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The growth opportunity for Filipino Provincial banks is huge. The potential in SME and agricultural lending is 3 times today's market size. As banks become 'Regional Champions' they should grow 5 times larger and significantly increase ROA and ROE.

To reach this potential, banks must grow beyond 20 branches. This will require capabilities to change; capabilities in marketing, controls, systems development and governance will become critical. Bridge provides these capabilities. As a result, 'Provincial Banks' will become better able to manage growth and complexity.

Ultimately this will result in higher valuation and a more secure future for the bank. Bank owners can expect ~80% increase in the value of their banks above the 'baseline'.
There are considerable opportunities to increase profit in Provincial Banks

Opportunity to triple lending Opportunity to reduce costs
Provincial Bank's lending opportunity ($Bn)
Source: Bridge analysis
(Non-interest) Expense / Asset
Source: Bridge analysis

Bridge's approach.

Agree partnership
Expand network
(acquisition or organic)
Innovate distribution
Share lending best practice
Launch new products and segments
Reduce costs, manage risk
Merge Exit
will considerably increase Provincial Bank's ROE (Example Bank impact)
Baseline projection
ROE 2009 ROE 2016 (no changes)
Potential opportunity by 2016
Expand lending Introduce transaction banking Reduce costs Improve balance sheet structure Total Potential

. resulting in considerable value increase

Example bank Position in 2016- Base Case (No Bridge investment) Position in 2016 - Investment case (With Bridge investment)
Capital 3.2 x 2010 5.5 x 2010
ROAvE 11% 26%
Growth rate 20% 35%
Book Value multiple 1.2x 1.5x
Value (whole enterprise) PhP 3.0bn PhP 6.6bn
Value (today's owners) PhP 2.7bn PhP 5.1bn (1.7 x base case)
Dividends (to today's owners) PhP 0.06bn PhP 0.48bn (6.2 x base case)
Total value to today's owners P3.3bn P5.7bn (1.8 x base base)

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Bridge: Manila and Singapore