Welcome to Module 4 – 

Commercial Banks
 
Traditionally, commercial banks made working capital loans to businesses and
accepted commercial and individual checking and savings deposits.  Today banks and
other DIs are much more diversified and offer many types of services. This module
will cover the concepts in banking, specifically, commercial banks.  The module will
help us understand the various products and services offered by banks and this can
guide students in shopping for the right bank account. This module contains in-lesson
exercises, quiz/assignment.
 
CONSULTATION HOURS:
 
Phone or Messenger: 3:30 – 4:30 PM Mondays | Thursdays
 
Virtual time: 1:00 – 2:00 PM Tuesdays I Fridays
 
 
MODULE 4 LEARNING OBJECTIVES:
 
By the end of this module, the students will be able to:
Define what a commercial bank is.
Understand the types of banks, their products, and services.
Discuss which factors have motivated the significant innovation in banking.
Evaluate the performance of the commercial banking industry in recent years.
Know the main regulators of commercial banks.
 
COURSE CONTENT FOR MODULE 4:
 
Commercial Banks
 
TIME TO
ACTIVITY DESCRIPTION
COMPLETE
Lecture discussion Commercial Banks Overview 45 minutes
Lecture discussion Products and Services 45 minutes
Lecture discussion Commercial Banks in the Philippines 1 hour
Review Quick Review 15 minutes
Activity ACTIVITY 4 30 minutes
Quiz Summative quiz for module 4 15 minutes
 
LECTURE DISCUSSIONS
 
Module 4 – Commercial Banks
 
Commercial Banks
 
A commercial bank is a type of financial institution where most people do their
banking. Commercial banks are financial institutions that accept deposits, offer
checking account services, and make various loans. They also have products like
savings accounts for individuals and small businesses as well as certificates of deposit
(CDs).

These banks profit from the loans they provide consumers, earning an interest income.
The loans commercial banks offer may vary but may include home loans, car loans,
and personal loans. The capital used for these loans is sourced through customer
deposits like checking and savings accounts.

For instance, if you deposit money into a savings account, you are effectively lending
money to the bank. You will be paid interest for the money you deposited. However,
this interest rate may be less than the rates the bank charged on the money they lend.

In the Philippines, commercial banks are regulated by the Bangko Sentral ng Pilipinas
(BSP). The BSP imposes various conditions and prescribes the minimum level of
capitalization of banks.

Commercial Banks vs Investment Banks: What are the Differences?

Investment banks cater to large institutions to manage their money. These banks help
large companies create capital and underwrite debts. They also assist in mergers and
acquisitions. An investment bank can also help a large entity to help connect with
investors through issuing of bonds or stocks.

On the other hand, commercial banks provide financial services to individuals and
small businesses. They offer loans, deposit banking, and wealth management. This is
where we do most of our banking.

Commercial Bank Products and Services

In the Philippines, commercial banks offer various products and services to
consumers and businesses. Some of them are:

1. Deposit banking
 You can go to a commercial bank to put your money for safekeeping. You can open
savings, checking, or time deposit accounts, depending on your needs.

2. Credit cards

You can also get a credit card from a commercial bank, whether you are a first-time
cardholder or not. This card lets you spend money via credit for goods and services.

3. Loan services

You can apply for various loans offered by a commercial bank. Some of the loan
types that may be offered are car loans, mortgages, personal loans, and business loans.

4. Treasury management

Commercial banks offer this service to help clients make better use of their funds.
Enterprises are the usual clientele of this type of service.

5. Insurance

You can also get different insurance policies in commercial banks. Insurance can
protect you from financial losses caused by unexpected events and emergencies.

6. Wealth management

Commercial banks also offer wealth management to their clients. It is an investment

advisory service that combines different financial services to address your particular
need.

Commercial Banks in the Philippines

Here are some of the top commercial banks (arranged alphabetically) in the country:

1. AUB

AUB started as a joint venture between Filipino industrialists and Taiwanese

investment banks. It was granted the authority to operate as a commercial bank by
BSP’s Monetary Board in 1997.

Products and services:

 Deposit banking
 Loan services
 Credit cards
 Remittance

2. Bank of Commerce

Bank of Commerce is the 15th largest bank in the country in terms of assets. It is a
subsidiary of San Miguel Corporation.

Products and services:

 Deposit banking
 Credit cards
 Loan services
 Trust investment
 Treasury

3. BDO Unibank

BDO Unibank was established in 1968 as Acme Savings Bank. It was later acquired
by the SM Group. It has over a thousand operating branches in the Philippines.

Products and services:

 Savings accounts
 Checking accounts
 Credit cards
 Loan services
 Remittance

4. BPI

The Bank of the Philippine Islands has been around since 1851. It is one of the
leading commercial banks in the country, offering various products and services to
customers.

Products and services:

 Deposit banking
 Checking accounts
 Time deposit
 Credit cards
 Insurance

5. Chinabank

China Banking Corporation, also known as Chinabank, was founded in 1920 in the
Philippines. It is a member of the SM Group.

Products and services:

 Deposit banking
 Credit cards
 Remittance
 Loan services

6. CIMB Bank

CIMB Bank Philippines is an all-digital bank with over two million customers since
its creation in 2018. It was named International Finance’s 2020 Best New Digital
Bank Philippines.

Products and services:

 Savings accounts
 Loan services
  

7. Citibank

Citibank Philippines is the largest foreign commercial bank in the country. This
commercial bank offers corporate banking, treasury, and consumer products and
services.

Products and services:

 Deposit banking
 Global banking
 Loan services
 Credit cards
 Wealth management

8. Development Bank of the Philippines

DBP provides development banking, financing, management, and remittance services

to agricultural and industrial enterprises.

Products and services:

 Deposit banking
 Trust banking
 Investment services
 Development financing

9. Deutsche Bank

Deutsche Bank is a leading German bank with a global network. It gained a full
commercial banking license in the Philippines in 1995.

Products and services:

 Deposit banking
 Investment banking
 Asset management
 Wealth management

10. EastWest Bank

 A subsidiary of the Filinvest Development Corporation, EastWest Bank was the first
recipient of a commercial banking license after the central monetary authority
liberalized banking in the 90s.

Products and services:

 Deposit banking
 Credit cards
 Loan services
 Investment

11. HSBC

The Hongkong and Shanghai Banking Corporation (HSBC) is a British banking

institution that has been in the Philippines since 1875. It serves over 40 million
customers worldwide.

Products and services:

 Deposit banking
 Credit cards
 Investment
 Insurance

12. ING Philippines

ING operates in more than 40 countries and has been in the Philippines since 1990. It
offers digital banking services through its mobile app.

Products and services:

 Digital savings accounts

13. Land Bank of the Philippines

Land Bank is a government financial institution founded in 1963. It focuses on

serving farmers and fishermen.

Products and services:

 Personal banking
 Loans
 Treasury
 Trust banking

14. Maybank

Maybank is a Malaysian universal bank that has been in the Philippines since 1997.
For 2015-2016, it was named Brand of the Year, National Tier by the World Branding
Awards.

Products and services:

 Deposit banking
 Checking accounts
 Loan services
 Credit cards

15. Metrobank

Metrobank is the second largest bank in the Philippines. More than 48% of the
company is publicly owned.

Products and services:

 Savings accounts
 Time deposit
 Checking accounts
 Credit cards

16. PBCom

The Philippine Bank of Communications or PBCom was established in 1939. It offers

financial services such as deposit and corporate banking, cash management, and
investment.

Products and services:

 Deposit banking
 Loan services
 Investment
 Cash management

17. PhilTrust Bank

Established in 1916, PhilTrust is one of the oldest banking institutions in the country.
It has branches in Metro Manila and major cities in Luzon, Visayas, and Mindanao.

Products and services:

 Deposit banking
 Loan services
 Personal trust services

18. Philippine Veterans Bank

Owned by World War II veterans, this commercial bank’s services cater to the retail
and corporate financial markets. It has 60 branches nationwide.

Products and services:

 Deposit banking
 Loan services
 Trust and investment
 Pension Express Padala
 19. PNB

The Philippine National Bank (PNB) is a private universal bank founded in July 1916.
It was the first bank in the country to reach the PHP 100 billion mark in assets in
1996.

Products and services:

 Personal banking
 Asset management
 Loan services
 Investment

20. RCBC

RCBC started as a development bank in the 1960s. It is now one of the biggest
commercial banks in the country, with over PHP 77 billion of total consolidated
resources as of the end of 2019.

Products and services:

 Deposit accounts
 Loan services
 Global Filipino products
 Cash management

21. Robinsons Bank Corporation

This commercial bank is the financial services arm of the JG Summit Group of
Companies. It started as a savings bank in the 90s during the Asian financial crisis.

Products and services:

 Deposit accounts
 Checking accounts
 Disbursements
 Loan services
 Investment

22. Security Bank

This financial institution’s businesses include retail, commercial, and corporate

banking. In 2012, Security Bank was named Bank of the Year—Philippines by The
Banker of the Financial Times of London. It is one of the most popular commercial
banks in the Philippines.

Products and services:

 Savings accounts
 Checking accounts
 Time deposit
 Investment
 Loan services
 23. Standard Chartered Bank

Standard Chartered was the first foreign bank established in the country in 1872. It
was given the universal bank status by BSP’s Monetary Board in 2001.

Products and services:

 Consumer banking
 Credit cards
 Loan services
 Wealth management

24. UnionBank

UnionBank has 200 branches in the country, with over five million customers. It
started as Union Savings and Mortgage Bank in 1968, making it one of the most
established banks in the country.

Products and services:

 Deposit banking
 Loan services
 Cash management
 Trust and investment

25. UCPB

Formerly known as Cocobank, UCPB was established in the 60s as First United Bank
(Philippines). Today, it is one of the largest commercial banks in the country with
over a hundred branches nationwide.

Products and services:

 Personal banking
 Investment
 Loan services
 Treasury placement