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MANILA, Philippines - Export & Industry Bank (EIB) is no stranger to financial difficulty, having resurrected the troubled Urban Bank more than a decade ago.
If the timing of, as well as the reason for EIB's closure is eerily familiar, that's because its predecessor was shuttered also on April and for similar grounds - inability to meet obligations as they fell due.
Urban Bank's difficulties stemmed from the use of depositors' money to buy substandard or doubtful receivables from the thrift bank's unit, Urbancorp Investments Inc. The Bangko Sentral ng Pilipinas (BSP) has since filed a string of cases against Urban Bank's officers, causing its president to take his life.
In the case of EIB, here's how the story went:
July 2001 - Philippine Deposit Insurance Corp. (PDIC) turns over shuttered Urban Bank to EIB.
September 2001 - EIB official merges with Urban Bank, with the former as the surviving entity.
May 2005 - BDO vies for, but drops bid to acquire branches of EIB after the former fails to secure PDIC commitment on incentives for a takeover. Indonesia's Lippo Group, which owned 30 percent of EIB, reveals it would inject fresh equity for the expansion of the thrift bank, which reported a huge drop in net income to P15.130 million in 2004 from P199.878 million in 2003. EIB management unveils major push into mortgage lending, retail and the small and medium enterprise (SME) sector.
December 29, 2005 - EIB and PDIC sign a memorandum of agreement containing the terms of the incentives that the state deposit insurer would grant for the sale of non-performing assets assumed from Urban Bank.
January 2, 2006 - EIB asks Philippine Stock Exchange (PSE) to suspend trading in bank's shares, and announces that its board approved the sale to PDIC of P10 billion in non-performing assets acquired from Urban Bank. Philippine-listed Medco Holdings Inc., which is the local affiliate of the Lippo Group, also announces that its board approved forging a memorandum of agreement (MOA) with PDIC for the Indonesian conglomerate's infusion of P3 billion into EIB. By then the Lippo Group already held 40 percent of EIB, with the remaining 60 percent in the hands of the Philippine Exporters Confederation Inc., a lobby group for SME exporters.
January 5, 2006 - EIB takes a haircut after PDIC announces that it agreed to pay only P3 billion for the P10 billion worth of non-performing assets that the thrift lender assumed from shuttered Urban Bank. On top of buying EIB's bad assets, PDIC also said it would provide a P600 million a year financial aid to the thrift lender for the next 10 years - a package that then PDIC president Ricardo Tan said would "bring the bank to safe harbor."
April 3, 2006 - EIB board of directors approves sale of the bank’s non-performing assets worth P3.2 billion as well as two special purpose vehicle (SPV) companies, namely EIB SPV AMC Inc. and EB Management Capital Inc. These bad assets were inherited from Urban Bank.
April 10, 2006 - EIB announces board approval of the sale of P10.1 billion worth of bad assets to Bayerische Hypo-und Vereinsbank AG.
April 21, 2006 - Securities and Exchange Commission (SEC) announces approval of the EIB's recapitalization, raising the lender's authorized capital stock from P2.19 billion to P7.5 billion. Subscribing to the bank's increase in capital were Apex Bancrights Holdings, Lead Bancfund Holdings, Philippine Business Bank owner Alfredo M. Yao, AOCZ Investments Co., and Extra Year Investments Ltd. - increasing foreign ownership to 37.81 percent from 29.85 percent previously.
January 16, 2008 - EIB announces it received fresh capital from strategic partners and discloses plan to increase its public float.
January 28, 2008 - EIB Realty Developers Inc., the 72-percent owned property unit of the thrift bank, announces it would increase its authorized capital stock from P246 million to P2.95 billion, with a quarter of that increase to be subscribed by a private entity. The real estate company plans to use the additional capital to develop commercial and business process outsourcing projects in Fort Bonifacio, Tagaytay and Davao, after divesting from One McKinley Place, a residential condominium joint venture with Concepcion-owned Philtown in 2007.
April 10, 2008 - Sultan Mining announces it would fully pay its debt to EIB a month after the mining company's initial public offering.
January 6, 2009 - EIB Realty announces the SEC approval of the property firm's increase in authorized capital stock from P204.6 million to P2.94 billion, and of the change in the property firm's name to Arthaland Corp.
May 19, 2009 - EIB president Juan Victor Tanjuatco announces the thrift lender was in talks with three commercial banks for either a buy-in or a buy-out. One of the suitors were Rizal Commercial Banking Corp. At end-September 2008, EIB's capital adequacy ratio stood at 17 percent, above the 10 percent minimum required by the Bangko Sentral ng Pilipinas.
June 1, 2009 - PSE fines EIB for its failure to submit its 2008 annual report.
October 2009 - EIB board approves sale to undisclosed buyer.
April 14, 2010 - BSP approves sale of shares in EIB to Project Quest Corp., Fleetwood Holdings Inc., Navion Capital Resources Corp., and Santos Gonzalez Hijos, Inc. for cash.
July 18, 2010 - BSP announces having approved in principle BDO's takeover of EIB. The approval includes an incentive package that involves the transfer of P10 billion in EIB loans to BDO and a rescheduling of their maturity from 2013 to 2029. In a statement, BSP says "BDO is entering this commercial transaction as the survivor of a wide selection process, independently conducted by EIB from a large number of potential domestic and international 'white knights.'
August 2, 2010 - EIB tells PSE of the planned sale of Banclife Insurance Co. Inc., EIB Securities Inc., ExportBank Plaza and other assets. EIB says it would submit before August 12 all outstanding reportorial requirements, including annual reports and audited financial statements for 2008 and 2009.
August 27, 2010 - BDO president Nestor Tan tells reporters that the lender was working for the completion of the requisite conditions for its acquisition of EIB, adding that, "I don't think it's going to be difficult to fulfill the conditions within the year."
September 20, 2010 - EIB chairman Jaime Gonzalez tells reporters in a press briefing that the thrift lender and BDO "should be complying with most of the conditions" of the sale "fairly soon." He further states, "We don't see any difficulties in complying with the approval in principles by the BSP."
April 13, 2011 - EIB and BDO announce PDIC approval of the second bank's takeover of the first.
April 26, 2012 - Monetary Board decides to place EIB under PDIC receivership.
April 27, 2012 - EIB fails to open, as PDIC assumes control of the troubled lender.
With a report from Likha Cuevas-Miel
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