COUNTRY BUILDERS BANK, INC. (CBB) 2017 ANNUAL REPORT · 1 COUNTRY BUILDERS BANK, INC. (CBB) 2017 ANNUAL REPORT Country Builders Bank, Inc. (A Rural Bank) (CBB) started operations

1

COUNTRY BUILDERS BANK, INC. (CBB)

2017 ANNUAL REPORT

Country Builders Bank, Inc. (A Rural Bank) (CBB) started operations as a newly merged bank

last November 7, 2017 after it merged with First Macro Bank, Inc. (A Rural Bank).

CBB now has a combined branch network of thirty six (36) branches and micro banking offices

majority of which are located in Metro Manila and the surrounding provinces of Cavite, Laguna,

Rizal and Bulacan areas.

The Bank serves a broad and diverse clientele including micro, small and medium enterprises

(SME), agricultural businesses, businessmen, professionals, teachers, vendors, employees and

households in its respective communities.

CBB Vision:

• To be the leading community bank in the country

CBB Mission

• To provide excellent banking and financial services

• To create better communities by nurturing entrepreneurs

• To cultivate commitment to excellence whereby employees can learn, grow and be self-

fulfilled

• To optimize earnings for the benefit of all stakeholders

Core Values

Excellence. To ensure excellence in service and banking competency to attain client trust and

loyalty

Integrity. To honor the trust of and the fiduciary responsibility to clients

Innovative. Matching banking products and services to clients’ needs

Professionalism / Teamwork. A team of committed employees instilled with passion, dedication

and pride in their work

Service-Oriented. To integrate the bank within the communities it serves

2

Message from the President:

Country Builders Bank, Inc. (CBB) has ventured once again into another major milestone

exactly five(5) years from the date of consolidation of Country Rural Bank of Taguig, Inc. and

Builders Rural Bank, Inc. on November 5, 2012.

On November 7, 2017, CBB started operations as a merged bank with another rural bank, First

Macro Bank, both with more than 50 years of existence. The merged bank is now the largest

rural bank in Metro Manila with 36 branches and MBOs, more than half of which are located in

Metro Manila, thus contributing greatly to the financial inclusion advocacy of the BSP in the

densely populated Metro Manila areas catering to the CDE socio economic classes of the

economy.

The merged bank now covers additional areas in Metro Manila and the surrounding areas of

Cavite, Laguna, Rizal and Bulacan with a combined workforce of 369 officers and employees.

CBB's results of operations in 2017 include the 2017 operations of FMB after the banks merged

in November, 2017.

Financial Highlights (Based on Audited FS)

Account 2017 2016 Remarks

Total Assets 2,800,645,665 2,062,628,009 Increased by 36%

Loans and Receivables – Net 1,070,201,284 776,770,326 Increased by 38%

Total Deposits 2,365,013,362 1,575,034,783 Increased by 50%

Net Income 28,698,336 21,412,322 Increased by 34%

Return on Equity 9.55% 8.17% Decreased by 1.38%

Financial Summary

Minimum Required Data Parent Bank (Solo)

2017 2016

Profitability

Total Net Interest Income 101,315,615.00 95,272,586.00

Total Non-Interest Income 95,080,772.00 75,352,166.00

Total Non-Interest Expenses 150,858,502.00 124,904,734.00

Pre-provision profit 45,537,885.00 45,720,018.00

Allowance for credit losses 9,434,527.00 13,893,000.00

Net Income 36,103,358.00 31,827,018.00

3

Selected Balance Sheet Data

Liquid Assets 1,420,773,252.00 1,002,427,207.00

Gross Loans 950,607,428.00 673,386,426.00

Total Assets 2,800,645,665.00 2,062,628,099.00

Deposits 2,365,013,362.00 1,575,034,783.00

Total Equity 327,053,978.00 274,124,575.00

Selected Ratios (108,578,325.00) (213,468,741.00)

Return on Equity 9.55 8.17

Return on Assets 1.18 1.07

Capital Adequacy Ratio 17.58 18.27

Others

Cash dividends declared 5,136,566.00 -

Head Count

Officers 60 60

Staff 309 304

In 2018, CBB will focus on the structural framework of the bank, especially, IT. The IT plans

for the merged bank have been greatly challenged with the BSP approval on the use of cloud

technology for banks. The actual integration of the IT systems of the merged banks and the

transfer of the disaster recovery sites have been greatly affected by the availability of cheaper

and more flexible technology brought about by the cloud technology.

We have sent a request to the BSP for the use of the cloud technology through Amazon web

service for our CASA, loans and accounting system..

In 2018, emphasis on increasing the loan portfolio of the bank will be done. More account

officers will be hired and continuous training will be done for all account officers and branch

manager

In 2017, one of the branch site of CBB, the Pembo branch, has been declared in the fault line of

Makati. This will be transferred to another area in Pembo which is not in the fault line

for earthquakes.

Our greatest challenge now is the competition on loans from commercial banks. Commercial

banks are approaching our existing borrowers with lower rates of interest. CBB has met this

challenge by matching the interest rates offered by these banks. This has lowered the bank's

profit margins so the bank now is on an aggressive campaign to increase its loan portfolio by

4

giving incentives, developing and training more account officers and reducing the processing

time for loans. In fact the credit committee meets almost daily as needed.

Board of Directors

The operations and management of Country Builders Bank is anchored on a unified commitment

to good corporate governance. It is led by a functioning Board of Directors and Management

team with competence, integrity and dedication, fully embracing the Bank’s mission, vision, and

values and guided not only by the Bank’s principles, but also by the principles of good corporate

governance – integrity, fairness, accountability, and transparency. Accountability of the Board of

Directors and Management are in place and implemented in accordance with high ethical

standards and strict regulatory compliance. The Board is attuned with the reforms imposed by

BSP and other regulators to elevate corporate governance practices.

The authorities of the members of the Board are derived from the Articles of Incorporation, and

the relevant sections of the Manual of Regulations (MORB) issued by the Bangko Sentral ng

Pilipinas (BSP), as the lead regulator for banks. The role of the Board and its committees are

well described and understood by the members that guarantee smooth performance of their

collegiate and individual duties and responsibilities. The Board is responsible for ensuring that

management maintains an appropriate system of internal controls which provides assurance of

effective operations, internal financial controls and compliance with rules and regulations.

The Bank considers that it has a robust governance framework with a clear organisational

structure, well defined, transparent and consistent lines of responsibility and effective processes

through which to identify, manage, monitor and report risks to which it is or might be exposed. It

has appropriate internal control mechanisms, including sound administrative and accounting

procedures and Information Technology (IT) systems and controls.

o The Role of the Board

The Board’s role is to provide leadership of the Bank and promote its vision, values, culture

and behaviour, within a framework of prudent and effective controls, which enables risk to

be assessed and managed. The Board also ensures that its obligations towards its

shareholders and other stakeholders are understood and met.

The Board is accountable for ensuring that, as a collective body, it has the appropriate skills,

knowledge, diversity and experience to perform its role effectively. The Board is

collectively responsible for the long-term success of the Bank; it sets the Group’s strategic

objectives, integrates sustainability into the way business is conducted, ensures that the

necessary financial and human resources are in place for the Group to meet its objectives

and reviews management performance. Furthermore, the Board has the responsibility to

present a fair, balanced and understandable assessment of the Company’s position and

prospects, including annual and interim financial statements and other price-sensitive public

reports and reports required by regulators and by law.

5

The Board is the decision-making body for all matters of importance that are significant to

the Bank as a whole because of their strategic, financial or reputational implications or

consequences. The appointment of individuals who may have a material impact on the risk

profile of the Bank is also subject to Board approval. Their appropriateness for the role is

monitored on an on-going basis. The Board is also responsible for determining the nature

and extent of the principal risks it is willing to take in achieving its strategic objectives and

ensuring the maintenance of an effective risk management and oversight process across the

Bank.

BOARD COMPOSITION

Board of Directors Share

holdings

%

Holdings

No. of

Years as

Director

1 Dakila B. Fonacier, CPA (Chairman)

Non-Executive

244,929 14.11% 2

BSBA - Accounting

MBA - Northwestern University (Chicago, USA)

Philippine Stock Exchange

Director

May 2011 – present

Securities Clearing Corporation of the Philippines

Independent Director

May 2011 – present

Bureau of Internal Revenue

2000 – 2001

Department of Finance – Undersecretary

2000 – 2001

2 Rodrigo B. Supeña, CPA 126 .01% 5

Member

Non-Executive

BSC – Accounting

MBA – Ateneo

Country Builders Bank, Inc.

– Chairman 2012 – 2015

Land Bank Leasing Corporation

– Director 2000- 2011

Land Bank (Various)

– SVP 1997 – 2005

6

Bank of the Philippine Islands

– VP 1994 – 1996

3 Ma. Corazon L. Miller, CPA 88,175 5.08% 5

Member

Executive

BSBA – Accounting

MBA – UP

UP Business Research Foundation Trustee

Country Rural Bank of Tagig, Inc. – President

University of the Philippines

– Senior Lecturer 1971 – 1979

Builders Savings & Loan Association Inc.

– President 1991 – 1997

CCH Computax, Inc.

– Tax Analyst (USA) 1987 – 1990

4 Renato R. Reyes, CPA

Member

86,120 4.96% 5

Non-Executive

Bachelor in Business Administration

MBA – UP

Marie France Group of Companies

– Director 1988 to present

Miracle Soybean Food International Corp.

– President / Chairman 2010 to present

Taganito Mining Corporation

– President 1986 – 1991

5 Celenita V. Francisco Member 50 .00% 5

Executive

BSBA – Accounting

MBA – Ateneo

CARD SME Bank

– Consultant of IFC 2009 – 2011

Philippine Deposit Insurance Corp.

– Consultant 2008 – 2010

Department of Finance

– Chief of Staff 1992 – 1996

7

6 Edgardo L. Valenzuela, Jr. 22,043 1.27% 4

Member

Executive

B.S Electrical Engineering

M.S.A. – Ateneo

Efficio Technology Services – 2013

Builders Rural Bank, Inc. 2006-2012

I Link – Pinoys

– Managing Director 2005 – 2006

Accenture

– Senior Software Engineer 2003 – 2004

Wireless Internet Solutions

– Senior Analyst 2000 – 2003

7 Benjamin C. Arciaga, CPA

Member (Independent)

350 .02% 4

Non-Executive

BSBA – Accounting

Banco Alabang

– Credit Risk Officer/ Director 2013

Banco Alabang, Inc.

– VP/Director 1997 – 2013

Bangko Sentral ng Pilipinas

– Bank Officer II 1974 – 1997

8 Ramon C. Reyes, CPA


50 .00% 5

Non-Executive

BS Commerce – Accounting

MBA – PCU

Filipino Savers Bank (A Rural Bank)

– Independent Director 2004 – 2011

Bangko Sentral ng Pilipinas

– Manager II 1978 – 2003

9 Carmelita G. Salgado, CPA


85 .01% 1

Non-Executive

BS Business Administration

MBA – Australia

8

Credit Information Bureau, Inc. (CIBI) Foundation, Inc. – Treasurer/Trustee 2017

Phil. Foundation for Cultural & Educational Development, Inc.

– Vice President

Parents for Education Foundation, Inc. – Exec. Vice President 2008 – 2017

University of the Philippines Business Research Foundation, Inc. – Trustee

BOARD LEVEL COMMITTEES

Board And Management Committee Number/ Composition Of Committee Members

Audit Committee 3 Board Members

At Least Two (2) Independent Directors

Risk Management Committee 3 Board Members

Corporate Governance Committee 3 Board Members

At Least Two (2) Independent Directors

Credit Committee 2 Board Members

Bank Manager/Designated Officer

Additional 1 BOD As Alternate Member

Nominations Committee 3 Board Members

One (1) Independent Director

Executive Committee 3 Board Members

EXECUTIVE COMMITTEE

The Executive Committee of the Bank has the power to direct the overall business of the Bank

including the review and approval of proposals and transactions related to credit in amounts

within the limits of its delegated authority.

AUDIT COMMITTEE

9

The Committee assists the Board in the effective discharge of its responsibilities in the areas of

statutory reporting, internal control systems, risk management systems, insurance and legal

proceedings, and the internal and external audit functions.

It reviews and prepares the internal audit program. It monitors and evaluates the adequacy of the

Bank’s internal control systems and procedures and makes recommendations to further

strengthen the systems and procedures.

RISK COMMITTEE

The Committee exercises the oversight function over risk management activities of the Bank. It

reviews the Bank’s management framework, assesses to determine the adequacy of its risk

management, monitors the Bank’s risk management profile and ensures that the risk strategies

are being complied with.

CORPORATE GOVERNANCE

The Corporate Governance Committee assists the Board in fulfilling its corporate governance

responsibilities, and ensures the Board's effectiveness and due observance of sound corporate

governance principles and guidelines, and its oversight of the Bank's corporate governance with

respect to laws, rules and regulations on corporate governance issued by the government

regulatory bodies.

CREDIT COMMITTEE

The Committee assist the board in fulfilling its responsibilities by providing oversight of the

credit and lending functions and strategies and objective of the bank, specifically:

• Oversight of the credit risk management of the Bank, including reviewing internal credit

policies and establishing portfolio limits;

• Reviews the quality and performance of the Bank’s credit portfolio; and

• Approves loans at thresholds determined by the Bank’s Credit Policy Manual.

o Meetings of the Board of Directors

The Board meets on a monthly basis and has a formal schedule of matters for consideration.

The Board receives regular reports and presentations from the Bank’s senior management on

strategies and developments in operations. Regular reports are also provided on existing and

emerging risks, risk management, credit exposures and the loan portfolio, asset and liability

management, liquidity, litigation, compliance and reputational issues.

During 2017 the Board held 15 meetings. Further details on the number of the meetings of

the Board and its committees and attendance by individual Directors are set out below.

10

Name of Director Designation Attendance %

Dakila B. Fonacier Chairman 13 87

Ma. Corazon L. Miller President 15 100

Renato R. Reyes Member 14 93

Rodrigo B. Supena Member 13 87

Celenita V. Francisco Member 15 100

Edgardo L. Valenzuela, Jr. Member 15 100

Benjamin C. Arciaga Member 15 100

Ramon C. Reyes Member 15 100

Julieta L. Santos (6 months) Member 6 Resigned

06/30/17

Carmelita G. Salgado (6 months) Member 7 88

Board and Management Committees:

1. Executive Committee:

Name of Director Attendance %

Ma. Corazon L. Miller Chairman 10 100%



Anna Liza B. Santiago (Non-Director) Member 10 100

2. Credit Committee:




Celenita V. Francisco Alternate Member 93 77

Imee C. Ramuyan (Non-Director) Member 113 91

3. Risk Management Committee:


Ramon C. Reyes Chairman 9 100%



Benjamin C. Arciaga Alternate Member 9 100

11

4. Audit Committee:


Benjamin C. Arciaga Chairman 12 100%



5. Corporate Governance Committee:


Ramon C. Reyes Chairman 4 100%

Dakila B. Fonacier Member 3 75

Benjamin C. Arciaga Member 4 100

6. Nomination Committee:






7. Assets & Liabilities (ALCO) Sub-Committee:




Anna Liza Santiago Member 9 100

Principal Officers

1 Ma. Corazon L. Miller, CPA

BSBA – Accounting

MBA – UP

12

President

(see above positions)

2 Anna Liza B. Santiago, CPA

BSBA – Accounting

Senior Vice President – Operations

Country Rural Bank of Tagig, Inc.

– (Various) VP Operations 1997 – 2012 Builders Savings & Loan Asso. Inc.

– Comptroller 1996 – 1997 ABS Holdings, Inc.

– Chief Accountant 1993 – 1996 Sycip, Gorres, Velayo & Co.

– Audit–in–Charge 1990 – 1993

3 Charles E. Miller

BBA – Accounting

MSA – Accounting

E. Michigan University

MSBA Marketing - USC

BS - CIS – Washburn University

Senior Vice President – Support Services


– Consultant – 2004 – 2012 CCH Computax, Inc.

– Marketing Director – 1987 – 1991 Marvin Maydew CPA & Associates

– Auditor 1981 -1987

4 Edgardo L. Valenzuela, Jr.

B.S. Electrical Engineering

M.S.A.–Ateneo

Vice President – Loans

(see above positions)

13

5 Reginald L. Ocampo

BSC – Applied Economics

MBA – Loyola Marymount University

Vice – President – Microfinance/HRD

First Macro Bank, Inc.

– Various – President 1996 – 2016

7 Anastacia M. Reyes

BSC- Accounting

Chief Compliance Officer


– Various Compliance Officer 2010 -2012 Builders Rural Bank, Inc.

– Various – Corporate Secretary 2006 – 2010 First Macro Bank, Inc.

– Various – VP – HR & Customer Service 1992 – 2006 Rural Bank of Pateros, Inc.

– Manager 1986 – 1992

8 Rowena V. Huidem

BS – Accounting

Comptroller

Country Rural Bank of Tagig, Inc. – Comptroller – 2012

Country Rural Bank of Tagig, Inc. – Senior Accountant – 2006 – 2012

9 Ronald T. Verzosa

BS – Accounting

Internal Audit Quality Assurance Manager

Fundline Financing Corporation

– Financial Audit Officer 2010

14

Tropical Disease Foundation, Inc.

– Internal Audit Quality Assurance Supervisor 2006 – 2010 Phoenix Publishing House, Inc.

– Internal Audit Asst. 2005 – 2006

Merchants Bank

– Branch Accountant 1999 – 2004

SELF ASSESSMENT;

The Board of Director conducts annually a self-assessment of their performances for the

preceding twelve (12) months period using the self-assessment form.

The self evaluations are summarized and rated. The scores and ratings serve as a tool to

check the strength and weaknesses of the members of the Board of Directors.

RELATED PARTY TRANSACTION

The main objective of the policies on RPT is to provide the management with the proper and

standard guidelines in the appropriate exercise of its oversight functions and in the

implementation of effective control systems for managing the bank’s exposures to Related Party

Transactions (RPT) as these may potentially lead to abuses that are disadvantageous to the bank

and its depositors, creditors, fiduciary clients and other stakeholders.

1. RPTs are conducted in the regular course of business and not undertaken on more favorable

economic terms than similar transactions with non-related parties under similar

circumstances.

2. All Directors, Officers and Employees of the Bank shall not engage in any transaction that

may be construed as having conflict of interest with the bank. The members of the board,

stockholders and management shall disclose, to the board whether they directly or indirectly

or on behalf of third parties, have a financial interest in any transaction or matter affecting

the bank. In case of doubt, any material matter that poses conflict of interest shall be vetted

by the Corporate Governance and Chief Compliance Officer and endorse to the Board of

Directors for approval.

DIVIDEND POLICY

For the year 2017, CBB declared 7% and 2% for cash dividends to preferred shareholders,

private and government respectively.

CONSUMER PROTECTION PROGRAM

15

CBB recognizes the basic rights of its customers which are directly relevant to the business of

delivering financial products and services as it is duty bound to guarantee protection and defend

them.

In the process, the Board approved and implemented its Consumer Assistance Management

System (CAMS) to guarantee effective implementation and proper handling of consumers

complaints/requests and their faster resolution and reporting. The Board created the Consumer

Assistance Group headed by a Consumer Assistance Officer (CAO) to implement this CAMS.

The CAO reports directly to the Board of Directors through the Risk Management Committee

(RMC).

CONSUMER ASSISTANCE

The Board of Directors is responsible for developing the bank’s consumer protection strategies

and establishes an effective oversight over the Bank’s consumer protection program. It is

primarily responsible for approving and overseeing the implementation of the consumer

protection policies as well as the mechanism to ensure compliance with the said policies. It is

responsible for monitoring and overseeing the performance of senior management in managing

the day to day consumer protection activity. These functions and other duties and

responsibilities are delegated to the Marketing Department.

The Marketing Department is responsible for the implementation of the consumer protection

policies approved by the Board, manages the day-to-day consumer protection activities of the

Bank and other duties and responsibilities delegated by the Board.

This Consumer Assistance Group is headed by concurrently the Credit Risk Officer.

NOMINATIONS COMMITTEE

The Nomination Committee handles the selection of Directors. The Nomination Committee is

composed of four (4) Directors.

RETIREMENT:

The Bank has following retirement options for its officers and employees:

• Normal Retirement Age – upon reaching the age of 60 unless opted to defer retirement

until reaching 65 years old or anytime after having computed 35 years.

• Mandatory Retirement – upon reaching the mandatory age of 65 years old.

16

Risk Management

CBB, as a financial institution, is in the business of risk taking. Its activities expose the Bank to

credit, market, liquidity and operational risks. Credit risk emanates from exposures to borrowing

customers, counterparty risk in trading activities, and contingent credit risks arising from trade

finance exposures. Market risks covers price, liquidity and interest rate risks in the Bank’s

investment portfolio.

Liquidity risk may arise from shortage in funding and/or lack of market for sale of its assets.

Operational risk covers potential losses other than market and credit risk arising from failures of

people, process, systems and information technology and external events.

The ability to manage risks effectively is vital for the Bank to sustain its growth and continue to

create value for its shareholders.

Risk management involves identifying, measuring, controlling and reporting risks and disclosing

possible consequences. The normal risks in daily operations include credit, liquidity, market,

operations, legal and compliance. The Bank adopted the Risk Management Charter to see to it

that its directors, officers and staff are cognizant and duly advised of the laws, rules and

regulations relevant to banking and that these are observed to avoid penalties and administrative

sanctions.

The Bank’s Risk Management Committee are composed of 3 Directors, one of whom is an

Independent Director and an Independent alternate Director.

The Bank continually advances on its risk management techniques and integrate this into the

overall strategic business objectives to support the growth objectives of the Bank. The Bank

continues to review its limits system to ensure that it only enters into transactions allowed under

its existing policies and that adequate capital is available to cover risk exposures.

Credit Risk:

Credit risk pertains to the risk to income or capital due to failure by borrowers or counterparties

to pay their obligations, either in full or partially as they fall due, deterioration in the credit

quality of a borrower, issuer or counterparty, and the reduced recovery from a credit facility in

the event of default. This is inherent in the Bank’s lending, and is managed in accordance with

the Bank’s credit risk framework of risk identification, measurement, control and monitoring.

Credit risk is managed through a continuing review of credit policies, systems, and procedures. It

starts with the definition of business goals and setting of risk policies by the BOD. Account

officers and credit officers directly handle credit risk as guided by BOD-approved policies and

limits.

17

Exposures to credit risks are managed through regular analysis of the ability of the borrowers

and potential borrowers to meet interest and capital repayment obligations and by changing these

lending limits when appropriate. Exposures to credit risks are also managed in part by obtaining

high valued and easily marketable real-estate collaterals.

On the credit side, the Bank has instituted improvements on its credit policies, which includes

large exposure and credit concentration. Credit process streamlining has also been initiated to

ensure that commensurate controls are in place while the Bank continues to device ways to

improve on its credit process.

On the transactional level, exposure to credit risk is managed through a credit review process

wherein analysis of the ability of the obligors and potential obligors to meet interest and capital

repayment obligations is performed. Exposure to credit risk is also managed in part by obtaining

collateral and corporate and personal guarantees. Moreover, in accordance with best practices,

the Bank also adopts an internal credit risk rating system (ICRRS) for the purpose of measuring

credit risks and uses this information as a tool for decision-making. Pursuant to regulatory

requirements and best practices, the Bank also conducts sensitivity analysis and stress testing of

the credit portfolio to assess sensitivity of the Bank’s capital to BOD-approved credit risk

scenarios.

Liquidity Risk:

Liquidity risk is the risk that there could be insufficient funds available to adequately meet the

credit demands of the Bank and repay deposits on maturity. The bank ensures that there exist an

adequate amount of liquid assets to meet the daily funding requirements.

The Bank manages its liquidity risk through the management's monitoring of various liquidity

ratios, Treasury's regular assessment of liquidity gaps, and the maturity ladder. A maturity ladder

relates the inflows to outflows of funds at selected maturity dates and is constructed to measure

liquidity exposure. The ladder shows the Bank's statement of financial position distributed into

tenor buckets across the term structure on the basis of the term to final maturity or cash flow

dates. The amount of net inflows which equals the difference between the amounts of

contractually maturing assets (inflows) and liabilities (outflows) is computed per tenor bucket on

a cumulative basis incorporating certain behavioral and hypothetical assumptions regarding the

flows from assets and liabilities including contingent commitments over time. The calculated

periodic and cumulative gaps constitute the Bank's run off schedule, which indicate the Bank's

net funding requirements in local currency.

The Asset and Liability Committee (ALCO) reports to the Board of Directors.

Operational Risk:

Managing of operational risk is founded on a sound internal control environment:

18

Recruitment and placement policies are in place to ensure the integrity, ethics and competence of

personnel, a written Code of Conduct, written policies and procedures that clearly establish

accountability and responsibility, segregation of functions, verification and reconciliation

procedures, and, an effective assurance and internal audit function.

Information security policies were further strengthened, implemented, and disseminated across

all units of the Bank.

Interest Rate Risk:

Interest rate risk arises from the possibility that changes in the interest rates will affect future

cash flows or the fair value of the financial instruments. The Bank’s interest rate risk relates

primarily to the possible changes in the prevailing interest rates on deposit liabilities and on loan

investments that are subject to variable interest rates. The volatility in the interest rates of these

financial instruments will result in increase or decrease in the Bank’s interest spread, and

consequently will affect financial performance.

Compliance risk:

Risk to earnings or capital arising from violations of or non-conformance with laws, rules,

regulations, prescribed practices, internal policies and procedures or ethical standards. This

arises in situations where the laws or rules governing certain bank’s products or activities of its

clients may be ambiguous or untested. This exposes the Bank to fines, penalties, payment of

damages and the voiding of contracts.

Legal Risk:

This is defined as the risk to earnings or capital arising from unenforceable contracts, lawsuits or

adverse judgments. Banks are particularly susceptible to legal risks when entering new types of

transactions and when the legal right of a counterparty to enter into a transaction is not

established.

Banks’ Efforts to Combat Money Laundering and Terrorist Financing:

The banking industry’s goal is to help deter, detect and report criminal and terrorist activity,

while protecting the privacy of law-abiding customers, and ensuring the integrity of the banking

system in the Philippines. Country Builders Bank, Inc. adheres to this very noble objective.

The Bank is compliant with BSP Circular No. 706 series of 2011 when it updated its Money

Laundering and Terrorist Financing Prevention Program on November 27, 2017.

As a covered person, the Bank is implementing client identification, record keeping and

19

compliance regime requirements and reporting of covered and suspicious transactions to the

BSP-AMLC within the reglamentary periods. The Bank has significantly increased its anti-

money laundering controls and expanded its compliance departments to meet increasingly

stringent requirements from the AMLC to ensure that the products and services it offers are not

used for illegal purposes.

The following policies are embedded in this program and their implementation is being strictly

monitored for by the Bank’s Compliance Unit:

A. Customer Identification Process

A.1 Customer Acceptance Policy

A.2 Customer Identification

A.3 On-going monitoring of customers, accounts and transactions

B. Covered and Suspicious Transaction Reporting

C. Record Keeping and Retention

D. Training Program

In-house Orientation Seminars are regularly conducted to newly hired personnel of the Bank and

continuous training and re-training for the purposes of improving employee’s knowledge in

preventing money laundering and terrorism financing and to get to know the customers. Reports

dictating implementation of regulations and guidelines are presented to the BOD committees.

Reports on compliance of banking operations with regulations and guidelines by regulatory

bodies are likewise prepared and reported to the Board of Directors.

Corporate Governance:

The Board of Directors is committed to good governance which is vital to creating trust and

confidence with its stakeholders. The Board aims to ensure on an ongoing basis the application

of best practices of corporate governance and corporate administration.

The Board has delegated authority to the committees of the Board to support its oversight of risk

and control. The committees are the Corporate Governance Committee, the Risk Management

Committee the Nominations, the Executive Committee, and the Audit Committee. The

chairperson of each committee reports on matters discussed during committee meetings to the

subsequent scheduled meetings of the Board.

The Bank continually monitors and reviews its governance through effective oversight. The

Directors are aware that in case they have material concerns about the overall governance, these

should be acted upon without delay.

20

The Bank has acted judiciously and expeditiously to resolve complaints and/or concerns of its

clients pursuant to its Financial Consumers Protection Manual. Complaints were properly

referred to concerned units/departments for comments, replies and final resolution.

The Bank has a Code of Conduct and has ensured that appropriate steps have been taken to

disseminate it throughout the Bank along with its supporting policies and procedures. It has also

an approved Vision, Mission, Core values, Objectives and a 5-year Strategic planning.

The Bank has a comprehensive framework of written policies and procedures on all major areas

of operations such as AMLA, Credit, Risk, Internal Audit, Compliance, etc. These policies have

been approved by the Board and are being constantly reviewed. There also exists in the Bank

framework the limits of authority of various management levels. All powers are exercised by the

relevant authorities within the materiality thresholds.

Data Privacy Act of 2012

The Bank is compliant with the provisions of R.A. no. 10173, known as the “Data Privacy Act of

2012” with the registration with the National Privacy Commission and the designation of a

Bank’s Data Protection Officer on August 31, 2017, who shall be responsible in safeguarding the

personal and sensitive data of the Bank’s customers. He shall attend continuously seminars and

trainings with the said Office.

Bank’s Products and Services

I. Deposits

A. Peso Deposits

1. SAVINGS

➢ Regular

Features:

• P 100.00 minimum initial deposit

• P 500.00 average daily balance (ADB) to earn interest

• Interest rate of 0.25% per annum

➢ SUPER KIDS

Features:

• For 7 to 17 years old

• P 100.00 minimum initial deposit



2. TIME

➢ Country Plus Special Time Deposit

21

Features:

• P 5,000.00 minimum initial deposit

• Term of deposit is minimum of 30 days and maximum of 1 year

• Interest rates higher than savings interest rate

• Comes with a passbook for easy monitoring

• Flexible terms which allows depositor to plan and grow his deposits.

➢ Prime Time Deposit

Features:


• Term of deposit is Five (5) years and one (1) day

• Interest rate higher than Country Plus Time Deposit

• Interest is credited monthly to regular savings account, a settlement account

• Tax free (Not subject to withholding tax)

3. CURRENT/DEMAND DEPOSIT OR CHECKING ACCOUNT

Features:



• No service charge on collection of local checks

• No limit on deposits and withdrawals

• Available to Individual/Corporations/NGO’s

• Instant access via check book

4. CBB APPS KIT

Features:

• Cost is P 500.00

• Comes with a pre-deposited P 100.00 savings and a passbook

• Comes with Manulife Micro Insurance for the principal and qualified dependents

good for 1 year



• Priority lane (for all bank and non-bank transactions)

B. FOREIGN CURRENCY DEPOSITS

1. US DOLLAR Savings Deposit

Features:

• $ 100.00 minimum initial deposit

• $ 200.00 average daily balance (ADB) to earn interest


22

2. US DOLLAR TIME DEPOSITS

Features:

• $ 1,000.00 minimum initial deposit

• Term of deposit is minimum of 30 days and maximum of 1 year

• Interest rate varies

II. LOAN PRODUCTS

1. Agricultural Loans

2. Commercial Loans

• Additional working capital for business

• Business Credit line

3. Industrial Loans

4. Loans to Small Medium enterprises (SME)

5. Real Estate Loans

• Purchase of House and Lot

• Purchase of lot only

• Construction of House

• Home improvement Loans

o House renovation

o House extension

o Other house related needs

6. Consumption Loans

• SSS pensioners loan

• Educational loans

• Multi-Purposes loans

• Medical and Annual Check-up loans

7. Loans to Professionals

• Purchase of medical and dental equipments

• Renovation and repairs of clinics/offices

III. SERVICES

1. Acceptance of Bills and Premium Payments (Authorized Bayad Center Agent):

a. Bills Payments for the following business establishments and utilities:

• Manila Electric Company (MERALCO)

• Manila Water Works

• Maynilad

• Skycable

23

• Destiny Cable

• Digitel

• Bayantel

• Smart/Globe

• Others

b. Monthly/Quarterly Premiums and Payments for the following:

• Social Security System (SSS)

• Philippine Health Insurance Corporations (PhilHealth)

• Manulife

• Philamlife

• Sun Life

• Others

c. Remittances:

• Western Union

• Uniteller

• I-remit

• My Remit

• Moneygram

• Smartmoney

• Transfast

• Cebuana Padala

• Others

2. Automatic Tellers Machines (ATMs) installed in selected branches

3. Servicing of SSS Pensioners Monthly Pensions

4. Safety Deposit Box rental at Binan Branch

5. Authorized/Licensed Micro Insurance reseller (Manulife Micro Insurance)

BRANCHES

The CBB has to-date thirty-one (31) regularly operating branches and five (5) micro-

banking offices to service the banking needs of the people of Metro Manila, and in the provinces

of Laguna, Bulacan and Rizal, Cavite, Antipolo and Rizal.

A. Metro Manila Branches:

Taguig City:

24

1. Main Office – 6 Gen. Luna Street, Tuktukan, Taguig City

2. FTI Complex Branch – Stalls 1 - 3, Maharlika Gate, FTI Complex, Taguig City

3. Lower Bicutan Branch – Gen. Santos Avenue, Lower Bicutan, Taguig City

4. Signal Village Branch – 30 Gov. Rodriguez, Signal Village, Taguig City

5. Western Bicutan ( C5 )Branch – Blk. 9 Lot 7, MRT Avenue, Taguig City

6. Lower Bicutan Branch – 8 General Santos Ave., Lower Bicutan, Taguig City

Makati City:

7. Comembo Branch – 56 Sampaguita Street, Comembo, Makati City

8. Pembo Branch – Sampaguita cor. Mullien Street, Pembo, Makati City

City of Manila:

9. Manila City Branch – 1665 A. Francisco, San Andres, Manila

Quezon City:

10. Commonwealth Branch – 22 Steve St. corner Villongco St., Commonwealth, Quezon City

Pasig City:

11. San Joaquin Branch – 207 M. Concepcion Street, San Joaquin, Pasig City

12. Santolan Branch – 79 Amang Rodriguez Avenue, Santolan, Pasig Cit

13. San Miguel Branch – M. Eusebio Avenue, San Miguel, Pasig City

Marikina City:

14. Marikina Branch – 345 J.P. Rizal Street, Sto. Nino, Marikina City

Muntinlupa City:

15. Alabang Branch – 377 West Service Road, Alabang, Muntinglupa City

Las Pinas City:

16. Las Pinas Branch – 298 Real Street, Pulang Lupa, Las Pinas City

Caloocan City:

17. Camarin Branch – 5887 Camarin, Caloocan City

Municipality of Pateros:

18. Pateros Branch – 22 M. Almeda Street, Pateros City MM

19. Pateros Branch (Formerly 1stMB) – P. Herrera cor. Morcilla Streets, Pateros, Metro

Manila

B. Provincial Branches:

Bulacan:

1. Angat Branch – Poblacion, Angat, Bulacan

2. Muzon Branch – Libis, Muzon, San Jose del Monte City, Bulacan

25

3. Norzagaray Branch – Bigte, Norzagaray, Bulacan

Laguna:

1. Binan Branch – Jacobo Gonzales Street, Poblacion, Binan, Laguna

2. Los Banos Branch – J. P. Rizal Street, Poblacion, Los Banos, Laguna

3. Sta. Rosa Branch – 1634 E, National Highway, Sta. Rosa, Laguna

Rizal:

1. Ampid Branch – 117 Gen. Luna Street, Ampid, San Mateo, Rizal

2. Montalban Branch – 115 J. P. Rizal Street, Mangahan, Rodriguez, Rizal

3. Angono Branch – 785 M. L. Quezon Ave., San Isidro, Angono, Rizal

4. Morong Branch – Tomas Claudio Street, San Pedro, Morong, Rizal

Cavite

1. Dasmarinas Branch – Area B, Bagong Bayan, Dasmarinas, Cavite

2. GMA Cavite Branch – Poblacion 1, Congressional Road, GMA, Cavite

C. MBOs of the merged First Macro Bank, Inc.

1. Trece Martirez, Cavite – San Agustin, Trece Martirez, Cavite

2. Silang, Cavite – 168 J. P. Rizal Street, Poblacion 1, Silang, Cavite

3. Imus, Cavite – DCT Building, Regatta West Subd., Bucandal 3, Imus City, Cavite

4. Binan, Laguna – 5185 National Hi-Way, Canlalay, Binan, Laguna

5. Antipolo City – 2 Sto. Nino Street, San Jose, Antipolo City

Membership and Accreditation/Affiliation:

The Bank is a member in good standing of the following:

1. Philippine Deposit & Issuance Corporation (PDIC);

2. Rural Bankers Association of the Philippines (RBAP)

3. Federation of Metro Manila Rural Banks, Inc. (FOMMRBI)

4. Bancnet

Accreditation:

1. Social Security System (SSS) - SSS Pensions Direct Deposits and as a conduit financial

institution to its Special Financing Program, Hospital financing Program and Financing

Program for Educational Institutions.

2. Small Business Corporation (SBCFC)

3. Agricultural Guaranty Fund

4. Department of Education (APDS)

5. Philippine Health Insurance Corporation (PhilHealth)

6. Home Development and Mortgaged Corporation (HDMF)

7. Philippine Long Distance Telephone Company (PLDT)

26

8. Manila Electric Company (MERALCO)

COUNTRY BUILDERS BANK, INC.

TOP 10 STOCKHOLDERS

NAME NATIONALITY

NO. OF

SHARES

HELD

PERCENT

(%)

1 Dakila B. Fonacier Filipino 244,929 14.11%

2 Julieta L. Santos Filipino 181,696 10.47%

3 Sonia L. Ocampo Filipino 148,666 8.56%

4 Ma. Cristina L. Valenzuela Filipino 138,479 7.98%

5 Reginald L. Ocampo Filipino 99,859 5.75%

6 Sonja L. Ocampo Filipino 99,636 5.74%

7 Ma. Corazon L. Miller Filipino 88,175 5.08%

8 Renato R. Reyes Filipino 88,120 4.96%

9 Mother of Life Center Institution 74,009 4.26%

10 Maria Reyes &/or Renato R. Reyes Filipino 70,000 4.03%

CBB WEBSITE: www.cbb.com.ph

http://www.cbb.com.ph/

http://www.cbb.com.ph/

Documents

COUNTRY BUILDERS BANK, INC. (CBB) 2017 ANNUAL REPORT · 1 COUNTRY BUILDERS BANK, INC. (CBB) 2017 ANNUAL REPORT Country Builders Bank, Inc. (A Rural Bank) (CBB) started operations