January 29, 2008

Joey Bermudez retiring from Chinatrust

...but isn't turning his back on banking

WHEN news spread about the impending retirement of Chinatrust Philippines president Joey A. Bermudez, he was besieged by text messages and calls from the media. Some reporters expressed concern and wanted to know if he was sick. Those who’ve covered the banking beat and who’ve become his friends have seen Bermudez shrink in weight, which some of us thought troubling, just in the last couple of years.

“No, no!” protests the 52-year-old banker as we got together for lunch last week, a day after Chinatrust reported to the Philippine Stock Exchange that the board of directors had accepted his retirement, effective April 2. “Everyone in the family is just on a health kick. My wife, my kids, my [second] son is even buffed. When he visits the office all the girls say he’s delicious!” he reports to us in his usual deadpan humor face.

He also corrects the misconception that he’s permanently leaving the banking industry. “I’m just retiring from Chinatrust,” he says, which again brought up questions from us about his stint at the Taiwanese-owned bank, and more inquiries about just exactly why he’s leaving it after seven years of service. Did they give him a hard time? Was there any language problem (snickers all around the table)?

But Bermudez dispels all that between mouthfuls of roast chicken by explaining that, actually, he’s taking a break because of his family. “I’m bringing my kids to Canada this April. They’ve all been vocal about wanting to study abroad kasi,” he says. The kids are Miguel, 20; Angelo, 19; Rafael, 14; Gabriel, 11; and the youngest, a girl, Christina, 10. “From April to June, Ester [his wife] and I will go to Canada, look for schools for them and for a house they can live in. Then we’ll come back, ang mga bata lang maiiwan du’n,” he continues.

For those still not in the know, Canada has one of the best educational systems in the world, and the standards of its universities are comparable with even the most distinguished private institutions in the United States, but at almost half the tuition.

Banking veteran

A subsidiary of Chinatrust Commercial Bank Ltd. of Taiwan, Chinatrust Philippines was initially incorporated as Access Banking Corp. in September 1995. It changed to its present name, Chinatrust (Philippines) Commercial Bank Corp., in January 1996 after the Taiwan bank took full ownership of the bank. In June 1999 its shares were finally listed on the Philippine Stock Exchange.

But when Bermudez took over as president in 2001, everyone we knew went “Chinatrust? Ano ’yon?” No one had heard about the bank, except for those who were in the banking industry.

Bermudez has a long distinguished career, working in various major banks — Bank of the Philippine Islands (BPI), PCIBank, Solidbank and, lastly, Philippine Savings Bank — and mentored under the hardiest and most prominent bankers of the time, one of whom, Rafael Buenaventura, even went on to become the central bank governor.

But Bermudez, who has never backed down from a good challenge especially when it comes to creating new bank products and strategies, went ahead to take over as president of what many thought as an obscure bank. Talking to him then, his friends asked what the bank’s owners offered him that was so appetizing he just had to leave his cushy job at PSBank. “They’re giving me a car. But since I still have to prove myself, isa lang ang side-view mirror,” he joshed at the time. That side-view-mirror joke has become standard entertainment fare everytime we get together.

Unlike other Chinatrust branches around Asia, the Philippine branch is the only one that has a local as its head, and the only one whose local business is as dominant as its Taiwanese business. In other countries, Chinatrust primarily targets the global Chinese. “The shareholders agreed with me that our full commercial banking franchise would be underutilized if we were to run after the Taiwanese niche alone. We had to offer products for Filipinos, otherwise we won’t be able to sufficiently enlarge our revenues,” he explains.

So from a small institution, Chinatrust’s lending portfolio has grown into respectable volumes, which is no mean feat considering that it is a foreign bank in a highly competitive local industry. Its consumer loan portfolio has risen to over P5 billion from near zero in 2001. Low-cost deposits have more than quadrupled since 2001. “We also built an Internet-powered debit-card business which has grown to 250,000 cards from zero in 2001,” he notes. Chinatrust branches have expanded to 2, from 18 in 2001, and its brand is now as familiar as most major local banks.

So we assume that Bermudez has already earned that other side-view mirror.


Despite his almost maniacal schedule overseeing the bank’s operations and meeting with colleagues from the parent bank, Bermudez managed to find time to finish his thesis to finally graduate with a Master’s Degree in Business Economics from the University of Asia and the Pacific in 2004. He’s also managed trips to the gym, which explains his trimmed-down physique, and occasional swats at the golf ball.

Asked what he’s going to do now, Bermudez admits considering the possibility of going into microfinance lending. Having started his career as an agribanker at BPI, this is no far stretch for Bermudez. Thinking up of ways to help channel more loans to the agricultural sector and to small and medium enterprises — the usually unbankable sectors—was when he was at his happiest. He considers those days “the most enjoyable” in his entire banking career. In fact, when he was still there, PCIBank always garnered the best bank award from the Guarantee Fund for Small and Medium Enterprises (GFSME) because of the institution’s sizeable lending to such firms. But banks need institutions, like GFSME then, or the Small Business Guarantee Fund Corp. now, to guarantee the loans to the smaller ventures and ensure repayment to the banks.

“With microfinance, you can give vent to your creativity because the structure is less rigid, the rules are more flexible, unlike formal bank lending,” Bermudez explains.

He is already dipping his foot in the sector. Through a tieup with the Management Association of the Philippines, of which he is vice president, he is helping former President Corazon Aquino’s Pinoy Me foundation to assist microfinance institutions to securitize their receivables. “This is so they don’t have to depend on banks for funds. They can just go to the capital markets to raise funds by securitizing their assets,” he says.

The idea is to take a group of investors to buy the loan portfolio of a microfinance company so the latter can use the funds to lend to more borrowers. There is no cost to the borrowers as they will still be paying the same interest rate to the microfinance company, which remains as the loan-collecting agent.

Bermudez is also considering to teach at a business school in the meantime. But he stresses he isn’t closing his doors totally on the banking industry where he honed his career. “I will respond to opportunities as they present themselves, giving more weight this time to what my heart desires rather than what appeals to the pockets.”

But what if a bank offers you a car with two side-view mirrors this time? we ask. “Hmmm....I’ll have to think long about that one,” he answers, deadpan again; and on cue, we all burst out laughing.

(My interview and photo of Joey Bermudez was originally published in the BusinessMirror on Jan. 25, 2008)

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