PDIC taking more time to decide on EIB fate

MANILA, Philippines - State-run Philippine Deposit Insurance Corp. (PDIC) has extended anew to March 25 the period within which to determine if Export and Import Bank Inc. (EIB) would be undergo rehabilitation or liquidation, a PDIC official said.

PDIC executive vice president Cristina Orbeta said they were supposed to decide on the fate of EIB last Jan. 25 but their board had approved another extension to give them an ample time to gather the consent of the bank’s shareholders, creditors and depositors on the mode of rehabilitation/liquidation.

As of Jan. 24 this year, PDIC was able to get the consent of 48 percent of the bank’s uninsured depositors.

The PDIC official said the process of getting consent from shareholders, depositors and creditors is somewhat tedious. “Some want us to reveal how much they could recover once a rehabilitation is carried, but we could not disclose that,” she said.

When EIB was ordered closed in April 2012, the level of uninsured deposits was at P11 billion, while P3 billion were insured, involving 4,000 accounts.

At the time of the closure, its liabilities stood at P24 billion compared to assets of P11 billion.

Orbeta said the extension would also allow them to discuss further with strategic third-party investors (STPIs) on their interest to rehabilitate and/or participate in the bidding for EIB.

To date, PDIC is meeting with depositors/creditors for update on the status of fulfillment of conditions for rehabilitation.

Orbeta said they also continue to assess the conduct of the re-bidding.

Depending on the outcome of these discussions, she said they hope to come up with the new rebidding schedule within the next few weeks.

Earlier, PDIC said it is planning to implement a two-pronged approach for EIB’s rehabilitation. This would involve the auction of its assets and assumption of its liabilities, and auction of its commercial bank license.

In December 2012, EIB’s shareholders decided to push through with the sale of its assets, liabilities and commercial bank license, provided that 100 percent of uninsured depositors and creditors give their consent.

“Likewise, STPIs interested in acquiring EIB also indicated that the consent of depositors and creditors is critical considering that the bank’s assets are much less compared to total liabilities,” PDIC earlier said.

PDIC also noted that the implementation of the rehabilitation would necessitate the turnover of deposit documents. “This requires the written consent of the depositors to preclude charges for the violation of the Deposit Secrecy Law,” it said.

In October 2012, the first tranche of bank’s assets and liabilities was supposed to be auctioned off but failed as a temporary restraining order (TRO) was issued a day before the bidding.