Home History Financial Highlights Core Values Board of Directors Management Committee Our Clients Products & Services Risk Management Corporate Governance Report of Independent Auditors Statement of Management Responsibility Branch Directory Awards & Citations E-mail Us

Click Here for the Latest
Chairman's Report

This is the speach delivered by the President at Queenbank's annual Top Level Management Conference 2006  

CHAIRMAN'S REPORT 2006

     From my days as a young native product trader running a family business in the early 60's, to taking over the leadership of a fledging radio network in the 70's, to the boardroom of a newly operated financial services company in 1981, I never anticipated just how incredible my life’s journey would be.
      Along the way, I’ve experienced much success and endured many setbacks. Yet through it all, I’ve never stopped thinking about how the financial services industry could be a positive force to the community by providing capital to small and medium entrepreneurs, while rewarding employees and shareholders for their commitment to, and belief in, the enterprise.
      I believe Queen City Development Bank is the financial company that best embodies these goals. The bank has accomplished what some once viewed as impossible. Our Franchise now belongs to the elite billionaire’s club, having registered year-end resources of P1.027 billion. In a sense, this is a mark of continuity and strength. Yet this is also a signal of change to come. Many of the opportunities and the challenges that lie before us are different from those we faced two decades ago.
      Industry-wide, Queen City Development Bank is one of the most highly capitalized thrift banks in the Philippines. We are one of the few thrift banks that continue to register positive results while at the same time consistently delivering a fair return of revenue and dividends to our stakeholders. Your management team has been successful where many have failed.

      In the past few years we have accomplished the hardest of tasks:
          1. Consistent CAMELS rating of 4 for five (5) consecutive Bangko Sentral ng Pilipinas audit results, each under different audit teams, and
          2. Relatively high capital-to-risk-asset (CAR) ratio of 57.81%, five folds better if compared against BSP standard requirement of 10% both for thrift and commercial banks.

      We have enjoyed helping to build the business over the past 24 years and we approach the future with enthusiasm, embracing both the opportunities and the challenges of a new chapter in our company’s history.
      We begin from a position of strength: 2005 was a fine year. We strengthened our positions in places we do business. We continued to perform well with a slight increase in net income despite a very challenging environment. We also improved our risk management structure across the regions, limiting our exposure to political and economic vulnerabilities while continuing to grow our franchise.
      Our record speaks for itself. But despite this growth, we are sometimes asked: Can you still grow? Are you dependent on your core business? Our answer is unequivocal: We see significant opportunities for growth, and we are committed to maintaining Queenbank’s record as a steadily growing company. We see many ways to achieve this goal including:
     1. Market share - The market for financial services is highly fragmented across many firms. Because of our unique platform, we have more opportunities to expand our franchise organically — by bringing our products and services to these markets and growing our market share — than any other company in our Industry.
     2. Cross-marketing - In addition to growing our share in markets throughout the region, we have the ability to grow organically through cross-marketing. We have consistently demonstrated the ability to cross-market on-line products and services to both our consumer and corporate customers.
     3. Acquisition - when the right strategic acquisition opportunities become available, opportunities that fill unique product or geographic gaps, we will grow by acquisition. Of course, as we grow, our competitors are not standing still. We intend to acquire banks with added-value and that come with the right price. We intend to join the bandwagon soon.

Our Priorities

     Our foremost desire is to develop and maintain strong financial discipline. Financial discipline is the bedrock upon which truly great companies are built. Such companies prevail through both good and bad economic times and consistently deliver solid performance relative to competitors. Our goal is to become one of those companies.

Financial discipline requires:
     1. A superior financial reporting and management information system. In 2005 we created and effectively ran a financial reporting system which results in transparent accounting policies. While we are satisfied with the progress we have made to date, the real benefit will come over time as our management teams increasingly use these tools for effective management decisions.
     2. A strong balance sheet. We want a balance sheet of unquestioned strength.
     3. Accountability of performance. Financial reports alone won’t suffice. They are simply tools. Financial discipline requires those in charge to have a deep understanding of their businesses and of what drives profitability and growth.
     4. Identifying, pricing and managing risk. All forms of risk — interest, credit, market, liquidity, operational, technology and business as well as our risks must be categorized and managed within the constantly changing economic environment.
     Our Systems Department has been working hard to adjust to the risk associated with new technology. Starting with the consolidation of accounting reports last year, we enhanced our processes by investing in new hardware and routers to improve transaction output day in and day out.

Invest for Growth

      Our firm cannot grow simply by improving efficiency. It requires a laser-focus on execution, a consistent management of risk, a competitive product set and outstanding customer service. We are looking for good growth. We intend to build our business by investing in organic growth and filling strategic gaps through acquisitions and partnerships. We will not grow short-term revenue at the expense of long-term success. For us smart growth means doing a lot of little things right.

Create a Winning Culture

     Over the course of our careers, we have accomplished major changes. They are always difficult. Today, a new culture is being shaped that reflects the way we do business here at Queenbank. Everyday, we are becoming more candid and open in the way we communicate and more disciplined in the way we run the firm.
      People are working together to tackle issues, and managers are leading their teams with a deeper understanding of the underlying dynamics of their businesses. There is greater buy-in for the vision, more passion about growing the business and a heightened sense of urgency. Our goal is to provide our people with the support they need to play an instrumental role in the future growth and success of this firm. We are also working to create a more inclusive work environment by requiring our managers to be accountable for building diverse teams.

Addressing the Financial Roadmap

     This concern comes to mind in the wake of succeeding policy guidelines from the Bangko Sentral ng Pilipinas itself. In the latest guidance, the bank regulator stated that enforcement of prompt corrective action (PCA) on a bank found in the early stages of noncompliance with standard conditions/ratings is intended to restore the bank to normal operations within a reasonable period of time.
     BSP’s support will be contingent on a plan of action that the bank’s board of directors will have to execute with the BSP. Without that signed undertaking documented in a memorandum of understanding, the BSP cannot step in to check the deterioration of a banking entity. The prompt corrective action will no longer just zero in on the need to increase capital. Other bars have been erected below which the regulator will move in. These include risk-weighted capital ratios such as the capital-adequacy-ratio, which is basically the amount of risk a bank is exposed to base on its loans and other financial assets.
     These measures include the implementation of a capital restoration plan, business improvement plan and corporate governance reforms.

Build a great company

     Our Board of Directors share this commitment and are helping us accomplish it. We expect a lot from our Board, and they expect a lot from us. We appreciate their support and value their guidance.

     In closing, the past few years were transformative for Queenbank. In facing tough challenges we each have emerged better, stronger, and healthier. We asked a great deal of our employees during the past year, and most of them delivered. But we still have an enormous amount of work ahead.
      This year will be a crucial one for us.  The potential is tremendous. We intend to continue the intensity we have started to seize the opportunity and deliver on it for our customers, for our shareholders, for our employees and for all of the communities we serve throughout the region and the Philippines.

  Dr. Rogelio M. Florete
  Chairman and President

Click Here for the Latest Chairman's Report