Regulator: 6 banks to bid for shuttered EIB

The shuttered Export & Industry Bank. PHOTO BY ERWIN AGUILON/RADYO INQUIRER

Six commercial banks are out to bid for Export & Industry Bank, which the regulators closed due to insolvency.

According to the Philippine Deposit Insurance Corp. (PDIC), bidding for EIB has been set for late July or early August.

Several banks have expressed their “interest in rehabilitating EIB… We want them to participate in the due diligence process,” said Cristina Orbeta, PDIC’s executive vice president.

Apart from Banco de Oro, which earlier revealed its interest in acquiring EIB, five more Philippine commercial banks have expressed their intent to participate in the bidding for EIB, Orbeta said in a press conference Thursday.

PDIC has yet to finalize the mechanics of the bid to ensure that the bank most qualified gets to acquire EIB, she said. But the general requirement is that the investing bank must provide enough capital to resuscitate EIB, enabling it to meet all its obligations, and make it comply with the capitalization requirements of regulators.

“The rehabilitation plan must be advantageous not only to depositors, but also to creditors,” Orbeta said.

PDIC hopes that, with EIB successfully auctioned off, the estimated P10.4 billion worth of uninsured deposits in the bank will be secured from risks, Orbeta said.

PDIC has yet to receive offers from a foreign bank. But Orbeta said the PDIC would also welcome rehabilitation proposals from any foreign institution.

PDIC is also open to accepting rehabilitation from savings banks that want to expand operations and become a commercial bank by acquiring EIB, she added.

Orbeta said EIB could still add value to the bank that would acquire it, citing the number of its physical assets and client base.

EIB “has many branches and carries significant amount of deposits,” Orbeta said.

EIB, which had 50 branches, held close to P14 billion worth of deposits prior to its closure in April. But only P3.4 billion of the amount is covered by deposit insurance.

Under the law, only deposit accounts each worth P500,000 or less are covered by deposit insurance.

Uninsured deposits may or may not be paid depending on the amount to be raised by PDIC from liquidation of assets of a closed bank.

Orbeta said PDIC has tapped the services of Alba Romeo & Co. to determine the valuation of EIB.

On May 22, PDIC started settling small deposits, or those that are worth P10,000 or below, paying out P34.17 million, Orbeta said.