BSP bares winning bidders for Prime Bank branches

The Monetary Board (MB), the policy making body of the Bangko Sentral ng Pilipinas (BSP), has confirmed the winning bidders for the 25 branches of Prime Savings Bank.

Philippine Deposit Insurance Corp. vice president and head of special operations Rescina Bhagwani said the confirmation was approved on Oct. 13 during the regular MB meeting.

Bhagwani said the winning bidders are Ibank, Robinsons Savings Bank, Luzon Development Bank and Legaspi Savings and Loan Association. They will sign shortly a memorandum of agreement (MOA) with the BSP.

"After the agreement is signed, these banks will start paying for the branches," she said.

Bhagwani said she is optimistic that the agreement will be signed anytime within this year so they could be paying the uninsured depositors of Prime Bank as soon as possible.

The sale of the 25 branches of Prime Bank raised about P180 million to be used to pay off a portion of the P2.5-billion uninsured deposits of the defunct savings bank.

As for the remaining 37 branches, Bhagwani said the terms for their negotiated sale have yet to be approved by the Monetary Board.

If the remaining 37 branches will be sold on the same pricing as that of the 25 branches, the PDIC will be able to raise about P212 million. The Metro-based branches were sold at P8 million while the branches located in the provinces were sold at P5 million each.

Bhagwani earlier said the negotiated sale for the 37 branches would be made on a "cash basis."

During the bidding last Sept. 26 this year, 11 out of the 25 branches were won by iBank of businessman Ramon Sy while eight were bought by Robinsons Bank of the Gokongwei group. Two development banks, Luzon Development Bank and Legaspi Savings and Loan Association won three branches each.

Bhagwani said iBank won eight Metro Manila branches, one in Metro Cebu and one in Metro Davao and one branch in the province.

Robinsons Bank, on the other hand, won five Metro Manila branches, one in Cebu and two provincial branches.

The winning bidders of the 25 branches of Prime Bank will be given at least three years to pay with interest of four percent per annum.

The P180 million that was raised from the bidding represented only 8.5 percent of the total uninsured deposits of Prime Bank.

The PDIC is now working out an agreement with a government bank to service the deposit claims of Prime Bank. Those deposits that would not be covered by the proceeds of the sale of the branches would have to wait for the liquidation process of Prime Bank.