AMA Bank to contest closure order

AMA Rural Bank of Mandaluyong, the banking arm of the AMA Group of Companies of businessman Amable Aguiluz, is challenging what it claims was an “unreasonable” move by banking regulators to shut down its operations.

AMA Bank was placed last Nov. 8 under the receivership of Philippine Deposit Insurance Corp. (PDIC), which is mandated to take over banks that are insolvent, or those which did not have enough assets to cover its liabilities.

As a result, AMA Bank’s head office and all 10 branches and three other offices were not allowed to resume banking operations. As reported by the Inquirer on Saturday, the bank was padlocked based on an order issued by the Bangko Sentral ng Pilipinas (BSP).

However, AMA Bank’s management claimed in a statement on Sunday that it was “liquid,” citing its shareholders’ capital injection of an additional P405 million and a total deposit due from BSP/other banks amounting to P246 million.

The bank said it “regrets” the closure order, citing figures on assets and capitalization to prove its “strength.”

“Given this strength, AMA Bank assures our clients, employees and stakeholders that we are fit to operate in every capacity,” AMA Bank said.

“We challenge the closure as unreasonable. Guided by legal measures, we are exploring all possible courses of actions to resume our full operations and continue to serve you,” it added.

Citing its latest financial statement filed with the BSP, AMA Bank noted that it was the 15th biggest rural bank in the country in terms of assets with total resources at P2.76 billion as of end-September 2019.

The bank is also the fifth largest rural bank in capitalization with P1.04 billion.

AMA Bank has a net loan portfolio of P1.9 billion, consisting mainly of teacher salary loans, estimated to be the 13th biggest among rural banks.

The closure will affect holders of deposit accounts worth about P1.45 billion. It is the 21st largest rural bank in terms of deposit base.

Under the law, PDIC will cover valid deposits and claims up to the maximum deposit insurance coverage of P500,000.

AMA Bank was the eighth bank to be placed under the PDIC’s receivership and liquidation proceedings so far this year. Earlier, PDIC took over Rural Bank of Lemery, Rural Bank of Larena (Siquijor) Inc., East Coast Rural Bank of Hagonoy, Rural Bank of Guihulngan (Negros Oriental) Inc., Valiant Bank Inc., The Palawan Bank and Rural Bank of Basey (Samar) Inc.