^

Business

SSS eyes big returns from Urban Bank investment

- Ted P. Torres -
The Social Security System (SSS) expects to earn more than P500 million in interest income from a proposed P600-million investment in the Export Industry Bank (EIB) which is expected to take over Urban Bank and its investment arm, Urbancorp Investment Inc. (UII), SSS chairman and president Vitaliano Nañagas said yesterday.

Under the proposed rehabilitation plan for Urban Bank, SSS will make P600 million, three-year convertible and renewable bond placement with EIB, which will earn interest above the benchmark Treasury bill rates. The pension fund has the option to convert the bonds into common shares after the merger of EIB with UBI and UII.

The SSS already has common shares of stock in Urban Bank worth approximately P172 million. The bank ceased operations in April last year following a massive bank run caused by liquidity problems.

Aside from the P600-million investment of SSS, EIB will infuse P2.6 billion into the merged bank plus another P1.256 billion from the conversion of 10 percent of the depositors and investors money locked with UrbanBank, resulting in a capitalization of P4.456 billion for the new bank which may increase to over P5 billion when other increments and earnings amounting to roughly P1 billion are added.

The EIB and the National Association of Urban Bank Inc. and Urbancorp Investments Inc. Depositors and Creditors (NAUD) have submitted a rehabilitation plan to the Philippine Deposit Insurance Corp. (PDIC), receiver of the failed bank. The EIB has until May 15 to submit formal agreements between the SSS, the three major depositors named Petron Corp., San Miguel Corp., and the Manila Electric Corp., and all the depositors and shareholders of the bank.

The PDIC will also decide on May 15 whether to hand over all the assets and liabilities of Urban Bank and UII to EIB. The bank’s "white knight" hopes to start repaying in a graduated manner the depositors and shareholders by July this year.

vuukle comment

BANK

DEPOSITORS AND CREDITORS

EIB

EXPORT INDUSTRY BANK

MANILA ELECTRIC CORP

NATIONAL ASSOCIATION OF URBAN BANK INC

PETRON CORP

PHILIPPINE DEPOSIT INSURANCE CORP

URBAN BANK

  • Latest
  • Trending
Latest
Latest
abtest
Are you sure you want to log out?
X
Login

Philstar.com is one of the most vibrant, opinionated, discerning communities of readers on cyberspace. With your meaningful insights, help shape the stories that can shape the country. Sign up now!

Get Updated:

Signup for the News Round now

FORGOT PASSWORD?
SIGN IN
or sign in with