Banco Nacional de Cuba (BNC) is located in the building that was in the past the Gelatz Bank. Gelatz was one of the most sound and prestigious banks raised in Cuba in the middle of the XIX century. Its founder, Mr. Narciso Gelatz, was born in Catalonia. He arrived to Cuba in 1857 and took care of the family business, thus he founded the mercantile society Gelatz & Brothers and later on, together with other family members, he created Gelatz & Co.
On Aguiar Street, the so called Wall Street of Havana, the Gelatz family decided to build a construction with banking purposes. This zone had important buildings showing all variety of architectonic styles, going from neoclassical patterns to the most advanced ideas of New York or Chicago School of Architecture. Under this influence, the construction started, lasting from 1908 to 1910.
The one floor building is characterized by its horizontal frontage, based on Cuban eclectic codes and influenced by neoclassical and baroque elements, denoted by the use of pillars and cornices. In the interior, three areas are perfectly defined. In the Operation Area, the ceiling is covered by an admirable fanlight, the central part outstands a very beautiful Swiss strongbox and a spacious salon fully veneered by fancy woods, the same used in windows and doors. The wing dedicated to Bank direction offices and the Negotiation area is distinguished by another fanlight of colored – leaden crystals, showing an Art Nouveau tendency. All these parts are covered by Seville tiles, in different green tonalities. In the whole building were used the most diverse and expensive materials including: marbles, fancy woods. Also an unrepeatable smithy work is still present in large doors where the initials of the Gelatz family remained. The magnificence of the building is highlighted by great lamps and wall lights.
In 1942, the children of Mr. Narciso Gelatz announced an entity change of name, which started to be the Gelatz Bank. It was recognized by its honest and efficient performance that brought out the official recognition of Vatican and the governments of Cuba and Spain.
Banco Nacional de Cuba was created by Decree-Law No. 13 of December 23, 1948, as the central state bank, with organic autonomy, independent legal status and assets of its own. On April 27, 1950 Banco Nacional de Cuba started to operate as the Central State Bank executing all the functions which embodied this condition established by the aforementioned Law.
The process of economic and social transformations carried out by the revolutionary government since it came into power on January 1st, 1959, made necessary the introduction of radical changes in the banking structure to adjust it to the new conditions of the economic development.
By means of Decree No. 2261 of November 26, 1959, the presidency of Banco Nacional de Cuba was occupied by Commandant Ernesto Guevara de la Serna (Che), considered by History as the first revolutionary president of BNC, who performed this function until February 23, 1961. During his 15 months fully presidency mandate, he implemented the banking nationalization law approved by the revolutionary Government that left established the basis for what would be the socialist banking.
Since October, 1960, date in which the Banks were nationalized, BNC assumed the functions of financial institutions dissolved and remained as the unique financial entity in the country, responsible for the execution and control of the annual economic plan.
The new banking organization, on the basis established by Che, was regulated under Law No. 930 of February 23, 1961. This law disposed the creation of a State centralized and unique banking system, constituted by Banco Nacional de Cuba, whose objective was to favor the development and promotion of all productive activities in the country through the accumulation of financial resources and its most reasonable utilization.
Over a 20 years period, financial relations carried out by Banco Nacional de Cuba can be summed up as follows:
With socialist countries, the most important financing sources were made of official and bank credits, centrally and significantly negotiated with the former Soviet Union and other socialist countries.
Banco Nacional de Cuba considerably widened its relationships with two banking institutions created by CAME (Council for Mutual and Economic Aid): the International Bank for Economic Cooperation and the International Bank of Investment, which greatly contributed to international financing of international trade and economic integration programs until the collapse of the socialist system.
Financial relations with capitalist countries institutions were much more restricted tan those with socialist countries, which was in accordance with the more reduce volume of economic and commercial operations of Cuba with capitalist countries. However, it is necessary to point out that the main difference was not due to the volume of operations, but to the very different character of financial relations with the Banks of those countries.
Credits granted were, in general, short term and were subjected to terms and conditions strictly commercial with highly costs. Obviously, these terms and conditions reflected commercial risk that normally creditors conferred to businesses with underdeveloped countries, but in the case of Cuba, they also reflected political risk that creditors attributed to their relationship with this socialist country affected economically and financially by US blockade.
Notwithstanding the abovementioned situation, during the 60´s and at the end of the 70´s some advances were produced in the relations with institutions of capitalist countries, such as the gradual establishment of relations with export credit insurance institutions. Besides, the number of correspondent banks all over the world was also increased reaching to more than 500 and some representative offices were opened in Spain, Switzerland, Japan and Panama.
All this progress was possible not only for the plenty of credits during the 70´s, but also by the professionalism achieved by Banco Nacional de Cuba in its performance at international level. In 1982 BNC, affected by liquidity international crisis and the US blockade, was forced to renegotiate its debts with capitalists creditor countries and banks.
The attributions and functions conferred to Banco Nacional de Cuba by Law 930, as to international operations, were kept in force until October 13, 1984, date in which Decree-Law No. 84 was passed ¨ON THE NATIONAL BANKING SYSTEM AND BANCO NACIONAL DE CUBA¨.
In this new organic law, Banco Nacional de Cuba continued acting as the central, international, commercial and investment bank but a fundamental change was introduced in the banking organization that had prevailed until that moment: the creation of non-state banks was authorized, mainly to carry out international operations and the establishment of representative offices for foreign banks in Cuba.
This legally meant the end of State monopoly operations in foreign currency. However, centralization of foreign currency remained for almost every entity in the country that would not obtained the License from Banco Nacional de Cuba allowing them to carry on international operations.
During the last years of the decade of the 80´s and the beginning of the 90´s the Cuban economy was considerably affected due to the effects of the international crisis, the fail of sugar prices in the international market, the sustained price rising of fundamental imports, the disappearance of socialist system in the countries from East Europe and the strengthening of economic blockade imposed by the United States of America.
Cuba experienced a serious backward in the sector of external financing, which can be mainly summarized as follows:
Massive retreat of deposits and loans by creditor Banks, originating a liquidity crisis and subsequently difficulties to face payment obligations contracted, thus generating underbalance in external commitments.
– Decrease in external financing and higher costs for the ones obtained.
– Debt renegotiation process could not be reactivated.
Export credit insurance institutions remained closed to Cuba.
To revert this adverse situation, the Cuban government declared a ¨Special Period Stage¨ and adopted several decisions enabling the adjustment of the economic organization to the current conditions, mentioning for instance: for its direct relation to international activity, the decentralization of foreign trade and the subsequent authorization of mercantile societies and productive and commercial entities capable of executing foreign trade operations.
Likewise, other transformations were carried on, among them: the broader opening to foreign investment to Cuba and self-financing schemes for state and mercantile societies was approved, as well as the free holding and circulation of foreign currency. Al this allowed these entities to own accounts in foreign currency, which used to be only assumed by Banco Nacional de Cuba, with the exception of authorized cases.
Cuban economy experienced important changes taking into account the measures adopted to cope with new conditions. As a result, it became necessary to implement a new restructuring of the national banking and financial system to enable its adjustment to the current economic conditions.
The restructuring process was implemented by Decree-Law 172 and 173, both of May 28, 1997 and paved the way for the creation of new financial institutions or the ratification of the existing ones capable of providing specialized banking services, such as leasing and fiduciary services.
Banco Nacional de Cuba, held all the functions and attributions recognized by Decree-Law No. 84, 1984, with the exception of the central banking functions. Later, in 1998, as part of the financial system restructuring process, Decree-Law No. 181 was enacted, stipulating that BNC is freed from central banking and guidance functions. It remained as a commercial bank and kept the record and control, service and handling of the foreign debt that Cuban Government and Banco Nacional de Cuba have contracted with foreign creditors with the guarantee of Cuban State.
BNC, as all other financial institutions, is subjected to Banco Central de Cuba´s regulation and supervision, which undoubtedly constitutes the essential reason for its more efficient performance.
As a universal and multi-services bank, BNC has attributions and functions allowing all kinds of operations as well as financial intermediation. However, as currently banking services has been broadening by virtue of the reorganization process, BNC is focusing on operations related to foreign trade.
At present, when convenient and necessary, BNC can rely in other financial institutions established in the country to obtain specialized services or to use the network of bank branches. This alternative of searching support would not be possible at times of bank centralized monopoly.</p >
The debt keeping and record and the act of subscribing renegotiation agreements with Bank creditors allow Banco Nacional de Cuba to develop and encourage relationship at international bank level and to establish relations with the most important Credit export insurance companies.
In this sense, it can be said that Banco Nacional de Cuba has achieved and maintained an international recognition during its existence as a financial institution, given by professionalism demonstrated in its performance, by the sustained efforts attending the prioritized needs of the country and, at the same time, by fulfilling its foreign commitments while the economic situation permit to do so.
In accordance to its history and tradition, the prospects of Banco Nacional de Cuba, undoubtedly, are still to honor its name and serve the development and welfare of the country, no matter difficulties or obstacles to overcome in order to fulfill the mission conferred by mandate of law.