LBC Development Bank bites the dust, Are there other LBC's out there waiting to implode? - June 30, 2011 Edition

The Philippine Deposit Insurance Corporation (PDIC) advised consumers to wisely choose the banks where they will deposit their money. The trouble is, most depositors don't and can't read financial statements before they open a bank account. The regulators, whose job is to safeguard the public's money, have a problem bank list that they do not divulge to the public, for fear of sparking another bank run. So who can the public turn to, to advise them where to put their money? No one, except the banks themselves who will always promote their self-interests. This analysis is an attempt to fill in that knowledge gap, by screening out the weaker banks that seem ready to implode at any given moment.

List of Local Philippine Commercial Banks with a High % of Distressed Assets to Total Capital Cushion As of June 30, 2011
	Total Distressed Assets (In PHP Billion)1	Total Capital Cushion (In PHP Billion)2	Distressed Assets/ Total Capital Cushion (In %)3
United Coconut Planters Bank	63.583	6.092	1043.55%
Export and Industry Bank	14.458	1.677	861.95%
Bank of Commerce	34.079	18.568	183.54%
Philippine Veterans Bank	10.793	6.104	176.82%
Philippine National Bank	67.328	38.258	175.98%
Philippine Bank of Communications	9.596	6.096	157.42%
Union Bank of the Philippines	38.686	38.215	101.23%
Rizal Commercial Banking Corporation	29.423	33.099	88.89%
Maybank Philippines Inc.	2.886	3.860	74.75%
Allied Banking Corporation	13.667	18.864	72.45%
Bank of the Philippine Islands	52.695	77.235	68.23%
Metropolitan Bank and Trust Co.	61.204	91.212	67.10%
Land Bank of the Philippines	33.675	51.019	66.01%
Banco de Oro Unibank Inc.	65.864	109.861	59.95%
East West Banking Corporation	7.786	13.658	57.00%
Philippine Trust Company	8.372	14.706	56.93%
China Banking Corporation	18.929	35.375	53.51%
Asia United Bank Corporation	5.029	9.464	53.14%
Security Bank Corporation	12.417	26.704	46.50%
Development Bank of the Philippines	16.103	35.620	45.21%
Robinsons Bank Corpo	1.170	5.187	22.57%
Chinatrust (Philippines) Commercial Banking Corporat	1.230	6.770	18.17%
Al-Amanah Islamic Bank of the Philippines	0.082	0.532	15.49%
BDO Private Bank, Inc.	0.108	4.533	2.38%
Total	569.163	652.708	87.20%

1Includes Classified Loans and Other Risk Assets, Acquired Real Estate, Non-Current Assets Held for Sale, Other Assets

2Includes Stockholders Equity less Other Capital Accounts plus Allowance for Credit Losses and Impairment

3A ratio of Distressed Assets to Total Capital Cushion greater than 100% signals the danger of insolvency

Disclaimer:

This list only serves as a screening guide.  It is not a definitive guide and must be taken in the context of other factors.  The figures are based on the individual banks' published statement of condition as of June 30, 2011 as published in the BSP website (www.bsp.gov.ph). For this analysis, no attempt was made to go through the audited financial statements of each bank. Readers are suggested to make their own investigations and verify the figures presented. Both BSP and PDIC have their own problem bank screening systems that are much more sophisticated in scope and design, given that they have more access to information over the banks they regulate.