Banking PPT Week 1

BANKING AND
FINANCIAL
INSTITUTIONS
By: Rose Gumban
INTENDED LEARNING OUTCOMES
1. Define Banks, Banking, and Financial
Institutions.
2. Classify the different kinds of Financial
Institutions.
3. Summarize the role, attributes of Banking and
Financial Institutions.
OUTLINE OF DISCUSSION
I. What is Bank?
II. Define Banking.
III. What is Banking and Financial Institutions
IV. Classification of Financial Institutions
V. Types of Banks
v.1. As to Ownership
v.2. As to Incorporation
v.3. As to Structure
VI. Attributes of Banking and Financial Institutions
VI. Roles of Banking and Financial Institutions
BANK DEFINED
• as defined by the General Banking Act (as
amended):
“only entities duly authorized by the Monetary
Board of the Central Bank may engage in the
lending of funds to obtained from the public
through the receipt of deposits of any kind, and
all entities regularly conducting such operations
shall be considered as banking institutions and
shall be subject to the provisions of this Act, of
the Central Bank Act, and other pertinent laws”.
BANKING
• Is the service performed by a financial
institution known as Bank, which is primarily
concerned with the safekeeping of funds
through the acceptance of deposits of money
and the provision of credit through lending of
money.
BANKING
– assists in the mobilization of funds needed for
various industries and other productive
undertakings.
– receiving, collecting, transferring, paying, lending,

investing, dealing, exchanging, and handling
money (safe deposit, custodianship, agency,
trusteeship) and money claims both domestically
and internationally.
Banking & Financial Institution
• government agency or privately owned entity
that collects funds from the public, and from
other institutions, and invests those funds in
financial assets, such as loans, securities, bank
deposits, and income generating property.
• act as intermediaries between saver and
borrowers and are differentiated by the way
they obtain and invest their funds.
Banking & Financial Institution
• business organizations that offer a broad base
of financial services or specialize in specific
functions, products, or services.
• they include various banks and non-banks
institutions.
Financial Institutions
• Depository financial institutions - a group
that includes commercial banks, savings and
loan associations, mutual savings banks, and
credit unions-conduct business by accepting
public deposits, which are insured by the
federal government against loss, and
channeling their depositors' money into
lending activities.
Financial Institutions
• Non-depository financial institutions - fund
their investment activities directly from the
financial markets by selling securities to the
public or by selling insurance policies, in case
of insurance companies, such as brokerage
firms, life insurance companies, pension
funds, and investment companies.
Classification
Banks are classified into the following subject to the
power of the Monetary Board to create other classes
or kinds of banks:
1. Universal banks (UBs)
2. Commercial banks (KBs)
3. Thrift banks (TBs)
a. Savings and mortgage banks
b. Stock savings and loan associations, and
c. Private development banks
4. Rural banks (RBs)
5. Cooperative Banks (Coop Banks)
6. Islamic banks (IBs)
7. Other classifications of banks (e.g. Non-Banks)
Non-Bank Financial Institution (NBFI)
• Non-bank financial institutions (NBFIs) are
financial institutions that do not have a full
banking license but they facilitate bank-related
financial services, i.e., investment, risk pooling,
contractual savings and market brokering.
• Only NBFIs with quasi-banking functions (NBQBs)
and those without quasi-banking function but are
subsidiaries and affiliates of banks and NBQBs are
subject to BSP supervision.
Non-Banks with Quasi-Banking
Functions (NBQBs)
• NBQBs are financial institutions authorized by
BSP to borrow funds from 20 or more lenders
for their own account through issuances,
endorsement or assignment with recourse or
acceptance of deposit substitutes for purposes
of re-lending or purchasing receivables and
other obligations.
Non-Banking Financial Institutions
1. Non-Banks with Quasi 9. Lending Investors
Banking Functions
10. Pawnshops
2. Non-Stock Savings and
Loan Associations 11. Money Brokers
3. Offshore Banking Units in 12. Fund Managers
the Philippines
13. Cooperatives
4. Representative Offices in
the Philippines 14. Private Insurance
5. Investment Houses Companies
6. Financing Companies 15. Mutual Building
7. Investment Companies and Loan
8. Securities Dealers/Brokers Associations
As to ownership
• Privately owned. It is organized and
capitalized by private citizens for their profit.
• Publicly owned. It is organized by the state

and sometimes has a minimum of private
ownership.
PRIVATE-OWNED BANKING
INSTITUTIONS
• BDO Unibank • United Coconut Planters
• Metropolitan Bank and Bank (UCPB)
Trust Company • East West Banking
• Bank of the Philippine Corporation (EastWest Bank)
Islands (BPI; oldest bank in • Citibank Philippines
Southeast Asia) • Asia United Bank
• Philippine National Corporation (AUB)
Bank (PNB) • The Hongkong and Shanghai
• Security Bank Corporation Banking Corporation (HSBC)
• China Banking Corporation • Philippine Trust
• Union Bank of the Company (Philtrust Bank)
Philippines • Bank of Commerce
• Rizal Commercial Banking • Maybank Philippines, Inc.
Corporation (RCBC) • Robinsons Bank Corporation
PRIVATE-OWNED BANKING
INSTITUTIONS
• Philippine Bank of • Bank of America, N.A.
Communications (PBCom) • Bank of China - Manila Branch
• Mizuho Bank, Ltd. Manila Branch • Mega International Commercial
• The Bank of Tokyo-Mitsubishi UFJ, Ltd. Bank Co. LTD
• Standard Chartered Bank Philippines • KEB Hana Bank - Manila Branch
• Deutsche Bank • Bangkok Bank Co. Ltd.
• Philippine Veterans Bank (Veterans • Industrial Bank of Korea Manila Branch
Bank; PVB) • United Overseas Bank Limited Manila
• CTBC Bank (Chinatrust) Branch
• JPMorgan Chase & Co. (JPMorgan • Cathay United Bank Co. Ltd. - Manila
Chase) Branch
• Australia and New Zealand Banking • Shinhan Bank - Manila Branch
Group (ANZ) • Hua Nan Commercial Bank Ltd. Manila
• Sumitomo Mitsui Banking Corporation • First Commercial Bank Manila
Manila Branch Branch (zh)
• ING Group N.V.
PUBLIC-OWNED or GOVERNMENT
BANKING INSTITUTIONS
• Development Bank of the Philippines
• Land Bank of the Philippines
• Al-Amanah Islamic Investment Bank of the
Philippines
• Overseas Filipino Bank (OFBank) (former
Postal Bank of the Philippines (PPSB)
or PostBank)*
*not operating
GOVERNMENT NON-BANK FINANCIAL
INSTITUTIONS
• The Government Service Insurance System
• The Social Security System
• Home Development Mutual Fund (HDMF or
known as Pag-Ibig Fund)
• The National Home Mortgage Finance
Corporation (NHMFC)
As to incorporation
• Domestic. When it is incorporated under the
laws of the Philippines. It follows that majority
of the stocks are owned by Filipinos in
conformity with the Philippine Corporation
Code.
As to incorporation
• Foreign. When the bank is incorporated under
the laws of another country, although the
bank might be doing business in the
Philippines. Organization, therefore, follows
the pattern of incorporation in the country to
which the owners owe allegiance without
prejudice to the supervision and control
imposed by Philippine laws on banks and
financial institutions, and others which have
anything to do with corporate entities.
As to structure
• Stock Corporation. They sell shares of stocks
to the general public to raise capital. All
commercial banks are organized as such. The
purpose of organizing is for profit.
• Non-Stock Corporation. The organization is
on a membership basis. The purpose of such
organization is for mutual benefits and service
rather than for profit.
Attributes of the Bank
• It must be authorized by the Monetary Board
of the Central Bank;
• It must engage in the lending of funds;
• It must obtain the funds from the public
through the receipt of deposits of any kind;
and
• It must be regularly conduct such operations.
Major Roles of Banking and Financial
Institutions
1. As participants, particularly in the money
creation process; and
2. As intermediaries in the Savings-Investment
process.

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BANKING AND

– receiving, collecting, transferring, paying, lending,

• Publicly owned. It is organized by the state

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