Equitable sells P5.3-B NPAs to German bank

Equitable PCI Bank, together with its subsidiary, Equitable Savings Bank, recently unloaded P5.3 billion worth of non-performing assets (NPA) to a special purpose vehicle (SPV) controlled by Bayerische Hypo- und Vereinsbank AG, Germany’s second largest private commercial bank.

In a disclosure to the Philippine Stock Exchange (PSE), Equitable said it is selling, together with its savings bank subsidiary, the NPAs to Cameron Granville Asset Management (SPV-AMC) Inc., a Philippine-registered SPV.

The sale and purchase agreements signed April 1 are subject to Bangko Sentral ng Pilipinas (BSP) approval and certain closing conditions.

The deal brings to P15.8 billion the idle assets EPCIBank has unloaded to SPVs in the last five months.

Last year, it sold– in two tranches–P10.5 billion of NPAs to Lehman Brothers.

Bank officials said unloading a big chunk of bad assets off its books and putting them to productive use would further strengthen its balance sheet and increase its growth potential.

Equitable president and chief executive officer Rene J. Buenaventura said the latest sale would significantly improve its asset quality ratio. He added that the bank will enjoy advantages under the SPV framework for NPA disposition.

"We will maximize all the benefits the law has to offer, including tax and transaction cost savings."