ADB backs sale of banks’ bad loans, assets

The Asian Development Bank (ADB) said yesterday it has approved a local currency loan to finance the purchase of a portfolio of non-performing loans and assets from Equitable PCI Bank and Equitable Savings Bank of the Philippines by a special purpose group.

The size of the loan was not disclosed at the request of the special purpose vehicle, Cameron Granville Asset Management, the ADB’s principal structured finance specialist William Willms told AFP.

Cameron Granville Asset Management is part of the German Bayerische Hypo-und Vereinsbank (HVB) group, which is Germany’s second-largest bank with total assets of about $470 billion.

The ADB said the portfolio being acquired has a book value of $98 million and HVB’s Singapore branch will service the portfolio.

"ADB’s participation in this transaction is consistent with one of the key thrusts of ADB’s private-sector development strategy for the Philippines and that is to help address the non-performing loans and asset problem in public and private financial institutions," Willms said.

He said the transaction is in line with the Philippine government’s medium-term plans to promote a stronger and more stable financial sector and the development of domestic capital markets.

The ADB recently helped National Home Mortgage Finance Corp. of the Philippines in its sale of a portfolio of delinquent mortgage loans to DB Real Estate Global Opportunities.

Apart from the Philippines, the ADB is also involved in a number of other transactions related to non-performing loans and assets transactions in India and China. Last year it became an anchor investor in two distressed asset funds. – AFP