East West Banking : 2021 Annual and Sustainability Report - Main Section

2021 Annual and Sustainability Repo

Accelerated Transformation for a

FUTURE- READY

YOU

ABOUT THE THEME

Improving operational efficiency. For years, this was the main focus of banks, and it was enough to drive profitability and overall growth.

Then COVID-19 came. Suddenly, client expectations and consumer behaviors changed, regulations tightened, technology-driven innovations accelerated, and new competition from non-banks changed the game.

The global pandemic not only accelerated transformation around the world; it also brought the future to the NOW.

In this 2021 Annual and Sustainability Repo, themed "Accelerated Transformation for a Future-Ready You," EastWest shares the highlights of its past year's peormance, as well as its ongoing initiatives to meet the challenges to its business today so that it can help its customers, people, and other stakeholders tackle the future with more confidence.

VISION

BRAND PILLARS

To be a world-class bank anchored on service excellence in our chosen markets

• • Insighul expeise directed towards your priorities

• • Dedication to making banking easier for you

  MISSION

  To create value:

• • Entrepreneurial spirit to realize our collective best potential

For our chosen markets, by providing them with excellent service in the delivery of integrated and innovative products, responsive to their current and future financial needs, at the best value

SERVICE PILLARS

For our employees, by continuously providing them with oppounities to develop their full potential and by giving recognition and rewards commensurate to their contribution

PERSONABLE: Warm and positive aitude, genuine sentiment, and personal concern for the customer's well-being and business affairs

For our community, by commiing ourselves to improving the quality of life of those around us through the suppo for various charities and involvement in outreach activities

DEPENDABLE: Dedicated to making banking as easy as possible for the customer - taking the effo away whenever we can but with professional regard for due process

For our regulators, by uncompromisingly adhering to the highest standards of business ethics and corporate governance

PROACTIVE: Actively listening, offering the right information at the right time, considering what the customer needs with thoughul cross-selling

For our shareholders, by managing the bank professionally and prudently to consistently achieve optimal possible returns

B

CONTENTS

• 01 Our Repo

• 02 Who We Are

• 04 Financial Highlights

• 06 Message from the Chairman

  • 40 Risk Exposure

• 10 Q&A with the Vice Chairman & CEO

• 14 Transforming for Our Customers

• 19 Feature: Tried and Tested Transformation Paner

• 20 Transforming for Our People & Society

• 24 Feature: FilVax

• 28 Transforming for Our Business

• 29 Feature: Cybersecurity

• 30 Sustainability at EastWest

• 34 Risk Management

• 36 Capital Adequacy Reconciliation

• 48 Corporate Governance

• 60 Board of Directors

• 62 Profiles of Board of Directors

• 64 Senior Management

• 70 Senior Officers

• 71 Organizational Cha

• 72 Conglomerate Map

• 74 Subsidiaries & Affiliates

• 80 Products and Services

• 76 Sustainable Peormance Matrix

• 82 EastWest Store Network

• 95 Offsite ATM Network

• 92 EastWest Rural Bank Store Network

• 99 Shareholder Information

Geographical Presence

• • EastWest & EastWest Rural Bank Stores

  (including Store-lites): 490

• • Onsite ATMs: 399

• • Offsite ATMs: 185

OUR REPORT

As a responsible financial institution that takes pride in being one of the fastest-growing Philippine banks, EastWest strives to positively contribute to the transformation of the local economy, the environment, and society to ensure a future that benefits all.

To guide us in this journey, we published this Annual and Sustainability Repo that discloses our Economic, Environmental, Society and Governance (EESG) peormance, which includes our non-financial peormance across the EESG aspects of our business for the repoing period January 1 to December 31, 2021.

This repo was prepared in accordance with the Securities and Exchange Commission's Sustainability Repoing Guidelines for Publicly Listed Companies under Memorandum Circular No. 4, Series of 2019. It also uses the Global Repoing Initiative (GRI) Standards repoing guidelines as reference.

Scope

The Repo covers the financial and non-financial peormance of all operations of the EastWest enterprise, including its subsidiaries EastWest Rural Bank, Inc. and EastWest Insurance Brokerage,

Inc. It does not include the peormance of EastWest Ageas Life Insurance Corporation (Troo), a joint venture with Ageas International Insurance Inc.

For feedback on our repo, contact: [e-mail]

Since opening our doors to the public on August 1, 1994, the name EastWest has become synonymous with steady growth.

We offer products and services to consumers and the corporate middle market through our stores, digital plaorms such as EastWest Online and Mobile Banking, and alternative delivery channels such as ATMs and chat banking. Over the years, we have been making strides in providing products and services that answer the ever-changing needs of our chosen market, and making banking more accessible and convenient for our clients through EastWest Online Banking and the

EastWest Mobile Banking App.

Suppoing our growth is our parent company, Filinvest Development Corporation (FDC), one of the country's leading conglomerates which has interests in banking, real estate, hospitality and tourism, power generation, infrastructure, and sugar.

We are commied to make our customers' dream a reality by accelerating our transformation initiatives so that we will remain relevant, responsive, and resilient now and into the future.

As a testament to our ability to fulfill our commitment,

EastWest was again ranked among the region's well- established banks, according to The Asian Banker's 500 Strongest Banks in Asia Pacific 2021 list. The recognition also fuher solidified our position as one of the strongest in the country.

We are commied to make our customers' dream a reality by accelerating our transformation initiatives so that we will remain relevant, responsive, and resilient, now and into the future.

Retail Customers (Consumers)

Medium-sized Corporates

• • Deposits

• • Cards

• • Wealth Management

• • Investments

• • Trust

• • Forex

• • Insurance

• • Remiance

• • Cash Management

• • Treasury

• • Loans

• • Insurance BrokerageStores:

490

including EWRB Store-lites

ATMs:

584

Online and mobile banking:

~648,000

users

EastWest Rural Bank, Inc. (100% owned)EastWest Insurance

Brokerage, Inc. (100% owned)

EastWest Leasing Corp. (100% owned)Affiliate:

Troo (50% owned)

Mobile banking app (Komo):

~328,000

downloads

Since 2012, EastWest has been trading under the symbol 'EW' in the Philippine Stock

Exchange (PSE).

Subsidiaries:

6th largest credit card issuer in the Philippines (based on receivables)

Among the top Private Lending Institutions for Government Teachers' Salary Loan

One of the largest in auto financing

Asian Banker 500

Strongest Banks in Asia

Asian Banker 500

Largest Banks in Asia

inclusive of consultants and contractual employees

Male-Female Ratio:

36%-64%

Percentage of Workforce in Work from Home: 44%

Workforce:

6,876

Financial Peormance	2021	E2 2020	2019
Profitability (in Millions Php)
Net Interest Income	21,027	26,503	21,467
Trading income	1,939	5,485	1,393
Fees & Other Income	4,045	1,395	5,838
Net Revenues	27,010	33,383	28,698
Operating Expenses	16,520	16,230	16,405
Provision for Losses	4,149	9,834	4,042
Provision for Taxes	1,590	510	1,669
Net Income	4,515	6,508	6,242
Balance Sheet Data (in Millions Php)
Assets	404,762	408,202	406,324
Consumer Loans	155,277	186,696	197,772
Corporate Loans	60,589	58,831	71,333
Low-Cost Deposits (CASA)	244,989	228,787	186,785
High-Cost Deposits	81,856	100,269	117,941
Capital	59,350	55,483	49,067
Key Financial Ratios (in %)
Return on Equity	7.9	12.3	13.7
Return on Assets	1.1	1.6	1.6
Net Interest Margin	6.5	8.1	6.9
Cost-to-Income Ratio	61.2	48.6	57.2
Capital Adequacy Ratio	15.6	13.8	12.9
Common Equity Tier (CET 1) Ratio	14.5	12.6	10.4
Per common share data (in Php)
Net Income Per Share:
Basic	2.0	2.9	2.8
Diluted	2.0	2.9	2.8
Book Value Per Share	26.4	24.7	21.8
Others
Cash Dividend Declared (in millions Php)	-	-	-
Stock Dividends Declared (in million Php)	-	-	-
Headcount	*7,281	7,518	7,803
Officers	3,093	3,146	3,176
Staff	4,188	4,372	4,627

*This includes employee count of Quest Marketing and Integrated Services, Inc., another subsidiary of EastWest, which is not covered in the scope of the rest of this Annual Repo.

If 2020 was the year we steeled our nerves

MESSAGE FROM THE CHAIRMAN

Transforming for Our Future

because of the threats of COVID-19, 2021 was

when we became hopeful that things would sta

turning around.

Higher vaccination coverage and less worry that the health system is geing overwhelmed all pointed to encouraging signs, prompting the government to ease mobility restrictions and allow businesses to open at full capacity in 2021. The increase in business activity, coupled with higher public spending and household consumption, enabled the Philippine economy to sta its recovery from the 9.5% contraction in 2020 and post a 5.7% GDP growth in 2021. That sets the stage for its full recovery to bring us to 2019 GDP level this 2022.

Overall, the pandemic had been difficult to economic actors. The economic backlash resulted in job losses, business closures, and lower productivity. Founately, while much unceainties remain and we continue to be watchful for potential new threats from the pandemic, we are staing to see the horizon beer.

We really hope this continues so that the country can recover almost 3 years of lost oppounities, and get back to its status as among the fastest growing economies in the region.

The pandemic also brought about the need for faster transformation. This call for transformation is very evident in banks like EastWest.

Transforming for our customers

Now that customer behavior has shiſted to using digital payment and banking plaorms, we expanded our digital capabilities and massively increased the number of our online banking users. Our customers who used to go to our stores now come to know and appreciate our online and mobile banking channels. As we transform customer experiences, we aim to create value by keeping our products and services consistently relevant to our customers' ever evolving needs.

While this was largely anticipated, the pace of the digital evolution accelerated during the pandemic. It affirms our decision to keep our store count at 490, including our Rural Bank's store-lites, and shiſt our investment priority to non-store distribution channels.

Our aspiration is to accelerate our digitalization to provide more and more digital banking services.

Transforming for our people

Digital transformation, however, is just one aspect. While technology enables us to offer more seamless, convenient, and safe transactions, services have to be delivered in a distinct way that wins the heas and minds of our customers. Our employees play a vital role in this aspect.

As such, we focus on building talent capacity, competency, and connection as fundamentalelements to our sustainability. We ensure talents'

leadership and functional competencies are developed in time and employee engagement programs are in place. Our goal is to continuously deepen our bench of capable and energized talents who will drive our future growth as well as our subsidiaries'.

With several training programs available in the Bank, EastWestbankers will gain the right competencies, knowledge, and skills to be able to explain what products and services are available. In the end, our customers benefit from having products tailor-fit to their financial needs, as well as services delivered in a way that are efficient, satisfactory, and convenient.

We are also making sure we have a succession of leaders in pursuit of the same vision and aspirations for EastWest.

COVID-19 has also accelerated behavioral changes in the way we work and live, sometimes also blurring the distinction. While working from home enables us to minimize the risk of exposure to the virus, it also affects employee productivity and mental health. No organization to date has yet peected the work-from-home (WFH) situation, even organizations like

EastWest that takes great pride in being one of the most WFH-ready local banks.

Digital transformation...is just one aspect. While technology enables us to offer more seamless, convenient, and safe transactions, services have to be delivered in a distinct way that wins the heas and minds of our customers."