BSP shutters GSIS Family Bank

Bangko Sentral ng Pilipinas building. INQUIRER FILE PHOTO

The Bangko Sentral ng Pilipinas (BSP) has shuttered for insolvency the thrift bank controlled by Government Service Insurance Service (GSIS), which the state-run pension fund had failed to sell as interested bidders struggled to get the nod of the minority shareholder.

In a statement, the Philippine Deposit Insurance Corp. (PDIC) disclosed that GSIS Family Bank on Friday was placed under its receivership by the Monetary Board, the BSP’s highest policy-setting body.
The PDIC hence took over the Pasig City-headquartered bank, which has 11 branches in Cavite, seven in Metro Manila, two in Laguna and one in Bulacan.

The GSIS held 99.6 percent of the thrift bank, whose president was Emmanuel L. Benitez and chaired by Geraldine Marie Berberabe-Martinez.

As of end-March, GSIS Family Bank had 14,507 accounts with deposits totaling P974.81 million. Over four-fifths of total deposits or P786.39 million had been insured.

The PDIC told depositors that “all valid deposits shall be paid up to the maximum deposit insurance coverage of P500,000.” Claims settlement would start next month.
In January, the GSIS said it was seeking court approval of a concession that would allow the state-run pension fund to sell its controlling stake in GSIS Family Bank even without prior consent from the Dragon family.

“We’re trying to convince the courts to allow us to post a bond to protect whatever interest the minority shareholder or claimer is being infringed by our sale, instead of taking a very slow process,” GSIS president and general manager Robert G. Vergara had said, adding that the petition had been filed with the Makati Regional Trial Court.

Last year, the GSIS tried three times but failed to dispose of its 99.5-percent share in GSIS Family Bank through negotiated sale, as bidders had to secure the Dragon family’s consent as holder of a mere 0.5 percent in the bank.

READ: GSIS declares failed bid for family bank

“Rather than continue a process that will not result in a viable buyer, then we’re thinking that maybe we should attack it from a different perspective and work with the courts to see what it is that the minority shareholder wants, and if they believe that there are some value there they will lose, for the courts to decide what the value is and put up a bond,” Vergara had said.

During the last round of bidding last October, the GSIS’s Investment Bids and Awards Committee declared a failure of negotiated sale as no party fully complied with the requirements.

All three tries by the GSIS to sell its controlling stake in the bank last year involved 25,150,006 common shares, 48,758 preferred “A” shares, and 1.25 million preferred “C” shares, with a floor price of P501 million.

READ: P501-M price set for GSIS Family Bank

The three rounds of negotiated sale had also been subject to the condition that the small stake in GSIS Family Bank belonging to private stockholders represented by the heirs of former Cavite Rep. Renato P. Dragon through Patricia Angeli D. Nubla will also be sold to the same buyer through a separate negotiation and agreement.

Investment banking and asset management firm Altus Capital Partners Inc. submitted financial offers as well as documentary requirements to purchase the GSIS’s majority share in the thrift bank formerly known as Comsavings Bank all three times it was offered for negotiated sale, but was unable to get the Dragon family’s consent on all occasions.

The GSIS had also declared as a failure its negotiated sale of the bank shares to Phindep Development Corp., which was the lone entity that submitted the required consent letter from the Dragon family last July.

Securities and Exchange Commission (SEC) documents showed that Phindep, a real estate firm, is based in Cavite—the province where the late Dragon had served as a representative to Congress. The company was registered with the SEC just last March 2015, with an authorized capital stock of only P1 million.

A series of failed bidding in recent years prompted the GSIS to try disposing of its stake in the thrift bank through negotiated sale.

The GSIS had offered an incentives package to potential buyers under Monetary Board Resolution No. 224, which allows the new owner to open 20 additional branches and relocate 12 of GSIS Family Bank’s existing 22 branches anywhere in the country; continue the bank’s authority to accept government deposits from the GSIS; retain GSIS Family Bank’s thrift banking license if the winning bidder is a commercial bank; merge with GSIS Family Bank if the winning third party is a thrift bank, with option to convert into a commercial bank; and convert GSIS Family Bank into a commercial bank if the winning third party investor is not a bank. RAM