MANILA, Philippines — As Philippine Veterans Bank (PVB) celebrates its 27th year, it is likewise attaining record highs in various financial performance indicators.
“We will end this year with a record net income performance and we will rank among the top five banks in such metrics as Return on Equity and Return on Assets,” said Roberto F. de Ocampo, chairman of PVB and former Finance Secretary.
When de Ocampo assumed the leadership of PVB in 2013, he initiated major reforms to improve the bank’s operations, compliance, and risk management. With the support of a new board of directors, the bank embarked on an internal restructuring that has been PVB’s focus for the last five years. A majority of these reforms are now in place and PVB has reoriented its focus to business development, enhancing and developing new products and services and providing the foundation for sustainable growth.
PVB’s financial performance, as of September is concrete proof that these efforts have started to bear fruit. As of this period, the bank has already surpassed P500 million in net income, exceeded the P50 billion level in terms of deposits, and its loan portfolio has increased by 18% over the end-2018 level. In both major activities, PVB has established new historical highs. It also registered its most efficient year of operations yet, with a cost-to-income ratio of 67% as of the third quarter 2019. This compares favorably well with some of the country’s banking giants.
In terms of innovative products, PVB also recently became the first commercial bank to complete a receivables purchase transaction worth P2 billion that other banks are now trying to replicate. To further improve distribution, PVB opened its first-ever business center in Cebu last August to fast-track loan applications and expand its customer base in this vibrant region.
Unique mandate and structure
Relaunched on August 2, 1992, the bank was created by Congress with a singular mission to honor Filipino war heroes.
By virtue of Section 27 of RA 3518, PVB was given the special role of a government depository bank as a gesture of appreciation by a grateful nation for the sacrifices of the veterans of World War II. As such, it is the only private commercial bank allowed by law to take in deposits from the government, including local government units, and government-owned and -controlled corporations.
Unlike many banks and financial institutions that are largely family owned or held by private interests even if they are publicly listed, PVB has the widest public ownership with a shareholder base comprising of 384,000 WWII veterans and their designated heirs. Its charter also mandates the bank to set aside 20% of its income to assist WWII veterans and their families. The bank is further unique as many of its employees are direct descendants of WWII veterans.
While owned by WWII veterans and their heirs, PVB is a professionally managed organization. It maintains a diverse and prestigious board and the directors composed of some of the most experienced and highly respected personalities in business and in public service. These include a former Internal Revenue and Customs Chief; a former Labor Secretary and the first lady Dean of the Asian Institute of Management; a former Chairperson and Senior Partner of Isla Lipana & Company, and three former bank presidents.
“Beyond the usual banking operations, PVB serves the Filipino nation as the ‘keeper of the flame,’” said Chairman de Ocampo, the son of a WWII veteran and the only chairman of a Philippine bank who has had a distinguished career in public service, the most notable of which is serving as the country’s fiscal chief, a position that won him several international awards as Finance Minister of the Year.
He said PVB is the only bank in the country that prominently displays a History Wall in many of its branches. The History Wall showcases historic events and images during WWII, as a way of paying homage to its shareholders and preserving the memory of their heroism.
PVB also consistently commemorates the Bataan Death March through the annual Bataan Freedom Run and Freedom Trail held every April, as well as supports the commemoration of WWII Liberation anniversaries in the country via sponsoring the installation of murals, historical markers and monuments. It also champions historical preservation through WWII documentaries, publishing coffee table books and multimedia materials, and sponsoring lectures and research endeavors to preserve the legacy of veterans’ heroism.
For its active and sustained efforts toward cultural preservation, PVB has garnered several awards from various prestigious organizations. Among others, it has won a Silver Anvil Award from the Public Relations Society of the Philippines (PRSP) for its History Wall, cited for “inspiring nationalism and portraying the Filipino at his best.”
Strength in niche markets
The bank prides itself as serving well-defined market niches.
Beyond serving Filipino WWII veterans’ needs, PVB strives to be the Philippine military’s bank of choice. In its continuing diversification, the bank aspires to be the primary bank for the entire AFP and uniformed personnel in the near future. It plans to develop housing projects for members of the military, in addition to currently providing salary and pension loans to the AFP personnel and retirees.
PVB also offers a full range of solutions for the needs of LGUs, their employees, and their supply chain. The PVB Cash Management Suite includes a complete automated HR payroll system particularly suited for the needs of cities and municipalities and the entire LGU supply chain. A steadfast partner in local development, its LGU loans enable local communities to build farm-to-market roads, bridges, and other infrastructure that improve their quality of life and livelihood.
Nonetheless, the bank is likewise an active participant in the private commercial banking segment with private sector loans accounting for 51% of the total loan portfolio as of end-September. The client list ranges from companies ranked as among the top 1,000 corporations to entrepreneurs and MSME accounts.
Looking into the future
While rooted in history and tradition, PVB is embarking on a digital transformation, consistent with the rapidly changing banking environment that covers online and mobile banking and, soon, money transfers and payments over multiple channels.
Driven by newfound confidence in the institution, the PVB family is now setting its sights higher on a new paradigm: a sustainable growth path while achieving superior financial performance, as determined by financial ratios that are at par with or even better the major industry players.
“The organization is filled with hope, renewed enthusiasm, and confidence to achieve and deliver—like how our veterans soldiered on despite the odds,” said Renato A. Claravall, president of PVB.
Through changing times and seasons, PVB is sustained by the bravery of its shareholders. This is the Bank’s driving force. “We need to constantly improve the pride, mission, and sense of purpose that our bank has always been known for. In this way, we do justice to our shareholders,” Claravall added.
What makes Veterans Bank unique to you?
I have been with Philippine Veterans Bank for the past 27 years. One thing that is special with the bank is that we take part in nation building by giving back to World War II veterans who gave their life for our country’s liberation. Five to 10 years from now, I see PVB growing and booming and on top of other banking institutions.
Cecilia Isabel S. Chanco
Securities Custodian
Credit Administration
PVB is a unique bank as it is the only bank owned by thousands of World War II veteran stockholders. Serving and making their lives a little comfortable in times of need is not much compared to what they have done in the past. I am employed with a bank that is engaged in the cause of the veterans, that’s why I’ve been with the bank for 23 years now. My Lolo’s blood runs through my veins, a warrior’s blood, a hero’s blood.
Florentino A. Solangon
PVB Employees Union President
I joined the bank when it re-opened in August 1992 — that was 27 years ago. I was actually part of the technical working group in the Senate who handled and caused the passing of Republic Act 3169, rehabilitating PVB. I was witness to the perseverance of the WWII veterans to reopen their bank. Realizing the deep sense of pride and value of PVB’s mission, I decided to support the bank and joined its management team. Even with all the challenges the Bank has been through all these years, I know I made the right decision to stay.
Atty. Rosario A. Sabalburo
First Vice President/Head
Assets Recovery & Remedial Management Division