By: Michelle V. Remo
Philippine Daily Inquirer
5:53 am | Tuesday, September 13th, 2011
The Philippine Deposit Insurance Corp. (PDIC) has assured depositors of
LBC Development Bank, many of them families of overseas Filipino
workers, they will get back their deposits which were mainly the
remittances of their loved ones working abroad.
In a statement, PDIC said all deposits covered by insurance and
confirmed as valid shall be reimbursed immediately on completion of the
validation process.
"PDIC assures the public, particularly depositors of LBC Development
Bank, that the corporation will pay all valid accounts and deposit
insurance claims as soon as possible," the insurer said in a statement.
In a press conference, PDIC executive vice president Cristina Orbeta
said it was believed many LBC Development Bank depositors were OFW
families given the bank's tie-up with courier and remittance firm LBC
Express.
She said PDIC will soon announce the schedule of forums where depositors
would be oriented on the insurance claim process. Such forums are
normally held in the bank's branches.
Last Thursday, the Monetary Board of the Bangko Sentral ng Pilipinas
placed LBC Development Bank, the financial services arm of the LBC
Group, under receivership.
Nestor Espenilla, BSP deputy governor for bank supervision, said this
was because, for one thing, the bank had become insolvent—meaning the
bank's liabilities had exceeded its assets.
Espenilla said LBC bank was engaged in unsafe and unsound banking
practices, such as paying higher than average interest rates for deposits.
"High return means high risk," Orbeta said.
Espenilla said that prior to its closure, the LBC bank had been under
the Prompt Corrective Action (PCA) program of the BSP. Still, it failed
to improve its financial standing, he said.
Banks under PCA are subject to stricter monitoring and are given
recommendations on how to improve their financial standing in order to
comply with the liquidity requirements of the BSP.
"LBC Bank had been under the PCA, but it failed to improve and address
the concerns of the BSP," Espenilla said.
LBC Bank has its head office in Makati City and 19 branches nationwide.
The bank has 321,516 depositors holding P6.09 billion in deposits.
PDIC said that of the deposits, P3.73 billion was covered by insurance.
PDIC insurance covers deposit accounts of P500,000 and below. Bigger
accounts would have to wait until the bank's assets are fully liquidated
to see if they would get anything back.
In Batangas City, LBC Development Bank depositors were "outraged" and
"distraught" over its closure.
"There were a lot (of depositors that came), especially this morning,
that we didn't even have time to take breakfast," said a PDIC
representative in Batangas City.
"You could see some of them almost crying. An old woman was shaking, I
saw her hands. She said her deposit was over P500,000," the
representative, who requested anonymity for lack of authority to speak,
said by phone.
Maria Theresa Enojado, LBC bank manager in Naga City, said in a phone
interview that she was "shocked" over the closure.
Enojado said "everything was OK and running smoothly without any
problems of liquidity," as far as she knew.
"Our main concern now is to ensure that depositors get back all their
deposits and for us to get our jobs back," she said.
In Cebu, depositors trooped to the LBC bank branches in the city after
hearing the news.
The PDIC had taken over the LBC bank branch on Gorordo Avenue on Friday
evening, according to the guard outside the bank. With reports from
Maricar Cinco and Juan Escandor Jr., Inquirer Southern Luzon; and
Jhunnex Napallacan, Inquirer Visayas
--
---------------------------------------------
CARLOS ANI - SEEDFINANCE Corporation - http://www.seedfinance.net
Email: carlosani@seedfinance.net
Landline Phones: +63495010127 and +63495762924
Cellphone: +639152919580
DEVJOBS - http://www.devjobsmail.com
PHILDEVFINANCE - http://phildevfinance.posterous.com
CONSULTING - http://www.carlosani.com
My News Clippings - http://www.myclipps.posterous.com
Family website: http://www.anifamily.net
------------------------------------------
