The National Bank of the Philippines (PNB, Filipino: Bangko Nasyonal ng Pilipinas; Spanish: Banco Nacional Filipino; Fujian Chinese: Philippine National Bank; Peh-øe-jí: Hui-lip-pin Kok-ka Gên-hâng) is a major Philippine bank located in Pasay, Philippines. It was established by the Philippine government on July 22, 1916 in the American era.

The bank became the first universal bank in the Philippines in 1980 and was acquired by tycoon Lucio Tan after being privatized by the government in 1989. After its merger with Tan-owned Union Bank on February 9, 2013, PNB became the fifth largest private domestic bank in the country.

PNB is the seventh largest bank in the Philippines by assets as of 2023. It has 713 domestic branches and more than 1,400 ATMs. PNB has more than 70 overseas branches, representative offices, money transfer centers and subsidiaries in Asia, Europe, the Middle East and North America.

History

National Bank of the Philippines, 50 points (1917). First World War Emergency Circulation Note.

Early Years

The National Bank of the Philippines was established on July 22, 1916 as a state-owned banking institution. Its main mission was to provide financial services to industry and agriculture in the Philippines and to support the government's economic development efforts. The First World War was raging in Europe at the time, creating a huge demand for the country's main export products, namely sugar, coconut, coconut oil, Manila hemp and tobacco. However, due to limited access to credit facilities, not much has been done to develop industries that produce these popular crops. To address this issue, the Deputy Governor of the Philippines, Henderson Martin, together with Miguel Cuaderno (who later became the Governor of the Central Bank), drafted a charter for the National Bank.

On February 4, 1916, the Philippine Legislature passed Public Act No. 2612, providing for the establishment of the PNB to replace the small government-owned Agricultural Bank of China, which was 1 million pesos. The first headquarters of the PNB was located at the Masonic Temple along Escolta in Manila, then "Wall Street of the Philippines", in the bustling Santa Cruz district of Manila. Henry Parker Willis, an American, was the first president of the association.

With the establishment of the PNB, Filipinos had their own bank. The PNB was authorized to provide short-term and long-term loans to agriculture and industry. Filipino farmers could then take advantage of loans with annual interest rates between 8% and 10%. The PNB was also authorized to receive deposits, open foreign credits and rediscount bills.

On July 24, 1916, the PNB established its first branch outside Manila in Iloilo Province. In 1917, the PNB opened its first non-Filipino branch in New York City, USA. The following year, it established 5 more domestic branches and 1 branch outside the Philippines in Shanghai, China.

As de facto central bank and national treasury

Until 1949, PNB was the de facto central bank of the Philippines. It was given special powers to issue banknotes for circulation.

PNB briefly ceased operations in January 1942, but reopened the following month under the supervision of the Japanese authorities. Immediately after World War II, PNB reopened and acquired the assets and assumed its liabilities of the banking division of Bangko Sentral ng Pilipinas.

With the creation of the Central Bank in 1949, PNB's role as an issuer of banknotes, custodian of bank reserves, sole depository of government funds, and clearing house for the banking system ceased.

Between 1967 and 1979, PNB opened offices in London, Singapore, Jakarta, Honolulu, and Amsterdam, as well as 14 provincial branches. It also initiated a U.S. dollar remittance program.

In 1980, PNB became the first universal bank in the country. However, thanks to Senator Benigno S. Aquino Jr. An economic recession triggered by the assassination, it ran into difficulties in the mid-1980s and received government assistance in 1986.

For a time, the bank was headed by Roberto Benedicto, a classmate of President Ferdinand Marcos and the head of the sugar monopoly. He also owned Overseas California Bank in Los Angeles, California, together with Marcos. In 1990, Benedicto agreed to transfer ownership of the bank to the Philippine government in exchange for dropping criminal racketeering and conspiracy charges against him. PNB bought the bank for $10 million and incorporated it into their Century Bank affiliate in Los Angeles.

Privatization

Privatization began in 1989 when 30% of its shares were offered to the public and listed on the stock exchange.

In 1992, PNB became the first Philippine bank with assets reaching 100 billion pesos. Later that same year, privatization continued with a second public offering of shares.

In 1995, PNB's headquarters was moved to the PNB Financial Center on Pasay Central Avenue (now Diosdado Macapagal Avenue). In 1996, the Securities and Exchange Commission approved the bank's new articles of incorporation and by-laws and changed PNB's status from government to private company, reducing government control to 46%.

21st Century

PNB Branch in Marat, Manila

In early 2000, Lucio Tan Group became the largest single private shareholder. In less than a year, the group injected nearly 20 billion pesos of new capital into the bank. At the end of 2000, when PNB suffered huge withdrawals, mainly from government accounts, the government provided financial assistance of 25 billion pesos.

In May 2002, the Philippine government signed an agreement with Lucio Tan to exchange the government's loans for shares. The agreement increased the government's stake from 16% to 45% and reduced Lucio Tan's stake from 67% to 45%. [8] Lucio Tan and the government also agreed to sell three-quarters of their combined stake within five years.

That same year, the PNB hired Lorenzo V. Tan, 40, as its youngest bank president. Following senior management's Good Bank-Bad Bank strategy, PNB finally posted revenue of 52 million pesos in 2003 (restated from earlier reported figures of 168 million pesos due to GAAP changes), after several years of losses. The bank was able to repeat this feat, reporting revenue of 353 million pesos by the end of 2004.

io Tan Group exercised its right to match a competitor's bid of 43.77 pesos per share and purchased the government-owned stake. The completion of the sale is expected to accelerate the development and operational competitiveness of the PNB concession.

Despite being fully privatized, PNB remained a government depository bank until May 3, 2007.

PNB ATM in Baguio

PNB-ATM on wheels

PNB has remittance centers in the United States, Canada, the United Kingdom, Spain, the Netherlands, France, Germany, Austria, Italy, Hong Kong, Japan, Singapore, Malaysia, and Middle Eastern countries

PNB has also stepped up its marketing efforts to overseas Filipino workers through its PNB Global Filipino Money Card.

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

Merger with United Bank

The Allied Bank Center, located on Ayala Avenue in Makati, was used as the PNB Makati Center as a secondary office for PNB.

On December 7, 2007, the Philippine Supreme Court upheld a judgment rejecting the state's seizure of Lucio Tan Corporation: "There is no doubt that the petitioner's (government's) garnishment order is indeed null and void and has no legal force. This landmark decision will trigger a planned merger between PNB and Tan's own Union Banking Corporation. Edgar Bancod, head of research at ATR-Kim Eng Securities, said the merged bank would become the fourth largest in the country after Metrobank, Banco de Oro and Bank of the Philippine Islands.

On December 12, 2007, an official statement from PNB and Allied Bank confirmed that the merger of the two banks was imminent in early 2008. In August 2009, PNB and Allied Bank expected to complete the merger within the next 6 to 9 months after the latter sold its 28% stake in Oceanic Bank, California. As of July 7, 2010, the remaining stumbling blocks to the merger had been resolved as the latter found a buyer for its minority stake in a California bank. The move is believed to have paved the way for the merger.

On February 9, 2013, the merger of PNB with Allied Bank was completed, with National Bank of the Philippines as the surviving brand. The merged bank became the fourth largest domestic private bank. Tarriela became the chairperson of the merged bank, and Mier became the CEO. Mier served as CEO until his retirement on May 27, 2014; Mier was replaced by Reynaldo Maclang as President and CEO. Maclang served as President and CEO until his retirement on November 15, 2018. Jose "Wick" Veloso became President and CEO on November 16, 2018, until he stepped down as head of the Government Services Insurance System (GSIS) on July 5, 2022, appointed by the then new President, Ferdinand "Bongbong" Marcos Jr. His successor, Florido P. Casuela, took office on April 25, 2023.

Employees' Union

In Japan, the employees of the Tokyo branch of PNB are represented by the union Tozen