Export Bank placed under receivership

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Friday, April 27, 2012

MANILA (Updated) -- The Bangko Sentral ng Pilipinas (BSP) has placed under receivership the Export and Industry Bank (EIB) after it failed to pay maturing obligations, a television report said Friday.

The Philippine Deposit Insurance Corp. (PDIC), which is taking over the bank's affairs effective Friday, shut down more than 50 branches of the bank nationwide, including two in Davao City.

Eddielyn Sales, administrative assistant of PDIC-Davao, said in an interview that the bank will no longer operate effective Friday and PDIC will conduct the necessary financial inventory on the bank.

Based on the statement issued by PDIC dated April 27, the order was by virtue of the Monetary Resolution 686 dated April 26.

But Sales refused to elaborate on the reason behind the bank's placement under PDIC receivership.

Export Bank notice of recievership
The notice issued by PDIC

"As receiver, PDIC shall gather all the assets of the closed bank and verify and validate all bank records," PDIC president Valentin Araneta said in a statement.

Export Bank has a total of 50,052 depositors across the country. Sales does not have the figure of the bank's number of depositors in Davao City.

PDIC is set to distribute the balances of the bank's depositors whose balances are below P10,000 starting next month.

"Holders of these accounts who have no outstanding loans and who have updated their addresses in the bank during the past years do not have to file deposit insurance claims," Araneta said.

PDIC-Davao is set to hold a consultation with the bank's depositors in the city next week.

EIB branches in Davao City are located on C.M. Recto Avenue and the other at the corner of Jacinto st. and CM Recto.

Invoking Section 30 of Republic Act 7653 or the New Central Bank Act, the Monetary Board cited EIB's "insufficient realizable assets" to cover liabilities and inability to continue its business without involving probable losses to its depositors and creditors.

Assets of banks operating in the Philippines posted a record-high P7.642 trillion last year, of which P25 billion belongs to EIB, data from the BSP show.

"The overall Philippine banking system remains sound and stable with ample liquidity and high level of capitalization. The closure of EIB is not expected to adversely affect the Philippine banking system considering its relatively small size," the Monetary Board said.

EIB president Juan Victor Tanjuatco, who informed the BSP of the bank's dire situation on Thursday, has yet to issue a statement as of this posting.

The Makati City-based bank, which is engaged in commercial banking, trust and funds management, has around 50,000 depositors with over 50 branches mostly located in Metro Manila, BSP Deputy Governor Nestor Espenilla Jr. said.

Araneta, in a separate statement, said he has directed the corporation to marshall all resources needed to ensure that the receivership and the payment of deposit insurance are done swiftly.

Payment for accounts with balances of P10,000 and below comprising 62 percent of the bank’s total deposit accounts of 50,052 is targeted to start by the end of May.

For depositors with account balances of more than P10,000, claim forms will be distributed during Depositors Forums to be conducted nationwide starting May 2.

During the forums, the procedures, instructions and requirements for filing claims will be discussed.

Claims servicing operations for accounts of over P10,000 are expected to commence not before the end of June.

EIB was a result of the merger of the closed Urban Bank Incorporated and UrbanCorp Investment Incorporated, which were both under receivership of the BSP and the Philippines Security and Exchange Commission.

One of its officers is Chinese-Filipino magnate Alfredo Yao, who also owns budding airline Zest-Air and beverage company Zest-O.

Last year saw the PDIC taking over 29 banks, including the Banco Filipino and Savings and Mortgage Bank, affecting some 177,000 depositors nationwide.

But the Court of Appeals said last February that the BSP failed to prove that the bank is insolvent, a condition when liabilities exceed assets.

It even ordered the bank's reopening within 30 days and that the BSP should infuse P25 billion for Banco Filipino's rehabilitation plan.

The government has since appealed the case. (With Virgil Lopez/Sun.Star Davao/Sunnex)

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