Bancommerce inks MOA with Urban owners

Bank of Commerce is finalizing its bid to acquire Urban Bank by joining forces with the major stockholders of the closed bank.

Social Security System (SSS) chairman and president Carlos Arellano said yesterday Bank of Commerce had signed a memorandum of agreement (MOA) with existing shareholders of Urban Bank to join forces with them.

"Bank of Commerce signed a MOA last week with Urban Bank stockholders," Arellano said. SSS holds a substantial share in the bank equivalent to two board seats. He said these shares are now valued at P120 million to P130 million.

However, the signing of the MOA has nothing to do with the scheduled June 13 bidding of the bank according to Philippine Deposit Insurance Corp. (PDIC) president Norberto Nazareno.

"We (PDIC) are not part of that (MOA). Urban Bank is now PDIC. Whatever agreement is signed between Bank of Commerce and the stockholders of Urban Bank has nothing to do with us. It is between themselves. Urban Bank and its shareholders are two separate (legal) entities," he said.

"As far as we are concerned, the bidding will continue as is. We will evaluate the five other proposals," he said.

Urban Bank was placed under the receivership of PDIC, which means that the bank is now under its control. PDIC has the final say on the bidding.

Officials of both Bank of Commerce and Urban Bank could not be reached for comment.

The fine other banks seriously interested Urban Bank were Rizal Commercial Banking Corp., Allied Bank, Banco de Oro, Keppel Tatlee Bank of Singapore, and Banque Nationale de Paris.

Arellano said Bank of Commerce is now working out a deal with the biggest depositors of Urban Bank so that they would not pull out their funds once the bank is reopened. He said the bank either wants depositors to hold on to their deposits for a given period or convert some of these into equity in the bank.

Among Urban Bank's biggest depositors are Petron Corp., San Miguel Corp., and Manila Electric Co.. These firms represented the bulk of the bank's P8-billion deposits when it was closed on April 26 and placed into receivership by PDIC.

Petron chairman Jose Syjuco Jr., said there were indeed negotiations going on with the bank and its depositors but refused to divulge further details. The firm has P1 billion deposited in Urban Bank. "It is part of our interest that it will be reopened soon," Syjuco said.

Arellano said the SSS is working out a special agreement with Bancommerce for it to be able to convert its holdings in Urban Bank into ownership or real estate properties located in Ft. Bonifacio, where the bank's subsidiary, Urban Realty Development Corp. has substantial holdings.

"We have another agreement to swap our equity shares with properties in Ft. Bonifacio," he said. Ft. Bonifacio, a former military camp, is now being converted into a prime residential and commercial district like Makati City. Urban Realty is part of the consortium that is undertaking its development.