Sale of Prime Bank branches delayed

The sale of the remaining branches of Prime Savings Bank may be delayed due to some legal issues, Philippine Deposit Insurance Corp. (PDIC) sources told The STAR.

"There is a minor problem on the issue of relocation of branches. The Monetary Board (MB), the policy making body of the Bangko Sentral ng Pilipinas (BSP) is still tackling the legality issue," the sources said.

According to sources, the MB wants to resolve this issue first before giving the go signal for the sale of the 37 remaining branches of Prime Bank.

Sources said the Board is concerned that the buyers will encounter some problems relocating the branches because of prevailing restrictions on bank branching.

"The BSP wants everything in order before selling the branches," the source said, adding that the legal department of the central bank is now threshing out the issue.

Despite these "minor glitches," the sources said they expect to be able to sell the Prime Bank branches within the year.

"If there will be no more minor surprises like these, then we are hopeful we can sell the branches within the year," the sources said.

The uninsured depositors of Prime Bank are waiting for the sale since the proceeds will be used to partially pay them off.

Last October, BSP confirmed the sale of 25 branches of Prime Bank to International Exchange Bank (Ibank), Robinsons Savings Bank, Luzon Development Bank and Legaspi Savings and Loans Association.

About P180 million was raised from the sale of the 25 branches which will be used to settle a portion of the P2.5-billion uninsured depositors of the defunct savings bank.

If the remaining 37 branches will be sold at the same price 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 P5 million for branches located in the provinces. – Donnabelle Gatdula