Montinola asked to stay on as BPI CEO for 2 more years

The Bank of the Philippine Islands (BPI) has asked executive Aurelio Montinola III to stay for two more years as the lender’s president and CEO after he reaches the mandatory retirement age of 65 this August.

In a disclosure, the Ayala-led company said the extension would give Montinola more time to finish reforms he had started at the bank. Montinola’s term extension was approved at the company’s board meeting on June 15.

“(Montinola’s) term extension should give the Ayala group more time to find his successor. This makes it appear that they have a ‘shallow bench,’” analyst Jose Mari Lacson of Campos Lanuza & Co. said.

Lacson said Montinola will need a clear succession plan to show that he has a worthy replacement as head of one of the country’s top banks.

BPI said Montinola reaches the company’s mandatory retirement age this August, “but the board has requested him to stay on for this extended period.”

“This is to enable the completion of the transformation initiatives that Mr. Montinola has introduced over the last few years and will ensure continuity of the bank’s commitments until a new successor will be in place,” the company told the local bourse.

Montinola was widely considered as the front-runner to replace Amando M. Tetangco Jr. as central bank governor when the latter’s six-year term ends this July.

However, President Aquino has said he would reappoint Tetangco, who has received numerous accolades from the international community for his role in stabilizing the company’s economy, for another six years.

Tetangco will be the first central bank governor to serve two terms.

Montinola, who studied at the Harvard School of Business, took over as BPI president in 2005. He currently sits as president of the influential Bankers’ Association of the Philippines.

BPI earlier reported a net income of P2.8 billion for the first quarter of the year, 4.5 percent higher than the P2.7 billion realized in the same period last year. Return on equity was 14.4 percent and return on assets was 1.5 percent.