The Philippine Deposit Insurance Corporation (PDIC) and the National Government (NG) fully sold their combined remaining shares in the Philippine National Bank (PNB). The divestment via public offering was made jointly with PNB which raised primary shares to further boost its capital. Shares sold by the government consisted of 17.4 million common shares (3.04%) of the NG and 54.4 million preferred shares (9.24%) of the PDIC or a total of 71.8 million shares. Gross proceeds of the sale amount to about P1 billion for the NG and P3.2 billion for the PDIC. The NG and PDIC deemed the joint public offering with PNB as a good exit option in light of positive market developments and prospects of higher recovery on the sale of their shares.

PDIC Executive Vice President Cristina Q. Orbeta said that the sale of the government's remaining shares is strategic for PDIC as it marked the successful conclusion of the 6-year rehabilitation program of the bank after PDIC granted financial assistance in 2001. She said that the faithful compliance of all parties to their respective commitments, proper disclosure and prudent monitoring of the bank's financial performance and viability, and a professional management team were key to PNB's successful rehabilitation.

Through the financial assistance PDIC extended to PNB in 2001, PNB gained financial flexibility enabling it to increase its capital above regulatory requirements and improve non-performing loan (NPL) ratios to more manageable levels.

The bank has steadily gained financial strength since then enabling it to fully pay its P6.1 billion loan to the PDIC in June this year, four years ahead of the scheduled maturity date. Moreover, value of shares appreciated by close to 50% from a par value of P40 per share to public offer sale price of P59 per share.

Orbeta said that the Philippine Deposit Insurance Corporation is proud to have played a significant role in the turnaround of PNB and become part of its colorful history. PDIC's mandate to assist banks underscores its commitment to do its share in strengthening the public's confidence in the stability of the banking system.