Small fish rescues big fish

The re-opening of Urban Bank is the story of a small fish that rescued a big fish. The Export and Industry Bank (EIB), with assets valued at about P7 billion, helped Urban Bank, with assets of close to P28 billion, to go back on stream.

Urban Bank declared a bank holiday about two years ago. This caused agony to thousands of depositors and creditors, from an orphanage to a giant pension fund.

The Bank of Commerce showed initial interest to rescue the bank. But, unexpectedly, it withdrew its plan.

Rather than whine, depositors and creditors took an active stance. Urban Bank will be rehabilitated. It will be re-opened. It was on holiday only because it was short of cash to pay its debts. It has more assets than liabilities. They did not want the bank liquidated. This was their affirmation statement every morning.

The bank could resume operations under a new management and win back the trust and confidence of debtors and creditors, the government, and the business community. The depositors and creditors formed the National Association of Urban Bank Depositors (NAUD) to work for rehabilitation and re-opening.

NAUD developed a strategy to avert liquidation of Urban. The group gained accreditation from the Philippine Deposit Insurance Corp. to submit an alternative plan. But first, NAUD had to find a "white knight" partner to pull off a successful plan. NAUD and the EIB teamed up for the effort. Putting the team together were Reynaldo David of EIB, Josue Camba, Jr., and Joey Antonio of NAUD, and Urban Bank officers. David, vice chairman of EIB, was backed by his chairman, Sergio Ortiz-Luis, Jr., and president, Benjamin Castillo.

Beginning this Wednesday, Aug. 8, Urban Bank will resume transactions, Urban will implement its liabilities payments scheme by end-August. Before the year is over, Urban will be merged with EIB. The small fish, EIB, will transform into one of the country’s top commercial banks. As survivor of the merger, the five-year old EIB will offer more services to its clients.