Philippine National Bank

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Philippine National Bank Logo

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 country’s 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.

de facto Central Bank

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.

Electronic Data Processing System

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 logos from 1976

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.


The privatization of the Bank started when 30 per cent of its outstanding stocks was offered to the public and its stocks were listed in the stock exchange in 1989.

In 1992, PNB became the first Philippine bank to reach the P100 billion mark in assets. Later that year, a second public offering of its shares was issued to continue its privatization.

In 1995, the Bank moved to its new headquarters at the PNB Financial Center in Roxas Boulevard, Pasay City. In 1996, the Securities and Exchange Commission approved the Bank's new Articles of Incorporation and by-laws and the change in the status of PNB from a government-based to a private corporation with the control of the government reduced to 46 per cent. At the turnover rites on July 23, 1996, President Fidel V. Ramos declared:

"PNB is the bank for the Filipino wherever he or she may be-- in the country's centers of commerce and industry, in the far reaches of the countryside, and even in many places across the globe."

A New Beginning

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 Management’s 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 country’s 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. [1]

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 PNB’s franchise and operational competitiveness.

Despite being fully privatized, PNB will remain to be a government depository bank until May 3, 2007.

PNB Today

PNB’s strong financial performance is followed by a string of recognition and awards for its leadership in the service of the Global Filipinos where it banks on its revitalized domestic and overseas presence, friendly service and value-for-money pricing.

The Bank won two awards from the Social Security System’s Balikat ng Bayan Awards 2005 in two categories: Best Collecting Commercial Bank for Overseas Filipino Workers’ Remittance; and for the second consecutive year, as the Best Paying Commercial Bank, for servicing the accounts of SSS pensioners through its extensive domestic network of branches.

PNB was voted by the consumers, no less, for the second consecutive year as certified Gold Superbrand from the joint survey of the venerable international publication, Reader’s Digest, and global media research giant, ACNielsen, along with a host of other brand leaders in the consumer product categories.

PNB maintains its leadership in the overseas remittance business with remittance centers in the United States, Canada, England, Spain, the Netherlands, France, Germany, Austria, Italy, Hong Kong, Japan, Singapore, Malaysia and the Middle East countries.

PNB has also stepped up its marketing efforts through customer-oriented product development and tri-media advertising campaign that focuses on paying tribute to the heroism and growing influence of Filipino workers in the global economic arena with the brand offering, PNB Global Filipino Money Card.

Complementing PNB's banking activities are its subsidiaries like PNB General Insurers, a non-life insurance company; PNB Capital, an investment bank; PNB Securities, a stock brokerage outfit and PNB Forex, which engages in foreign exchange trading. It also has a majority stake in PNB-Japan Leasing Corp. For life insurance requirements of PNB clients, it has a substantial equity stake in Beneficial PNB Life.


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