Interview with GEORGE S. K. TY
By Doreen G. Yu
Editors Note: George Ty is ranked as the 9th richest Filipino in 2009 as conducted by Forbes. He has a net worth of $435M. He is the owner of one of the biggest bank in the Philippines, the Metropolitan Bank and Trust Company (Metrobank).
When George S.K. (for Siao Kian; the first character of his Chinese name means youth, the second strength or persistence) Ty founded the Metropolitan Bank & Trust Co. in 1962, part of his business vision was that in 15 years he would set up a foundation as the means by which he could give back and serve the community. That was one of the few targets he didn’t meet, for it was only in January 1979–or 16 years later–that the Metrobank Foundation was established, acquiring controlling interest in the Manila Doctors Hospital.
Almost three decades later, the foundation has significant projects in health care, education, the military and police, the arts, architecture and design with an operations budget of well over P100 million. Among its projects are awards for outstanding teachers, policemen and soldiers, as well as a national painting competition and another for design. These projects have since become benchmarks in corporate social responsibility and philanthropy.
The foundation’s endowment got a major boost in 1993 when, on the occasion of his son’s wedding, Ty announced a donation of one million of his personal shares in Metrobank–at the time worth about P600 million–to the foundation. With increased resources, the foundation expanded its activities, especially in education.
I am probably one of the most misunderstood men around," he tells us in a rare but extremely candid interview over breakfast (his is a sparse serving of fruit and tea, while the rest of us get a multi-course spread) at the penthouse of the Metrobank Plaza in Makati. "Being the majority shareholder of the biggest bank, people misunderstand that it’s all my money."
That, he warns, is a pitfall facing bankers: "After a while, some of them forget that it’s not their money, and it’s not up to them to invest in whatever they like."
"As a banker," he continues, "I always remember that I’m holding public funds...that I am trusted by the public, and it is my job to protect the depositors." "Trust" and "protect" are two key words that come up often when Ty talks about the banking business. This, he explains, underlies the conservative conduct of business that is the foundation of the strength of Metrobank. He says he realized "how powerful a bank is" when the family-owned Wellington Flour Mills ran into financial difficulties back in the 1950s. "Then I decided I want to be a banker," he smiles.
In 1962, at the age of 29, Ty founded Metropolitan Bank & Trust Company, together with Don Emilio Abello, Don Pio Pedrosa and Placido Mapa Sr., with a branch in Binondo. Four years later, a provincial branch was set up in Davao; by the 1970s the bank went international, opening in Taipei. "In Taiwan, people forgot the name Metrobank; they called it the Filipino bank," he says proudly.
He speaks of "having, somewhere in your heart, love–for the business, for the people. That’s very important." A surprising statement perhaps, coming from a successful hard-nosed banker, but not much more surprising than when he reveals that, threatened with the prospect of a hostile take-over sometime ago, he gathered the bank’s senior officers and told them that if the take-over became inevitable, he would give up all his shares in order to save the bank, perhaps even agree to help run it under the new owners. "At least I save the bank," he reasons, "rather than lose both (my shares and the bank)."
Fortunately, circumstances intervened and the threat never materialized, and Metrobank, majority family-owned but "not run like a family business," today has assets nearing P600 billion and a loan portfolio of almost P350 billion, the country’s biggest bank (until perhaps the merger of Equitable-PCI and Banco de Oro) with a network of 557 domestic branches and 32 overseas offices. It is the only Philippine bank allowed to open a branch in China, in the booming metropolis of Shanghai.
Last year, Ty turned over the presidency of Metrobank to his eldest son Arthur, who at only 40 years is the youngest bank president around. But the elder Ty is quick to dispel any notions that this is simply a case of natural succession, that Arthur got the position only by virtue of being the SOB–son of the boss.
"After observing him for many years, I told Arthur that even if you are not my son, I would still make you president," he says, offering what must be the best endorsement a son can get. "That should give him a lot of motivation," Ty adds with a mischievous laugh.
He also insists that he is "not a very hard-working man, compared to others. I have many hobbies," he says, including swimming which partly accounts for his good health and sprightly gait.
Another hobby–if it can be called a hobby– is his art collection, particularly of traditional Chinese paintings, which is reputed to be the largest private collection in the world outside of China. Some of the paintings in his collection are scheduled to be exhibited in the Shanghai Museum.
When asked about plans for a museum here to house this and other art collections owned by the bank and the foundation, he says, "I’ve thought about it, but I don’t know how much the public here will appreciate Chinese paintings. Some friends abroad put up museums for their collections, but after a while, nobody comes anymore. You cannot expect people to come back and see the same paintings over and over. Opening a museum is not an easy thing."
Another jewel in the crown is Toyota Motor Philippines, the only locally-controlled (51 percent) Toyota subsidiary in the world (all others are majority owned by Toyota Japan), consistently number one in automotive sales in the country.
When asked why and how he ventured into what even he admits is unknown business territory, Ty answers with a laugh, "I asked the same question! They found me... Toyota insisted that it had to be Metrobank. I do not know anything about car manufacturing, but they brought us to Toyota City (in Aichi, Japan), showed us their facilities and assured us that they would support us.
"When I asked Dr. (Shoichiro) Toyoda (at that time president, now honorary chairman, of Toyota) why, all he answered was that ‘when Toyota is looking for a partner...if we find the right partner, then we’re already 50 percent successful.’ We’ve been their partner for over 15 years, so I think maybe we are the right partner!" With the company reali- zing about P12 billion after taxes, there’s very little room for argument there.
A further business surprise is the Marco Polo Hotel in Cebu, in what was formerly the Cebu Plaza Hotel. "This one not only found me, I was forced," Ty guffaws. "It was a bad debt; I had to develop it. With my experience of having stayed in hotels half of my life I went into it," which included overseeing the remodeling and refurbishing of the prime downtown Cebu property.
But associates say that it isn’t really that far a stretch, because the 74-year-old taipan, who came to the Philippines from China when he was six years old, is something of a frustrated architect.
"Sometimes I think I prefer to be in construction than banking," he admits, perhaps only half joking.
His successful real estate venture, Federal Land, now headed by second son Alfred, has roots in an early transaction, when Ty was still a student. He had put a P500 down payment on a piece of property in the then newly developing Araneta Heights in Sta. Mesa, which he subsequently sold for a profit. "I made a few thousand pesos there," he shares.
Making money, and spending money in the community are, for George Ty, two sides of a coin, inseparable. That includes paying taxes (the group pays up to P12 billion annually) and paying workers (around P5.2 billion a year in compensation for Metro-bank employees), and even something as simple as doctors’ fees.
"When I go to see a doctor at Manila Doctors Hospital, they do not make me wait and let me go in first, but I pay double," he says, "so that maybe the doctor can help someone else."
That brand of mathematics also holds true for all the beneficiaries of the foundation’s projects. "We don’t ask anything from them," he reveals. "I only say that in case someday you do well, you are successful, you will help others the way we helped you."
Despite an accent that unmistakably reveals his ethnic origins, Ty is staunchly proud of being Filipino. "If I am not in the Philippines, I cannot be what I am today," he says unequivocally, grateful for the opportunities of education, business, and service that his adopted land has given him and his family. "That is why I never talk negatively about the country."
On Tuesday, February 6, Ty will receive the Management Man of the Year 2006 award from the Management Association of the Philippines (MAP), together with Ayala Corporation chairman Jaime Augusto Zobel de Ayala (see STARweek issue of 21 January 2007).
Asked for his thoughts on this pairing of the two awardees, Ty says, "First of all, I think we both represent a particular generation in our own families’ involvement in the business. We both represent a set of values that have accounted for our families’ success in the industries where we have business interests. The difference is that in my case, you could say that my retirement signals the passing of the torch to the next generation, which JAZA represents at Ayala."
STARweek: What has been your most successful management formula? What is the key to your successfully building the Metrobank "empire"?
Ty: Taking good care of people, whether they are our clients or employees. I think that over the years, we have managed our relationships with people who do business with us, and take care of business for us, such that we have continued to enjoy their loyalty and support. Without these people, Metrobank would not have been able to stay in the business and become an industry leader.
Q: When you handed over the reins to your son Arthur, what advice/instructions did you give him?
Ty: I’ve always told my sons Arthur and Alfred to think big. In particular, I think that Arthur has spent enough time with the bank to know how to run it, and he has a lot of seniors to help him run it better, people like Placido Mapa Jr. and Tony Abacan. I just told him to listen to whatever advise these people may offer him but at the end of the day, it will be up to him to make the hard decisions.
Q: How different is your son’s management style from yours?
Ty: Arthur has the benefit of the best education to make him succeed, not just from the academe but from his long and extensive exposure to many facets of the bank’s operations. In this sense, his management style should be a blend of the best academic preparation and the needed grasp of the Metrobank culture and an understanding of its people.
Q: How do you spend your time now? How active are you still in your various businesses?
Ty: I am trying to expand and consolidate Metrobank’s involvement overseas. We’re growing the family’s business in Asian markets. I am now able to spend more time personally looking after our investments and trying to look for more business opportunities, particularly in China.
Q: What "rule" do you live by, in business as well as in life?
Ty: I’ve always sought to do everything the best way it can be done, whether banking or real estate development or automobile dealership. I think this has accounted for pretty much what I’ve accomplished in life, personally and as a businessman.
Q: How many of your children are now in the business?
Ty: All my five children, in one way or the other, are currently involved in the business or in Metrobank subsidiaries. Arthur is of course president of the bank, while Alfred is in charge of Federal Land and Toyota. My three daughters (Anjanette, Margaret and Alesandra) are all with Metrobank subsidiaries.
Click here to see the top40 richest Filipinos in 2008.