MANILA, Philippines - State-run Philippine Deposit Insurance Corp. (PDIC) has started servicing the insurance claims of depositors of the Araneta-owned LBC Development Bank that was ordered closed and placed under receivership by the Bangko Sentral ng Pilipinas (BSP) last Sept. 9.
PDIC said in a statement that it started receiving, processing and paying depositors’ claims last Nov. 16 and payout operations would continue until December.
The deposit insurer said payout operations are being held in the 18 LBC Bank branch premises including Angeles, Baguio, Balanga, Batangas, Cagayan de Oro, Cebu, Dagupan, Davao, Iloilo, Kalibo, La Union, Laoag, Naga, Olongapo, San Pedro, Timog, Urdaneta and Vigan.
It added that the payout operations for the LBC Bank head office is ongoing at the PDIC office in Chino Roces Ave. in Makati City until Dec. 16 while the payout operations for the Imus branch is ongoing at the bank premises of the closed GMA Rural Bank – Imus Branch located at Aguinaldo Highway, Tanzang Luma, Imus, Cavite until Dec. 1.
The agency advised depositors who do not have appointment dates to proceed to the branches and designated sites for their priority numbers that would correspond to a specific appointment date or the schedule when the depositor’s claim would be serviced by PDIC representatives.
PDIC said that claims of depositors with appointment dates would be processed onsite after which claims for valid deposits with complete documentation would be paid onsite.
“Depositors who lack supporting documents will be requested to submit the necessary documents before they could receive their payments. Depositors are urged to appear during their appointment dates. Otherwise, their claims may not be processed onsite,” PDIC said.
Last Sept. 9, the BSP’s Monetary Board ordered the closure of LBC Bank based on Section 30 of Republic Act 7653 or the Central Bank Act of 1993 laying down the proceedings in receivership and liquidation of a bank or a quasi-bank.
The law provides that a bank or quasi-bank would be placed under receivership or liquidation if it is unable to pay its liabilities as they become due in the ordinary course of business except in cases that its inability to pay caused by extraordinary demands induced by financial panic in the banking community;
The bank regulator could close a problematic bank if it has willfully violated a cease-and- desist order under Sec. 37 that has become final, involving acts or transactions which amount to fraud or a dissipation of the assets of the institution.
In a report submitted to the BSP, the assets of LBC Bank stood at P6.39 billion as of end-2010 while its liabilities stood at P5.84 billion. Its soured loans also stood at P316.3 million for a high non-performing loan (NPL) ratio of 27.3 percent as against the thrift banking industry’s NPL ratio of only 7.32 percent
LBC Development Bank is the second biggest bank ordered closed by the BSP this year after the Aguirre-owned Banco Filipino Savings and Mortgage Bank was shuttered last March 17.
Latest available records show that LBC Bank had estimated total deposit liabilities of P6.09 billion as of June 30. Insured deposits amount to P3.73 billion.
Data showed that the number of accounts totaled 321,516 out of which 99.4 percent are fully covered by deposit insurance.
LBC Bank is a 20-unit thrift bank. Its head office is located at 809 JP Rizal St., Poblacion, Makati City.
The bank was initially established as the Pasay Rural Bank Inc. but a group of innovative businessmen transformed the modest institution to Banco Real Development Bank in 1985.
In 1995, keen on creating a solution to the financial networking needs of overseas Filipino workers, the LBC Group acquired the bank’s majority of shareholdings.