President's Report

Fellow Stakeholders, Welcome to Queen City Development Bank, Inc.’s annual stockholders meeting. This annual exercise, the 43rd for Queenbank serves as a venue for the Bank’s shareholders to congregate and discuss the result of its financial condition. Looking back at 2023, no one could have predicted what to expect. Chronic disruptions to supply chains, continuing inflationary pressures, wait and see attitude of businessmen, and the ongoing war in Ukraine combined to create a tumultuous environment for businesses and financial markets. Having been in business for more than four (4) decades, undercurrent events presented are indeed familiar to us. And, as we exhibit strength throughout the pandemic, our franchise has been an important source of stability during times of immense change and challenge. This is an opportunity and a responsibility we take seriously.

To capsulize, the year 2023 will be remembered for:

First, is how we continued to support our customers. We advised and educate them in digital literacy and supported the shifts in their business approach. We started to guide them in working towards transition to clean-energy economy.

Secondly, we give emphasis in positioning Queenbank for the future. We started categorizing and updated the banks’ five-year strategic plan to categorize business mix and simplify operations. We focused on how to accelerate growth, gaining more customer support and increasing shareholders returns.

By most measures, we ended the year stronger than when we started.

Our Initiative in 2023: During the year, we gave emphasis on generating low cost deposits and grant loans, after local economists predicted the gradual return of the country’s economic activity. Early on, we started working on setting our focus on digital transformation and customer friendly cashless products. This is a timely approach to the pandemic weary economy where customers started using digital transaction through various platform. We re-enforced product accessibility by asking our line personnel to introduce these new products to merchants to improve customer usability with the end view of increasing the bank’s business transactions.

Let me now give you a snap shot of Queenbank’s business operation results. For the year ending December 2023, Queenbank generated audited gross revenue of P218.5 million and net income of P15.2 million. These results showed that with perseverance and proper management, our business enterprise will continue to generate good revenue and grow our resources.

We also made significant progress in increasing the linkages between our businesses so we can more easily engage clients with products and services we offer. Our markets and banking businesses are now aligned more closely, and, as a result, we are supporting our clients in a more integrated way. While we admit that this may take some time to implement, we are already seeing the fruits of our labor. We have streamlined our approval process for new products.

Our bank is also pursuing merger plans with its affiliate Queen City Rural Bank, Inc. In addition, we have also secured the approval of the banks’ Board of Directors to acquire the 50 years old Rural Bank of Leganes, Inc. We are in pursuit of acquiring more banks to better serve and provide easy access to our customers anytime, anyplace, anywhere. This move is placing Queen City Development Bank, Inc. in the position to compete with its industry peers.

To support strong customer interaction, we ensured a culture characterized by quality service. We properly explained to our line officers the value of customer satisfaction and performance as a basis for growth. This is part of an effort to boost opportunities and to increase accountability for how our personnel should approach their daily work. Few years back, I started talking about developing the sense of ownership that our people feel for our franchise, we are building a culture that’s centered on delivering the best outcomes for all our stakeholders.

Taking into account our growth plan, the investments we are making in our businesses and efficiencies that will come out of our work, we believe we can increase shareholder value in the medium term. Over the longer term, I believe that our strategy will lead to a higher-quality earnings mix, and we’ll further increase our returns as a result.

Expectations for 2024

Looking at the early part of 2024, our main concern is growing our business. We cannot just be complacent waiting for a customer to come and visit our bank to transact business. That’s the reason that I called upon our personnel to initiate and identify probable business segments that will complement our business model. This jumpstarted the move in accelerating our work to address the budget gaps. This work is so consequential in nature that we call it our early transformation. It still and will be our number one priority.

Ensuring we have a culture characterized by accountability underpins the success of our transformation and broader vision for our franchise. We remain committed to a workplace that mirrors the communities we serve. With the Philippines’ overall inflation rate decelerating to 3.9% in December last year and financial institutions holding on to the possibility of a fourth quarter rate cut, we are looking to a better and buoyant 2024. The economy is slowly recovering while impact of the pandemic subsiding and the return to in-person shopping and traveling back to normal, local businesses are also upbeat for a rebound.

The year 2024 will also be a year of increased digitalization for the banking industry. We will continue to work with our technology partners in different areas like branch banking enhancements, and enhanced customer servicing. Many factors will come into play in the coming months such as fluctuating oil prices and movement of interest rates, higher food basket index, and strong local consumption.

Our environmental, social and governance agenda is a reflection of the special responsibility for our Bank to minimize if not eradicate many of society’s toughest challenges, such as the impact of climate crisis. Last year, we released our initial plan, setting specific guidelines for our ESG framework. This framework will set the stage for the commencement of the formulation of the bank’s policy, and product manual for our personnel to look into and steer them in complying with this new regulation.

So whilst the environment has changed, our strategy has not, and we remain steadfast in executing and delivering a steady return for our shareholders.