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Bacolod City, PhilippinesFriday, June 22, 2012
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More banks vying as
EIB white knight

MANILA – Five other banks, aside from Banco de Oro Unibank, have indicated interest in acquiring Export and Industry Bank, Philippine Deposit Insurance Corporation executive vice president Cristina Orbeta said, yesterday.

Orbeta declined to name the banks, saying nothing is final yet unless these banks have submitted their proposals.

She explained that after receiving the proposals, PDIC will conduct a due diligence process, with the participation of EIB officials, to answer all queries of the interested investors.

PDIC targets to bid EIB at the latter part of July or early August, Orbeta said.

She said the five other interested investors are all local banks but stressed that PDIC is “not constrained to receive qualified proposals” either from foreign-owned banks or big savings banks that want to upgrade.

The estate deposit insurer needs to assess first the capital of the interested investor to check its ability to infuse liquidity, the rehabilitation program as well as whether the investor practices good governance.

Orbeta said EIB is very attractive because of its branch network.

EIB, which has a head office in Exportbank Plaza in Makati City, has 50 branches nationwide and 25 of these are in restricted areas. Its deposit totaled P14.8 billion until its closure on April 26, 2012 and P3.3 billion of this is insured.

Orbeta disclosed that P34.17 million of the valid deposits have been given their insurance and these deposits are accounts amounting P10,000 and below.

PDIC started paying insurance of EIB deposit accounts amounting P10,000 and up on June 19 and two pay-out schedules are set on June 29 and July 11, 2012.

The Bangko Sentral ng Pilipinas placed EIB under PDIC receivership after the commercial bank, which is listed with the Philippine Stock Exchange, asked the central bank to take over the bank on April 25, 2012 due to insolvency.

Earlier, BSP Deputy Governor Nestor Espenilla Jr. said EIB has a maturing time deposit amounting to around P700-800 million on April 27, 2012 and April 30, 2012, both of which cannot be paid by EIB.

EIB was formerly known as Urban Bank but was renamed after a white knight, a term in the banking sector for investors taking over ailing banks, came in after the bank was placed under receivership by the central bank in early April 2000.

It has an existing rehabilitation program, which was approved in principle by the Monetary Board.

However, its latest white knight - the Sy-led BDO already informed monetary officials last April 26 of its decision to abandon the acquisition plan, citing EIB’s pending legal issues.

Orbeta said the “grant of financial assistance is no longer possible” for EIB but stressed its rehabilitation will not have any additional cost to PDIC.

“Custody to rehabilitate EIB is equal to cost of liquidation,” she added.*PNA

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