EPCI Bank’s feuding groups issue joint statement of support on bank operations

In a move aimed at pacifying jittery investors, the warring key shareholders of Equitable PCI Bank have issued a joint statement assuring the public that the bank is "operating as usual" and ready to service the needs of its depositors.

The joint statement was signed Friday by Antonio Go representing the Go family on one side, and the group of Government Service Insurance System president and general manager Winston Garcia, Social Security System president and chief executive officer Corazon dela Paz, and Ferdinand Martin Romualdez of Trans-Middle East Philippine Equities Inc. (TMEQ).

The GSIS-SSS group and TMEQ claim to have a controlling 54-percent stake in EPCI Bank. The Go family, on the other hand, has a 25-percent direct stake in the country’s third largest lender.

"We, the major shareholders of Equitable PCI Bank, wish to assure our depositors, creditors, investors and the public in general, that we are fully supportive of the bank and its management and staff. The bank is operating as usual and is ready to address the banking requirements of its customers with the efficient service it has been known for," the statement said.

"Management continues to exercise its authority which it has been authorized in the past. While we may have contrasting views on some shareholder issues which we are currently in the process of resolving, we remain united in our trust in the professionalism and competence of the bank’s management team," the groups further said.

The shareholders said they are working towards achieving EPCIBank’s objective of becoming "Your Bank of Choice" – the best bank to do business with".

The rift between the bank’s controlling Go family and its other shareholders turned for the worse at the bank’s shareholders meeting earlier this week, with the GSIS-SSS led group walking out of the meeting to convene a separate meeting whereby they elected a new 15-person board of directors.

On the other hand, the Go family and its allies pushed through with the original meeting to elect their own 15-person board of directors. Notably, in both cases, 11 existing board members were re-elected, including the bank’s chief executive officer, Rene Buenaventura.

Concerned over EPCI Bank’s future, Bangko Sentral ng PIlipinas Governor Amando Tetangco met with the bank’s key shareholders to discuss ways to address the boardroom impasse, which if not resolved soon could further undermine investor confidence.

Tetangco said BSP stands ready to protect the interest of the depositors and other stakeholders in EPCI Bank.

He, however, is confident that the intra-corporate dispute at EPCI Bank would be resolved soon.

International rating agency Fitch Ratings expressed concern that a protracted legal dispute between EPCI Bank’s shareholders would adversely affect the operations of the bank and its ratings.

"EPCI Bank’s ratings may well come under pressure if the dispute is not quickly resolved. If it drags on, not only will senior management be distracted from developing and implementing strategy and staff morale dampened, but depositors may become nervous," said Peter Tebbutt, senior director in Fitch’s Financial Institutions team in Asia.

Fitch’s existing ratings on EPCI Bank are long-term foreign currency ‘BB’ (Outlook: Negative), short-term ‘B’, individual ‘D’ and support ‘3’.

The GSIS-SSS-led group said it is not contemplating any change in management and assured senior officers of the bank that they will retain their positions.

The Go family’s Equitable Banking Corp. merged with Philippine Commercial International Bank (PCIBank) in September 1999, in a deal supported financially by the state-run pension funds SSS and GSIS.