Financial Projections

With the recommended strategies being mentioned, such will aid in the

achievement of the stated strategic and financial strategies. The implementation of the strategies

will translate to a change in the finances of BDO. The following are the financial projections for

BDO following the strategies and fulfillment of the stated objectives:

7.4.1. Statement of Income

STATEMENT OF INCOME
FOR THE YEAR ENDED DECEMBER 2013
AND PROJECTED FOR DECEMBER 2014, 2015, 2016
(amounts in Million of Philippine Pesos)
Actual Projected

2013 2014 2015 2016

Interest Income P54,104 P59,514.4 P71,417.28 P92,842.46

Interest Expense (P13,440) (P13,440) (P13,440) (P13,440)

Net Interest Income P43,166 P46,074.4 P57,977.28 P79,402.46

Impairment Losses (P7,001) (P7,001) (P7,001) (P7,001)

Net Interest Income

after Impairment P36,165 P39,073.4 P50,996.28 P72,401.46
Losses
Other Operating P31,844 P35,072.4 P42,086.88 P54,712.94
Income
Other Operating (P43,259) (P43,259) (P47,584.9) (P57,101.88)
Expenses

Profit before Tax P24,750 P30,886.8 P45,498.26 P70,012.52

Tax Expense (P2,104) (P2,625.38) (P3,867.35) (P5,951.06)

Net Profit P22,646 P28,261.42 P41,630.91 P64,061.46

 One of BDO’s financial objectives is to have a continuously increasing income while

maintaining expenses except when necessary. The projected income statement reflects its

compliance with the objectives formulated. Moreover, the statement above reflects the result or

income from the implementation of the recommended business strategies. The interest income

and other operating income were computed at increasing rates of 10% whose increase is justified

by the implemented strategies, while expenses for interest and impairment losses were

maintained and the tax expense rate was also remained at 8.50%. Meanwhile, operating

expenses remained the same only until 2014 and increase by 10% in 2015 and 20% in 2016. It

is so because it is in 2015 when the upgraded and improved mobile banking application will be

launched. Such justified the 47.31% change in net profits from 2014. While in 2016, there will be

establishment of the new bank branch and the acquisition of a new rural bank. This supported the

53.88% change in net profits from 2015 to 2016. The changes in the amounts are justified using

the strategies implemented as well as compliance of the financial objectives.

7.4.2. Statement of Financial Position

STATEMENT OF FINANCIAL POSITION

FOR THE YEAR ENDED DECEMBER 2013
AND PROJECTED FOR DECEMBER 2014, 2015, 2016
(amounts in Million of Philippine Pesos)
Actual Projected
2014 2015 2016
2013 (Increase by (Increase by (Increase by
10%) 20%) 30%)*

Total Assets P1,672,778 P1,840,055.8 P2,208,066.96 P2,870,487.05

Total Liabilities P1,508,424 P1,659,266.9 P1,991,120.28 P2,558,456.36

Total Stockholders’
P164,534 P180,788.9 P216,946.68 P312,030.69
Equity

Total Liabilities and

P1,672,778 P1,840,055.8 P2,208,066.96 P2,870,487.05
Equity
 One of the financial objectives of BDO is to have a continuously increase in net income

(7.3.1.). The increase in income translates to an increase in assets because an increase income

may be due to increase in loan receivables, deposits, investments, cash and net property plant

and equipment. The 10% increase in each year is justified by the implementation of the

recommended strategies. In 2015, the increase was justified by the launch of the updated and

improved mobile banking application of BDO. This means more clients can access BDO’s

services and it also translates to a flawless delivery of services. It satisfies further, one of the

formulated objectives which is to invest more in technology to improve its mobile banking

application. While in 2016, the increase is justified by the establishment of a new bank branch

and the acquisition of a rural bank. This also satisfies BDO’s objective which is to increase

presence in rural areas. An increase in market share is to be expected as well, being that the

assets of BDO are also increasing. Liabilities also increased as the assets increase. This reflects

that while there was an increase in assets during acquisition the implementation of the strategies,

there is also a relative increase in liabilities.

7.4.3. Financial Highlights

Financial Highlights (in Billion PHP)

*2016 *2015 *2014 2013 2012 2011

 Resources 1,840.
2,870.4 2,208.0 1,672.8 1,241.5 1,097.3
1

 Net Profit 64.1 41.6 28.3 22.6 14.5 10.5

 Operating Expenses 57.1 47.6 43.3 43.3 39.5 36.3

 Equity 312.0 216.9 180.7 164.4 154.4 97.0

*Projected amounts based on 7.4.1 and 7.4.2 respectively.

 The above table shows the financial highlights of BDO from 2011 to 2013 which are based

on its Annual Reports. While the amounts from 2014 to 2016 are gathered fro the above

statements which are projections supported by the strategies and objectives formulated. It can

be seen that there is a continuous increase in all aspects.