MANILA, Philippines - The Bangko Sentral ng Pilipinas (BSP) has ordered the closure of publicly listed Export & Industry Bank (EIB) after the commercial bank admitted that it does not have enough cash to service its maturing deposits.
BSP Deputy Governor Nestor Espenilla Jr. yesterday said the central bank’s Monetary Board issued a resolution dated April 26, placing EIB under receivership as mandated under Section 30 of Republic Act 7653 or the New Central Bank Act of 1993.
Espenilla said the bank was placed under receivership of the state-run Philippine Deposit Insurance Corp. (PDIC) “on account of its inability to meet its obligations as they become due, insufficient realizable assets to meet its liabilities and its inability to continue in business without involving probable losses to its depositors or creditors.”
EIB president Juan Victor Tanjuatco wrote to BSP to surrender its bank operations to the regulator and to declare a bank holiday effective April 27 as it is unable to service maturing deposits of about P800 million.
As early as 2010, EIB had committed to sell its core banking business to Banco de Oro Unibank Inc. of retail magnate Henry Sy but the deal has yet to get final approval from the BSP.
However, the country’s largest bank decided to shelve its plan to acquire the ailing bank.
Espenilla said BDO officials had informed the BSP that it was no longer keen on acquiring EIB due to several cases pending before the courts.
He added the bank closure would affect about 50,000 depositors with deposits amounting to at least P14 billion.
Based on its 2010 financial statement submitted to the BSP, EIB assets stood at P31 billion while its total liabilities amounted to P29.59 billion, of which P19.1 billion were deposit liabilities.
EIB is chaired by Jaime Gonzalez while Alfredo Yao serves as vice chairman together with Albert Cheok and Tanjuatco as president. Board of directors include Dionesio Carpio Jr., Douglas Chew, John Luen Wai Lee, Joseph Pineda, Rainer Silhavy, Sai Chong Cheng, Maria Constance Gonzalez, Antonio Panajon, Edna Daguisin-Reyes, Jeffrey Yao, and Roberto Atendido.