Bank of Cebu was one of the largest banks based in Cebu province, and it started operations in 1961. In 1990, after several years of lending to trading and commercial businesses in Cebu City, the bank began shifting its lending portfolio in favor of
small and medium enterprises involved in manufacturing, taking advantage of the city's industrialization. On August 31, 2006, the Bank of Cebu declared
bankruptcy and was subsequently declared insolvent, the first time a bank in the Philippines failed since the failure of
Urban Bank in 2000. The bank was placed under the
receivership of the
Bangko Sentral ng Pilipinas, and at the time of its closure, it had some 8,000 depositors split among seven branches located in
Metro Cebu. However, this was denied by the court, and subsequently by the
Court of Appeals. Despite the failure, 98% of the bank's depositors were able to retrieve the entirety of their deposits as they were covered by the
Philippine Deposit Insurance Corporation. ==References==