The Export & Industry Bank (EIB) was placed under receivership of the Philippine Deposit Insurance Corporation (PDIC) by the Monetary Board (MB) of the Bangko Sentral ng Pilipinas (BSP) on April 26, 2012 pursuant to Section 30 of Republic Act (RA) No. 7653 due to the bank’s inability to meet its obligations as they become due, insufficient realizable assets to meet its liabilities and its inability to continue in business without involving probable losses to its depositors or creditors. According to the published BSP statement, EIB voluntarily surrendered its banking operations to the BSP due to its inability to service withdrawals. Furthermore, aside from writing BSP to voluntarily surrender banking operations, EIB also informed the BSP of the declaration of a bank holiday effective April 27, 2012. PDIC took over the bank on April 27, 2012.
The Board approvals of the PDIC and BSP for the purchase of assets and the assumption of liabilities of EIB by a qualified banking institution were in place prior to the voluntary surrender by EIB of its banking operations.
Even back in March 2010, the PDIC Board approved an agreement between EIB and the banking investor for the acquisition of all assets and the assumption of all liabilities of EIB by the investor with financial assistance (FA) to EIB, subject to certain conditions. In April 2011, the PDIC Board again approved the terms between EIB and the third party under amended terms and conditions that included the restructuring of the FA in accordance to the amended requirements. All documentations relative to the revised terms were ready for execution. However, the investor required as a closing condition the final resolution of a substantial contingent liability arising from a suit filed by a third party. The transaction could not proceed pending the fulfillment of this closing condition.
With the closure of EIB, the PDIC, as Receiver, has to determine EIB’s financial condition. It is undertaking a financial audit of the bank, through an independent financial auditor, to determine the valuation of EIB and define the requirements for rehabilitation. As with any closed bank, a rehabilitation proposal for EIB should address the requirements for capital strengthening, liquidity, sustainability, viability, and governance. The terms of reference for qualification of interested parties and the requirements for rehabilitation shall be announced as soon as information on the status of major assets and liabilities has been sufficiently validated. Interested parties may manifest their interest to PDIC anytime.
PDIC continues to study all possibilities allowed by law to help protect the interests of depositors.
RELATED ARTICLES:
- PDIC starts paying EIB depositors with account balances of ten thousand pesos and below
- PDIC Statement on EIB Rehabilitation
- Schedule of PDIC Depositors Forum for Depositors of the Closed Export & Industry Bank (EIB)
- MB places Export & Industry Bank under PDIC receivership
All valid insured deposit claims will be paid
- Statement of the Philippine Deposit Insurance Corporation
on Export and Industry Bank
April 27, 2012
- 2012-08 - Export & Industry Bank, Inc.
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