UCPB gets add’l P7.5B from PDIC

The United Coconut Planters Bank (UCPB) received another P7.5 billion in liquidity assistance on top of the P20-billion bailout assistance from the Philippine Deposit Insurance Co. (PDIC).

The total assistance received by the UCPB topped the P25 billion record set by the Philippine National Bank. This amount is P2.5 billion shy of the P30 billion received by Metropolitan Bank and Trust Co. which paid the whole amount within a year.

UCPB president Jose Querubin told reporters yesterday that it was pre-paying the liquidity assistance but the amount was never

disclosed when the bank signed the P20-billion assistance package from the PDIC last year.

"We are pre-paying the entire P7.5 billion which is due Sept. 15," Querubin said. "We are paying two months earlier."

PDIC records show that UCPB received P7 billion in assistance and another P13 billion that the UCPB paid for with assets.

After the PDIC-UCPB agreement was signed, rumors persisted that the bank needed at least P20 billion more in order to plug the hole in its coffers although the bank got only P7.5 billion in what the PDIC considered in its books as "liquidity assistance."

UCPB advanced P5 billion from the PDIC in May last year as part of the financial assistance package that involved the immediate issuance of P2 billion worth of Tier 2 notes and the subsequent issuance of another P5 billion tranche of Tier 2 bonds.

The remaining P13 billion was infused by the PDIC through the direct acquisition of P8 billion worth of non-performing loan (NPL) and P7 billion worth of NPLs with a buy-back option.

Since then, however, UCPB has managed to make some recovery, generating over P170 million from the sale of its foreclosed assets and expecting another P15 billion from the auction scheduled this month.

UCPB is sitting on about P22 billion worth of real and other properties owned or acquired (ROPOA) assets but bank officials said the market response to the sale of its bad assets had encouraged management to hold at least two more auctions this year.