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Sunday, October 9, 2011

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.

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