MANILA, Philippines—The Philippine Deposit Insurance Corp. said the planned sale of the commercial banking license of Export & Industry Bank would not take place this year, and rescheduled it for early 2013.
The sale of the commercial banking license is the second leg of a process to settle the affairs of EIB, which has been ordered closed due to insolvency.
The first leg involves the sale of the bank’s assets, including its 50 branches. The assets were supposed to be auctioned off last October 18, but a temporary restraining order on the bid process was issued on the same day.
Valentin Araneta, president of PDIC, said that his office might only push through with the second leg of the process once the first phase has been completed.
“We are going to try to bid out the assets of the bank within the year. [But] the sale of the commercial banking license may have to be pushed to next year,” Araneta told reporters Friday.
But Araneta said that PDIC is still hoping it can auction off the bank’s assets successfully soon.
He noted that the TRO, which was issued by the Makati Regional Trial Court, had already lapsed, since it was valid for only 72 hours.
The court has since declined requests to extend the order.
PDIC said it would soon announce the date when EIB’s assets would be sold off.
The TRO on the sale of the bank’s assets was sought by parties that have claims against E-Securities, a subsidiary of EIB.
The complainants said the sale of EIB would deprive them the chance of filing claims with the bank in relation to the obligations of E-Securities.
The complainants claimed E-Securities sold without authority some 32.18 million DMCI shares worth P1.47 billion.
Araneta said that some banks have already been prequalified for the October 18 auction of EIB’s assets. Those who have already complied need not reapply to qualify for the second round of bidding.
PDIC would not reveal the identities of the banks, but it said several commercial institutions had already complied with pre-qualification requirements.
Most commercial banks that will join the bid for EIB’s assets are in the process of expanding operations, keen on acquiring the 50 branches of the shuttered bank.
The winning bidder may also avail of a regulatory incentive, allowing it to open 30 new branches in Metro Manila cities.
Banks are currently banned from putting up new branches particularly in Makati, Mandaluyong, Manila, Parañaque, Pasay, Pasig, Quezon City and San Juan.
Also, entities that have no commercial banking license at the moment are expected to vie for EIB’s license.
PDIC said that by selling the bank’s assets and commercial banking license separately, the regulator would generate more revenue.
EIB was ordered closed in April by the Monetary Board of the Bangko Sentral ng Pilipinas due to insolvency.