GLOBAL HISTORY

Banking Service

It is believed that the English word Bank derived from the Italian
word Banco (long bench), because Jewish bankers sat them while providing
currency exchange and loan services, normally in populous areas like
markets or preaching halls. Bank may also trace its origins to the German
word Banch meaning a pile, the word Germans used to represent a kind
of public debt. Regardless of how the word originated, banks have been
important financial institutions linking the economies of the world.
Historically, banks functioned to provide deposit, loan, and currency
exchange services. With time, these banking services became increasingly
important to a nations economic advancement.
Safe in the temple: 18th century BC
Wealth compressed into the convenient form of gold brings one
disadvantage. Unless well-hidden or protected, it is easily stolen.
In early civilizations a temple is considered the safest refuge; it is a solid
building, constantly attended, with a sacred character which itself may deter
thieves. In Egypt and Mesopotamia gold is deposited in temples for safekeeping. But it lies idle there, while others in the trading community or in
government have desperate need of it. In Babylon at the time of Hammurabi,
in the 18th century BC, there are records of loans made by the priests of the
temple. The concept of banking has arrived.
In Egypt, There is firm evidence that around 3,900 B.C., Egypt adopted a
banking service utilizing cows as units of exchange. Deposited cows were
assigned a value and exchanged for goods of equal value. Near Babylon, in
modern-day Iraq, services to secure valuables and extend business loans

were also emerging. At the Semitic red monastery of Uruk (thought to be the
derivation of Iraq), one of the worlds oldest cities, the priests leased land
to farmers. The monastery also held a vast quantity of valuables donated by
the faithful. The monastery earned extra income by lending these items to
borrowers and charging rental fees.
Later, they offered pawning services, paying farmers cash for their grain and
cattle. As Uruk prospered, traders began depositing their valuables with the
monasteries. They were issued clay tablets coloured with sienna as proof of
deposit; with them, they could withdraw items at monastery branches. In
addition to the monasteries, wealthy people offered banking services.
Greek and Roman financiers: from the 4th century BC
Banking activities in Greece are more varied and sophisticated than in any
previous society. Private entrepreneurs, as well as temples and public bodies,
now undertake financial transactions. They take deposits, make loans,
change money from one currency to another and test coins for weight and
purity.
They even engage in book transactions. Moneylenders can be found who will
accept payment in one Greek city and arrange for credit in another, avoiding
the need for the customer to transport or transfer large numbers of coins.
Rome, with its genius for administration, adopts and regularizes the banking
practices of Greece. By the 2nd century AD a debt can officially be
discharged by paying the appropriate sum into a bank, and public notaries
are appointed to register such transactions.
In early Ancient Rome deposit bankers were known as argentarius and at a
later time as nummularius or mensarii. The banking-houses were known
as Taberae Argentarioe and Mensoe Numularioe. Money-lenders would set up
their stalls in the middle of enclosed courtyards called macella on a long
bench called a bancu, from which the words banco and bank are derived.
The collapse of trade after the fall of the Roman Empire makes bankers less
necessary than before, and their demise is hastened by the hostility of the
Christian church to the charging of interest. With the ascent of Christianity,
banking became subject to additional restrictions, as the charging of interest
was seen as immoral. The Torah and later sections of the Hebrew
Bible criticize interest-taking, but interpretations of the Biblical prohibition
vary. Usury comes to seem morally offensive. One anonymous medieval

author declares vividly that 'a usurer is a bawd to his own money bags,
taking a fee that they may engender together'.
Religion and banking: 12th - 13th century
The Christian prohibition on usury eventually provides an opportunity for
bankers of another religion. European prosperity needs finance. The Jews,
barred from most other forms of employment, supply this need. The Jews
could lend to farmers against crops in the field, a high-risk loan at what
would have been considered usurious rates by the Church.
The same is true of another group, the knights Templar, who for a few years
become bankers to the mighty. They too, an exclusive sect with private
rituals, easily fall prey to rumour, suspicion and persecution. The profitable
business of banking transfers into the hands of more ordinary Christian folk first among them the Lombards.
Bankers to Europe's kings: 13th - 14th century
During the 13th century bankers from north Italy, collectively known as
Lombards, gradually replace the Jews in their traditional role as moneylenders to the rich and powerful. The business skills of the Italians are
enhanced by their invention of double-entry book-keeping. Creative
accountancy enables them to avoid the Christian sin of usury; interest on a
loan is presented in the accounts either as a voluntary gift from the borrower
or as a reward for the risk taken.
Siena and Lucca, Milan and Genoa all profit from the new trade. But Florence
takes the lion's share.
Florence is well equipped for international finance thanks to its famous gold
coin, the florin. First minted in 1252, the florin is widely recognized and
trusted. It is the hard currency of its day.
By the early 14th century two families in the city, the Bardi and the Peruzzi,
have grown immensely wealthy by offering financial services. They arrange
for the collection and transfer of money due to great feudal powers, in
particular the papacy. They facilitate trade by providing merchants with bills
of exchange, by means of which money paid in by a debtor in one town can
be paid out to a creditor presenting the bill somewhere else (a principle
familiar now in the form of a cheque).

The ability of the Florentine bankers to fulfil this service is shown by the
number of Bardi branches outside Italy. In the early 14th century the family
has offices in Barcelona, Seville and Majorca, in Paris, Avignon, Nice and
Marseilles, in London, Bruges, Constantinople, Rhodes, Cyprus and
Jerusalem.
To add to Florence's sense of power, many of Europe's rulers are heavily in
debt to the city's bankers. Therein, in the short term, lies the bankers'
downfall.
In the 1340s Edward III of England is engaged in the expensive business of
war with France, at the start of the Hundred Years' War. He is heavily in debt
to Florence, having borrowed 600,000 gold florins from the Peruzzi and
another 900,000 from the Bardi. In 1345 he defaults on his payments,
reducing both Florentine houses to bankruptcy.
Florence as a great banking center survives even this disaster. Half a century
later great fortunes are again being made by the financiers of the city.
Prominent among them in the 15th century are two families, the Pazzi and
the Medici.
In 1407, the first modern bank was founded in Italy under the name of
Banco di San Giorgio. The Bank or Company of Saint George was a financial
institution of the Republic of Genoa. Founded in 1407 it was one of the oldest
chartered banks in Europe, if not the world and known as the worlds first
modern, public bank.
After years of war with Venice and a crushing defeat at the battle of Chioggia
in 1381, the republic of Genoa was effectively bankrupt. To rescue it, towards
the end of 1407, Genoas Council of Ancients authorized the Casa di San
Giorgio to carry out this job by creating a bank that would facilitate the
repayment of Genoas debts in return for interest at 7 per cent and the right
to collect taxes and customs owed to the city. This was beginning of the
Banco di San Giorgio which became forerunner to modern Merchant Banking
and survived for nearly 400 years (1407-1805).
The Fugger dynasty: 15th - 16th century
At the start of the 15th century the Medici are Europe's greatest banking
dynasty, but their political power later distracts them from the highly focused
business of making money. After the reign of Lorenzo the Magnificent

the bank's finances are in a risky state.

Their role as leading bankers is usurped by a German dynasty, that of the
Fuggers. Like the Medici, the Fuggers amass vast wealth by massaging the
finances of the papacy and of great princes.
The shift of European power to the Habsburgs in the late 15th century is the
basis of the Fugger wealth. The family descends from an Augsburg weaver
and their first fortune is in textiles. They make their first loan to a Habsburg
archduke in 1487, taking as security an interest in silver and copper mines in
the Tirol - the beginning of an extensive family involvement in mining and
precious metals. In 1491 a loan is made to Maximilian; a subsequent loan to
him in 1505 (by which time Maximilian is the Holy Roman emperor) is
secured by the feudal rights to two Austrian counties.
But by far the largest Fugger project is undertaken in 1519 on behalf of
Maximilian's grandson, Charles.
Charles is determined to succeed his grandfather as German king and Holy
Roman emperor, but the post involves election and there is a rival candidate
- the French king, Francis I. Charles turns to the Fugger family for his election
expenses. Out of a massive total of 852,000 florins, to be spent on bribing
the seven electors, the Fuggers provide nearly two thirds (544,000 florins).
The campaign succeeds. The candidate is elected as Charles V.
Interest rates at the time are never less than 12% per annum. And when a
loan has to be raised urgently, the 16th-century banker is often able to
negotiate a rate of as high as 45%. Banking for emperors is profitable.
Continuous warfare and other expenses of state are a constant drain on
Charles's treasury. Like any ruler of the time, his costs outrun his sources of
revenue. Loans from bankers fill the gap, and they are often repaid by leases
on sources of royal income.
Thus the Fuggers are granted in 1525 the revenues from the Spanish orders
of knighthood, together with the profits from mercury and silver mines. The
bankers therefore become, in a sense, both revenue collectors and managers
of state assets. But their high rates of interest can quickly cripple a kingdom
engaged in too many unprofitable wars.
The Fuggers use their wealth responsibly, as can still be seen in the Fuggerei

- a community for the poor, built in Augsburg in 1519 and still in use today.
By the end of the 16th century the family withdraws from financial risktaking, after some disastrous ventures, and settles into the more
conventional aristocratic existence which their wealth has bought.
There will be other such exceptional dynasties, most notably the Rothschilds.
But by the early 17th century banking begins also to exist in its modern sense
as a commercial service for customers rather than kings.
Banks and cheques: from the 16th century
In 1587 the Banco della Piazza di Rialto is opened in Venice as a state
initiative. Its purpose it to carry out the important function of holding
merchants' funds on safe deposit, and enabling financial transactions in
Venice and elsewhere to be made without the physical transfer of coins.
This was an accepted part of trade in ancient Greece, but it has previously
been carried out by individual moneylenders - involving a high risk of
bankruptcy. The Venetian initiative, with the expenses born by the state, is
an attempt to provide a measure of security in this central aspect of the risky
business of trade.
Other Mediterranean trading centers (in particular Barcelona and Genoa)
have possibly taken this step before Venice, and it is soon followed in
northern cities - Amsterdam in 1609, Hamburg in 1619, Nuremberg in 1621.
A related development is that of the cheque, a device which depends on the
existence of banks as recognized institutions. A bill of exchange, the original
method of transferring money without the use of coins, is a complex contract
between private parties and one or more moneylenders. A cheque is a bill of
exchange between banks, payable by one of the banks to whoever holds and
presents the cheque.
This much simplified version of a bill of exchange slowly gains acceptance
from the late 17th century. At the same time it is realized that the banking
process has its own in-built potential for profit which can more than cover the
costs of processing cheques and transferring money.
The total of the money left on deposit by a bank's customers is a large sum,
only a fraction of which is usually required for withdrawals. A proportion of
the rest can be lent out at interest, bringing profit to the bank. When the

customers later come to realize this hidden value of their unused funds, the
bank's profit becomes the difference between the rates of interest paid to
depositors and demanded from debtors.
The transformation from moneylenders into private banks is a gradual one
during the 17th and 18th centuries. In England it is achieved by various
families of goldsmiths who early in the period accept money on deposit
purely for safe-keeping. Then they begin to lend some of it out. Finally, by
the 18th century, they make banking their business in place of their original
craft as goldsmiths.
With private banking part of the fabric of commercial life, the next stage in
the story is the development of national banks.
National banks and Modern Banks: 17th - 18th century
Venice, after being possibly the first city to found a bank for the keeping of
money on safe deposit and the clearing of cheques, is also a pioneer in the
involvement of a bank with state finances. In 1617 the Banco Giro is
established to solve problems encountered by the earlier Banco della Piazza
di Rialto, which has got into trouble through the making of unsecured loans.
Its debtors include the Venetian government. The Banco Giro is founded on
the principle that the government's creditors accept payment in the form of
credit with the new bank. In solving an existing problem, this also provides
new opportunities. Venice now has a mechanism for raising public finance on
the basis of guaranteed credit.
The logical extension of this concept is a national bank, established in some
form of partnership with the state. The earliest example is the Bank of
Sweden, founded in 1668 and today the world's oldest surviving bank. It is
followed before the end of the century by the Bank of England, originally a
joint-stock company which begins its existence in 1694 by arranging a loan
of 1,200,000 to the government.
During the 18th century the Bank of England gradually undertakes many of
the tasks now associated with a central bank. It organizes the sale of
government bonds when funds need to be raised. It acts as a clearing bank
for government departments, facilitating and processing their daily
transactions.

The Bank of England also becomes the banker to other London banks and
through them to a much wider banking community. The London banks act as
agents in the capital for the many small private banks which open around
the country in the second half of the 18th century.
All these banks use the Bank of England as a source of credit in a crisis. For
this purpose the national bank needs a large reserve of gold, which it
accumulates until almost the entire hoard of the nation's bullion is stored in
its vaults.
The Industrial Revolution and growing international trade increased the
number of banks, especially in London. At the same time, new types of
financial activities broadened the scope of banking far beyond its origins. The
merchant-banking families dealt in everything from underwriting bonds to
originating foreign loans. These new "merchant banks" facilitated trade
growth, profiting from England's emerging dominance in seaborne shipping.
Two immigrant families, Rothschild and Baring, established merchant
banking firms in London in the late 18th century and came to dominate world
banking in the next century.
A great impetus to country banking came in 1797 when, with England
threatened by war, the Bank of England suspended cash payments. A
handful of Frenchmen landed in Pembrokeshire causing a panic. Shortly after
this incident, Parliament authorized the Bank of England and country bankers
to issue notes of low denomination.

The Growth of Commercial Banking

By the early 1900s New York City was beginning to emerge as a world
financial center. Companies and individuals acquired large investments in
(other) companies in the US and Europe, resulting in the first true market
integration. This comparatively high level of market integration proved
especially beneficial when World War I cameboth sides in the conflict
sought funds from the United States, by issuing new securities and selling
existing holdings, though the Allied Powers raised by far the larger amounts.
Being a lender to the world resulted in the largest growth of a financial
economy to that point.

The stock market crash of 1929 was a global eventmarkets crashed

everywhere, all at the same time, and the volume of foreign selling orders
was high. The Great Depression followed, and the banks were blamed for it,
although the evidence has never been strong to connect the speculative
activities of the banks during the 1920s with either the crash or the
subsequent depression of the 1930s. Nonetheless, there were three
prominent results from these events that had great effect on American
banking. The first was the passage of the Banking Act of 1933 that provided
for the Federal Deposit Insurance system and the GlassSteagall provisions
that completely separated commercial banking and securities activities.
Second was the depression itself, which led in the end to World War II and a
30-year period in which banking was confined to basic, slow-growing deposit
taking and loan making within a limited local market only. And third was the
rising importance of the government in deciding financial matters, especially
during the post-war recovery period. As a consequence, there was
comparatively little for banks or securities firms to do from the early 1930s
until the early 1960s.
Rise of Automatic Teller Machines
Many experts believe that the first automated banking machine was the
creation of an American inventor and businessman named Luther Simjian.
Simjian held patents on all kinds of thingsincluding an army flight simulator,
a color x-ray machine, a self-focusing camera, an exercise bicycle and a
teleprompterbut he was best known for his work on the Bankograph, a
machine that could accept cash or check deposits at any hour of the day or
night.
In 1960, Simjian managed to persuade a New York City bank to take a few of
his automatic-deposit machines. So that customers could trust that they
would see their money again, there was a microfilm camera inside the
Bankograph that took a snapshot of every deposit. Customers received a
copy of the photo as their receipt. Still, the Bankograph did not catch on.
The only people using the machines were prostitutes and gamblers who
didnt want to deal with tellers face to face, Simjian explained, and there
were not enough of them to make the machines a worthwhile investment.
By the end of the 1960s, however, times were changing, and a broader
segment of the populationmore comfortable with the idea of self-service
and more willing to trust unfamiliar technologieswas willing to give
automated banking a try.

In 1967, a Scottish inventor named John Shepherd-Barron was sitting in the

bathtub when he had a flash of genius: If vending machines could dispense
chocolate bars, why couldnt they dispense cash? Barclays, a London bank,
loved the idea, and Shepherd-Barrons first ATM was installed in a branch on
Enfield High Street not long afterward. Unlike modern ATMs, ShepherdBarrons did not use plastic cards. Instead, it used paper vouchers printed
with radioactive ink so that the machine could read them. The customer
entered an identification code and took her casha maximum of 10 at a
time.
The first automated banking machine in the U.S. was devised by a Dallas
engineer and former professional baseball player named Donald Wetzel.
Wetzels machine used plastic cards like the ones we use today. (Instead of
radioactive ink, the cards stored account information in magnetic strips.) In
September 1969, a Chemical Bank branch on Long Island installed the first of
Wetzels machines. By 1970, dozens of U.S. banks had jumped on the ATM
bandwagon. To introduce this new machine to consumers, banks used all
kinds of advertising tricks. For example, to get the attention of female
customers, a bank in Columbus, Ohio, sponsored a six-hour Paul Newman
movie marathon on a local television channel. Every 25 minutes during the
movies, commercials for the bank touted the advantages of its new cashdispensing machine.
However, it took a corporate gamble and a blizzard for the ATM to win the
confidence of American consumers. In 1977, the chairman of Citibank took a
huge risk, spending more than $100 million to install ATMs all over New York
City. That investment paid off the following January when a huge blizzard hit
New York, dumping 17 inches of snow on the city. Banks were closed for
days; meanwhile, ATM use increased by 20 percent. Within days, Citibank
had launched its by-now-familiar The Citi Never Sleeps ad campaign.
Posters and billboards showed customers trudging through snow to get to
Citibank ATMs.
After that, almost every one of the countrys banks followed Citis lead. The
era of the ATM was underway.
The Rise of Electronic Banking
Online or e-banking was preceded by home banking, which allowed clients to
access their accounts and perform basic transactions over the phone. It was
introduced in the mid-1970s in order to reduce back-office check-processing
costs. Robert Spicer, Vice President of Chevy Chase, a federal savings bank,

says that it failed to generate enough consumer interest to become cost

effective.
In 1981, New York City became the first place in America to test out this
innovative way of doing business, as four of its major banks Citibank,
Chase Manhattan, Chemical and Manufacturers Hanover made this home
banking access available to their customers. At the time, customers didnt
really take to the initiative, so it failed to gain momentum until the next wave
of innovation in the mid-1990s.
In October, 1994, Stanford Federal Credit Union became the first financial
institution in the U.S. to offer internet banking to all of its customers. Around
a year later, on October 6, 1995, Presidential Bank became the first bank in
the country to offer customers access to their accounts online. Many other
banks soon followed its lead.
Customers were hesitant to use online banking at first for a number of
reasons. Many didnt trust its security features, were unsure of how to use it
and didnt care to invest the significant amount of time start up required.
After easing into e-commerce, the idea slowly began to catch on.
It took until 2007 for major banks in the U.S. to develop mobile banking apps
that actually worked and customers wanted. Consumers found it difficult to
view their financial information on the small cellphone screens that were
common at the turn of the 21st century. Some banks offered the service,
only to discontinue it for lack of interest. In 2002, Wells Fargo developed a
mobile banking service and only 2,500 customers enrolled in it. Because of
the poor response, they soon withdrew the offering.
Once smartphones took over from cellphones, and the size and capabilities
of mobile devices increased, so did the effectiveness of mobile banking.
Banks introduced mobile banking apps that accommodated more types of
cellphones, but smartphone users and advanced apps gave mobile banking
the boost that made it a safe and viable choice. Consumers preferred the
easier navigation and improved images and graphics offered by these
updated, technologically advanced apps.
By 2008, even smaller banks began to offer mobile banking services and
apps. By then, larger banks and their customers were using these services
regularly. By 2012, more than 21 percent of all smartphone owners were
using mobile banking -- in a report conducted for the Board of Governors for
the Federal Reserve -- but 44 percent of that number belongs to the 18-to-29

age group, with the second largest group -- 30 to 44 -- representing 36

percent of those who use mobile banking apps. These numbers are expected
to increase as more people rely on smartphones and tablets, and banks
continue developing apps for a variety of mobile devices.

One of the first US financial institutions to literally put banking at

its customers fingertips
In 2015, Webster Bank announces the integration of Apples Touch ID
authentication into its mobile banking app, one of the features first uses by
a US bank. As part of the robust multi-tier security model developed for the
app by Mobile Money provider Monitise (LSE: MONI), Touch ID allows
consumers to access selected features by fingerprint identification alone.
The service is available as part of an update to Websters app, developed
with Monitise, now on the App Store.
The use of Touch ID allows customers of Webster Bank - which has over $22
billion in assets and 164 banking centers in the northeast - to login and
check their balance or view their transaction history by just swiping their
fingerprint. In order to safeguard accounts, for more detailed transactions
such as payments and transfers, users will continue to follow full
authentication steps using their regular account name and password.

LOCAL HISTORY
Banking Service

Spanish and American Colonial Period

According to The General Banking Law Annotated: Book 2,- published by
the The Banko Sentral ng Pilipinas, the first organized credit institutions,
known as Obras Pias, were established in the Philippines during the 16th
century Spanish colonial era.
The capital of Obras Pias came from pious Catholics and their profits were
intended to maintain hospitals, orphanages, and other charitable endeavors.
The Obras Pias served as commercial banks and marine insurance
companies, with the bulk of their funds invested in the galleon trade.
In 1869, the opening of the Suez Canal facilitated trade between the
Philippines and Europe. The Philippines then attracted British capital, and in
the years that followed, the Chartered Bank of India, Australia, and China
(now known as the Standard Chartered Bank) and the Hong Kong and
Shanghai Banking Corporation (HSBC), both British-owned banks, opened
their branches in Manila.

In 1883, Madrid-based Banco Peninsular Ultamarino also established a

branch in the country. However the Spanish bank ceased operations after
four years.
By the end of the Spanish regime, the banks in existence were: El Banco
Espaol Filipino de Isabel (now the Bank of Philippine Islands or BPI), which
was given the sole mandate under a Spanish Royal Decree of 1854 to issue
banknotes called Pesos Fuertes; the Chartered Bank of India, a branch of the
HSBC; the Monte de Piedad; and the Banco Peninsular Ultamarino de Madrid.
It should be noted that under the Spanish regime, there were no significant
Filipino interests, initiatives, or capital in banking.
During the American colonial period, banks from the United States of
America started to establish local branches that would cater to growing
American economic interests and capital inflow into the country.
The American Bank was first to open a branch in 1901. However, it was
placed under receivership by the Insular Treasurer for making doubtful loans
after only four years of operation.
At the turn of the 20th century, the Americans established the Guaranty
Trust Corporation (GTC) and International Banking Corporation (IBC). The
existence of GTC was short-lived, while IBC was eventually taken over by the
National City Bank of New York (now known as Citibank, N.A.).
Years later, in 1912, as a result of an earlier decision of the stockholders to
rename the Bank, El Banco Espaol Filipino became officially known as the
Bank of the Philippine Islands (BPI), or Banco de las Islas Filipinas. Under the
American administration, the Bank was allowed to continue issuing Philippine
pesos, although no longer on an exclusive basis.
Other foreign banks subsequently made their presence in the Philippines. In
1918, the Manila branch of the Yokohama Specie Bank was given a license to
do business in the Philippines.
From 1919 to 1930, foreign banks Asia Banking Corporation, the ChineseAmerican Bank of Commerce of Peking, China, and the National City Bank of
New York opened branches in the Philippines.
During the American colonial era, the Philippine banking system was largely
dominated by foreign bank branches whose capitals were devoted to

financing commerce and trade, rather than the development of the countrys
natural resources.
It should also be mentioned that the Bank of the Philippine Islands, which
then possessed the privilege of issuing currency notes, was the only
significant bank controlled by local interests.
To break the foreign banking monopoly and remedy the lack of credit
facilities, the Philippine National Bank (PNB) was established in 1916 with the
Philippine Government as the majority stockholder.
The PNB was meant to function as a government enterprise that would widen
the variety of banking services beyond trade finance in exportation and
importation, money changing of foreign currency, and fund transfers, all of
which, while useful in the short term, failed to mobilize capital in the
development of natural resources.
Its charter at that time empowered the PNB to issue bank notes and act as a
depositary of government funds.
Commonwealth Period
During the Commonwealth period (1935-1946), more foreign bank branches,
such as the Bank of Taiwan and the Nederlandsche Indische Handelsbanks,
were established in the Philippines.
In 1939, the government created the Agricultural and Industrial Bank to
absorb the functions of the National Loan and Investment Board and to
harness government resources.
The Philippine Bank of Communications, reported to be the first bank with
genuine Filipino private capital, was also established during this period.
However, it was temporarily closed at the outbreak of the Second World War.
According to the Bangko Sentral ng Pilipinas The General Banking Law
Annotated: Book 2 (our main source of these historical data), only Filipinoowned and Japanese banks were allowed to operate during World War II.
The Chartered Bank of India, Australia, and China, the HSBC, and the
National City Bank of New York were all treated as enemy properties and
placed under liquidation by the Japanese Military Government.

On the other hand, the Nampo Kaihatsu Kinko (or the Southern Development
Bank) opened a Manila branch in 1942 and acted as the Japanese
governments fiscal agent in the Philippines.
After the liberation, all domestic banks that operated during the Japanese
occupation were unable to reopen because the greater part of their assets
consisted of worthless Japanese war notes, bonds, and obligations of the
Japanese-sponsored republic, and balances with Japanese banks.
In June 1945, Executive Order No. 48 paved the way for the reopening of
some banks.
The first license to reopen was granted to the National City Bank of New York
in June, 1945. In the same year, other foreign banks such as the Chartered
Bank of India, Australia, and China, HSBC, and Nederlandsche Indische
Handelsbanks were likewise granted the license to reopen.
In 1947, a branch of the Bank of America, NT & SA (Bank of America) of San
Francisco, California, was allowed to establish a branch in Manila. The
following year, the Bank of America absorbed the assets and liabilities of the
local branch of the Nederlandsche Indische Handelsbanks.
The year 1949 is identified as ''a turning point in the monetary history of the
Philippines.'' It marked the beginning of the country's ''post-independence
monetary history'' with the 1948 enactment of the Charter of the Central
Bank of the Philippines - setting into motion the operation of the country's
monetary authority.
In 1949, when the Central Bank of the Philippines started its operations, the
banking system consisted of seven commercial banks, three thrift banks, the
sole government specialized bank, the Agricultural and Industrial Bank, and
seven foreign bank branches. It would also be important to note that the
General Banking Act (GBA) became effective on the same day, for the first
time, explicit rules and regulations governing bank organization and
operations were laid down.
Another major banking statute, the Rural Banks Act, was enacted in 1952.
Two years later, the Agricultural and Industrial Bank merged with the
Reconstruction and Rehabilitation Fund to form the Development Bank of the
Philippines (DBP).
During this period, the Central Bank was actively engaged in the
establishment of development banks. It also provided rural banks with 100%

counterpart financing for equity and access to rediscounting facility at highly

subsidized terms.
Another major piece of legislation enacted under the Philippine Republic was
the Law on Secrecy of Bank Deposits, which discouraged private hoarding by
encouraging the public to deposit their money in banking institutions.
In 1969, the Ayala Corporation, which had been associated with the Bank
since the start became the dominant shareholder group. Following this
change in the ownership structure, BPI soon became the financial flagship of
the Ayala group of companies.
The ascendancy of the Ayala business house among the Bank's shareholder
groups led to significant changes in the way the first bank in the Philippines
conducted its business during the latter half of the 20th century. For
instance, the Bank fast-tracked its growth by engaging in a merger with
Peoples Bank and Trust Company in 1974. This was followed by the merger
with or acquisition of Commercial Bank and Trust Company in 1981, Ayala
Investment and Development Corporation in 1982, Makati Leasing and
Finance Corporation in 1982, Family Bank and Trust Company in 1985, City
trust Banking Corporation in 1996, Ayala Insurance Holdings Corporation in
2000, Far East Bank and Trust Company in 2000, DBS Bank Philippines in
2002, and Prudential Bank in 2005.
In the 1980s, the Central Bank issued rules creating investment
management accounts that did not qualify as trust accounts. The new
regulation encouraged the trust department to introduce a new financial
product called the common trust fund.
It was in this decade that universal banking was introduced in the country.
This system was adopted by the Central Bank upon the recommendation of
the World Bank-to enable certain banks to invest in allied and non-allied
undertakings while engaging in commercial banking functions.
A significant circular issued by the Central Bank in the 1980s was Circular No.
905 (issued in 1983), which lifted the interest rate ceilings imposed by the
Usury Law.
Interest-rate ceilings had led to an excess demand for loans and credit
rationing. The Malacaang Palace interfered in loan decisions regarding
state-owned banks, weakening the quality of bank portfolios. It was argued
that a market-determined interest rate would make such behavior less

rewarding and more difficult. However, before the interest rate reform could
be initiated and before the expanded commercial bank reform had an impact
on the banking industry, a series of crises hit the Philippines, throwing the
country's financial system into disarray.
The economic and political crisis that occurred in the aftermath of the
assassination of Marcos's political rival, Benigno Aquino, resulted in a virtual
collapse of much of the banking industry, particularly the smaller institutions.
The larger banks suffered substantial losses from the drastic devaluations of
the peso between 1983 and 1985. Commercial bank loans increased slightly
in 1984, but then fell almost 30 percent in the following two years--from
P116 billion to P83 billion--before turning upward again. Inflation during that
three-year period was almost 80 percent. The two largest financial
intermediaries, the Philippine National Bank and Development Bank of the
Philippines, became insolvent, and a number of financial institutions failed,
including the three largest investment houses, three commercial banks, the
majority of the more than 1,000 rural banks, and the largest savings bank.
The Aquino government undertook a rehabilitation program for the Philippine
National Bank and Development Bank of the Philippines. In 1986
nonperforming assets of the two institutions were transferred to the
government, reducing the value of the assets of the Philippine National Bank
by 67 percent and that of the Development Bank of the Philippines by 87
percent. The relative importance of these two banks in the financial sector
diminished dramatically. The domestically owned commercial banking sector,
however, became more concentrated. From the mid-1950s to the early
1980s, the five largest private domestic commercial banks accounted for
about 35 percent of total assets of the private domestic commercial banks.
By 1988 that ratio had risen to around 55 percent. The combined assets of
the five private domestic commercial banks, the Philippine National Bank,
and the two largest foreign branch banks accounted for two-thirds of total
commercial bank assets, up from 56 percent in 1980.
In 1990 the six largest commercial banks earned an estimated P7.9 billion in
after-tax profits, an increase of 42 percent over 1989, which in turn was a 32
percent increase over 1988. A 1991 World Bank memorandum noted that the
extent of bank profits indicated a "lack of competition" and a "market
structure for financial services characterized by oligopoly." Philippine banks
had the widest interest rate spread (loan rate minus deposit rate) in
Southeast Asia.

It was only around 1999 to 2000; major banks in the Philippines were able to
successfully implement internet banking. Before, internet banking was just
browser-based or can be only accessed through desktops or laptops. Now,
you can access internet banking with your phone or mobile devices as long
as it has internet connection.
Major Banks in the Philippines have most internet banking services available
that other foreign banks have. Some basic services that major banks in the
Philippines have are:

account inquiry or deposit, loans, credit cards

funds transfer

bills payment

customer services:
o stop payment order on check
o checkbook reorder
o information on products and services

Improvements of Internet Banking in the Philippines

Some special services have been added such as:

schedule banking transactions

foreign exchange

reloading of prepaid mobile phones

online account applications

electronic statements

Advanced internet banking has been also added:

investment account inquiry

subscription and redemption of investment funds

mobile application: banking and mobile payments

In 2008, The Bank of the Philippine Islands was the first to introduced
envelope- less deposit machine- Express deposit; however, these units still
belong to the previous generation of ATMs that dont have intelligent"
capabilities. Improve on the machine was released by the Bank of the
Philippine Islands were released on 2012.
On 2015, The Bank of the Philippine Islands recently launched a remote
banking app for Windows Phone. It's the first such banking app in the
Philippine Islands for Microsoft's mobile operating system.
Heres a list of its features:

View the account balances of your enrolled BPI, BPI Family Savings, BPI
Direct deposit accounts, BPI Credit Cards, and Investments accounts
View the transaction history and details of your enrolled accounts
Transfer funds from your enrolled accounts to any other BPI, BPI Family
Savings, or BPI Direct deposit account
Pay to over 300 partner merchants
Subscribe to or redeem from your investment accounts
Load a BPI Express Cash Card or BPI My ePrepaid Card
Reload Globe/TM prepaid numbers
Look for the nearest ATM/branch
Browse through BPI's latest promos
Check the latest Foreign Exchange rates of BPI
Access to Quick Links
Email confirmation sent to your registered email address for every
financial transaction done
Verisign security certificate which enables SSL for end-to-end
encryption
Optional enabling of the Transfer to Anyone requires ATM activation or
signed form
Remote disabling of the Transfer to Anyone feature via BPI Express
Online or 89100

The following are the lists of best banks in the Philippines for 2016. The lists
include the best commercial banks as to assets, deposits, capital, and loans.
Top 10 Best
Bank in the
Philippines as
to Assets

Top 10 Best
Bank in the
Philippines as
to Deposits

Top 10 Best
Bank in the
Philippines as
to Loans

Top 10 Best
Bank in the
Philippines as
to Capital

BDO
Metrobank
BPI
Landbank
RCBC
DBP
PNB
Chinabank
Unionbank
Security Bank

BDO
BPI
Metrobank
Landbank
Chinabank
RCBC
PNB
Unionbank
DBP
UCPB

BDO
BPI
Metrobank
Landbank
Chinabank
RCBC
PNB
Security Bank
DBP
Unionbank

BDO
Metrobank
BPI
Landbank
Unionbank
DBP
RCBC
Chinabank
Security Bank
PNB

Commonly known as Banco de Oro, BDO, or sometimes BDO Unibank, is one

of the largest banks in the Philippines. It is owned by the SM Group of
Companies, one of the country's largest conglomerates and owner of the SM
chain of malls.
Banco de Oro had its humble beginnings on January 2, 1968, when it started
off as a thrift bank called Acme Savings Bank. With two branches in Metro
Manila, Acme was one of the smallest banks in the Philippines at the time.
In November of 1976, Acme was acquired by the Sy Group, the group of
companies currently owned by retail magnate Henry Sy, and renamed Banco
de Oro Savings and Mortgage Bank.
In December of 1994, BDO became a commercial bank. To reflect the bank's
new status, BDO was renamed Banco de Oro Commercial Bank, and in
September of 1996, BDO became a universal bank, which led to the bank's

name being changed to the current Banco de Oro Universal Bank. It is one of
the many banks owned by a Chinese-Filipino in the Philippines (others
include Metrobank and Chinabank).
BDO eventually became involved in insurance services in 1997 (it is
a bancassurance firm) by establishing a subsidiary called BDO Insurance
Brokers. In 1999, BDO expanded its insurance services through partnerships
with Assicurazoni Generali s.p.a., one of the world's largest insurance firms,
and Jerneh Asia Berhad, a member of Malaysia's Kuok Group. Later, BDO
partnered up with its insurance affiliates, which are Generali Pilipinas Life
Assurance Company and Generali Pilipinas Insurance Company, in March
of 2000.
On June 15, 2001, BDO merged with Dao Heng Bank's Philippine subsidiary,
with BDO as the surviving entity. The merger boosted the number of BDO's
branches from 108 branches before the merger to 120 after the merger. In
late April 2005, United Overseas Bank sold 66 out of its Philippine
subsidiary's 67 branches to BDO after UOB's Philippine subsidiary is set to
rationalize its operations from retail to wholesale banking. All UOB branches
completed integration into the BDO network on March 22, 2006, increasing
the number of Banco de Oro branches to 220.
On August 5, 2005, Banco de Oro and an SM subsidiary, SM Investments,
bought 24.76% of the shares of Equitable PCI Bank, the Philippines' thirdlargest bank, and 10% of an Equitable PCI affiliate, Equitable CardNetwork,
one of the Philippines' largest credit card issuers, from the family that
founded the bank, the Go family. BDO has also been offered a further 10% by
another Equitable PCI affiliate, EBC Investments, and a deal is being made to
buy (awaiting court approval) the 29% stake of the Social Security
System (SSS), the Philippines' pension fund. Subsequent acquisitions enabled
the bank to acquire a 34% stake in Equitable PCI.
On December 1, 2005, Banco de Oro shares were listed as a component of
the PSE Composite Index for the first time.
Banco de Oro is now the largest bank in the Philippines in terms of assets,
loans and deposits. The bank is the product of the Banco de Oro-Equitable
PCI Bank merger after the boards of both Banco de Oro Universal Bank
and Equitable PCI Bank agreed to merge on December 27, 2006. For a while,
the entity was known as Banco de Oro-EPCI, Inc., but announced that it
would go by the name Banco de Oro Unibank, Inc. starting February 2007.
Finally in 2010 Banco de Oro changed its name to BDO Unibank Inc. other

possible names are Banco De Oro Unibank, Banco De Oro, BDO Unibank,
Banco De Oro BDO and plainly BDO.

The Bank of the Philippine Islands or BPI is the oldest bank in

the Philippines still in operation. It is owned by the Ayala Corporation and is
based in Makati City's Central Business District, on the corner of Ayala
Avenue and Paseo de Roxas, across from the Philippine headquarters
of HSBC.
BPI is also the oldest bank in Southeast Asia and has a long and
distinguished history that spans over a century. It has either influenced or
has been influenced by many nations, including parts of the former Spanish
Empire, especially Mexico, and the United States. While it is considered by
many as an old institution, BPI is trying, with moderate success, to promote
itself as a dynamic institution that caters to its various clients, which hail
from various sectors of Philippine society.
BPI also pioneered rural banking in the Philippines, as its countryside banking
operations preceded that of many other banks' rural banking operations by
many years. Today, it maintains a large rural branch network, with some
branches dating bank to the Spanish or American colonial periods. Its
network more than 800 branches is by far the largest branch networks of any
bank in the Philippines.
The bank has received several awards from various financial magazines,
such as Euromoney and the Far Eastern Economic Review. Its most recent
award was for the best retail bank in the Philippines in 2005.
BPI was established on August 1, 1851 as the Banco Espaol-Filipino de
Isabel II (Spanish-Filipino Bank of Isabel II), named after the queen
of Spain, Isabella II, the daughter of former king Ferdinand VII. The bank was
the second Philippine bank during the Spanish era after a bank was founded
by Francisco Rodriguez, a Filipino Quaker based in London, in 1830. Today,
Rodriguez's bank no longer exists.
The royal decree establishing the Banco Espaol-Filipino also gave it the
power to print Philippine currency, the first time the Philippine peso was
printed in the country (before 1851, a multitude of currencies were used,

most notably the Mexican peso). They were originally called "pesos fuertes"
(PF), or "strong pesos". First printed on May 1, 1852, they were reedemable
at face value for gold or silver Mexican coins. The first deposit with the bank
was also done on that day by a man named Fulgencio Barrera. Three days
later, a Chinese man named Tadian became the first borrowing client of the
bank after the bank discounted to him a promissory note amounting to ten
thousand pesos fuertes.
On September 3, 1869, following a revolution which overthrew Isabella II, the
name was changed to Banco Espaol-Filipino. In January 1892, the bank
moved from the Royal Custom House in Intramuros to the new business
district of Binondo, north of the Pasig River after it found out that Intramuros
was becoming "economically inactive". It moved to 4 Plaza Cervantes, which
was at that time a prime property owned by the Dominican friars.
The first branch of Banco Espaol-Filipino outside Manila was opened
in Iloilo on March 15, 1897. However, the idea to set up branches outside
Manila was formulated as far back as the 1850s, with the first branch
planned to be opened in Bacolor, the capital of Pampanga at the time. But by
then, Iloilo became more productive than Pampanga in the sugar industry,
hence the move to open the first branch in Iloilo instead of Bacolor.
Following the cession of the Philippines to the United States following the
signing of the 1898 Treaty of Paris, the bank changed from a Spanish
institution to a Philippine one. On January 1, 1912, a decision by the
shareholders of Banco Espaol-Filipino changed the name to the present
Bank of the Philippine Islands (BPI), or Banco de las Islas Filipinas in Spanish.
The basis for the name change was Act No. 1790, passed on October
12, 1907, which permitted the bank to change its name. The bank was also
privatized during the American colonial period.
Following World War II, BPI was actively involved in the post-war
reconstruction of the Philippines. In 1949, with the establishment of the
Central Bank of the Philippines (now the Bangko Sentral ng Pilipinas), BPI
(and other banks issuing Philippine currency) lost the right to issue Philippine
pesos, a right it had since the Spanish colonial era and (with competition
from other banks) during the American colonial period.
In 1969, Ayala Corporation, which had been affiliated with BPI since its
establishment in 1851, became the dominant shareholder of BPI and
eventually made BPI into the flagship of Ayala's financial entities.

Starting in the 1970s, BPI has been involved with many mergers and
acquisitions. The first merger occurred in 1974 with BPI's acquisition of
the People's Bank and Trust Company. Major notable acquisitions
include Citytrust Savings Bank, a unit of Citibank, in 1996 and Far East Bank
and Trust Company on April 7, 2000. The merger with Far East Bank is
arguably the largest in Philippine banking history. In 2002 with the
acquisition of DBS Bank Philippines, a subsidiary of DBS Bank. However, the
BPI-DBS deal permitted DBS Bank to hold a stake in BPI. The latest
acquisition occurred in 2005 with the aqcuisition of Prudential Bank.
In 1982, BPI became a universal bank, and in 2000, became the Philippines'
first bancassurance firm, being the first Philippine bank to offer insurance
services after acquiring the insurance companies of the Ayala Group, the
parent company of the Ayala Corporation. Within that year, BPI also founded
the BPI Direct Savings Bank, an Internet bank, which launched BPI into 21st
century banking.
The bank has received several awards from various financial magazines,
such as Euromoney the Far Eastern Economic Review, The
Banker, Euromoney , Finance Asia, and Global Finance . Its most recent
award was from Asiamoney. In April 2010, the bank was awarded as the
Philippines' Strongest Bank. In 2009, the bank bags 10 awards as the Best
Domestic Bank; Best Local Cash Management Bank in the Philippines as
voted by Small-Sized Corporations; Best Local Cash Management Bank in the
Philippines as voted by Medium-Sized Corporations; Best Local Cash
Management Bank in the Philippines as voted by Large-Sized Corporations;
Best Domestic Provider of FX Services in the Philippines as voted by
Corporates; Best Domestic FX Provider of FX Prime Broking Services in the
Philippines as voted by Corporates; Best Domestic FX Provider of Single-Bank
Electronic Trading Platform.
In October 2015, BPI launched the "Make the Best Things Happen" campaign
which empowers Filipinos to make the best of their life happen by providing
innovative and accessible financial solutions.

Metropolitan Bank and Trust Company or commonly known as Metrobank.

In September 1962 by George Ty, together with businessmen Don Emilio

Abello, Don Pio Pedroso and Placido Mapa, Sr. founded the Metrobank
primarily to offer financial services to the Chinese-Filipino community. In
1963, the banks first branch opened in Divisoria, Manila. Four years later,
the bank expanded outside Manila and opened their first provincial branch in
Davao.
In 1970, Metrobank started expanding outside the Philippines. Its first
international branch was in Taipei, Taiwan. In 1973, the bank established a
banking office in Hong Kong and in 1975, another Metrobank branch opened
in Guam, the first Philippine bank to open in American territory. Branches in
Los Angeles and New York followed after. In 1977, the Central Bank
authorized Metrobank Foreign Currency Deposit Unit (FCDU) operations.
On February 26, 1981, Metrobank decided to go public and list its common
shares in the Makati Stock Exchange and Manila Stock Exchange under the
stock symbol MBT. On August of the same year, the Philippine Central Bank
granted Metrobank universal banking license. This allowed the bank to
venture into non-banking related businesses.
In 1986, Metrobank established its own credit card company, Unibankard
Corporation (now known as Metrobank Card Corporation. In 1988, it
partnered with Japanese automotive manufacturer, Mitsui Corporation to
establish the Toyota Motor Philippines.
In 1995, Metrobank achieved the milestone of being the first billion dollar
bank with total capital of P22 billion. In 2001, Metrobank opened its first
branch in Shanghai, China. Nine years later, Metropolitan Bank (China) was
established with branches in Najing and Shanghai.
The Metrobank Group has a combined network of over 800 local and
international branches/offices, remittance offices and subsidiaries worldwide.
It has 557 domestic branches and 32 offices in New York, Hong Kong, Tokyo,
Osaka, Seoul, Pusan, Guam, Taipei, Kaohsiung, Madrid, Barcelona, Vienna,
Rome, Bologna, Milan, Singapore, Chicago, Hawaii, and Shanghai.
On September 28, 2009, Metrobank is the first local bank to offer a line
of CNY denominated offerings.

Land Bank of the Philippines, also known as Landbank or by its initials, LBP,
is a bank in the Philippines owned by the Philippine government. Landbank
services mainly rural farmers and fisherman|fishermen since the Philippines
largely has an agriculture-based economy. It provides the services of a
universal bank; however, it is officially classified as a "specialized
government bank" with a universal banking license. Landbank is the fourth
largest bank in the Philippines in terms of assets and is the largest
government-owned bank. It is also one of the biggest government-owned
and/or controlled corporations in the Philippines.
Unlike most Philippine banks, Landbank has an extensive rural branch
network. It services many rural sector clients in areas where banking is either
limited to rural banks or is non-existent.
Landbank was established on August8, 1963 as part of the Agricultural Land
Reform Code, or Republic Act No. 3844. At that time, Landbank was
established for the purposes of land reform: that is, so to speak, the
purchase of agricultural estates for division and resale to small landholders
and also to facilitate the purchase of land by the agricultural lessee. In 1965,
Landbank's by-laws were approved and its first board of trustees, with the
Secretary of Finance as chairman, was formed.
On October 21, 1972, Presidential Decree No. 27, signed by thenPresident Ferdinand Marcos, emancipated all tenant farmers working on
private agricultural lands devoted to rice and corn, whether working on a
landed estate or not. The system was implemented through a system of
sharecropping and/or lease-tenancy. Landbank was tasked to collect 15-year
land amortizations from beneficiaries at the cost of the value of the land plus
six percent interest per annum.
By 1973, Landbank was in financial distress. It lacked the resources and the
capital needed to implement the land reform programs and was too deficient
in structure to implement the programs efficiently. On July 21, Marcos signed
into law Presidential Decree No. 251, which revitalized the bank. The decree
granted Landbank a universal banking license (the first bank in the
Philippines to be issued such a license) with a social mission to spur
countryside development. The decree expanded Landbank's powers to
include lending for agricultural, industrial, home-building and home-financing
projects and other productive enterprises, as well as lending to farmers'
cooperatives and associations to facilitate production, marketing of crops
and acquisition of essential commodities. Landbank was also mandated by

the decree to provide timely and adequate support in all phases involved in
the execution of agrarian reform and also increased its authorized financial
capital|capital to 3 billion pesos. It also became exempted from all national,
provincial, city and municipal taxes and assessments.
Landbank was reorganized in 1977 when it was divided into three sectors to
better assess the needs of its customers. It was divided into the Agrarian,
Banking and Operations sectors to strengthem operations and ensure longterm viability.
In 1982, the Agricultural Credit Administration (ACA), established under the
same law as Landbank, was abolished and all its assets and functions
transferred to Landbank. ACA's function was to extend credit (finance)|credit
to small farmers. Also in this year, Union Bank of the Philippines (UnionBank)
was formed, with Landbank having a 40-percent stake in the governmentowned commercial bank.
Landbank became the financial intermediary for the Comprehensive Agrarian
Reform Program (CARP) in 1988. It was also in this year that UnionBank
started a gradual privitization. The Aboitiz Group of Companies acquired
Landbank's 40% share of UnionBank in the same year and still has this share
today. Landbank also became the third member of Expressnet, an automatic
teller machine|ATM consortium, in December of 1991.
On February 23, 1995, Landbank's charter was once again amended. Its
authorized capital was increased to nine billion pesos and established it as
an official government depository. It also increased the number of board
members of Landbank's board of trustees to nine members. On August
25, 1998, Landbank's authorized capital was once again increased to 25
billion pesos.
In 2015, it was planned to merged with DBP but it had not pushed through.
One year later, on February 4, 2016, President Benigno Aquino III approved
the Executive Order #198 on the merger between Land Bank and the DBP,
with the former as the surviving entity.

The Philippine National Bank (PNB), created during the American colonial
period on 22 July 1916, is among the top banking institutions in

the Philippines and considered as one of the country's economic pillars. It is

the countrys first universal bank, and functioned as the de facto Central
Bank of the Philippines until the 1940's. It is also the first to offer automated
tellering services in the country through the self-service tellering machine
(ATM's). Today, it is part of Lucio Tan Group of Companies and has the
biggest Philippine bank network in the world.
The Philippine National Bank was established as a government-owned
banking institution on July 22, 1916 with headquarters in the old Masonic
Temple along Escolta, Manila. Its primary mandate was to provide financial
services to Philippine industry and agriculture and support the government's
economic development effort. World War I, then raging in Europe, generated
huge demand for the country's major exports namely: sugar, copra, coconut
oil, Manila hemp and tobacco. However, not much was being done to develop
the industries that produced these sought-after crops since access tocredit
facilities was limited then. To solve this problem, Henderson Martin, Vice
Governor of the Philippines, together with Mr. Miguel Cuaderno (who later
became Central Bank governor) drafted the charter fora national bank.
On February 4, 1916, Public Act 2612 was passed by the Philippine
Legislature providing for the establishment of the PNB to replace the small
P1 million government-owned Agricultural Bank. PNB's first head office was
the Masonic Temple along Escolta, the then "Wall Street of the Philippines" in
the bustling district of Sta. Cruz in Manila. An American, H. Parker Willis, was
its first president.
With PNB's establishment, Filipinos found a bank of their own. PNB was
authorized to grant short and long-term loans to agriculture and industry. The
Filipino farmers then could avail of loans with interest between 8% to 10%
per annum. PNB was also authorized to receive deposits, open foreign credits
and rediscount bills.
On July 24, 1916, PNB established its first branch in Iloilo. In 1917, PNB
marked its entry in the field of international banking when it opened its New
York Branch. The following year, it established five more domestic branches
and another overseas branch in Shanghai, China.
PNB has also functioned as the de facto Central Bank of the Philippines until
1949. It was given the special power to issue circulating notes.
PNB briefly ceased operations in January 1942 but reopened the next month
under the supervision of Japanese authorities. After the Second World War,

PNB reopened immediately and acquired the assets and assumed the
liabilities of the banking division of the National Treasury.
With the establishment of the Central Bank in 1949, PNB's role as issuer of
currency notes, custodianship of bank reserves, sole depository of
government funds and clearing house of the banking system ceased.
In 1955, it was authorized to operate as an investment bank with powers to
own shares and to issue debentures. In 1963, it established the National
Investment and Development Corporation to engage primarily in long-term
and equity financing of business ventures.
PNB transferred to its new Head Office along Escolta in 1966 and launched
the first on-line Electronic Data Processing System in the entire Far East.
Between 1967 and 1979, PNB continued to expand its operations by opening
offices in London, Singapore, Djakarta, Honolulu and Amsterdam. In the
domestic field, it opened 14 provincial branches. It was also during this
period that the Bank started the Dollar Remittance Program.
In 1980, PNB became the first universal bank in the country. However, it
encountered operational difficulties in the mid-80s as a result of the
economic downturn triggered by the assassination of Senator Benigno S.
Aquino, Jr and had to be assisted by the government in 1986.
In early 2000, the Lucio Tan Group became the single biggest private
stockholder.
The group pumped in nearly P20 billion fresh capital in less than one year-the
largest capital build-up to date in the country. This was done to emphasize
the commitment of the new stockholders' group to the improvement of the
Bank's financial condition, which has been incurring losses in operations, due
to poor asset quality.
In late-2000, when the Bank suffered huge withdrawals mainly from the
government accounts, the government provided financial assistance of P25
billion.
In May 2002, the Government and the Lucio Tan Group sealed the
Memorandum of Agreement (MOA) that embodies the provisions that will
help turn the Bank around. It includes, among others, the settlement of
government's liquidity assistance by way of increasing government's stake in
the Bank from 16.58% to 44.98% making it equal to the Lucio Tan Group's
44.98% from 68%.

Following the Senior Managements Good Bank-Bad Bank strategy, PNB

finally posted an income of P52 million (as restated from an earlier reported
figure of P168 million, due to changes in Generally Accepted Accounting
Principles) in 2003, after several years of being in the red. The Bank was able
to repeat this feat and reported an income of P353 million by end-2004. PNB
was able to sustain its momentum towards full rehabilitation and is very well
on its way in becoming one of the countrys most admired banks once more.
In May 2002, the Philippine government and Lucio Tan signed an agreement
to swap the government's loans to shares. The accord increased the
government's stake to 45 percent from 16 percent and reduced Lucio Tan's
holding to 45 percent from 67 percent.
Lucio Tan and the government also agreed that year to sell three-quarters of
their combined stake within five years.
In August 2005, PNB became fully privatized. The joint sale by the Philippine
government and the Lucio Tan Group of the 67% stake in PNB was completed
within the third quarter of 2005. The Lucio Tan Group exercised its right to
match the P 43.77/share bid offered by a competitor and purchased the
shares owned by the government. The completion of sale is expected to
speed up the development of PNBs franchise and operational
competitiveness.
Despite being fully privatized, PNB will remain to be a government
depository bank until May 3, 2007.
On December 12, 2007, official statements from PNB and Allied
Bank confirmed the impending merger of both banks by early 2008. On
August 2009, PNB and Allied Bank were expected to complete their merger
within the next six to nine months after the latter sells its 28% stake in
California-based Oceanic Bank. As of July 7, 2010, the remaining stumbling
block to the merger was addressed as the latter found a buyer for its
minority stake in a California-based bank. The move is seen to pave the way
for the merger.
On February 9, 2013, the PNB-Allied Bank merger was completed,
with Philippine National Bank as the surviving brand. The merged bank
became the 4th largest private domestic bank. Tarriela will be the chairman
and Mier will be the chief executive of the merged bank

Chinabank or China Bank, formally known as China Banking Corporation, is

one of the largest banks in the Philippines. It is controlled by the SM Group of
Companies, one of the largest conglomerates in the Philippines and owner of
the SM chain of malls. It is the sister bank of Banco de Oro Universal Bank,
owing to their similar ownership structure.
Chinabank was established on August 16, 1920 by Dee C. Chuan, a leading
business leader and philanthropist, and Don Albino SyCip, a lawyer and topnotcher at the Philippine bar examinations, as the first privately-owned
commercial bank in the Philippines. It started off with an initial capital of ten
millionpesos and a head office in Binondo by 1924.
Growth during the American period was rapid, but during World War II, the
Japanese seized control of the bank. Its assets were converted into worthless
currencies and as such, the bank was forced to deposit its remaining funds
overseas so that it could reopen after the war. It did so after the liberation of
Manila in 1945.
Under Sycip's leadership after the war, Chinabank was involved in many
socio-civic projects, like the construction of artesian wells for the use of
Filipinos. It also extended loans, credit and other financial assistance to
entrepreneurs and contributed greatly to the reconstruction of the Philippine
economy. Its humble contributions to the reconstruction effort are even
remembered today.
Chinabank went public in 1965 and also has its own share of firsts. It was the
first Philippine bank to electronically process online deposit transactions
in 1969 and was also the first bank to offer telephone banking in 1988. It was
one of the founding members of the BancNet interbank network when it was
founded in 1990.
In 1990, Chinabank moved its headquarters from Binondo to its present-day
headquarters on Paseo de Roxas in Makati City to better establish itself as
one of the major players in the Philippine banking industry. Its present
headquarters is in proximity to the headquarters of other major banks, such
as Citibank, Equitable PCI Bank, United Coconut Planters Bank and Philippine
Savings Bank. It also became a universal bank on August 26, 1991.

In 2008, China Bank's thrift bank subsidiary China Bank Savings (CBS) began
operations. CBS is focused on the retail side of the business, offering banking
products and services that China Bank does not, such as a kiddy savings
account and personal loans. In 2012, China Bank acquired Pampanga-based
Unity Bank which was merged with CBS in 2014. The acquisition supports the
Bangko Sentral ng Pilipinas Strengthening Program for Rural Banks (SPRB)
Plus which aims to effectively serve the countryside and improve the delivery
of financial services to rural communities by strengthening the thrift and
rural banking industry. The merger fast-tracked the savings banks branch
expansion program. CBS is targeting 100 branches by 2014.
China Bank was included in three list of one of the "top 100 ASEAN
companies in terms of delivering shareholder value" by the US consulting
firm Stern Stewart and Company in 2009. It was also awarded the Best
Wealth Management House in the Philippines by The Asset Magazine (HK) in
2011. At the 2012 Bell Awards of the Philippine Stock Exchange, China Bank
was named as one of the best-governed companies in the Philippines. It was
the only bank among the top five awardees in the publicly listed companies
category. The Bank was again awarded at the Bell Awards in 2013 one of
only two other awardees to have been in the top five twice in a row. China
Bank was also a recipient of the Institute of Corporate Director's Gold Award
for Corporate Governance in 2011 and 2012.
China Bank entered into a credit card partnership with MasterCard in
2013. China Bank is launching three credit card types under the MasterCard
brand in the last quarter of 2014: China Bank Prime, China Bank Platinum,
China Bank World MasterCardall equipped with two of the worlds most
advanced security technology: EMV & 3D Secure.

Union Bank of the Philippines more commonly known as UnionBank, is one of

the largest banks in the Philippines, ranking seventh in terms of assets after
its successful merger with smaller competitor International Exchange Bank. It
is one of the most stable Philippine banks and is the host bank of the E-Card
accounts of the members of the Government Service Insurance System.
UnionBank is a Philippine universal bank. Today multiple channels are
available for transaction and information access: nationwide branch network,

on-site and off-site automated teller machines, a call center and Internet
bank.
In strategic business, the bank is a provider of corporate cash management
& B2B solutions to leading local and multinational companies operating in
the country. Its other lines of business are in Treasury services & capital
markets, Internet banking, consumer finance and distribution network.
UnionBank is a partnership among the Aboitiz Group, Insular Life and Social
Security System. It started operations in 1981 and became a commercial
bank on January 19, 1982. In July 1992, UnionBank was granted the license
to operate as a universal bank.
In 1993 UnionBank merged with International Corporate Bank ("Interbank")
and in 2006 another merger with International Exchange Bank ("iBank")
followed.

Security Bank, more formally known as Security Bank Corporation and

abbreviated as SBC, is one of the largest commercial banks in the
Philippines.
Security Bank was established on June 18, 1951 as Security Bank and Trust
Company (SBTC) in Manila. At the time, SBTC was the first privately-owned,
Filipino-controlled bank of the post-World War II era. The bank's head office
was first located on Plaza Goiti, moving to Escolta in 1954. At the time,
Security Bank was so aggressive in opening branches that at one point
during the 1950s, it had more branches in Metro Manila than any other local
bank.
Beginning in the 1960s, Security Bank also started expanding outside Metro
Manila, with the opening of its first provincial branch in Angeles
City, Pampanga. Within the decade, the bank started a rapid expansion in
the provinces. It was also in the 1960s that Security Bank led a consortium of
local and foreign companies that lent US$62 million to the Lopez family to
fund their acquisition of Meralco, the first of its kind in Philippine banking
history.

In the 1970s, Security Bank issued its first credit card, introducing the
Philippines to Diners Club. It also marked the start of the bank's trust
offerings, many of which were deemed innovative, and still survive today as
pre-need and common-trust plans, of which they are descended from
Security Bank's offerings at the time. Towards the end of the 1970s, the bank
was granted permission to operate a foreign currency division by the Bangko
Sentral ng Pilipinas. It widened its investment services portfolio in the 1980s,
even when the Philippines was thrown into a deepening political crisis. Like
other major banks, Security Bank survived.
The 1990s brought in new owners led by present chairman Frederick Y. Dy.
On April 26, 1994, the bank was issued a universal banking license by the
BSP. With the issuance of its universal banking license, the legal name of
Security Bank changed to the present-day Security Bank Corporation. The
bank also moved to its new headquarters along Ayala Avenue in Makati City.
SBC's stock was also formally listed on the Philippine Stock Exchange on June
8, 1995, with a 1.5 billion-peso initial public offering. The bank celebrated its
fiftieth anniversary on June 18, 2001.
In February 2015, SBC launched the Bancassurance product in partnership
with FWD Life, adding to the robustness of their financial services offering.
In January 2016, The Bank of Tokyo-Mitsubishi UFJ, Japan's largest bank,
acquired the 20% minority stake of Security Bank for a deal worth 36.9 billion
pesos.

The Development Bank of the Philippines, commonly known by its

initials, DBP, is a state-owned development bank in Makati City, Philippines.
DBP's history can be traced back during the time of the Commonwealth of
the Philippines. In 1935, the National Loan and Investment Board (NLIB) was
created to coordinate and manage the various government trust funds such
as the Postal Savings Fund and the Teacher's Retirement Fund. In 1939, the
NLIB was abolished and its functions were transferred to a new body, the
Agricultural and Industrial Bank (AIB).

AIB continued operations until the outbreak of World War II. After the war, in
1947, the AIB was abolished and the Rehabilitation Finance Corporation was
formed in its place by Republic Act No. 85, absorbing the powers and
functions of the AIB. The RFC provided credit facilities for the development of
agriculture, commerce and industry and the reconstruction of properties
damaged by the war. In 1958, the RFC was reorganized into the modern-day
DBP, reflecting that since reconstruction was largely finished, the RFC can
venture into other fields.
With an initial capital of 500 million pesos, DBP set to work on expanding its
facilities and operations to accelerate efforts on national economic
development. It established a nationwide branch network and tapped local
and foreign resources to complement its capital. It also borrowed money
directly from international finance institutions. While this strategy helped
accelerate capital formation and employment, especially in the countryside,
the strategy eventually proved to be disastrous. By the time of Ferdinand
Marcos, DBP's viability was undermined by an increasing number of nonperforming accounts following a 1970s recession.
After the ouster of Marcos and the election of Corazon Aquino as president,
she issued Executive Order No. 81, which reorganized the bank and gave it a
new charter. All non-performing assets and liabilities were subsequently
transferred to the government on June 30, 1986 and led to DBP forming a
program to strengthen its institutions, such as a thorough revision of the
credit process and a training program for the intensive implementation of
new lending thrusts. Likewise, DBP reopened its lending windows for housing,
agriculture and SMEs.
In 1995, DBP became a universal bank when it was granted its universal
banking license, and three years later, had its charter revised. Under the
revised charter, DBP's authorized capital would increase from five billion
pesos to 35 billion pesos and led to the creation of the posts of President and
CEO.
In 2015, it was planned to merged with Landbank but it had not pushed
through.
One year later, on February 4, 2016, President Benigno Aquino III approved
the Executive Order #198 on the merger between Land Bank and the DBP,
with the former as the surviving entity.

Rizal Commercial Banking Corporation is the banking arm of the Yuchengco

Group of Companies (YGC), which was founded by Ambassador Alfonso
Yuchengco.
CBC was incorporated in 1960 as a small development bank and made a
niche in the Chinese-Filipino community when Yuchengco became the
Chairman of the Board and opened its first branch in Binondo in 1964.
In 1973, RCBC, through the directive of Yuchengco, partnered with two
international banks to raise the level of banking expertise of RCBC. These
were the Continental Illinois National Bank and Trust Co. of Chicago, USA,
and The United Financial of Japan. With the affiliation of the Japanese bank,
the Japanese market created another niche for the bank.
In the 1980s, when other banks were opening branches in Metro Manila,
RCBC decided to tap the exporting companies in export processing zones. By
doing so, the bank forged long-term partnership with these companies
particularly those in the semi-conductor industry. In 1986, RCBC went public
and its common shares were listed in the Philippine Stock Exchange under
the stock symbol RCB.
In 1996, RCBC established its thrift bank, RCBC Savings Bank and acquired
the Capitol Development Bank in 1998. In the mid-2000, the bank acquired
67% of Bankard.
Responding to an ever-growing digital consumer base, RCBC continually
innovates its products and services to match the dynamic consumer needs in
the digital space. Providing ease and convenience, in 2007, it launched the
RCBC MyWallet. This all-in-one card allows customers to enjoy electronic
banking convenience anytime, anywhere and it lets customers do
transactions like a regular ATM card: withdrawals, cashless shopping, balance
inquiry and bills paymentall these, without the hassles of keeping a
monthly maintaining balance. To further supplement its electronic banking
capability, RCBC launched AccessOne soon after, as a personal internet
banking system. AccessOne allows customers to have a better online
banking experience with its features such as enhanced and customizable
user interface, real-time presentation of Bankard credit card transaction

history, prepaid mobile loading and viewing of investments and RCBC

Savings bank loans. This is also available as a mobile application.
Aside from this, together with RCBC Savings Bank, RCBC launched the Touch
Q Lobby Management System in 2014. The RCBC Touch Q is a self-service
teller assist kiosk in the branch that conveniently pre-stages customers'
banking transactions. It provides assistance to customers in financial and
non-financial transactions like cash and check deposits, cash withdrawal,
check encashment, bills payment, fund transfer, MyWallet reloading, account
opening among many others. The system manages the traffic inside a
branch through a smart queuing system. Customers can access the RCBC
Touch Q on the web and through mobile apps (both Apple and Android) even
before going to the branch. Upon completion of the online transactions, a QR
code or reference number will be generated which customers can use for
queue prioritization in the branch.

TRANSACTION PROCESS
Opening a Saving Bank Account
1. Visit any bank branch of your choice and bring the following
requirements for opening a bank account.
Two (2) valid and recent IDs with your name and picture
Two (2) Photocopies of your ID
IDs acceptable for opening a savings account can be: Passport, Drivers
license, PRC ID, NBI clearance, Police clearance, Postal ID, Voters ID,
Barangay certification, GSIS e-Card, SSS ID, Phil health card, Senior
Citizen Card, OWWA ID, OFW ID, Seamans Book, Alien Certification of
Registration/Immigrant Certificate of Registration, and other
Government office IDs.
Billing Statement and 2 photocopies in order to verify your address.
Billing statement can be Electric bill, Telephone bill, Water bill, Credit
Card bill, Cellphone bill etc.
Two (2) copies 11 latest ID picture
2. Upon entering the bank branch, proceed to New Account Desk. Tell the
bank officer you want to open a bank account and then fill-up all forms
that will be given to you.

3. Give the initial deposit for your savings account. Your initial deposit
should be equal or more than the maintaining balance.
4. Claim your ATM card or passbook which normally available for pick-up
after 3-7 banking days.

Cash Deposit
1.
2.
3.
4.
5.

Go to the nearest bank branch in your place

Get a cash deposit slip
Fill up the form with the following account details
Submit the Cash Deposit Slip and Cash to the Bank Teller.
Get your Deposit Transaction Receipt.

Withdraw from Automated Teller Machine

1. Go to the nearest ATM and make sure that your bank account has
money deposited in it by checking your balance before attempting to
withdraw.
2. Insert your ATM Card into the machine's card slot
3. When your ATM card has been accepted, the screen will ask you to
enter your secret PIN. Its best advised that you should cover your
hands when entering your PIN especially when there are a lot of people
behind you.
4. Once you managed to enter your PIN successfully, the screen will take
you into the main options. You can now choose the option that
says 'Withdraw Cash'.
5. After pressing the Withdraw Cash button, the next step is to press the
amount that you want to withdraw.
6. Finally, the exact amount of cash will be given by the ATM
machine after confirming that the details you entered are all correct.
You can now take your money and also don't forget to take your
receipt.
Applying for a Loan (Housing)

Home loan is a financing facility secured by a real estate where funds can be
used for the following loan purposes: purchase of vacant lot; purchase of
house and lot; purchase of townhouse unit; purchase of condominium unit;
house construction; refinancing/take out; house renovation/home
improvement; and reimbursement of acquisition cost.
1. Go to your trusted bank branch and bring the following requirements:
Filipinos, Filipinos married to foreigners, Foreigners (if collateral is a
condominium), or former Filipinos with or without Dual Citizenship, of
legal age (not exceeding 65 yrs. old upon loan maturity)Individuals
with minimum gross family income of P50,000.00/monthly.
For sole proprietorships or family corporations, the business must be
profitably operating for the last two (2) years.

Insurance Requirements
Mortgage Redemption Insurance (MRI) equal to loan amount
Fire Insurance equal to the appraised value of the improvement
Contractors All Risk Insurance for construction loan only (to be
converted into Fire Insurance upon project completion)
Master Fire Policy for condominiums only
Pre- approval Requirements
For documentary requirements, you should furnish the following documents
before your housing loan will be approved.
I.

II.

III.

IV.

Collateral Papers
Copy of TCT / CCT
Lot plan and vicinity map certified by a Geodetic Engineer
Master Deed of Declaration of Restrictions (for condominiums)
For construction/renovation
Building plan or floor plan
Bill of materials
Building specifications (certified by a Civil Engineer)
For refinancing
Statement of account or latest three (3) months official receipts
Others
Marriage contract
Valid ID (primary IDs eg. Drivers License, passport, SSS, etc)
Owners Collateral Appraisal Authorization
Appraisal fee
Post Approval Requirements

After the approval of you loan, there are some requirements you need to also
submit to complete your application such as the following:
Original Owners Duplicate Copy of Title (TCT or CCT) registered under
the name of the borrowers
Original Copy of Tax Declaration (for Land & Improvement) registered
under the name of the borrowers
Original Copy of Tax Clearance for the Current Year (for Land and
Improvement)
Original Copy of Current Years Real Estate Tax Receipts (for Land and
Improvement)
2. Submit all the requirement
3. After the mortgage is registered properly and completely, the bank will
release the money that you loan.

DISADVANTAGE OF BANKING

1. Small Bank Unions struggle to match the level of convenience

(ATMs and branches) that many banks provide their customers.
2. Some Banks have limited product/ service offerings
3. Provincial location has limited accessibility. If youre traveling
or unable to make it into the location during standard hours of
operation, you wont be able to do business.
4. Fraud is more likely with an online service than the fraudster
physically visiting a branch.
5. Banks have to employ specialist web developers and expensive
computers to run the site.
6. If the web site goes down then customers cannot access their
accounts.
7. Banks are possible to be bankrupt
8. When a large number of bank customers withdraw their
deposits simultaneously, the bank may suffer from Bank Run

ADVANTAGE OF BANKING
1. Some banks offer small interest on loans
2. Some bank offers Time deposit, whereas you will earn interest
on your saving
3. Saving money will be much easier by using bank
4. Having a bank account is more convenient during Payday
5. With online banking, you can manage your funds easily by just
using your smartphones.
6. Establishing a relationship with a bank can set you up for great
opportunities in the future, such as a loan to buy your first car
or home, special savings plans for college and vacations.
7. You can easily pay your bills using E-banking/ Online Shopping
8. It feels much safer to carry ATM Card rather than cash
9. Having a bank account give a person a sense of independency
10.

Saving account can be used during emergencies

11.
Having a bank account are necessary if you have a
business
12.

Some banks offers Investment opportunity

13.
Some banks have partner merchants who offers
discounts, freebies and exclusive offers
14.

OFW can use banks to remit from abroad to Philippines