PNB and Filipinos: History of resiliency

In many ways, the tale of the Philippine National Bank mirrors Philippine history. It enshrines many of our countrymen’s hopes and dreams for a better life. And though both have undergone tough stretches throughout the years, the resiliency and determination to overcome has never waned.

First established in 1916, PNB has maintained a track record of reliability and versatility despite the many conflicts it went through. It is an institution that has witnessed both the survival of the country and its people through the ravages of war and the transformation of the economy from the barter trade to the cash economy to its present stature in the international arena.

PNB pioneered many innovations in the banking system thereafter and has maintained its leadership throughout the years, surmounting the problems resulting from the Asian financial crisis of 1997 and many other political and economic conflicts. In 2000, PNB’s financial crisis was resolved with government support and a renewed ownership mix that included the group of taipan Lucio Tan, coupled with a professional management team and a dedicated workforce. The bank’s privatization efforts culminated in the joint sale of the 67 percent share of the government and the Lucio Tan Group in PNB as provided for in the Memorandum of Agreement entered into by both parties in 2002. Today, the Lucio Tan Group owns 77.4 percent of the bank, with the Philippine government’s counterpart of 12.5 percent. Thus, PNB is now a truly private bank that nonetheless retains its status as a government depository until 2007.

The positive developments realized by the bank in the last three years vindicate the sound business model it has adopted that focuses on three main objectives: reducing the bank’s non-performing assets; strengthening its core business in the areas of remittances, deposits, lending and treasury, while improving profitability.

Under the helm of leadership is PNB President and Chief Executive Officer, Omar Byron Mier who brings with him over 35 years of experience in the banking industry. He led the Remedial Management Group of PNB, responsible for reducing the non-performing loan portfolio from P55 billion (62 percent NPL ratio) as of May 2003 to P35 billion (49 percent NPL ratio) by the end of 2004 – effectively ushering in the turnaround performance of PNB. The first woman chairperson of the PNB Board, Flor Gozon-Tarriela was cited as a Distinguished Lady Banker in 1981 by the Bankers Association of the Philippines and was a former Undersecretary in the Department of Finance. Other distinguished members of the Board are Dr. Lucio Tan, Florido Casuela, Domingo Chua, Macario Te, Eric Recto, Washington Sycip, Feliciano Miranda Jr., Ricardo Tan and Virgilio Angelo. Together with a professional management team and a dedicated workforce, PNB posted increasing revenues and retained and attained growth and profitability levels, thus gaining a position as one of the Top Five private banks in the country. PNB realized a net income of P425 million in the first half of the year, up by 35 percent compared to the same period last year. Mr. Mier also told reporters that double-digit improvements in trading and foreign exchange income, interest income on loans and receivables and remittance business drove the bank’s profits higher. PNB’s good financial standing is evidenced by its capital adequacy ratio, which stands at 17 percent higher than the required 10 percent set by the Bangko Sentral ng Pilipinas.

All told, foundations are now in place for the Philippine National Bank’s further growth and stability, with the vision of being among the top three financial institutions in the next five years.