Equitable says BSP aid normal

Equitable PCI Bank said yesterday there was nothing abnormal about the liquidity assistance it asked from the Bangko Sentral ng Pilipinas (BSP) last year when it was hit by heavy withdrawals.

Equitable spokesman Elbert Zosa said "I think it was a regular repurchase facility which the bank availed of, there was nothing abnormal or special about it."

BSP Deputy Governor Alberto Reyes said the BSP made a special repurchase facility available to Equitable PCI Bank last year.

"There was such a facility for Equitable but it is not that large as reported," Reyes said, adding the BSP has yet to validate the total repurchase facility opened to the bank. He said "there were several transactions and it was not just a one-time deal."

It was earlier reported that Equitable PCI Bank sought a P30-billion liquidity assistance from BSP late last year, after exhausting its stock of secondary reserves due to massive withdrawals by its depositors.

The withdrawals were spurred by fears of the loss of secrecy protection when its top executives surrendered documents and testified at the Senate impeachment trial against former President Joseph Estrada who allegedly opened an account with the bank from jueteng proceeds.

Repurchase or repo facilities are loan windows resorted to by banks to finance short-term liabilities like unexpected cash requirements. These short-term loans are granted without requiring collateral.

However, the BSP reportedly required Equitable PCI Bank to surrender collateral in the form of government securities and real estate to acquire 100 percent of the liquidity assistance.

Sources said the bank is concerned parties which want to acquire a stake in the bank might withdraw if the controversy is revived.

Earlier, the controversy prompted the bank’s major shareholders to consider selling the bank or seeking new investors willing to infuse fresh capital into the bank.

There are a number of groups eyeing a majority stake in the bank, among them are those earlier prequalified such as US-based Newbridge Capital, Fubon Group of Taiwan, and Rizal Commercial Banking Corp. The other interested parties are Spain’s Banco Santander and Standard Chartered Bank. The Gokongwei family also confirmed exploratory talks with Equitable PCI Bank for a possible bid to acquire a majority stake in the bank. The Gokongwei group sold its take in PCI Bank two years ago but is keen on making a comeback in the banking sector. – Rocel Felix