Bank of the Philippine Islands

History

BPI was established on August 1, 1851 as the El Banco Español Filipino de Isabel II (Spanish-Filipino Bank of Isabel II), named after the queen of Spain, Isabella II, the daughter of 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.

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 Philippine peso fuerte (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 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 City 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 and other provinces in Panay became more productive than Pampanga in the sugar industry, hence the move to open the first branch in Iloilo, which was then the Queen City of the South.

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 Republic 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 lost the right to issue Philippine pesos, a right it had since the Spanish colonial era and during the American colonial period.

In December 31, 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 Banking Corp in 1996 and Far East Bank and Trust Company on April 7, 2000. The merger with Far East Bank is arguably one of the largest in the Philippine banking history.

In 1982, BPI became a universal bank, and in 2000, became the Philippines' first bank assurance firm, being the first Philippine bank to offer insurance services after acquiring the insurance companies of the Ayala Corporation, 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.

On February 14, 1986, BPI led the foundation of its own interbank network, Expressnet. However, the latter was eventually absorbed by rival network BancNet.

In October 2015, BPI launched the "Make the Best Things Happen" campaign which empowers Filipinos to make the best of their life happen by providing innovative and accessible financial solutions.

Subsidiaries and Partners

BPI is divided into the following subsidiaries and affiliates:

BPI Direct Savings Bank

BPI Direct Savings Bank is a wholly owned subsidiary of BPI and is the Philippines’ first internet bank operating in a generally paperless environment with no defined geographical boundaries.

BPI Direct empowers its customers, including Filipinos around the globe and the new generation in this electronic age, to be in full control of their finances as it made banking available 24/7, wherever they may be.

BPI Direct Savings Bank was incorporated and registered with the Securities and Exchange Commission on September 26, 1986, primarily as a subsidiary meant to engage in the general business of savings and mortgage banking.

In 2000, BPI Direct underwent a major image change as it became the first Philippine bank designed around the telephone and online banking channels. It wanted to provide its clients with a way to have access to their accounts 24/7, as well as to provide the convenience of traditional banking services, such as opening a savings account.

Two years later, BPI Direct realigned its business strategy towards the Overseas Filipino community. Today, expatriate Filipinos in some countries with high numbers of Filipinos, such as Bahrain or Hong Kong, can open BPI Direct accounts, and Filipinos abroad can access their accounts from anywhere in the world. Because of this, BPI Direct decided to name itself "your bank away from home", which is its official slogan.

Ownership

While Philippine Central Depository is listed a major shareholder, it is more of a trustee-nominee for all shares lodged in the PCD system rather than a single owner/shareholder

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

Competition

BPI's main competitors are BDO and Metrobank. However, other competitors include Land Bank of the Philippines, Philippine National Bank, RCBC, DBP, East West Unibank, and Citibank Philippines.

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).