LBC Development Bank, a unit of the LBC Group, has been placed under receivership of the Philippine Deposit Insurance Corp. (PDIC).
In a statement over the weekend, PDIC said it took over the assets and liabilities of LBC bank after the Monetary Board of the central bank determined that the institution was plagued by liquidity problems.
“All valid accounts and deposit insurance claims will be paid as soon as possible,” PDIC said in a statement.
LBC Development Bank, with head office on JP Rizal St. in Makati City, had 19 branches nationwide.
As of end-June this year, total deposits placed with the bank amounted to P6.09 billion. Of the amount, P3.73 billion is covered by insurance, PDIC said citing bank records.
In terms of number of accounts, there were 321,516 as of June, 99.4 percent of which are fully covered by deposit insurance, said PDIC.
The government insurance agency said the placement of the thrift bank under its receivership would not significantly affect its resources. PDIC noted that the insured deposits with LBC Development Bank made up only a tenth of one percent of total deposits in the country’s banking system.
Under PDIC’s charter, deposits worth P500,000 or below are covered by insurance. Deposits in excess of the amount may or may not be paid depending on the amount to be raised from the liquidation of a closed bank’s assets.
PDIC will conduct forums in areas where branches of LBC are located so that depositors of the bank will know how to claim insurance.
Owners of deposit accounts worth P10,000 or below need not apply for insurance claims. In their case, PDIC will simply mail notices to them and they can withdraw from designated redemption offices, like branches of Land Bank of the Philippines.
The placement of LBC Development Bank under receivership may come as a surprise to the bank’s depositors given the institution’s track record.
LBC Bank was previously awarded the “superbrand” status by Superbrands Philippines Council, which cited it for being one of the most reliable and trusted brands.