Bank of the Philippine Islands

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Bank of the Philippine Islands
BPI logo
Type Public (PSE: BPI)
Founded Manila, Philippines (1851)
Headquarters Makati City, Philippines
Key people
Jaime Augusto Zobel de Ayala II, Chairman
Aurelio R. Montinola III, President
Finance and Insurance
Financial Services
P9.0 billion PHP (US$187.5 million USD) (Green Arrow Up Darker.png8%) (2006) [1]

The Bank of the Philippine Islands or BPI is the oldest bank in the Philippines still in operation and is the third-largest bank in the country in terms of assets, third only to Metrobank and second to Banco de Oro Universal Bank. BPI still holds the record as the Largest Bank in terms of market capitalization in the Philippines (P173 billion = US$3.604 billion as of December 2006). The most profitable bank in the Philippines consistently. 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 Español-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 Español-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 Español-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 Español-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 Español-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.

Today, BPI has maintained a leadership position in consumer banking, trust banking and asset management, corporate banking/corporate finance and bancassurance. BPI boasts of having the largest combined network of branches/kiosk units and ATMs: more than 800 branches and 1,448 ATMs (as of September 2006), with over 300 corresponding banks worldwide, servicing some 3 million depositors. Total assets reached P582 billion (US$12.125 billion) as of December 2006.

For years, international publications and rating agencies have given annual awards to BPI as one of the best banks in the region. Among these are the Far Eastern Economic Review, The Banker, Euromoney, Asiamoney, BusinessWeek, The Asset, Global Finance, Finance Asia, and The Asian Banker.

BPI has been consistently cited for its above-average profitability, sufficient capital/assets, low-cost funding base and manageable non-performing loan levels. Fitch Ratings noted that BPI has a comprehensive risk management which is superior to that of its peer banks, and this serves as an important element in keeping BPI better positioned in Philippine banking in the years ahead.


Subsidiaries and Affiliates

BPI is divided into the following subsidiaries and affiliates:


¹ Includes DBS Bank
² Voting powers are under the authority of the Archbishop


BPI's main competitor is Metrobank. However, other competitors include BDO-EPCI, INC., Land Bank of the Philippines, and Philippine National Bank.

BPI does not compete with its two banking partners: BPI Family Savings Bank and BPI Direct Savings Bank. Instead, they offer different levels of services based on the needs of the potential BPI client(s).


BPI is highly regarded as one of the best Philippine banks. It has received a multitude of awards which are listed below:


BPI is known for its firsts which are listed below:

See also

External links

Original Source

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