Remaining Prime Bank branches to be sold next month

The Philippine Deposit Insurance Corp. (PDIC) expects to finalize the negotiations for the sale of the remaining 37 branches of Prime Savings Bank next month, a ranking PDIC official said yesterday.

"By November, we hope to finish the sale," PDIC head for special operations Rescina Bhagwani said, adding that they have submitted their proposed guidelines for the said negotiated sale to Bangko Sentral ng Pilipinas (BSP) this week.

"Hopefully by Friday next week the Monetary Board will approve our proposal," she said.

PDIC and the BSP had relaxed the rules for the sale of the Prime Bank branches to encourage banks to buy. For instance, Metro Manila-based branches are now being sold for only P10 million from earlier bid price of P15 million; and P5 million for provincial branches from P8 million. They have also allowed bidders to bid for more than one branch.

Aside from these, winning bidders for the 25 banks are given three years to pay for their purchases at a four-percent interest rate per annum.

She said the negotiated sale will be on a first-come-first-served basis that is why they are likely to finalize the deal by November.

The PDIC official said they want to finish the sale of the branches as soon as possible so they could pay part of the P2.5-billion worth of uninsured deposits of defunct Prime Bank.

In a bidding last Sept. 26, PDIC was able to sell 25 of the 62 branches of Prime Bank.

Ibank, owned by the family of businessman Ramon Sy, won 11 branches while Robinson’s Bank of the Gokongwei group of companies, got eight branches. Two development banks bought three branches each.