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Friday, September 30, 2022

Bank of the the Philippine Islands @ 165

At 165 years and counting, Bank of the Philippine Islands (BPI) –  the country’s first bank – continues to notch many “firsts” in the banking and financial  industry.


Originally named Banco Espanol de Isabel II ( after Spain’s then reigning monarch), BPI  was established  in August 1, 1851,  by the Junta de Autoridades. The Junta was a Manila-based committee of civil and ecclesiastical officials,  which was created in 1828  by royal decree of King Ferdinand VII.


The bank’s original capital was provided by Obras Pias – which handled charitable contributions to the Catholic Church.  Among the original stockholders was prominent businessman Antonio de Ayala, forebear of current BPI Chair Jaime Augusto Zobel de Ayala.


During simple rites commemmorating the bank’s 165th anniversary earlier this month, Cezar P. Consing, BPI President,  described  the bank’s evolution and growth, as follows:


 “The Church was the dominant shareholder until 1968, when Ayala became the bank’s largest shareholder.   Some of the best names in global finance have been BPI shareholders:  J.P. Morgan, taking a 20% stake in 1974, DBS buying J.P. Morgan’s stake in 1999, and the Government Investment Corporation of Singapore acquiring a portion of DBS’ stake in 2014.”


Acquisitions complemented organic growth. “..in 1974, People’s Bank; in 1980, Comtrust; in 1984, Family Savings Bank; in 1996, Citytrust; in 2000, Far East Bank; and in 2005, Prudential Bank.”


Consing enumerated the many “firsts” in BPI’s glorious  history.


1851 – BPI made its first loan to a Filipino-Chinese merchant.


1864 – BPI lent money to the colonial government to build Arranque Market and Hospital de San Juan de Dios.


1888 – BPI financed Jacobo Zobel’s Companie de Tranvias de Filipinas, the steam operated railway that replaced horse-drawn carriages.


1896 – BPI issued the Phippines’ the very first bank note. 


By royal decree, BPI was given the monopoly of  issuing  notes to extent of three times its capital stock of 1.5 million pesos. “Its bank notes were designated as Pesos Fuertes, in denominations of 5, 10, 25, 50, 100 and 200, payable in Mexican or Spanish-Filipino silver coins.” ( from Money and Banking in the Philippines)


The bank notes were jointly used  with Mexican peso coins, Alfonsino pesos, Spanish coins and  Manila-minted Spanish-Filipino silver coins.


1982 – Pioneered in electronic banking.


1990 – Established the first ATM network.


2000 – Established the first bancassurance company.


2009 – Established the first mobile microfinance institution.


2013 – Built the first solar-powered bank branch. ( Ayala Avenue Extension Branch)   


2016 – BPI, together with ADB and Credit Guarantee Investment Facility (CIGF) issued the first Climate Bond certified in emerging markets for a single project.  This P12.5B transaction was provided to Aboitiz Power Renewables, Inc .


Despite massive volatilites faced by international and financial institutions in 2015,  BPI had another good year. The numbers showed significant improvements across all metrics, eg.,  total assets, loans , deposits, asset yields, assets under management, capital adequacy and  market capitalization. Particularly impressive was BPI’s CASA ratio – a barometer of client loyalty and cost competitiveness – which is now the highest among peer institutions.


In addition, BPI continued to engage the community in several fronts.


-BPI Foundation directly engaged and advanced financial wellness, financial inclusion, financial literacy and sustainable development.


-The BPI-DOST Science Awards continued to provide the country’s brightest students a platform for presenting and implementing science and techonlogy-based business concepts.


-BPI Sinag continued to  empower young Filipino entrepreneurs via a complete program of  social entrepreneurship boot camp, mentorship and access to incubation financing.  


-BPI also nurtured the civic spirit of its employees through the BPI Bayan Volunteerism Program.  In 2015, as  in previous years, BPI staffers contributed thousands of volunteer hours to  assist targetted communities in conceptualizing, organizing, fund-raising and implementing self-help projects.


Consing attributed BPI’s longevity and prosperity to its faithful adherence to its Credo:


BPI has prospered throughout its long history because it has never shirked from its primary responsibilities: to our Clients—we do well when our clients do well; to our People—fair rewards for integrity, professionalism and loyalty; to our Shareholders—superior risk-adjusted returns and prudent management; and to our Country—inclusive and responsible nation building.”


(Disclosure: This writer was an officer of BPI prior to joining government in 1986. He  recently  rejoined BPI as an independent director.)

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