PBCom pays P2-B emergency loans

After containing a run on its deposits last week and the infusion of additional capital, Philippine Bank of Communications (PB Com) is now paying back over P2 billion in emergency loans it acquired from the Bangko Sentral ng Pilipinas (BSP), a high-ranking PB Com official told The STAR yesterday.

The official, who requested anonymity, said PB Com is also ruling out emerging with other banks just to strengthen its position in the industry.

"With a new capital, we intend to stay as a strong commercial bank on our own," he said, adding that "we also want to stay as a commercial bank even if our capital is way above that of a universal (extended commercial) bank."

On May 3, the board of directors of PB Com approved an increase in its capital by P2.6 billion to P7.3 billion from P4.7 billion. This exceeded the minimum capital requirement for commercial banks of P2.4 billion and P4.950 billion for universal banks.

He said PB Com has paid the BSP over P1 billion last week out of the P2.5 in emergency loans it obtained. It is expected to make more payments this week.

The bank tapped the lending facility of the BSP to finance heavy withdrawals on April 28 as nervous depositors pulled out their funds after receiving text messages that the bank along with the International Exchange Bank (iBank) are suffering from a bank run.

Earlier, PB Com has been reported to be eyeing other banks including Rizal Commercial Banking Corp. for a possible merger. The official, however, said its shareholders, decided to improve the bank's finances through infusion of new capital.

"Basically, this is just a show of faith by shareholders. They want to give the message that they are behind the bank one hundred percent," he said. The bank's principal owners, he said are among the country's original Chinese taipans namely the Luys of International Copra Export and the Nublas and Chungs of La Suerte Cigarette.