Exportbank reopens Urban Bank

The Philippine Deposit Insurance Corp. (PDIC) has extended a special loan of P200 million to the Export and Import Bank (EIB) which has acquired Urban Bank.

EIB acquired Urban Bank and its investment arm Urbancorp Investment Inc. (UII) more than a year after it (Urban Bank) was closed due to financial difficulties.

The bank was formally turned over by PDIC to EIB yesterday in simple rights as it opened for depositors wanting to withdraw their "locked up" cash. Payment of loans would be done in tranches and in various categories to avoid a sudden outflow of capital.

EIB president Benjamin P. Castillo said the P200-million loan was in anticipation of heavy withdrawals. Castillo added that the bank also has a standby facility of P1.5 billion from the PDIC as a safe net for bigger withdrawals next year.

"We have decided to avail of the P1.5-billion standby facility next year despite its being made available by the PDIC this year," he said, adding that EIB has the capitalization to cope with the various types of withdrawals.

Meanwhile, Castillo assured that their mandate to give priority to exporters would continue.

"We are however expanding to areas of property, housing and investment banking which was the strength of the former Urban Bank," the bank president said. – Ted Torres