash dividend distributions from 2018 to 2020 follow:

Date of Declaration Per Share Total Amount Record Date Payment Date
February 19, 2020 =1.00
P =4,497
P March 6, 2020 March 20, 2020
February 13, 2019 1.00 3,980 March 1, 2019 March 14, 2019
February 21, 2018 1.00 3,180 March 8, 2018 March 16, 2018

The computation of surplus available for dividend declaration in accordance with SEC Memorandum
Circular No. 11 issued in December 2008 differs to a certain extent from the computation following
BSP guidelines.

24. Surplus Reserves

This account consists of:

2020 2019
Reserve for trust business (Note 29) P
=1,736 =1,596
P
Reserve for self-insurance 524 502
P
=2,260 =2,098
P

In compliance with existing BSP regulations, 10.0% of the Parent Company’s income from trust
business is appropriated to surplus reserves. This yearly appropriation is required until the surplus
reserve for trust business equals 20.0% of the Parent Company’s regulatory net worth.

Reserve for self-insurance represents the amount set aside to cover losses due to fire, defalcation by
and other unlawful acts of the Parent Company’s personnel or third parties.

25. Other Operating Income and Expenses

Service Charges, Fees and Commissions

The table below presents the disaggregation of service charges, fees and commission by business
segment:

Consolidated Parent Company

2020 2019 2018 2020 2019 2018
Consumer banking =
P5,072 =
P5,724 =
P5,694 =
P4,618 =
P110 =
P125
Branch banking 3,040 3,679 3,418 2,306 2,589 2,482
Corporate banking 850 1,639 791 737 936 812
Investment banking/treasury 618 855 680 434 357 297
Others 2,123 2,369 2,112 896 1,153 1,238
=
P11,703 =
P14,266 =
P12,695 =
P8,991 =
P5,145 =
P4,954

Others include the remittance business of the Group and the Parent Company.

The remaining performance obligations on revenue contracts with customers of the Group under
PFRS 15, which are expected to be recognized beyond one year amounting to = P727.2 million and
=832.0 million (included in ‘Deferred revenues’ under ‘Other liabilities’) as of December 31, 2020
P
and 2019, respectively, refer to the customer loyalty program of the Parent Company (MCC until
2019 - see Note 11). The customer loyalty points have no expiration and redemptions can go beyond
one year.

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Miscellaneous Income and Expenses

In 2020, 2019 and 2018, miscellaneous income includes gain on initial recognition of investment
properties and other non-financial assets amounting to = P127.1 million, P=486.5 million and
=638.5 million, respectively, for the Group and =
P P14.6 million, P
=33.2 million and = P22.8 million,
respectively, for the Parent Company; recovery on charged-off assets amounting to = P691.6 million,
=866.8 million and =
P P874.9 million, respectively, for the Group and P=449.3 million, =
P12.0 million and
=8.8 million, respectively, for the Parent Company; and information technology and other fees
P
amounting to = P360.5 million, =
P44.9 million and =P895.9 million, respectively, for the Group and
=269.6 million, P
P =38.1 million and =P365.9 million, respectively, for the Parent Company (Note 31).

Miscellaneous expenses consist of:

Consolidated Parent Company

2020 2019 2018 2020 2019 2018
Insurance =
P3,592 =
P3,420 =
P3,422 =
P2,985 =
P2,764 =
P2,684
Security, messengerial and janitorial 3,500 2,581 2,433 2,986 2,054 1,837
Management, professional and
supervision fees 1,771 1,569 1,530 1,539 1,308 1,151
Information technology (Note 31) 1,574 1,385 1,066 1,379 911 684
Advertising 512 1,161 986 439 340 221
Litigation (Note 12) 911 904 781 512 390 276
Communications 602 634 647 372 115 115
Repairs and maintenance 695 569 538 416 222 190
Transportation and travel 658 569 527 517 428 382
Stationery and supplies used 465 520 446 333 337 261
Entertainment, amusement and
representation (EAR) (Note 28) 300 488 340 251 440 295
Others (Note 31) 3,100 2,776 2,519 2,327 1,777 1,477
=
P17,680 =
P16,576 =
P15,235 =
P14,056 =
P11,086 =
P9,573

26. Notes to Statements of Cash Flows

The amounts of interbank loans receivable and SPURA, gross of allowance for credit losses,
considered as cash and cash equivalents follow:

Consolidated Parent Company

2020 2019 2018 2020 2019 2018
Interbank loans receivable and SPURA =
P79,408 =72,175
P =50,731
P =
P57,210 =56,153
P =24,724
P
Interbank loans receivable and SPURA
not considered as cash and cash
equivalents (32,739) (4,862) (11,351) (27,369) (1,575) (1,982)
=
P46,669 =
P67,313 =
P39,380 =
P29,841 =
P54,578 =
P22,742

Significant non-cash transactions of the Group and the Parent Company (other than the impact of
PFRS 16 adoption in 2019) include; additions to ROU assets as disclosed in Note 10; foreclosures of
properties or additions to investment and chattel properties as disclosed in Notes 12 and 14,
respectively; reclassifications of BUC (Note 10); impact of merger (Note 11); and issuance of stock
dividends (Note 23).

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The table below provides for the changes in liabilities arising from financing activities in 2020 and
2019:

Consolidated
Net
Beginning cash flows Others Ending
2020
Bills payable and SSURA (Note 17) =
P238,281 (P
= 44,680) (P
= 53,987) =
P139,614
Bonds payable (Note 19) 80,486 10,869 42 91,397
Subordinated debts (Note 20) 7,660 (6,500) 7 1,167
Notes payable (Note 21) 2,592 (2,592) – –
Dividends payable (Note 21) 90 – – 90
Total liabilities from financing activities =
P329,109 (P
= 42,903) (P
= 53,938) =
P232,268
2019
Bills payable and SSURA (Note 17) =259,607
P (P
=29,298) =7,972
P =238,281
P
Bonds payable (Note 19) 30,743 49,499 244 80,486
Subordinated debts (Note 20) 26,618 (19,000) 42 7,660
Notes payable (Note 21) 2,600 – (8) 2,592
Dividends payable (Note 21) 90 – – 90
Total liabilities from financing activities =
P319,658 =
P1,201 =
P8,250 =
P329,109

Parent Company
Net Impact of merger
Beginning cash flows (see Note 11) Others Ending
2020
Bills payable and SSURA (Note 17) =
P139,072 (P
= 87,421) =
P65,389 (P
= 8,389) =
P108,651
Bonds payable (Note 19) 70,110 6,219 – 26 76,355
Subordinated debts (Note 20) 6,494 (6,500) 1,166 7 1,167
Total liabilities from financing activities =
P215,676 (P
= 87,702) =
P66,555 (P
= 8,356) =
P186,173
2019
Bills payable and SSURA (Note 17) =151,079
P (P
=12,007) =–
P =–
P =139,072
P
Bonds payable (Note 19) 27,826 42,135 – 149 70,110
Subordinated debts (Note 20) 22,471 (16,000) – 23 6,494
Total liabilities from financing activities =201,376
P =14,128
P =–
P =172
P =215,676
P

Others include the effect of cash flows of liabilities arising from operating activities, declaration of
dividends, and effect of amortization of transaction costs.

27. Retirement Plan and Other Employee Benefits

The Parent Company and most of its subsidiaries have funded non-contributory defined benefit
retirement plan covering all their respective permanent and full-time employees. Benefits are based
on the employee’s years of service and final plan salary.

For employees of the Parent Company, retirement from service is compulsory upon the attainment of
the 55th birthday or 30th year of service, whichever comes first.

The existing regulatory framework, Republic Act (RA) 7641 (Retirement Pay Law) requires a
provision for retirement pay to qualified private sector employees in the absence of any retirement
plan in the entity, provided, however that the employee’s retirement benefits under any collective
bargaining and other agreements shall not be less than those provided under the law. The law does
not require minimum funding of the plan. The Parent Company and most of its subsidiaries meet the
minimum retirement benefit specified under RA 7641.

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The principal actuarial assumptions used in determining retirement liability of the Parent Company
and significant subsidiaries are shown below:

Parent
Company FMIC PSBank ORIX Metro MCC (Note 11)
As of January 1, 2020
Average remaining working life 9 years 7 years 10 years 13 to 26 years -
Discount rate 4.74% 4.82% to 4.84% 4.86% 5.1% to 5.2% -
Future salary increases 7.00% 6.29% 5.80% 7.00% -

As of January 1, 2019
Average remaining working life 9.6 years 7 years 12 years 14 to 27 years 10 years
Discount rate 7.29% 7.16% to 7.32% 7.33% 6.80% to 7.80% 7.28%
Future salary increases 7.00% 5.00% 6.00% 7.00% to 8.00% 8.00%

Discount rates used in computing for the present value of the DBO of the Parent Company and
significant subsidiaries as of December 31, 2020 and 2019 follow:

Parent
Company FMIC PSBank ORIX Metro MCC (Note 11)
2020 3.58% 3.38% to 3.68% 3.56% 3.50% to 3.90% -
2019 4.74% 4.61% to 4.84% 4.86% 5.10% to 5.20% 4.88%

The net retirement liability (asset) of the Group and the Parent Company is presented in the
following accounts in the statements of financial position:

Consolidated Parent Company

2020 2019 2020 2019
Other assets (Note 14) (P
= 2,441) (P
=3,930) (P
= 2,441) (P
=3,930)
Other liabilities (Note 21) 214 938 ‒ ‒
(P
= 2,227) (P
=2,992) (P
= 2,441) (P
=3,930)

The defined benefit plan exposes the Group and the Parent Company to actuarial risk, such as
longevity risk, interest rate risk and market (investment risk).

The fair value of plan assets by each class as at the end of the reporting year are as follows:

Consolidated Parent Company

2020 2019 2020 2019
Cash and cash equivalents P
=156 =974
P P
=18 =4
P
Investment securities
Debt securities (Note 31) 22,413 21,415 18,692 17,997
Equity securities (Note 31) 5,328 4,855 5,111 4,640
Unit investment trust fund
and others (Note 31) 734 573 683 415
Total investment securities 28,475 26,843 24,486 23,052
Other assets 238 266 214 245
Total assets 28,869 28,083 24,718 23,301
Total liabilities (22) (6) (19) –
Fair value of net plan assets P
=28,847 =28,077
P P
=24,699 =23,301
P

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Changes in net defined benefit liability (asset) are as follows:

Present Value Fair Value of Net retirement

Consolidated of DBO Plan Assets liability/(asset)
January 1, 2020 =
P25,085 (P
= 28,077) (P
= 2,992)
Net benefit cost
Current service cost 1,873 – 1,873
Past service cost 285 – 285
Net interest 1,071 (1,241) (170)
Sub-total 3,229 (1,241) 1,988
Benefits paid (1,723) 1,723 –
Remeasurement in OCI
Return on plan assets (excluding amount
included in net interest) – (744) (744)
Actuarial changes arising from experience
adjustments (252) – (252)
Actuarial changes arising from changes in
financial/demographic assumptions 281 (3) 278
Sub-total 29 (747) (718)
Net acquired/(released) obligation due to employee
transfers – 15 15
Contributions paid – (520) (520)
December 31, 2020 =
P26,620 (P
= 28,847) (P
= 2,227)

Present Value Fair Value of Net retirement

Parent Company of DBO Plan Assets liability/(asset)
January 1, 2020 =
P19,371 (P
= 23,301) (P
= 3,930)
Net benefit cost
Current service cost 1,467 – 1,467
Net interest 867 (1,053) (186)
Sub-total 2,334 (1,053) 1,281
Past service cost 285 – 285
Benefits paid (1,424) 1,424 –
Remeasurement in OCI
Return on plan assets (excluding amount
included in net interest) – (717) (717)
Actuarial changes arising from experience
adjustments (173) – (173)
Actuarial changes arising from changes in
financial/demographic assumptions 424 – 424
Sub-total 1,446 (346) 1,100
Net acquired/(released) obligation due to employee
transfers 1,441 (1,052) 389
December 31, 2020 =
P22,258 (P
= 24,699) (P
= 2,441)

Present Value Fair Value of Net retirement

Consolidated of DBO Plan Assets liability/(asset)
January 1, 2019 =19,254
P (P
=22,631) (P
=3,377)
Net benefit cost
Current service cost 1,558 – 1,558
Past service cost 4 – 4
Net interest 1,326 (1,658) (332)
Sub-total 2,888 (1,658) 1,230
Benefits paid (1,474) 1,474 –
Remeasurement in OCI
Return on plan assets (excluding amount
included in net interest) – (1,509) (1,509)
Actuarial changes arising from experience
adjustments 734 – 734
Actuarial changes arising from changes in
financial/demographic assumptions 3,683 – 3,683
Sub-total 4,417 (1,509) 2,908
Benefits paid from previous year separation – 8 8
Settlement 1 – 1
Effect of curtailment (1) – (1)
Contributions paid – (3,761) (3,761)
December 31, 2019 =25,085
P (P
=28,077) (P
=2,992)

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Present Value Fair Value of Net retirement

Parent Company of DBO Plan Assets liability/(asset)
January 1, 2019 =15,195
P (P
=18,801) (P
=3,606)
Net benefit cost
Current service cost 1,169 – 1,169
Net interest 1,039 (1,369) (330)
Sub-total 2,208 (1,369) 839
Benefits paid (1,291) 1,291 –
Remeasurement in OCI
Return on plan assets (excluding amount
included in net interest) – (1,507) (1,507)
Actuarial changes arising from experience
adjustments 647 – 647
Actuarial changes arising from changes in
financial/demographic assumptions 2,612 – 2,612
Sub-total 3,259 (1,507) 1,752
Contributions paid – (2,915) (2,915)
December 31, 2019 =19,371
P (P
=23,301) (P
=3,930)

In 2020, 2019 and 2018, deferred tax on remeasurements on retirement plans credited (charged) to
OCI amounted to (P=215.6 million), =
P872.4 million, and (P
=214.2 million), respectively, for the Group,
and (P
=139.9 million), =
P525.7 million and (P
=135.6 million), respectively, for the Parent Company
(Note 28).

The sensitivity analysis below has been determined based on reasonably possible changes of each
significant assumption on the balance of defined benefit obligation as of December 31, 2020 and
2019, assuming all other assumptions were held constant:

Parent
Company FMIC PSBank ORIX Metro MCC (Note 11)
As of December 31, 2020
Discount rate
+100 basis points (bps) (P
= 1,403) (P
= 24) (P
= 262) (P
= 88) =
P–
- 100 bps 1,595 27 300 105 –
Salary increase rate
+100 bps 1,402 28 312 101 –
- 100 bps (1,273) (25) (277) (86) –
Turnover rate
+20% of actual rate (433) (12) (54) – –
-20% of actual rate 480 14 62 – –

As of December 31, 2019

Discount rate
+100 basis points (bps) (P
=1,180) (P
=22) (P
=307) (P
=68) (P
=132)
- 100 bps 1,332 24 357 81 152
Salary increase rate
+100 bps 1,222 26 366 78 121
- 100 bps (1,113) (23) (321) (67) (114)
Turnover rate
+3% (547) – – – –
+ 20% of actual rate – (10) (60) – (40)
- 3% 697 – – – –
- 20% of actual rate – 11 67 – 43

The Group and the Parent Company expect to contribute to the defined benefit retirement plans the
required funding for normal cost in 2021 amounting to =
P447.2 million and nil, respectively.

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The average duration of the DBO of the Group as of December 31, 2020 and 2019 are as follows:

Parent
Company FMIC PSBank ORIX Metro MCC (Note 11)
2020 12.04 years 10.49 to 14.52 years 12.50 years 10.9 to 13.1 years –
2019 12.15 years 10.57 to 14.94 years 15.43 years 11.40 to 12.60 years 14.26 years

Shown below is the maturity analysis of the undiscounted benefit payments:

Parent
Company FMIC PSBank ORIX Metro MCC (Note 11)
As of December 31, 2020
Less than 1 year =
P3,144 =
P27 =
P260 =
P26 P
=–
More than 1 year to 5 years 10,113 139 1,079 148 –
More than 5 years to 10 years 10,794 273 1,820 342 –
More than 10 years to 15 years 9,652 224 1,956 – –
More than 15 years to 20 years 11,278 194 2,025 – –
More than 20 years 11,514 165 1,443 – –

As of December 31, 2019

Less than 1 year =2,165
P P28
= =184
P =–
P P58
=
More than 1 year to 5 years 9,782 156 968 157 353
More than 5 years to 10 years 11,066 316 1,984 344 1,025
More than 10 years to 15 years 8,517 217 2,385 – 1,432
More than 15 years to 20 years 10,755 189 3,515 – 1,934
More than 20 years 11,762 199 3,999 – 1,123

In addition, the Parent Company has a Provident Plan which is a supplementary contributory
retirement plan to and forms part of the main plan, the Retirement Plan, for the exclusive benefit of
eligible employees of the Parent Company in the Philippines. Based on the provisions of the plan,
upon retirement or resignation, a member shall be entitled to receive as retirement or resignation
benefits 100.00% of the accumulated value of the personal contribution plus a percentage of the
accumulated value arising from the Parent Company’s contributions in accordance with the
completed number of years serviced. The Parent Company’s contribution to the Provident Fund in
2020 and 2019 amounted to = P321.3 million and =P265.3 million, respectively.

As of December 31, 2020 and 2019, the retirement funds of the Group’s employees amounting to
=28.8 billion and =
P P28.1 billion, respectively, are being managed by its trust banking unit. The Parent
Company has a Trust Committee that is mandated to approve the plan, trust agreement, investment
plan, including any amendments or modifications thereto, and other activities of the retirement plan.
Certain members of the BOD of the Parent Company are represented in the Trust Committee.

28. Income and Other Taxes

Under Philippine tax laws, the RBU of the Parent Company and its domestic subsidiaries are subject
to percentage and other taxes (presented as ‘Taxes and licenses’ in the statement of income) as well
as income taxes. Percentage and other taxes paid consist principally of gross receipts tax (GRT) and
documentary stamp tax (DST). Income taxes include 30.00% regular corporate income tax (RCIT)
and 20.00% final taxes paid, which is a final withholding tax on gross interest income from
government securities and other deposit substitutes. Interest allowed as a deductible expense is
reduced by an amount equivalent to 33.00% of interest income subjected to final tax.

Current tax regulations also provide for the ceiling on the amount of EAR expense (Note 25) that can
be claimed as a deduction against taxable income. Under the regulation, EAR expense allowed as a
deductible expense for a service company like the Parent Company and some of its subsidiaries is
limited to the actual EAR paid or incurred but not to exceed 1.00% of net revenue. The regulations

*SGVFSM005911*
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also provide for MCIT of 2.00% on modified gross income and allow a NOLCO. The MCIT and
NOLCO may be applied against the Group’s income tax liability and taxable income, respectively,
over a three-year period from the year of inception. For the taxable years 2020 and 2021, the
NOLCO incurred can be carried over as a deduction for the next five (5) consecutive taxable years,
pursuant to Revenue Regulation No. 25-2020.

FCDU offshore income (income from non-residents) is tax-exempt while gross onshore income
(income from residents) is subject to 10.00% income tax. In addition, interest income on deposit
placements with other FCDUs and offshore banking units (OBUs) is taxed at 15.00%. Income
derived by the FCDU from foreign currency-denominated transactions with non-residents, OBUs,
local commercial banks including branches of foreign banks is tax-exempt while interest income on
foreign currency loans from residents other than OBUs or other depository banks under the expanded
system is subject to 10.00% income tax.

Following are the applicable taxes and tax rates for the foreign branches of the Parent Company:
Foreign Branches Tax Rates
USA - New York Branch 21.00% federal income tax; 8.85% state tax; 6.50% city tax
Japan - Tokyo and Osaka Branches 2020 - 23.20% income tax; 2019 - 23.40% income tax;
Various rates for business taxes - income tax, local business, sheet value and sheet capital
allocations
Korea - Seoul and Pusan Branches Various rates; 0.50% education tax
Taiwan - Taipei Branch 20.00% income tax; 5.00% gross business receipts tax; 5.0% value-added tax

The provision for income tax consists of:

Consolidated Parent Company
2020 2019 2018 2020 2019 2018
Current:
RCIT* =
P7,729 =6,625
P =5,002
P =
P6,696 =3,772
P =2,090
P
Final tax 3,991 3,442 2,928 3,627 2,915 2,389
MCIT 5 6 8 - - 
11,725 10,073 7,938 10,323 6,687 4,479
Deferred* (4,679) (12) (193) (3,413) (78) 5
=
P7,046 =
P10,061 =
P7,745 =
P6,910 =
P6,609 =
P4,484
* Includes income taxes of foreign subsidiaries.

Components of net deferred tax assets of the Group and the Parent Company follow:

Consolidated Parent Company

2020 2019 2020 2019
Deferred tax asset on:
Allowance for credit and impairment losses =
P11,167 =7,692
P =
P8,546 =4,785
P
Unamortized past service cost 2,380 2,744 2,134 2,437
Retirement asset 523 1,238 1,017 996
Unrealized foreign exchange losses 403 7 403 –
Accumulated depreciation of investment
properties 308 272 156 160
Deferred membership/awards 305 334 305 –
NOLCO 34 – – –
MCIT 9 – – –
Others 807 189 24 47
15,936 12,476 12,585 8,425
Deferred tax liability on:
Unrealized mark-to-market gains 1,420 1,456 1,040 1,449
Unrealized gain on initial measurement
of investment properties 154 433 151 58
Others 334 75 – –
1,908 1,964 1,191 1,507
Net deferred tax assets =
P14,028 =10,512
P =
P11,394 =6,918
P

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Components of net deferred tax liabilities of the Group as of December 31, 2019 (nil as of
December 31, 2020) follow:

Deferred tax asset on:

Allowance for credit and impairment losses =287
P
Unamortized past service cost 4
Others 256
547
Deferred tax liability on:
Leasing income differential on lease accounting methods 581
Fair value gain on securities 4
Others 70
655
Net deferred tax liabilities =108
P

In 2020 and 2019, deferred tax credited (charged) to OCI amounted to (P=1.05 billion) and
=468.4 million respectively, for the Group and (P
P =1.03 billion) and =
P60.0 million, respectively, for the
Parent Company.

The Parent Company and certain subsidiaries did not recognize deferred tax assets on the following
temporary differences:

Consolidated Parent Company

2020 2019 2020 2019
Allowance for credit and impairment losses =18,835
P =17
P =17,532
P =–
P
NOLCO 675 814 – –
MCIT 9 20 – –

The Group believes that it is not reasonably probable that the tax benefits of these temporary
differences will be realized in the future.

There are no income tax consequences attaching to the payment of dividends by the Group to its
shareholders. There are no temporary differences arising from undistributed profits of subsidiaries,
branches, associates and a JV.

Details of the excess MCIT credits of the Group follow:

Amount Used/Expired Balance Expiry Year

2018 =8
P =–
P =8
P 2021
2019 6 – 6 2022
2020 5 – 5 2023
=19
P =–
P =19
P

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On September 30, 2020, the Bureau of Internal Revenue (BIR) issued Revenue Regulations
No. 25-2020 implementing Section 4(bbbb) of Bayanihan to Recover as One Act which states that
the NOLCO incurred for taxable years 2020 and 2021 can be carried over and claimed as a deduction
from gross income for the next five (5) consecutive taxable years immediately following the year of
such loss.

As of December 31, 2020, the Group has incurred NOLCO before taxable year 2020 which can be
claimed as deduction from the regular taxable income for the next three (3) consecutive taxable years
immediately following the year of such loss, as follows:

Inception Year Amount Used/Expired Balance Expiry Year

2017 =263
P =263
P =–
P 2020
2018 281 – 281 2021
2019 236 – 236 2022
=780
P =263
P =517
P

As of December 31, 2020, the Group has incurred NOLCO in taxable year 2020 which can be
claimed as deduction from the regular taxable income for the next five (5) consecutive taxable years
pursuant to Bayanihan 2, as follows:

Inception Year Amount Used/Expired Balance Expiry Year

2020 =236
P =–
P =236
P 2025

A reconciliation of the statutory income tax rates and the effective income tax rates follows:

Consolidated Parent Company

2020 2019 2018 2020 2019 2018
Statutory income tax rate 30.00% 30.00% 30.00% 30.00% 30.00% 30.00%
Tax effect of:
Tax-paid, tax-exempt and other non-
taxable income (34.94) (10.41) (12.13) (31.02) (8.16) (12.02)
Non-deductible interest expense 8.16 4.14 4.94 7.99 3.82 4.08
FCDU income (3.24) (1.51) (1.89) (2.90) (1.43) (1.94)
Change in unrecognized deferred tax
assets 14.45 – – 12.29 – –
Others - net 19.09 3.62 3.92 16.96 (5.16) (3.19)
Effective income tax rate 33.52% 25.84% 24.84% 33.32% 19.07% 16.93%

29. Trust Operations

Properties held by the Parent Company and PSBank in fiduciary or agency capacity for their
customers are not included in the accompanying statements of financial position since these are not
their resources (Note 30).

In compliance with current banking regulations relative to the Parent Company and PSBank’s trust
functions, the following are government securities deposited with the BSP.

Consolidated Parent Company

2020 2019 2020 2019
Investment securities at FVOCI P
=6,364 =143
P P
=6,250 =
P
Investment securities at amortized cost  5,000  5,000
P
=6,364 =5,143
P P
=6,250 =5,000
P

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30. Commitments and Contingent Liabilities

In the normal course of the Group’s operations, there are various outstanding commitments and
contingent liabilities which are not reflected in the accompanying financial statements. No material
losses are anticipated as a result of these transactions. The summary of contingencies and
commitments at their peso-equivalent contractual amounts arising from off-balance sheet items
follows:

Consolidated Parent Company

2020 2019 2020 2019
Trust Banking Group accounts (Note 29) =
P567,841 P491,659
= =
P558,273 =484,586
P
Credit card lines 205,815 209,766 205,815 –
Unused commercial letters of credit (Note 31) 42,283 44,036 40,930 41,342
Undrawn commitments - facilities to lend 17,413 21,980 17,393 21,980
Bank guaranty with indemnity agreement (Note 31) 8,591 9,904 8,591 9,904
Credit line certificate with bank commission 4,262 5,984 4,262 5,984
Outstanding guarantees 3,826 139 3,826 139
Outstanding shipside bonds/airway bills 2,594 1,931 2,594 1,931
Late deposits/payments received 1,756 1,539 1,746 1,530
Inward bills for collection 1,909 991 1,908 991
Confirmed export letters of credits 964 935 39 44
Outward bills for collection 821 850 819 849
Others 11,488 12,933 862 835
=
P869,563 =
P802,647 =
P847,058 =
P570,115

Several suits and claims relating to the Group’s lending operations and labor-related cases remain
unsettled. In the opinion of management, these suits and claims, if decided adversely, will not
involve sums having a material effect on the Group’s financial statements.

31. Related Party Transactions

Parties are considered to be related if one party has the ability, directly or indirectly, to control the
other party or exercise significant influence over the other party in making financial and operating
decisions or if they are subjected to common control or common significant influence such as
subsidiaries and associates of subsidiaries or other related parties. Related parties may be individuals
or corporate entities and are classified as entities with significant influence, subsidiaries, associates,
other related parties and key personnel (Notes 2 and 11).

The Group has several business relationships with related parties. Transactions with such parties are
made in the ordinary course of business and on substantially same terms, including interest and
collateral, as those prevailing at the time for comparable transactions with other parties. These
transactions also did not involve more than the normal risk of collectibility and did not present other
unfavorable conditions.

The Parent Company has a Related Party Transactions Committee (RPTC) and a Related Party
Transactions Management Committee (RPTMC), both of which are created to assist the BOD in
ensuring that transactions with related parties are reviewed to assess risks and are subjected to
appropriate restrictions to ensure that these are conducted at arm’s-length terms and that corporate or
business resources of the Parent Company are not misappropriated or misapplied. After appropriate
review, RPTMC (through RPTC) and RPTC disclose all information and endorses to the BOD with
recommendations, the proposed related party transactions. The members of the RPTC are appointed
annually by the BOD, composed of at least three (3) Board non-executive members, two (2) of whom
should be independent directors, including the Chairman. Currently, RPTC is composed of three (3)
independent directors (including the Committee’s Chairman); the head of Internal Audit Group (as

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Resource Person); and the Compliance Officer (as the Committee Secretary) and meets bi-monthly or
as the need arises. On the other hand, RPTMC members are appointed annually by the President,
composed of at least four (4) members. RPTC’s and RPTMC’s review of the proposed related party
transactions considers the following: (a) identity and relationship of the parties involved in the
transaction; (b) terms of the transaction and whether these are no less favorable than terms generally
available to an unrelated third party under the same circumstances; (c) business purpose, timing,
rationale and benefits of the transaction; (d) approximate monetary value of the transaction and the
approximate monetary value of the related party’s interest in the transaction; (e) valuation
methodology used and alternative approaches to valuation of the transaction; (f) information
concerning potential counterparties in the transaction; (g) description of provisions or limitations
imposed as a result of entering into the transaction; (h) whether the proposed transaction includes any
potential reputational risk issues that may arise as a result of or in connection with the transaction; (i)
impact to a director’s independence; (j) extent that such transaction or relationship would present an
improper conflict of interest; and (k) the availability of other sources of comparable products or
services. Further, no director or officer participates in any discussion of a related party transaction
for which he, she, or any member of his or her immediate family is a related party, including
transactions of subordinates except in order to provide material information on the related party
transaction to RPTC.

Major subsidiaries, which include FMIC, PSBank, MCC (until 2019 - see Note 11) and MBCL, have
their own respective RPTCs which assist their respective BODs in ensuring that transactions with
related parties are reviewed to assess risks and are subjected to appropriate restrictions to ensure that
these are conducted at arm’s-length terms and that their corporate or business resources are not
misappropriated or misapplied.

Details on significant related party transactions of the Group and the Parent Company follow
(transactions with subsidiaries have been eliminated in the consolidated financial statements):

Consolidated
Category Amount Terms and Conditions/Nature
2020
Entity with Significant Influence Over the Group
Outstanding Balance:
Deposit liabilities* =
P1,986 With annual fixed interest rates ranging from 0.00% to 0.30%
including time deposits with maturity terms from 30 to 39 days
(Note 16)
Bills payable* 107 Peso borrowings subject to annual fixed interest rates of 0.88%
with maturity term of 70 days (Note 17)
Amount/Volume:
Deposit liabilities (385) Generally similar to terms and conditions above
Bills payable (105) Generally similar to terms and conditions above
Interest expense 2 Interest expense on deposit liabilities and bills payable
(Notes 16 and 17)
Subsidiaries
Outstanding Balance:
Interbank loans receivable* 6,412 Foreign currency-denominated lending which earn annual fixed
interest rates ranging from 0.00% to 3.45% with maturity terms
from 17 to 212 days (Note 7)
Investment securities at
FVTPL 83 Treasury notes and private bonds purchased from FMIC and
PSBank
FVOCI 1,218 Treasury note purchased from PSBank
Receivables from customers* 4,971 Unsecured, with ECL of P =35.0 million;
With annual fixed interest rates ranging from 1.13% to 1.37%
and maturity terms from 1 day to 3 years (Note 9)
Accounts receivable 144 Non-interest bearing receivables on service fees, underwriting
fees, remittance, rental fees and common use service area fees
(Note 9)
Other receivables 3 Accrued rent receivable from PSBank and ORIX

(Forward)

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Consolidated
Category Amount Terms and Conditions/Nature
Derivative assets =
P751 Swaps bought with various terms (Note 8)
Deposit liabilities* 3,373 With annual fixed interest rates ranging from 0.00% to 0.30%
including time deposits with maturity terms of 40 days
(Note 16)
Bills payable* 37 Peso borrowings subject to annual fixed interest rates ranging
from 0.75% to 1.00% with maturity terms from 90 to 97 days
(Note 17)
Treasury stock 65 Parent Company’s shares held by FMIC’s mutual fund
subsidiary (Note 23)
Dividends declared 1,103 Dividend declared by PSBank (Note 11)
Amount/Volume:
Interbank loans receivable (466) Generally similar to terms and conditions above
Receivables from customers (11,108) Generally similar to terms and conditions above
Accounts receivable (50) Generally similar to terms and conditions above
Deposit liabilities (856) Generally similar to terms and conditions above
Bills payable (102) Generally similar to terms and conditions above
Interest income 172 Interest income on receivables from customers and interbank
loan receivables (Notes 7 and 9)
Service charges, fees and commissions 29 Income on transactional fees, including underwriting fees
Trading and securities gain – net 38 Net gain from securities transactions (Note 8)
Foreign exchange loss – net (31) Net loss from foreign exchange transactions
Leasing income 27 Income from leasing agreements with various lease terms
Miscellaneous income 231 Information technology and other fees
Interest expense 34 Interest expense on deposit liabilities, bills payable and bonds
payable (Notes 16, 17 and 19)
Contingent – derivatives 5,450 Swaps bought with various terms
Securities transactions
Purchases 69,454 Outright purchases of investment securities at FVTPL and
FVOCI
Sales 10,880 Outright sale of investment securities at FVTPL and FVOCI
Foreign currency
Buy 10,644 Outright purchases of foreign currency
Sell 3,833 Outright sale of foreign currency
Associates
Outstanding Balance:
Deposit liabilities* =
P2,923 With annual fixed interest rates ranging from 0.00% to 0.25%
including time deposits with maturity terms from 31 to 35 days
(Note 16)
Amount/Volume:
Receivables from customers (1,301) Generally similar to terms and conditions above
Accounts receivable (1) Generally similar to terms and conditions above
Deposit liabilities 1,508 Generally similar to terms and conditions above
Interest Income 31 Interest income on receivables from customers (Note 9)
Trading and securities gain - net 43 Net gain from securities transactions (Note 8)
Foreign exchange loss - net (2) Net loss from foreign exchange transactions
Leasing income 24 Income from leasing agreements with various lease terms
Interest expense 2 Interest expense on deposit liabilities (Note 16)
Securities transactions
Outright purchases 1,124 Outright purchases of FVTPL securities and FVOCI
investments
Outright sales 5,258 Outright sale of investment securities at FVTPL and FVOCI
Foreign currency
Buy 178 Outright purchases of foreign currency
Sell 1,929 Outright sale of foreign currency
Other Related Parties
Outstanding Balance:
Receivables from customers* =
P34,005 Secured - P=5.4 million, unsecured - P
=28.6 million, with ECL of
P
=220.0 million.
With annual fixed interest rates ranging from 2.50% to 5.00%
and maturity terms from 30 days to 5 years (Note 9)
Assets held under joint operations 219 Parcels of land and former branch sites of the Parent Company
contributed to joint operations (Note 14)
Deposit liabilities* 18,356 With annual fixed interest rates ranging from 0.00% to 1.00%
including time deposits with maturity terms from 6 days to 359
days (Note 16)
Bills payable* 77 Peso-denominated borrowings with annual fixed interest rates
ranging from 0.63% to 1.13% and maturity terms from 66 to
182 days
(Forward)

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Consolidated
Category Amount Terms and Conditions/Nature
Amount/Volume:
Receivables from customers =
P1,778 Generally similar to terms and conditions above
Accounts receivable (2) Generally similar to terms and conditions above
Deposit liabilities 4,466 Generally similar to terms and conditions above
Bills payable 77 Generally similar to terms and conditions above
Interest income 1,484 Interest income on receivables from customers (Note 9)
Foreign exchange gain - net  Net gain from foreign exchange transactions
Leasing income 15 Income from leasing agreements with various lease terms
Interest expense 12 Interest expense on deposit liabilities and bills payable
(Notes 16 and 17)
Contingent
Unused commercial LCs 35 LC transactions with various terms
Foreign currency
Buy 273 Outright purchases of foreign currency
Sell 95 Outright sale of foreign currency
Key Personnel
Outstanding Balance:
Receivables from customers =
P83 Secured - P
=57 million, unsecured - P=25.8 million, no
impairment.
With annual fixed interest rates ranging from 0.00% to 10.00%
and maturity terms from 1 year to 15 years (Note 9)
Deposit liabilities 314 With various terms and minimum annual interest rate of 0.00%
(Note 16)
Amount/Volume:
Receivables from customers (2) Generally similar to terms and conditions above
Deposit liabilities 147 Generally similar to terms and conditions above
Interest income 3 Interest income on receivables from customers (Note 9)
2019
Entity with Significant Influence Over the Group
Outstanding Balance:
Deposit liabilities* =2,371
P With annual fixed interest rates ranging from 0.00% to 3.00%
including time deposits with maturity terms from 10 to 30 days
(Note 16)
Bills payable* 212 Peso borrowings subject to annual fixed interest rates ranging
from 3.63% to 4.00% with maturity term of 60 days (Note 17)
Amount/Volume:
Deposit liabilities 1,891 Generally similar to terms and conditions above
Bills payable 8 Generally similar to terms and conditions above
Service charges, fees and commissions 129 Financial advisory fees
Interest expense 16 Interest expense on deposit liabilities and bills payable
(Notes 16 and 17)
Subsidiaries
Outstanding Balance:
Interbank loans receivable* 6,878 Foreign currency-denominated lending which earn annual fixed
interest rates ranging from 0.00% to 4.00% with maturity terms
from 7 to 366 days (Note 7)
Investment securities at
FVTPL 125 Treasury notes and private bonds purchased from FMIC
(Note 8)
Amortized cost 2,368 Treasury note purchased from FMIC (Note 8)
Receivables from customers* 16,079 Secured - P=14.1 million and unsecured - P=16.0 billion, with
ECL of P=1.7 million; with annual fixed interest rates ranging
from 2.94% to 4.25% and maturity terms from 6 days to 3 years
(Note 9)
Accounts receivable 194 Non-interest bearing receivables on service fees, underwriting
fees, remittance, rental fees and common use service area fees
(Note 9)
Derivative assets 726 Cross-currency swaps with various terms (Note 8)
Deposit liabilities* 4,229 With annual fixed interest rates ranging from 0.00% to 3.00%
including time deposits with maturity terms from 6 to 126 days
(Note 16)
Bills payable* 139 Peso borrowings subject to annual fixed interest rates ranging
from 3.00% to 5.88% with maturity terms from 90 to 365 days
(Note 17)

(Forward)

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Consolidated
Category Amount Terms and Conditions/Nature
Treasury stock =72
P Parent Company’s shares held by FMIC’s mutual fund
subsidiary (Note 23)
Dividends declared 1,073 Dividend declared by PSBank and MB Bahamas (Note 11)
Amount/Volume:
Interbank loans receivable 2,244 Generally similar to terms and conditions above
Receivables from customers 2,394 Generally similar to terms and conditions above
Accounts receivable (139) Generally similar to terms and conditions above
Deposit liabilities 954 Generally similar to terms and conditions above
Bills payable 12 Generally similar to terms and conditions above
Bonds payable (81) Generally similar to terms and conditions above
Interest income 826 Interest income on receivables from customers and interbank
loan receivables (Notes 7 and 9)
Service charges, fees and commissions 102 Income on transactional fees, including underwriting fees
Trading and securities gain - net 300 Net gain from securities transactions (Note 8)
Foreign exchange loss - net (123) Net loss from foreign exchange transactions
Leasing income 58 Income from leasing agreements with various lease terms
Miscellaneous income 344 Information technology and other fees
Interest expense 73 Interest expense on deposit liabilities, bills payable and bonds
payable (Notes 16, 17 and 19)
Contingent - derivatives 8,473 Cross-currency swaps with various terms
Securities transactions
Purchases 13,100 Outright purchases of investment securities at FVTPL, FVOCI
and at amortized cost
Sales 77,841 Outright sale of investment securities at FVTPL and FVOCI
Foreign currency
Buy 28,461 Outright purchases of foreign currency
Sell 18,638 Outright sale of foreign currency
Associates
Outstanding Balance:
Receivables from customers* =1,307
P Unsecured with ECL of P =0.1 million; with annual fixed interest
rates ranging from 5.00% to 6.85% and maturity terms from 94
to 360 days (Note 9)
Accounts receivable 1 Non-interest bearing receivable on rental fees (Note 9)
Deposit liabilities* 1,415 With annual fixed interest rates ranging from 0.00% to 3.63%
including time deposits with maturity terms from 31 to 35 days
(Note 16)
Dividends declared 169 Dividends declared by PALIC, SMFC and TSI
Amount/Volume:
Receivables from customers 604 Generally similar to terms and conditions above
Accounts receivable (1) Generally similar to terms and conditions above
Deposit liabilities 579 Generally similar to terms and conditions above
Interest Income 57 Interest income on receivables from customers (Note 9)
Trading and securities gain - net 5 Net gain from securities transactions (Note 8)
Foreign exchange loss - net (13) Net loss from foreign exchange transactions
Leasing income 17 Income from leasing agreements with various lease terms
Interest expense 2 Interest expense on deposit liabilities (Note 16)
Securities transactions
Outright sales 1,664 Outright sale of investment securities at FVTPL and FVOCI
Foreign currency
Buy 168 Outright purchases of foreign currency
Sell 374 Outright sale of foreign currency
Other Related Parties
Outstanding Balance:
Receivables from customers* =32,227
P Secured - P=6.6 billion and unsecured - =
P25.6 billion, with ECL
of P
=11.4 million; with annual fixed interest rates ranging from
3.88% to 5.20% and maturity terms from 28 days to 5 years
(Note 9)
Accounts receivable 2 Credit card receivables, current and non-revolving (Note 9)
Assets held under joint operations 219 Parcels of land and former branch sites of the Parent Company
contributed to joint operations (Note 14)
Deposit liabilities* 13,890 With annual fixed interest rates ranging from 0.00% to 3.50%
including time deposits with maturity terms from 1 day to 357
days (Note 16)

(Forward)

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Consolidated
Category Amount Terms and Conditions/Nature
Amount/Volume:
Receivables from customers =2,755
P Generally similar to terms and conditions above
Accounts receivable (1) Generally similar to terms and conditions above
Deposit liabilities 69 Generally similar to terms and conditions above
Bills payable (51) Generally similar to terms and conditions above
Interest income 1,025 Interest income on receivables from customers (Note 9)
Foreign exchange gain - net 2 Net gain from foreign exchange transactions
Leasing income 21 Income from leasing agreements with various lease terms
Interest expense 605 Interest expense on deposit liabilities and bills payable
(Notes 16 and 17)
Contingent
Unused commercial LCs 5 LC transactions with various terms
Securities transactions
Outright sales 572 Outright sale of investment securities at FVTPL and FVOCI
Foreign currency
Buy 308 Outright purchases of foreign currency
Sell 1,140 Outright sale of foreign currency
Key Personnel
Outstanding Balance:
Receivables from customers =85
P Secured - P
=62.5 million unsecured - P
=22.1 million, no
impairment; with annual fixed interest rates ranging from 0.00%
to 10.00% and maturity terms from 1 year to 15 years (Note 9)
Deposit liabilities 167 With various terms and minimum annual interest rate of 0.00%
(Note 16)
Amount/Volume:
Deposit liabilities 1 Generally similar to terms and conditions above
Interest income 3 Interest income on receivables from customers (Note 9)

Parent Company
Category Amount Terms and Conditions/Nature
2020
Entities with Significant Influence
Outstanding Balance:
Deposit liabilities* =
P1,986 With annual fixed interest rate ranging from 0.00% to 0.30%
including time deposits with maturity terms of 30 to 39 days
(Note 16)
Amount/Volume:
Deposit liabilities (385) Generally similar to terms and conditions above
Interest expense 1 Interest expense on deposit liabilities (Note 16)
Subsidiaries
Outstanding Balance:
Interbank loans receivable* =
P6,412 Foreign currency-denominated lending which earn annual fixed
interest rates ranging from 0.00% to 3.45% with maturity terms
from 17 to 212 days with minimal expected credit loss (Note 7)
Investment Securities at
FVTPL 83 Treasury notes and private bonds purchased from FMIC and
PSBank
FVOCI 1,218 Treasury note purchased from PSBank
Receivables from customers* 4,971 Unsecured, with ECL of P =35.0 million;
With annual fixed interest rates ranging from 1.13% to 1.37% and
maturity terms from 1 day to 3 years (Note 9)
Accounts receivable 120 Non-interest bearing receivables on service fees, underwriting
fees, remittance, rental fees and common use service area fees
(Note 9)
Other receivables 3 Accrued rent receivable from PSBank and Orix
Derivative assets 751 Swaps bought with various terms (Note 8)
Deposit liabilities* 3,373 With annual fixed interest rates ranging from 0.00% to 0.30%
including time deposits with maturity terms of 40 days (Note 16)
Treasury stocks 65 Parent Company’s shares held by FMIC’s mutual fund subsidiary
(Note 23)
Dividend declared 1,103 Dividend declared by PSBank (Note 11)
Amount/Volume:
Interbank loans receivable 734 Generally similar to terms and conditions above
Receivables from customers (11,108) Generally similar to terms and conditions above
Accounts receivable (16) Generally similar to terms and conditions above
Deposit liabilities (856) Generally similar to terms and conditions above

(Forward)

*SGVFSM005911*
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Parent Company
Category Amount Terms and Conditions/Nature
Interest income =
P159 Interest income on receivables from customers and interbank
loans receivables (Note 9)
Service charges, fees and commissions 3 Income from transactional fees
Trading and securities gain - net 28 Net gain from securities transactions (Note 8)
Foreign exchange loss - net (31) Net loss from foreign exchange transactions
Leasing income 5 Income from leasing agreements with various lease terms
Miscellaneous income 219 Information technology and other fees (Note 25)
Interest expense 22 Interest expense on deposit liabilities, bills payable and interbank
loans payable (Notes 16 and 17)
Contingent - derivatives 5,450 Swaps with various terms
Securities transactions
Purchases 65,038 Outright purchases of investment securities at FVTPL and
FVOCI
Sales 10,880 Outright sale of investment securities at FVTPL and FVOCI
Foreign currency
Buy 10,644 Outright purchases of foreign currency
Sell 3,833 Outright sale of foreign currency
Associates
Outstanding Balance:
Deposit liabilities* =
P2,052 With annual fixed interest rates ranging from 0.00% to 0.25%
including time deposits with maturity terms of 31 to 35 days
(Note 16)
Amount/Volume:
Receivables from customers (1,301) Generally similar to terms and conditions above
Deposit liabilities 661 Generally similar to terms and conditions above
Interest Income 31 Interest income on receivables from customers (Note 9)
Trading and securities gain – net 42 Net gain from securities transactions
Foreign exchange loss - net (2) Net loss from foreign exchange transactions
Leasing income 10 Income from leasing agreements with various lease terms
Securities transactions
Outright purchases 400 Outright purchases of investment securities at FVTPL and
FVOCI
Outright sales 2,290 Outright sale of investment securities at FVTPL and FVOCI
Foreign currency
Buy 178 Outright purchases of foreign currency
Sell 1,929 Outright sale of foreign currency
Other Related Parties
Outstanding Balance:
Receivables from customers* =
P34,004 Secured - P
=5.4 million, unsecured - P=28.6 million, with ECL of
P
=220.0 million.
With annual fixed interest rates ranging from 2.50% to 5.00% and
maturity terms from 30 days to 5 years (Note 9)
Assets held under joint operations 219 Parcels of land and former branch sites of the Parent Company
contributed to joint operations (Note 14)
Deposit liabilities* 18,054 With annual fixed interest rates ranging from 0.00% to 1.00%
including time deposits with maturity terms of 6 days to 359 days
(Note 16)
Amount/Volume:
Receivables from customers 1,777 Generally similar to terms and conditions above
Deposit liabilities 4,677 Generally similar to terms and conditions above
Interest income 1,484 Interest income on receivables from customers
Foreign exchange gain - net  Net gain from foreign exchange transactions
Leasing income 15 Income from leasing agreements with various lease terms
Interest expense 2 Interest expense on deposit liabilities (Note 16)
Contingent
Unused commercial LCs 35 LC transactions with various terms
Securities transactions
Sales  Outright sale of investment securities at FVTPL and FVOCI
Foreign currency
Buy 273 Outright purchases of foreign currency
Sell 95 Outright sale of foreign currency
Key Personnel
Outstanding Balance:
Receivables from customers =
P72 Secured - P
=55 million and unsecured - P
=17 million,
no impairment; with annual fixed interest rates ranging from
0.00% to 10.00% and maturity terms of 2 to 15 years
(Note 9)
(Forward)

*SGVFSM005911*
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Parent Company
Category Amount Terms and Conditions/Nature
Deposit liabilities =
P314 With various terms and annual interest rate of 0.00% (Note 16)
Amount/Volume:
Receivables from customers 2 Generally similar to terms and conditions above
Deposit liabilities 147 Generally similar to terms and conditions above
Interest income 2 Interest income on receivables from customers (Note 9)
2019
Entities with Significant Influence
Outstanding Balance:
Deposit liabilities* =2,371
P With annual fixed interest rate ranging from 0.00% to 3.00%
(including time deposits) and maturity terms of 10 to 30 days
(Note 16)
Amount/Volume:
Deposit liabilities 1,891 Generally similar to terms and conditions above
Interest expense 6 Interest expense on deposit liabilities (Note 16)
Subsidiaries
Outstanding Balance:
Interbank loans receivable* =
P5,678 Foreign currency-denominated lending which earn annual fixed
interest rates ranging from 0.00% to 3.17% and maturity terms of
7 to 366 days with minimal ECL (Note 7)
Investment Securities at
FVTPL 125 Treasury notes and private bonds purchased from FMIC (Note 8)
Amortized Cost 2,368 Treasury notes purchased from FMIC (Note 8)
Receivables from customers* 16,079 Secured - P
=14.1 million and unsecured – P =16.0 billion, with ECL
of =
P1.7 million; with annual fixed interest rates ranging from
2.94% to 4.25% and maturity terms of 6 days to 3 years
(Note 9)
Accounts receivable 136 Non-interest bearing receivables on service fees, underwriting
fees, remittance, rental fees and common use service area fees
(Note 9)
Derivative assets 726 Cross-currency swaps with various terms (Note 8)
Deposit liabilities* 4,229 With annual fixed interest rates ranging from 0.00% to 3.00%
(including time deposits) and maturity terms of 6 days to 126
days (Note 16)
Treasury stocks 72 Parent Company’s shares held by FMIC’s mutual fund subsidiary
(Note 23)
Dividend declared 1,073 Dividend declared by PSBank and MB Bahamas (Note 11)
Amount/Volume:
Interbank loans receivable 1,044 Generally similar to terms and conditions above
Receivables from customers 2,394 Generally similar to terms and conditions above
Accounts receivable (138) Generally similar to terms and conditions above
Deposit liabilities 1,136 Generally similar to terms and conditions above
Interest income 767 Interest income on receivables from customers and interbank
loans receivables (Note 9)
Service charges, fees and commissions 38 Income from transactional fees
Trading and securities gain - net 167 Net gain from securities transactions (Note 8)
Foreign exchange loss - net (123) Net loss from foreign exchange transactions
Leasing income 31 Income from leasing agreements with various lease terms
Miscellaneous income 305 Information technology and other fees (Note 25)
Interest expense 53 Interest expense on deposit liabilities, bills payable and interbank
loans payable (Notes 16 and 17)
Contingent - derivatives 8,473 Cross-currency swaps with various terms
Securities transactions
Purchases 13,100 Outright purchases of investment securities at FVTPL, FVOCI
and at amortized cost
Sales 77,541 Outright sale of investment securities at FVTPL and FVOCI
Foreign currency
Buy 28,461 Outright purchases of foreign currency
Sell 18,638 Outright sale of foreign currency

*SGVFSM005911*
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Parent Company
Category Amount Terms and Conditions/Nature
Associates
Outstanding Balance:
Receivables form customers* =1,307
P Unsecured with ECL; with annual fixed rates ranging from
5.00% to 6.85% and maturity terms of 94 to 360 days (Note 9)
Deposit liabilities* 1,391 With annual fixed interest rates ranging from 0.00% to 3.63%
(including time deposits) and maturity terms of 31 to 35 days
(Note 16)
Amount/Volume:
Receivables from customers 604 Generally similar to terms and conditions above
Deposit liabilities 570 Generally similar to terms and conditions above
Interest Income 57 Interest income on receivables from customers (Note 9)
Foreign exchange loss - net (13) Net loss from foreign exchange transactions
Leasing income 3 Income from leasing agreements with various lease terms
Interest expense 2 Interest expense on deposit liabilities (Note 16)
Outright sale of securities 268 Outright sale of investment securities at FVTPL and FVOCI
Foreign currency
Buy 168 Outright purchases of foreign currency
Sell 374 Outright sale of foreign currency
Other Related Parties
Outstanding Balance:
Receivables from customers* =32,227
P Secured - P
=6.6 billion and unsecured - P
=25.6 billion, with ECL of
=11.4 million; with annual fixed interest rates ranging from
P
3.88% to 5.20% and maturity terms of 28 days to 5 years (Note 9)
Assets held under joint operations 219 Parcels of land and former branch sites of the Parent Company
contributed to joint operations (Note 14)
Deposit liabilities* 13,377 With annual fixed interest rates ranging from 0.00% to 3.50%
(including time deposits) and maturity terms of 6 to 357 days
(Note 16)
Amount/Volume:
Receivables from customers 2,755 Generally similar to terms and conditions above
Deposit liabilities 194 Generally similar to terms and conditions above
Interest income 1,025 Interest income on receivables from customers
Foreign exchange gain - net 2 Net gain from foreign exchange transactions
Leasing income 21 Income from leasing agreements with various lease terms
Interest expense 591 Interest expense on deposit liabilities (Note 16)
Contingent
Unused commercial LCs 5 LC transactions with various terms
Securities transactions
Sales 200 Outright sale of investment securities at FVTPL and FVOCI
Foreign currency
Buy 308 Outright purchases of foreign currency
Sell 1,140 Outright sale of foreign currency
Key Personnel
Outstanding Balance:
Receivables from customers =70
P Secured - P
=58.8 million and unsecured - P
=10.8 million,
no impairment; with annual fixed interest rates ranging from
0.00% to 10.00% and maturity terms of 5 to 15 years
(Note 9)
Deposit liabilities 167 With various terms and with annual interest rates of 0.00%
(Note 16)
Amount/Volume:
Receivables from customers 2 Generally similar to terms and conditions above
Deposit liabilities 1 Generally similar to terms and conditions above
Interest income 2 Interest income on receivables from customers (Note 9)

As of December 31, 2020 and 2019, government bonds with total face value of = P60.0 million
(classified as ‘Investment securities at FVOCI’) and = P60.0 million (classified as ‘Investment
securities at amortized cost’), respectively, are pledged by PSBank to the Parent Company to secure
the latter’s payroll account with PSBank. Also, the Parent Company has assigned to PSBank
government securities with total face value of P =4.1 billion (classified as ‘Investment securities at
FVOCI’) and = P4.0 billion (classified as ‘Investment securities at amortized cost’), respectively to
secure PSBank’s deposits to the Parent Company.

*SGVFSM005911*
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Receivables from customers and deposit liabilities and their related statement of financial position
and statement of income accounts resulted from the lending and deposit-taking activities of the
Group and the Parent Company. Together with the sale of investment properties, borrowings,
contingent accounts including derivative transactions, outright purchases and sales of securities and
foreign currency buy and sell, leasing of office premises, securing of insurance coverage on loans
and property risk, and other management services rendered, these are conducted in the normal course
of business, at arm’s-length transactions and are generally settled in cash. The amounts and related
volumes and changes are presented in the summary above. Terms of receivables from customers,
deposit liabilities and borrowings are also disclosed in Notes 9, 16 and 17, respectively, while other
related party transactions above have been referred to their respective note disclosures.

The compensation of the key management personnel of the Group and the Parent Company follows:

Consolidated Parent Company

2020 2019 2018 2020 2019 2018
Short-term employee benefits P
=3,879 =3,446
P =3,222
P P
=3,120 =2,500
P =2,334
P
Post-employment benefits 132 140 197 73 56 80
P
=4,011 =3,586
P =3,419
P P
=3,193 =2,556
P =2,414
P

Director’s fees and bonuses of the Parent Company in 2020, 2019 and 2018 amounted to
=69.0 million, P
P =66.1 million and =
P57.8 million, respectively.

Transactions with Retirement Plans

Under PFRS, certain post-employment benefit plans are considered as related parties. The Parent
Company has business relationships with a number of related party retirement plans pursuant to
which it provides trust and management services to these plans. Certain trustees of the plans are
either officers or directors of the Parent Company and/or the subsidiaries. Income earned by the
Parent Company from such services amounted to = P99.6 million, =P98.3 million and =P69.1 million in
2020, 2019 and 2018, respectively. In 2020 and 2019, the Parent Company purchased securities
totaling =
P938.7 million and = P2.1 billion, respectively, from its related party retirement plans and also
sold securities totaling P
=3.4 billion and =
P4.5 billion, respectively, and recognized net trading gain of
=
P46.6 million in 2020 and net trading loss of = P11.3 million in 2019. Further, as of December 31,
2020 and 2019, the total outstanding deposit liabilities of the Group from these related party
retirement funds amounted to = P112.0 million and =P103.6 million, respectively. Interest expense on
deposit liabilities amounted to = P1.6 million, =
P23.7 million and =P17.7 million in 2020, 2019 and 2018,
respectively.

As of December 31, 2020 and 2019, the related party retirement plans also hold investments in the
equity shares of various companies within the Group amounting to = P240.3 million and
=278.8 million, respectively, with unrealized trading losses of =
P P73.4 million and =P20.1 million,
respectively, and investments in mutual funds and trust funds of various companies within the Group
amounting to = P733.1 million and =P672.4 million, respectively, with unrealized trading gains of
=
P3.4 million and =P19.5 million, respectively. Further as of December 31, 2020 and 2019,
investments in the corporate bonds of the Parent Company by the related party retirement plans
amounted to = P1.7 billion and =
P3.7 billion, respectively, with unrealized trading gains of
=71.9 million and =
P P109.1 million, respectively. In 2020, 2019 and 2018, realized trading gains
amounted to = P11.2 million, =
P92.0 million and = P48.6 million, respectively. The related party
retirement plans also recognized dividend income of = P2.8 million and =
P0.7 million in 2020 and 2019,
respectively.

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32. Earnings per Share

The basis of calculation for earnings per share attributable to equity holdings of the Parent Company
follows (amounts in millions except for earnings per share):

2020 2019 2018

a. Net income attributable to equity holders of the
Parent Company =13,831
P =28,055
P =22,008
P
b. Weighted average number of outstanding
common shares of the Parent Company 4,496 4,496 4,267
c. Basic/diluted earnings per share (a/b) =
P3.08 P6.24
= =5.16*
P
*Restated to show the effect of stock dividends issued in 2019.

33. Foreign Exchange

Closing rates as of December 31 and WAR for each of the year ended December 31 are as follows:

BAP
2020 2019 2018
Closing P
=48.02 =50.64
P =52.58
P
WAR 49.63 51.79 52.68

34. Other Matters

The Group has no significant matters to report in 2020 on the following:

a. Known trends, events or uncertainties that would have material impact on liquidity and on the
sales or revenues except that in order to anticipate the impact of COVID-19 pandemic, as
required by the expected credit loss model of PFRS 9, the Group increased provisions for credit
and impairment losses to =P40.8 billion for the year ended December 31, 2020.
b. Explanatory comments about the seasonality or cyclicality of operations.
c. Issuances, repurchases and repayments of debt and equity securities except for (a) maturity of
the P
=8.0 billion LTNCD of the Parent Company as discussed in Note 16 and = P28.0 billion fixed
rate bonds as discussed in Note 19; (b) issuances of the P=10.5 billion fixed rate bonds and
US$ 500 million senior unsecured notes of the Parent Company and the = P4.65 billion fixed rate
bonds of PSBank as discussed in Note 19; (c) redemption of the 2025 Peso Notes by the Parent
Company as discussed in Note 20, and (d) maturity of the P =1.7 billion and = P895.2 million
unsecured notes issued by ORIX Metro on April 29 and October 29, 2020, respectively as
discussed in Note 21.
d. Unusual items as to nature, size or incidents affecting assets, liabilities, equity, net income or
cash flows except for the disposal of investment securities at amortized cost and payment of
cash dividends by the Parent Company, as discussed in Notes 8 and 23, respectively; and
e. Effect of changes in the composition of the Group during the year, including business
combinations, acquisition or disposal of subsidiaries and long-term investments, restructurings,
and discontinuing operations (except as discussed in Notes 2 and 11).

*SGVFSM005911*
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35. Subsequent Events

a. On January 21, 2021, the BOD of PSBank declared 7.50% regular cash dividend for the fourth
quarter of 2020 amounting to = P320.14 million or =
P0.75 per share, payable on February 22, 2021
to all stockholders of record as of February 5, 2021.
b. On February 17, 2021, the BOD of the Parent Company declared a regular cash dividend of
=1.00 per share and a special cash dividend of =
P P3.00 per share payable on March 18, 2021 to all
stockholders of record as of March 5, 2021.

36. Approval of the Release of the Financial Statements

The accompanying financial statements of the Group and of the Parent Company were authorized for
issue by the BOD on February 17, 2021.

37. Report on the Supplementary Information Required Under BSP Circular No. 1074

Supplementary Information Under BSP Circular No. 1074

On January 8, 2020, the Monetary Board approved the amendments to the relevant provisions of the
Manual of Regulations for Banks and Manual of Regulations for Foreign Exchange Transactions.
Among the provisions is the requirement to include the following additional information to the
Audited Financial Statements.

a. Quantitative Indicators of Financial Performance

The following basic ratios measure the financial performance of the Group and the Parent
Company:
Consolidated Parent Company
2020 2019 2018 2020 2019 2018
Return on average equity (1) 4.36% 9.47% 9.08% 4.29% 9.16% 8.81%
Return on average assets (2) 0.56% 1.20% 1.02% 0.65% 1.42% 1.23%
Net interest margin on average
earning assets (3) 3.98% 3.84% 3.82% 3.76% 3.09% 2.98%
(1)
Net income attributable to equity holders of the Parent Company for the year divided by average total equity attributable to the Parent Company.
(2)
Net income attributable to equity holders of the Parent Company for the year divided by average total assets.
(3)
Net interest income for the year divided by average interest-earning assets.

b. Description of Capital Instrument Issued

The Group and the Parent Company consider its common stock and subordinated debts as capital
instruments eligible as Tier 1 and Tier 2 capitals.

c. Significant Credit Exposures

Significant credit exposures as to industry, net of unearned discount and capitalized interest, as
reported to the BSP, follows:
Consolidated Parent Company
2020 2019 2020 2019
Amount % Amount % Amount % Amount %
Real estate activities =
P224,269 17.49% P =229,299 15.48% =
P178,707 16.59% P =181,400 15.49%
Wholesale and retail trade, repair of motor
vehicles and motorcycles 170,916 13.33% 237,091 16.00% 161,437 14.99% 214,289 18.30%
Manufacturing 160,993 12.55% 203,449 13.73% 159,068 14.77% 201,007 17.17%
Financial and insurance activities 106,442 8.30% 118,660 8.01% 110,095 10.22% 132,065 11.28%
Electricity, gas, steam and air conditioning
supply 67,961 5.30% 67,840 4.58% 65,835 6.11% 65,547 5.60%
Information and communication 62,956 4.91% 69,793 4.71% 62,399 5.79% 69,226 5.91%
(Forward)

*SGVFSM005911*
 - 133 -

Consolidated Parent Company

2020 2019 2020 2019
Amount % Amount % Amount % Amount %
Activities of household employees =
P56,213 4.38% =58,938
P 3.98% =
P55,892 5.19% =58,468
P 4.99%
Construction 44,203 3.45% 60,033 4.05% 37,095 3.44% 49,977 4.27%
Transportation and storage 26,875 2.10% 28,038 1.89% 24,619 2.29% 25,528 2.18%
Accommodation and food service activities 26,053 2.03% 28,472 1.92% 25,740 2.39% 28,140 2.40%
Agriculture, forestry, and fishing 22,024 1.72% 27,103 1.83% 19,977 1.85% 24,079 2.05%
Other service activities 15,104 1.18% 9,355 0.63% 398 0.04% 597 0.05%
Administrative and support service activities 5,712 0.45% 6,821 0.46% 5,148 0.48% 6,119 0.52%
Human health and social work activities 3,907 0.30% 4,073 0.28% 3,717 0.35% 3,825 0.33%
Water supply, sewerage, waste management
and remediation activities 3,181 0.25% 8,074 0.55% 3,102 0.29% 7,785 0.66%
Mining and quarrying 1,935 0.15% 3,890 0.26% 1,369 0.13% 3,155 0.27%
Education 1,411 0.11% 1,662 0.11% 1,067 0.10% 1,254 0.11%
Professional scientific and technical activities 1,313 0.10% 2,116 0.14% 1,154 0.11% 1,956 0.17%
Arts, entertainment and recreation 348 0.03% 216 0.01% 259 0.02% 137 0.01%
Others 280,668 21.87% 316,523 21.38% 159,976 14.85% 96,456 8.24%
=
P1,282,484 100.00% P
=1,481,446 100.00% =
P1,077,054 100.00% P
=1,171,010 100.00%

The BSP considers that concentration of credit exists when total loan exposure to a particular
industry or economic sector exceeds 30.00% of total loan portfolio except for thrift banks.

d. Breakdown of Loans
The following table shows information relating to receivables from customers by collateral, gross
of unearned discounts and capitalized interest:

Consolidated Parent Company

2020 2019 2020 2019
Amount % Amount % Amount % Amount %
Secured by:
Other securities =
P239,372 18.45 =
P294,368 19.81 =
P239,372 22.00 =
P294,362 25.13
Chattel 101,659 7.84 159,754 7.55 66,693 6.13 26,950 2.30
Real estate 126,873 9.78 112,107 10.75 20,396 1.87 74,718 6.38
Deposit hold-out 38,098 2.94 31,054 2.09 37,472 3.44 30,004 2.56
Equity securities 26,329 2.03 27,705 1.87 5,558 0.51 11,996 1.02
Others 22,090 1.70 27,366 1.84 2,803 0.26 5,114 0.44
554,421 42.74 652,354 43.91 372,294 34.21 443,144 37.83
Unsecured 742,880 57.26 833,282 56.09 716,024 65.79 728,142 62.17
=
P1,297,301 100.00 =
P1,485,636 100.00 =
P1,088,318 100.00 =
P1,171,286 100.00

Non-performing loans (NPLs) included in the total loan portfolio of the Group and the Parent
Company, as reported to the BSP, are presented below:

Consolidated Parent Company

2020 2019 2020 2019
Gross NPLs P
=30,919 =19,277
P P
=17,790 =10,209
P
Less allowance for credit losses 17,593 11,019 14,194 8,236
Net carrying amount P
=13,326 =8,258
P P
=3,596 =1,973
P

Under banking regulations, loan accounts shall be considered non-performing, even without any
missed contractual payments, when they are considered impaired under existing accounting
standards, classified as doubtful or loss, in litigation, and/or there is evidence that full repayment
of principal or interest is unlikely without foreclosure of collateral, if any. All other loans, even if
not considered impaired, shall be considered non-performing if any principal and/or interest are
unpaid for more than ninety (90) days from contractual due date, or accrued interests for more than
ninety (90) days have been capitalized, refinanced, or delayed by agreement. Restructured loans
shall be considered non-performing. However, if prior to restructuring, the loans were categorized
as performing, such classification shall be retained. Moreover, NPLs shall remain classified as
such until (a) there is sufficient evidence to support that full collection of principal and interests is
probable and payments of interest and/or principal are received for at least six (6) months; or (b)

*SGVFSM005911*
 - 134 -

written-off. Microfinance and other small loans with similar credit characteristics shall be
considered non-performing after contractual due date or after they have become past due.

e. Information on Related Party Loans

In the ordinary course of business, the Group has loan transactions with investees and with
certain directors, officers, stockholders and related interests (DOSRI) based on BSP Circular
No. 423 dated March 15, 2004, as amended. Existing banking regulations limit the amount of
individual loans to DOSRI, 70.00% of which must be secured, to the total of their respective
deposits and book value of their respective investments in the lending company within the
Group. In the aggregate, loans to DOSRI generally should not exceed the respective total equity
or 15.00% of the respective total loan portfolio, whichever is lower, of the Parent Company,
MCC (until 2019), PSBank, FMIC, and ORIX Metro.

The following table shows information on related party loans as reported to the BSP:
2020 2019
Related Party Related Party
DOSRI Loans Loans DOSRI Loans Loans
Consolidated
Total outstanding loans P
=8,732 P
=47,636 =13,837
P =69,244
P
Percent of DOSRI/ Related Party Loans to total
loan portfolio 0.64% 3.50% 0.89% 4.46%
Percent of unsecured DOSRI/Related Party
Loans to total DOSRI/Related Party Loans 17.42% 99.10% 22.10% 83.93%
Percent of past due DOSRI/Related Party Loans
to total DOSRI/Related Party Loans 0.01% 0.00% 0.00% 0.00%
Percent of non-performing DOSRI/Related Party
Loans to total DOSRI/Related Party Loans 0.01% 0.00% 0.00% 0.00%

Parent Company
Total outstanding loans P
=8,497 P
=47,521 =13,571
P =67,944
P
Percent of DOSRI/ Related Party Loans to total
loan portfolio 0.75% 4.19% 1.11% 5.54%
Percent of unsecured DOSRI/Related Party
Loans to total DOSRI/Related Party Loans 15.33% 99.10% 20.73% 83.62%
Percent of past due DOSRI/Related Party Loans
to total DOSRI/Related Party Loans 0.00% 0.00% 0.00% 0.00%
Percent of non-performing DOSRI/Related Party
Loans to total DOSRI/Related Party Loans 0.00% 0.00% 0.00% 0.00%

BSP Circular Nos. 560 and 654 provide the rules and regulations that govern loans, other credit
accommodations and guarantees granted to subsidiaries and affiliates of banks and quasi-banks
which require that the total outstanding loans, other credit accommodations and guarantees to
each of the bank’s/quasi-bank’s subsidiaries and affiliates shall not exceed 10.00% while a
separate individual limit of 25.00% for those engaged in energy and power generation, of the net
worth of the lending bank/quasi-bank, provided that the unsecured portion of which shall not
exceed 5.00% or 12.50%, respectively, of such net worth. Further, the total outstanding loans,
credit accommodations and guarantees to all subsidiaries and affiliates shall not exceed 20.00%
of the net worth of the lending bank/quasi-bank; and the subsidiaries and affiliates of the lending
bank/quasi-bank are not related interest of any director, officer and/or stockholder of the lending
institution, except where such director, officer or stockholder sits in the BOD or is appointed
officer of such corporation as representative of the bank/quasi-bank as reported to the BSP. As
of December 31, 2020 and 2019, the total outstanding loans, other credit accommodations and
guarantees to each of the Parent Company’s subsidiaries and affiliates did not exceed 10.00% of
the Parent Company’s net worth, as reported to the BSP, and the unsecured portion did not
exceed 5.00% of such net worth wherein the total outstanding loans, other credit
accommodations and guarantees to all such subsidiaries and affiliates represent 13.18% and

*SGVFSM005911*
 - 135 -

16.59%, respectively, of the Parent Company’s net worth. The Parent Company has no
outstanding loans, other credit accommodations and guarantees to subsidiaries and affiliates
engaged in energy and power generation.

Total interest income on DOSRI loans in 2020, 2019 and 2018 amounted to = P367.8 million,
=485.8 million and =
P P276.5 million, respectively, for the Group and P
=366.0 million,
=468.7 million and =
P P262.8 million, respectively, for the Parent Company.

f. Contingencies and Commitments Arising from Off-balance Sheet Items

The following is a summary of contingencies and commitments at their peso-equivalent
contractual amounts arising from off-balance sheet items:

Consolidated Parent Company

2020 2019 2020 2019
Trust Banking Group accounts =
P567,841 =
P491,659 =
P558,273 =
P484,586
Credit card lines 205,815 209,766 205,815 –
Unused commercial letters of credit 42,283 44,036 40,930 41,342
Undrawn commitments - facilities to lend 17,413 21,980 17,393 21,980
Bank guaranty with indemnity agreement 8,591 9,904 8,591 9,904
Credit line certificate with bank commission 4,262 5,984 4,262 5,984
Outstanding guarantees 3,826 139 3,826 139
Outstanding shipside bonds/airway bills 2,594 1,931 2,594 1,931
Inward bills for collection 1,909 991 1,908 991
Late deposits/payments received 1,756 1,539 1,746 1,530
Confirmed export letters of credits 964 935 39 44
Outward bills for collection 821 850 819 849
Others 11,488 12,933 862 835
=
P869,563 =802,647
P =
P847,058 =570,115
P

38. Report on the Supplementary Information Required Under Revenue Regulations (RR)
No. 15-2010

Supplementary Information Under RR No. 15-2010

On November 25, 2010, the BIR issued RR No. 15-2010 to amend certain provisions of
RR No. 21-2002 which provides that starting 2010, the notes to financial statements shall include
information on taxes, duties and license fees paid or accrued during the taxable year.

The Parent Company reported the following types of taxes for the year ended December 31, 2020
included under ‘Taxes and licenses’ account in the statement of income:

GRT =5,108
P
DST 2,076
Local taxes 220
Real estate tax 140
Others 334
=7,878
P

Details of the total withholding taxes remittances for the taxable year December 31, 2020 follow:

Final withholding taxes =2,853

P
Taxes withheld on compensation 2,541
Expanded withholding taxes 755
=6,149
P

*SGVFSM005911*
 SyCip Gorres Velayo & Co. Tel: (632) 8891 0307 BOA/PRC Reg. No. 0001,
6760 Ayala Avenue Fax: (632) 8819 0872 October 4, 2018, valid until August 24, 2021
1226 Makati City ey.com/ph SEC Accreditation No. 0012-FR-5 (Group A),
Philippines November 6, 2018, valid until November 5, 2021

INDEPENDENT AUDITOR’S REPORT ON

COMPONENTS OF FINANCIAL SOUNDNESS INDICATORS

The Board of Directors and Stockholders

Metropolitan Bank & Trust Company
Metrobank Plaza, Sen. Gil Puyat Avenue
Urdaneta Village, Makati City
Metro Manila, Philippines

We have audited in accordance with Philippine Standards on Auditing, the consolidated financial
statements of Metropolitan Bank & Trust Company and Subsidiaries (the Group) as at
December 31, 2020 and 2019 and for each of the three years in the period ended December 31, 2020,
and have issued our report thereon dated February 17, 2021. Our audits were made for the purpose of
forming an opinion on the basic financial statements taken as a whole. The Supplementary Schedule
on Financial Soundness Indicators, including their definitions, formulas, calculation, and their
appropriateness or usefulness to the intended users, are the responsibility of the Group’s management.
These financial soundness indicators are not measures of operating performance defined by Philippine
Financial Reporting Standards (PFRS) and may not be comparable to similarly titled measures
presented by other companies. This schedule is presented for the purpose of complying with the
Revised Securities Regulation Code Rule 68 issued by the Securities and Exchange Commission, and
is not a required part of the basic financial statements prepared in accordance with PFRS. The
components of these financial soundness indicators have been traced to the Group’s financial
statements as at December 31, 2020 and 2019 and for each of the three years in the period ended
December 31, 2020 and no material exceptions were noted.

SYCIP GORRES VELAYO & CO.

Josephine Adrienne A. Abarca

Partner
CPA Certificate No. 92126
SEC Accreditation No. 0466-AR-4 (Group A),
November 13, 2018, valid until November 12, 2021
Tax Identification No. 163-257-145
BIR Accreditation No. 08-001998-61-2018,
February 26, 2018, valid until February 25, 2021
PTR No. 8534208, January 4, 2021, Makati City

February 17, 2021

*SGVFSM005911*
A member firm of Ernst & Young Global Limited
 EXHIBIT 5

METROPOLITAN BANK & TRUST COMPANY AND SUBSIDIARIES

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS
AND SUPPLEMENTARY SCHEDULES
DECEMBER 31, 2020

Schedules Required under Annex 68-E of the Securities Regulation Code Rule 68

Schedule Description Page No.

A Financial Assets 1
Financial Assets at Fair Value Through Profit of Loss
Financial Assets at Fair Value Through Other Comprehensive Income
Financial Assets at Amortized Cost-Unquoted Debt Securities

B Amounts Receivable from Directors, Officers, Employees, Related 2

Parties, and Principal Stockholders (Other than Related Parties)

C Amounts Receivable from Related Parties which are Eliminated during 3

the Consolidation of Financial Statements

D Long-Term Debt 4-8

E Indebtedness to Related Parties (Long-Term Loans from Related 9

Companies)

F Guarantees of Securities of Other Issuers 10

G Capital Stock 11

Other Required Schedules/Information

Reconciliation of Retained Earnings Available for Dividend Declaration 12

Map Showing the Relationship Between and Among Related Entities 13-16

Financial Indicators 17
 Metropolitan Bank & Trust Company and Subsidiaries
Schedule A - Financial Assets
December 31, 2020

Number of shares or Valued based on

Amount shown in the Income received and
principal amount of market quotation at
Name of issuing entity and association of each issue balance sheet * accrued
bonds and notes end of reporting period
(in ₱ million) (in ₱ million)
(in million) (in ₱ million)

FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS (FVTPL)

Held-for-Trading (HFT) Securities
Debt Securities
Philippine Government Bonds (including its agencies) 38,439 39,990 39,990
Other Government Bonds 12,538 12,717 12,717
Private 6,336 6,540 6,540
59,247 59,247 1,958

Equity Securities 149 6,458 6,458 93

Derivative Assets 11,846 11,846 -
TOTAL FINANCIAL ASSETS AT FVTPL 77,551 77,551 2,051

FINANCIAL ASSETS AT FAIR VALUE THROUGH OTHER COMPREHENSIVE INCOME (FVOCI)

Debt Securities
Philippine Government Bonds (including its agencies) 473,234 484,740 484,740
Other Government Bonds 45,129 46,062 46,062
Private 36,658 36,943 36,943
567,745 567,745 12,285

Equity Securities 238 1,700 1,700 46

TOTAL FINANCIAL ASSETS AT FVOCI 569,445 569,445 12,331

FINANCIAL ASSETS AT AMORTIZED COST

Debt Securities
Philippine Government Bonds (including its agencies) 13,188 15,868 17,252
Other Government Bonds 3,830 3,803 4,066
Private 3,587 3,622 3,698
TOTAL FINANCIAL ASSETS AT AMORTIZED COST 23,293 25,016 4,808

UNQUOTED DEBT SECURITIES 963 65 70 117

Page 1
 METROPOLITAN BANK & TRUST COMPANY AND SUBSIDIARIES
Schedule B - Amounts Receivable from Directors, Officers, Employees, Related Parties
and Principal Stockholders (Other Than Related Parties)
December 31, 2020

Balance at
Beginning of Amounts Written Balance at End of
Name and Designation of Debtor Period Additions Amounts Collected Off Current Not Current Period

NOT APPLICABLE

Note: Transactions to these parties are made in the ordinary course of business.

Page 2
 METROPOLITAN BANK & TRUST COMPANY AND SUBSIDIARIES
Schedule C - Amounts Receivable from Related Parties which are Eliminated During the Consolidation of Financial Statements
December 31, 2020
(In P Millions)

Deductions
Balance at Beginning Amounts Amounts Written- Balance at End of
Name and Designation of Debtor of Year Additions Impact of Merger Current Not Current
Collected Off Year

First Metro Investment Corporation 1,051 2,228 3,267 - - 12 - 12

Metrobank Card Corporation 8,534 - - - 8,534* - - -
Metropolitan Bank (China) Ltd. 5,677 15,974 15,239 - - 6,412 - 6,412
ORIX Metro Leasing and Finance Corporation 7,711 3,799 6,539 - - 4,971 - 4,971
Philippine Savings Bank 53 1,149 1,132 - - 70 - 70
Remittance Centers:
Metro Remittance Center, Inc. 32 1,031 1,025 - - 38 - 38
Metro Remittance (Singapore) Pte. Ltd. 44 20 64 - - - - -
Metro Remittance (UK) Limited 29 143 158 - - 14 - 14
Metro Remittance (Hong Kong) Limited 4 2 6 - - - -
Metro Remittance (Japan) Co. Limited - 37 37 - - - - -
Others 16 175 178 - - 13 - 13

Total 23,151 24,558 27,645 - 8,534 11,530 - 11,530

* Effective January 3, 2020, MCC was merged into the Parent Company.

Page 3
 METROPOLITAN BANK & TRUST COMPANY AND SUBSIDIARIES
Schedule D - Long Term Debt
December 31, 2020

Amount shown under

Amount caption "Current portion of Amount shown under
Title of Issue and type of authorized by long-term debt" in related caption "Long-Term Debt" in Interest Maturity
obligation indenture balance sheet related balance sheet Rates Dates

Subordinated Debt

2023 Peso Notes issued December 20, 2013 1,170 1,167 6.210% December 20, 2023

Total Subordinated Debt 1,170 1,167

Bills Payable

Local Banks 2,401 2,368 0.251% September 30, 2022

Local Banks 2,000 1,990 4.010% December 19, 2022
Local Banks 1,500 1,492 4.010% March 10, 2023
Local Banks 1,500 1,491 3.760% April 21, 2023
Local Banks 100 99 4.600% June 4, 2023
Local Banks 100 99 3.815% November 24, 2023
Local Banks 900 893 4.000% December 21, 2023

8,501 8,432

Foreign Banks 3,842 3,829 0.7901% October 31, 2022

3,842 3,829

Deposit Substitutes 3 2 4.900% January 10, 2022

Deposit Substitutes 1 1 4.000% January 11, 2022
Deposit Substitutes 4 4 3.875% January 19, 2022
Deposit Substitutes 3 3 3.875% January 24, 2022
Deposit Substitutes 5 5 4.000% January 24, 2022
Deposit Substitutes 6 6 3.875% January 26, 2022
Deposit Substitutes 3 3 3.875% February 2, 2022
Deposit Substitutes 1 1 4.000% February 7, 2022
Deposit Substitutes 4 4 4.900% February 14, 2022
Deposit Substitutes 4 4 5.375% February 21, 2022
Deposit Substitutes 5 5 3.750% February 22, 2022
Deposit Substitutes 10 10 3.875% February 24, 2022
Deposit Substitutes 6 5 3.750% February 28, 2022
Deposit Substitutes 10 10 4.250% February 28, 2022
Deposit Substitutes 7 7 6.000% February 28, 2022
Deposit Substitutes 2 2 3.875% March 7, 2022
Deposit Substitutes 5 5 3.188% March 14, 2022
Deposit Substitutes 2 2 3.750% March 15, 2022

Page 4
 METROPOLITAN BANK & TRUST COMPANY AND SUBSIDIARIES
Schedule D - Long Term Debt
December 31, 2020

Amount shown under

Amount caption "Current portion of Amount shown under
Title of Issue and type of authorized by long-term debt" in related caption "Long-Term Debt" in Interest Maturity
obligation indenture balance sheet related balance sheet Rates Dates
Deposit Substitutes 1 1 4.000% March 21, 2022
Deposit Substitutes 2 2 3.750% March 28, 2022
Deposit Substitutes 5 5 3.188% April 4, 2022
Deposit Substitutes 2 2 3.750% May 16, 2022
Deposit Substitutes 1 1 4.000% May 31, 2022
Deposit Substitutes 15 15 4.125% June 6, 2022
Deposit Substitutes 1 1 4.000% June 8, 2022
Deposit Substitutes 5 5 4.125% June 20, 2022
Deposit Substitutes 8 8 4.250% June 20, 2022
Deposit Substitutes 0 0 4.875% June 20, 2022
Deposit Substitutes 5 5 4.250% June 22, 2022
Deposit Substitutes 1 1 4.125% July 4, 2022
Deposit Substitutes 4 4 5.201% September 19, 2022
Deposit Substitutes 18 18 2.000% October 19, 2022
Deposit Substitutes 5 5 5.125% November 3, 2022
Deposit Substitutes 1 1 5.125% November 7, 2022
Deposit Substitutes 1 1 5.650% November 8, 2022
Deposit Substitutes 4 4 5.125% November 14, 2022
Deposit Substitutes 1 1 5.200% November 14, 2022
Deposit Substitutes 16 16 2.800% November 16, 2022
Deposit Substitutes 6 6 3.000% November 16, 2022
Deposit Substitutes 4 3 2.800% November 17, 2022
Deposit Substitutes 2 2 2.800% November 18, 2022
Deposit Substitutes 8 8 2.800% November 21, 2022
Deposit Substitutes 6 6 3.000% November 21, 2022
Deposit Substitutes 17 16 2.800% November 23, 2022
Deposit Substitutes 8 7 2.750% November 24, 2022
Deposit Substitutes 20 20 2.750% November 25, 2022
Deposit Substitutes 18 18 2.750% December 1, 2022
Deposit Substitutes 15 15 5.125% December 1, 2022
Deposit Substitutes 11 11 2.750% December 2, 2022
Deposit Substitutes 18 18 2.750% December 5, 2022
Deposit Substitutes 6 6 3.000% December 5, 2022
Deposit Substitutes 17 17 2.750% December 7, 2022
Deposit Substitutes 6 6 2.750% December 9, 2022
Deposit Substitutes 10 10 2.875% December 12, 2022
Deposit Substitutes 52 52 2.750% December 14, 2022
Deposit Substitutes 3 3 2.750% December 15, 2022
Deposit Substitutes 1 1 2.750% December 16, 2022
Deposit Substitutes 16 16 2.750% December 19, 2022
Deposit Substitutes 12 12 3.000% December 19, 2022
Deposit Substitutes 1 1 4.625% December 19, 2022

Page 5
 METROPOLITAN BANK & TRUST COMPANY AND SUBSIDIARIES
Schedule D - Long Term Debt
December 31, 2020

Amount shown under

Amount caption "Current portion of Amount shown under
Title of Issue and type of authorized by long-term debt" in related caption "Long-Term Debt" in Interest Maturity
obligation indenture balance sheet related balance sheet Rates Dates
Deposit Substitutes 6 6 2.750% December 21, 2022
Deposit Substitutes 1 1 2.750% December 22, 2022
Deposit Substitutes 3 3 2.750% December 28, 2022
Deposit Substitutes 2 2 4.500% January 3, 2023
Deposit Substitutes 6 6 3.000% January 9, 2023
Deposit Substitutes 3 3 4.500% January 9, 2023
Deposit Substitutes 6 6 3.000% January 16, 2023
Deposit Substitutes 2 2 5.125% January 16, 2023
Deposit Substitutes 6 6 3.000% January 23, 2023
Deposit Substitutes 25 25 5.250% January 24, 2023
Deposit Substitutes 5 5 4.625% January 25, 2023
Deposit Substitutes 23 23 5.250% January 25, 2023
Deposit Substitutes 1 1 5.250% January 26, 2023
Deposit Substitutes 9 9 5.250% January 30, 2023
Deposit Substitutes 1 1 4.625% January 31, 2023
Deposit Substitutes 1 1 4.625% February 6, 2023
Deposit Substitutes 3 3 5.250% February 6, 2023
Deposit Substitutes 2 2 4.625% February 7, 2023
Deposit Substitutes 5 5 5.125% February 13, 2023
Deposit Substitutes 2 2 4.625% February 27, 2023
Deposit Substitutes 25 25 5.125% March 2, 2023
Deposit Substitutes 81 81 5.000% March 15, 2023
Deposit Substitutes 1 1 5.125% March 15, 2023
Deposit Substitutes 4 4 5.125% March 16, 2023
Deposit Substitutes 2 2 5.125% March 28, 2023
Deposit Substitutes 1 1 4.625% April 3, 2023
Deposit Substitutes 1 1 5.000% April 5, 2023
Deposit Substitutes 1 1 5.000% April 13, 2023
Deposit Substitutes 7 7 5.000% April 27, 2023
Deposit Substitutes 4 4 5.000% May 4, 2023
Deposit Substitutes 4 4 5.000% May 17, 2023
Deposit Substitutes 2 2 5.000% May 29, 2023
Deposit Substitutes 2 2 5.000% June 1, 2023
Deposit Substitutes 3 3 5.000% June 5, 2023
Deposit Substitutes 1 1 5.000% June 14, 2023
Deposit Substitutes 1 1 5.000% June 15, 2023
Deposit Substitutes 12 12 5.000% June 19, 2023
Deposit Substitutes 6 6 5.000% June 21, 2023
Deposit Substitutes 6 6 5.125% June 26, 2023
Deposit Substitutes 5 5 5.250% July 17, 2023
Deposit Substitutes 2 2 5.000% July 20, 2023
Deposit Substitutes 2 2 5.000% July 24, 2023

Page 6
 METROPOLITAN BANK & TRUST COMPANY AND SUBSIDIARIES
Schedule D - Long Term Debt
December 31, 2020

Amount shown under

Amount caption "Current portion of Amount shown under
Title of Issue and type of authorized by long-term debt" in related caption "Long-Term Debt" in Interest Maturity
obligation indenture balance sheet related balance sheet Rates Dates
Deposit Substitutes 6 6 5.000% July 27, 2023
Deposit Substitutes 5 5 6.250% July 31, 2023
Deposit Substitutes 2 2 6.500% July 31, 2023
Deposit Substitutes 1 1 6.250% August 1, 2023
Deposit Substitutes 5 5 5.000% August 3, 2023
Deposit Substitutes 1 1 5.000% August 9, 2023
Deposit Substitutes 4 4 5.000% August 10, 2023
Deposit Substitutes 1 1 5.300% August 10, 2023
Deposit Substitutes 50 50 6.500% August 10, 2023
Deposit Substitutes 5 5 4.125% August 24, 2023
Deposit Substitutes 1 1 4.125% August 28, 2023
Deposit Substitutes 1 1 5.300% August 29, 2023
Deposit Substitutes 1 1 6.250% August 29, 2023
Deposit Substitutes 1 1 6.250% August 30, 2023
Deposit Substitutes 3 3 4.125% September 20, 2023
Deposit Substitutes 1 1 4.125% September 26, 2023
Deposit Substitutes 2 4 4.375% September 26, 2023
Deposit Substitutes 1 1 6.750% September 26, 2023
Deposit Substitutes 2 2 4.625% October 4, 2023
Deposit Substitutes 2 2 6.750% October 5, 2023
Deposit Substitutes 1 1 2.300% October 9, 2023
Deposit Substitutes 4 4 4.375% October 11, 2023
Deposit Substitutes 4 4 4.375% October 16, 2023
Deposit Substitutes 1 1 6.750% October 23, 2023
Deposit Substitutes 3 3 6.875% October 25, 2023
Deposit Substitutes 2 2 6.875% November 7, 2023
Deposit Substitutes 2 2 4.125% November 21, 2023
Deposit Substitutes 1 1 4.125% November 23, 2023
Deposit Substitutes 7 7 4.125% November 27, 2023
Deposit Substitutes 1 0 4.000% December 18, 2023
Deposit Substitutes 3 3 4.125% February 8, 2024
Deposit Substitutes 1 1 4.125% February 13, 2024
Deposit Substitutes 1 1 4.125% March 6, 2024
Deposit Substitutes 1 1 4.250% May 9, 2024
Deposit Substitutes 5 5 4.750% March 5, 2025
Deposit Substitutes 35 35 6.200% December 18, 2025

884 880
Total Bills Payable 13,227 13,143

Page 7
 METROPOLITAN BANK & TRUST COMPANY AND SUBSIDIARIES
Schedule D - Long Term Debt
December 31, 2020

Amount shown under

Amount caption "Current portion of Amount shown under
Title of Issue and type of authorized by long-term debt" in related caption "Long-Term Debt" in Interest Maturity
obligation indenture balance sheet related balance sheet Rates Dates
Other Liabilities
Bonds Payable - Fixed Rate Bonds 17,500 17,433 6.300% April 11, 2022
Bonds Payable - Fixed Rate Bonds 4,650 4,619 4.500% February 4, 2023
Bonds Payable - Fixed Rate Bonds 13,750 13,671 4.500% October 24, 2023
Bonds Payable - Fixed Rate Bonds 24,012 23,580 2.125% January 15, 2026

59,912 59,303
74,309 73,613

Page 8
 METROPOLITAN BANK & TRUST COMPANY AND SUBSIDIARIES
Schedule E - Indebtedness to Related Parties (Long-Term Loans from Related Companies)
December 31, 2020

Name of Related Party Balance at Beginning of Period Balance at End of Period

NOT APPLICABLE

Page 9
 METROPOLITAN BANK & TRUST COMPANY AND SUBSIDIARIES
Schedule F - Guarantees of Securities of Other Issuers
December 31, 2020

Name of Issuing Entity of Securities Title of Issue of Each Total Amount Amount Owned by Person
Guaranteed by the Company for which this Class of Securities Guaranteed and for which this Statement is
Statement is Filed Guaranteed Outstanding Filed Nature of Guarantee

NOT APPLICABLE

Page 10
 METROPOLITAN BANK & TRUST COMPANY AND SUBSIDIARIES
Schedule G - Capital Stock
December 31, 2020

Number of shares
issued and
outstanding as Number of shares
shown under related reserved for options, Number of shares Directors,
Number of shares balance sheet warrants, conversion held by related officers and
Title of Issue authorized caption and other rights parties employees Others

Authorized
Preferred stock - P20 par value 1,000,000,000
Common stock - P20 par value 6,000,000,000

Issued and outstanding

Common stock - P20 par value 4,497,415,555 2,296,081,688 34,924,801 2,166,409,066

Page 11
 METROPOLITAN BANK & TRUST COMPANY
SURPLUS AVAILABLE FOR DIVIDENDS *
AS OF DECEMBER 31, 2020
(In P Millions)

UNAPPROPRIATED SURPLUS, BEGINNING P 144,154

Adjustments:
Less: Non-actual/unrealized income net of tax:
Accumulated share in net income of subsidiaries, associates
and joint venture - net of dividends, restated 29,904
Fair value adjustments (mark-to-market gains) 1,936
Recognized deferred tax asset (DTA) 7,878
Other unrealized gains or adjustments to retained earnings
Unrealized gains on foreclosure of investment properties -
net of accumulated depreciation 310
40,028

UNAPPROPRIATED SURPLUS AS ADJUSTED TO AVAILABLE FOR

DIVIDEND DISTRIBUTION AT BEGINNING OF YEAR 104,126

Add: Net income actually earned/realized during the year:

Net income during the year closed to Surplus 13,831

Less: Non-actual/unrealized income net of tax:

Fair value adjustment (mark-to-market gains) 1,006
Movement on DTA 3,413
Unrealized gains on foreclosure of investment properties -
net of accumulated depreciation 32
Equity in net income of subsidiaries, associates and a joint venture-net of
dividends 571
5,022

Net income actually earned during the year 8,809

Add/(Less)
Dividend declarations during the year (4,497)
Appropriations of Retained Earnings during the year (162)
(4,659)

UNAPPROPRIATED SURPLUS AVAILABLE FOR DIVIDENDS, END P 108,276

* The computation of surplus available for dividend declaration in accordance with SEC
Memorandum Circular No. 11 issued in December 2008 differs to a certain extent from
the computation following Bangko Sentral ng Pilipinas guidelines.

Page 12
Metropolitan Bank & Trust Company
Subsidiaries and Associates
As of December 31, 2020

Metropolitan Bank & Trust Company

(Metrobank)

SUBSIDIARIES ASSOCIATES

First Metro Investment SMBC Metro

Corporation (FMIC) Investment
and subsidiaries and Corporation **
Metro Remittance (Hong Northpine Land,
associates Inc.
Kong) Limited

(Refer to
separate sheet Metro Remittance
for FMIC's Taal Land, Inc.
organizational (Singapore) Pte. Ltd.
structure)

Metro Remittance (USA),

Philippine Savings Bank Inc.
(PSBank)
and a joint venture
MB Remittance Center
(Hawaii), Ltd.
(Refer to
separate sheet
for PSBank's Metro Remittance
organizational (Canada), Inc.
structure)

ORIX Metro Leasing and

Finance Corporation
(ORIX Metro) Metro Remittance (UK)
and subsidiaries Limited

(Refer to
separate sheet
for ORIX Metro Remittance (Japan)
METRO's Co. Ltd.
organizational
structure)

Metro Remittance (Italia),

S.p.A. ***
Metropolitan Bank (China)
Ltd.

Circa 2000 Homes, Inc. *

Metropolitan Bank
(Bahamas) Limited**

Philbancor Venture Capital

Corporation *

First Metro International

Investment Company
Limited (FMIIC), and a
subsidiary MBTC Technology, Inc. **

Golly Investment
Limited

* In process of dissolution
** In process of liquidation
*** Fully liquidated in January 2021

Page 13
First Metro Investment Corporation
Subsidiaries and Associates
As of December 31, 2020

First Metro Investment Corporation

(FMIC)

SUBSIDIARIES ASSOCIATES

First Metro
Securities Cathay
International
Brokerage Resources
Corporation Prima Corp.
Ventures Skyland Realty
Development Development
Corporation Corporation
PBC Capital
Investment
Corporation
Philippine AXA
Life Insurance
FMIC Equities, Corporation
Inc.
Dahon Realty
First Metro
Insurance Corporation
Brokers
Corporation
Lepanto
SBC Consolidated
Properties, Inc. Mining
Company ORIX Metro
Leasing and
First Metro Save Finance
and Learn Dollar Corporation
Bond Fund, Inc. (ORIX
METRO) and
Resiliency subsidiaries
(SPC), Inc.

Refer to ORIX
First Metro Metro's
Philippine Equity ownership
Exchange (separate
Traded Fund, First Metro
Inc. sheet)
Asset
Management,
Inc.

First Metro Save

and Learn
Balanced Fund, First Metro
Inc. Save & Learn
Fixed Income
Fund, Inc.

First Metro Save

and Learn Equity
Fund, Inc.

Page 14
Philippine Savings Bank
Joint Venture
As of December 31, 2020

Philippine Savings Bank

(PSBank)

JOINT VENTURE

Sumisho Motor Finance Corporation

Page 15
ORIX Metro Leasing and Finance Corporation (ORIX METRO)
Subsidiaries
As of December 31, 2020

ORIX Metro Leasing and

Finance Corporation
(ORIX METRO)

OMLF
International ORIX Auto OMLF
OMLF ORIX Rental Leasing
Trading and Servicer Insurance
Development Corporation Corporation Philippines Agency, Inc.
Corporation Corporation

Page 16
 METROPOLITAN BANK & TRUST COMPANY AND SUBSIDIARIES
FINANCIAL INDICATORS
AS OF DECEMBER 31, 2020 AND 2019

RATIO FORMULA 2020 2019

a) Liquidity Ratio Liquid Assets 46.08% 36.56%

Total Assets

b) Loans to Deposits Ratio Total Loans 72.18% 86.67%

Total Deposit Liabilities

c) Debt to Equity Ratio Total Liabilities 654.52% 688.84%

Total Equity Attributable to Equity
Holders of the Parent Company

d) Asset to Equity Ratio Total Assets 757.29% 791.72%

Total Equity Attributable to Equity
Holders of the Parent Company

Net Income Attributable to Equity

e) Return on Average Equity Holders of the Parent Company 4.36% 9.47%
Average Equity

Net Income Attributable to Equity

f) Return on Average Assets Holders of the Parent Company 0.56% 1.20%
Average Assets

g) Net Interest Margin on Average Earning Assets Net Interest Income 3.98% 3.84%
Average Earning Assets

h) Operating Efficiency Ratio Total Operating Expenses 49.59% 54.60%

Net Operating Income

i) Interest Coverage Ratio Earnings Before Interest and Taxes 196.95% 199.36%
Interest Expense

j) Net Profit Margin Net Income 9.73% 19.76%

Total Income

k) Capital Adequacy Ratio Total Qualifying Capital 20.15% 17.49%

Total Risk-Weighted Assets

l) Common Equity Tier 1 Ratio Net Tier 1 Capital 19.28% 16.19%

Total Risk-Weighted Assets

Page 17