Tuesday, September 23, 2008 Security Bank denies exposure to Lehman
ONE of the country's leading banking institutions on Monday denied "exposure" to the bankrupt US banking institution Lehman Brothers.
The Security Bank Corporation's (SBC), through its public relations firm Outsource PR, said the bank has no exposure to Lehman Brothers and that it has a sound financial footing as showed by its continued growth and improved assets quality.
"Security Bank, in a disclosure to the Philippine Stock Exchange (PSE), has confirmed that it does not have any direct or indirect exposure to Lehman Brothers Holdings, Inc. And while the global financial market moves to address these most recent concerns, SBC assures the public that its clients can rely on the bank's sound fundamentals as manifested in its continued growth and improved asset quality indices," said the bank.
To prove its financial liquidity, SBC said its interim financial report as of June this year shows it has an exceptionally low ratio of non-performing loans at 1.4 percent of its total loans and a non-performing loans cover of 298 percent.
This, the bank said, amount to over P4 billion in provisions against bad loans.
Earlier, SBC claimed that it did not have any direct or indirect exposure to Lehman but it had an exposure of US$10-million (about P480 million) to Merrill Lynch.
Several banks in the Philippines admitted that they have exposure to Lehman Brothers.
These include Banco de Oro (BDO) and Metropolitan Bank and Trust Co. (Metrobank) which said they had put up loss provisions totaling US$94 million for their exposures to products sold by the bankrupt US investment giant and its affiliates.
BDO, the second-largest bank by assets, was the first one to file a disclosure to the PSE.
It had set aside P3.8 billion (US$80 million) as a buffer for its investment exposure to Lehman, but did not say how much its total exposure was.
Metrobank, the biggest in assets, also reported that it had put up US$14 million in provisions for its exposure to Lehman bonds in the amount of US$20.4 million.
Rizal Commercial Banking Corporation (RCBC) disclosed that it was allocating P980 million (about US$20.8 million) for its US$30-million (P1.4-billion) investment in "structured products" linked to Philippine bonds and issued by Lehman.
The Development Bank of the Philippines (DBP), for its part, claimed that it also has a very small exposure to Lehman's financial products. (AH/Sunnex)
