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Veterans Bank, banking for a cause

Article - June 10, 2013
Entrusted with caring for the financial welfare of veterans and their descendents, PVB has also become an important local partner in development
RICARDO A. BALBIDO, CEO AND PRESIDENT OF PHILIPPINE VETERANS BANK (PVB)
The Philippine Veterans Bank (PVB) was first conceived in 1956, after a reparations agreement as part of a peace treaty had been signed with Japan. A portion of the $20 million provided by Japan, which invaded the archipelago in 1941 during World War II, was put into a trust fund for veterans of the war. 
 
This fund was eventually used in 1963 by the Veterans Federation of the Philippines to establish the PVB. The bank was born out of a deep sense of social responsibility towards the Philippines’ WWII veterans, as a symbol of gratitude and reverence. Its vision: to ensure, through its growth and profits, that veterans – as well as their widows, orphans and heirs – were provided with adequate care and a good quality of life, through healthcare, pensions and other provisions. 
 
Of PVB’s profits, 20% is set aside for the bank’s Board of Trustees. The board in turn invests this money in projects or investments deemed advantageous to the interest and welfare of veterans.  
 
In recent years, the bank has been growing from strength to strength, in tandem with the country’s economy. Between 2001 and 2011, it managed to increase the value of its assets from P14 billion ($345 million) to P57 billion. 
 

As of september 2012, Veterans bank had already lent out P7 billion ($168 million) to local government units, mainly for infrastructure-related projects
PVB is a successful, yet small bank. That is why in recent years, it has shifted its focus from corporate lending to local government unit lending (LGU) to support local development projects. Now, between 30% and 40% of its loan portfolio is comprised of LGU loans. 
 
“Outside of the two government-owned commercial banks, nobody is really looking at the needs of local government. PVB positions itself as a viable alternative bank to these two – rendering efficient service and competitive products that are adaptable and receptive to their development needs,” CEO and President of PVB Ricardo A. Balbido states.
 
“The needs of LGUs are very suitable to the size of resources that we can invest for them,” he adds.
 
It is in this market niche that the bank found a place where it could support the development of the Philippine economy; its lending to LGUs has helped to evolve infrastructure projects, transport terminals and other developments. 
 
There are two unique characteristics of the bank that distinguish it from other commercial banks in the country. First is the fact that it can accept government deposits, a privilege that was bestowed upon it in its original charter. Through this, the bank built a strong relationship with governmental agencies. 
 
“Since we can accept government deposits, a good number of government agencies and LGUs have supported us,” adds Mr. Balbido.
 
The second unique trait of the bank is that it is owned, and can only ever be owned, by the veterans, their widows or descendents. Therefore it is, essentially, a “closed-end equity bank.”

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