2021 EastWest Annual and Sustainability Report

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 Report, themed “Accelerated Transformation for a Future-Ready You,” EastWest shares the highlights of its past year’s performance, 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.

 

Transforming to Serve You

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 platforms 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.

Supporting 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 committed 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 further solidified our position as one of the strongest in the country.

 

2021 Highlights

Transforming for Our Future
If 2020 was the year we steeled our nerves because of the threats of COVID-19, 2021 was when we became hopeful that things would start turning around.

Higher vaccination coverage and less worry that the health system is getting 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 start 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. Fortunately, while much uncertainties remain and we continue to be watchful for potential new threats from the pandemic, we are starting to see the horizon better. We really hope this continues so that the country can recover almost 3 years of lost opportunities, 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 shifted to using digital payment and banking platforms, 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 shift 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 hearts 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 fundamental MESSAGE FROM THE CHAIRMAN Transforming for Our Future elements 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 perfected the work-from-home (WFH) situation, even organizations like EastWest that takes great pride in being one of the most WFH-ready local banks

We in EastWest continue our efforts to find the right balance between Office work and WFH for jobs where it is appropriate. We continue to refine our response to the question: How do we exactly do justice to the organization and our customers with the different combination of work arrangements? We need to seek ways to transform our ability to work under different working conditions and accordingly adopt the needed retooling, upskilling, and management practices.

Aside from the skillset, competencies and work arrangements of our EastWestbankers, we also have to be very mindful of their health and well-being so they, too can be future-ready for whatever situation the Bank may face. Vaccinations for COVID-19 were offered to all EastWestbankers, third-party hires, and employees’ family and friends. On top of the vaccination program, the Bank also provided wellness programs and health reminders. We are always looking for various ways to ensure the well-being of our employees because they are the lifeblood of our organization.

Transforming for our business
Any transformation will not be complete without improving the way we do things. We have to do away with convoluted processes and systems and harness technology to increase convenience and customer satisfaction. We are upgrading our core banking system to enable us to seize emerging opportunities as the economy recovers and as digital channels become the norm for our customers.

Organizational transformation also demands a change in mindset. We need to be even more innovative, so we have to be more focused on areas where we can really do very well. We are expanding our consumer offerings to remain a consumer-focused bank. In this period of rapid change, we also have to be more adaptive to new things if we are to make our business even more successful. To be adaptive is to focus on making our people more competent through the Bank’s RED – role clarity, environment and development framework, and our other competency development programs. Alongside these programs, we also ensure that we have efficient and seamless processes and systems that help make our employees become more productive. This way, we consistently enable employees in making our customers happy.

Transforming for the future
In embarking on all these transformations, our goal is simple: sustainability.

COVID-19 not only raised expectations for companies to drive positive change; it also made us focus on the long haul, which gets more challenging because of disruptions like the pandemic.

Looking at the bigger picture on a global standpoint, we see that the megatrends happening in the world in the next decade have not significantly changed despite the pandemic clearly derailing our short-term outlook. We are still able to map out our strategy as a sustainable business by keeping tabs on these trends that may impact our future:
1) The shift in the economic power to China and the so-called “E7” emerging markets from the G7 economies;
2) Climate change and resource scarcity;
3) Rapid advancement of technology;
4) Changes in demographics and social change; and
5) Rapid urbanization.

These five megatrends all have an impact on the Philippines given that:
1) We are geographically located near China and Indonesia (one of the E7);
2) We are the country most at risk from a climate crisis;
3) We are among the most active digital users in the world;
4) We have a young population that would propel our future growth; and
5) We have a rapidly growing urban population equivalent to nearly half of our total population.

To meet the demands of the future as a sustainable business, we need a competent workforce, the right systems and processes, products and services that are relevant to customers’ needs, and happy customers — it is as simple as that.

We want to be a successful, sustainable and future-ready organization that’s why we have to accelerate transformation. Some goals may take longer to achieve, but we will persevere and sustain with clarity of vision. When we become successful in building the kind of organization that has the endurance to last, then we will make the most difference to our customers, our employees, our shareholders, and to the larger society.

Because of COVID-19, we gained a shared understanding of a universal truth: We are all in this together.

On behalf of the Board of Directors of EastWest, thank you for your support during another extraordinary year. We look forward to the day when we can meet again in person and toast to new beginnings.