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Monday, November 25, 2013

The Top Distressed Philippine Banks as of June 30, 2013

Editor's Note: 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 not done a good job recently.  In the past ten years, two commercial banks, twenty-one thrift banks, and a staggering 187 rural banks have collapsed, often quite suddenly and without warning:  Regulators do 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.

Editor's Note: The ratio of Distressed Assets to Total Capital Cushion is a variant of the famous Texas Ratio, which was widely used by US financial regulators to predict bank failure during the US Savings and Loan Crisis in the 1980s and early 1990s. The basic premise is that a bank with Distressed Assets greater than its Capital Cushion is in danger of insolvency, because a significant drop in the value of  the Distressed Assets will eat into a significant amount of the bank's capital.  A bank that has a Distressed Ratio greater than 100% is flagged as borderline insolvent.  For a more detailed discussion of this ratio, please visit a previous blog post: The Texas Ratio of Select Philippine Banks

This is a list of the top distressed Universal and Commercial (U/KB) as well as Thrift Banks in the Philippines as of June 30, 2013.  It updates the five previous blog posts: "The Top Distressed Philippine Banks as of March 31, 2013""The Top Distressed Philippine Banks as of December 31, 2012",  "The Top Distressed Philippine Banks as of September 30, 2012""The Top Distressed Philippine Banks as of June 30, 2012" and "The Top Distressed Philippine Banks as of March 31, 2012".

To see where your bank stands relative to these banks, please check the previous blog post: "Philippine Banks Deteriorate in the 2nd Qtr. of 2013"

Top Distressed Philippine Banks
By Total Distressed Assets/ Total Capital Cushion
Jun 30, 2013
In Php

Jun 30, 2013
Bank Type of Bank Total Distressed Assets (In PhP) Total Capital Cushion (In PhP) Distressed Assets/ Total Capital Cushion (In %)
THE REAL BANK (A THRIFT BANK) INC Thrift 8,296,692,399.73 403,147,751.48 2057.98%
BANK OF CHINA LIMITED-MANILA BRANCH U/KB 6,838,283,651.77 691,729,423.89 988.58%
COMSAVINGS BANK Thrift 2,193,267,337.22 335,887,558.21 652.98%
VILLAGE BANK INC (A THRIFT BANK) Thrift 494,620,969.02 87,144,473.36 567.59%
UNITED COCONUT PLANTERS BANK U/KB 63,316,802,556.61 12,448,548,502.92 508.63%
LEGAZPI SAVINGS BANK, INC. Thrift 922,546,339.95 194,120,410.23 475.24%
ILOILO CITY DEVELOPMENT BANK Thrift 328,266,813.63 73,862,437.99 444.43%
CITIBANK, N.A. U/KB 44,123,293,102.38 12,818,896,927.70 344.21%
PLANTERS DEVELOPMENT BANK Thrift 11,783,198,139.89 4,460,571,956.35 264.16%
DEUTSCHE BANK AG U/KB 3,265,228,734.45 1,447,862,733.62 225.52%
BATAAN DEVELOPMENT BANK Thrift 169,143,806.97 77,165,974.30 219.19%
STANDARD CHARTERED BANK U/KB 5,810,576,329.84 2,774,968,941.19 209.39%
UNIVERSITY SAVINGS BANK INC Thrift 479,467,363.23 236,579,775.75 202.67%
BANK OF COMMERCE U/KB 32,286,289,713.71 18,850,764,599.62 171.27%
FARMERS SAVINGS & LOAN BANK INC Thrift 203,690,085.15 120,342,960.18 169.26%
BUSINESS AND CONSUMERS BANK (A DB) Thrift 136,341,890.16 84,866,201.63 160.66%
OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK) Thrift 136,393,839.68 85,693,754.49 159.16%
EQUICOM SAVINGS BANK INC Thrift 858,055,374.71 543,104,334.15 157.99%
RCBC SAVINGS BANK INC Thrift 13,378,688,171.77 8,554,603,721.31 156.39%
KOREA EXCHANGE BANK U/KB 865,926,261.02 615,452,065.13 140.70%
ENTERPRISE BANK INC (A THRIFT BANK) Thrift 309,741,821.27 221,400,839.94 139.90%
MALAYAN BANK SAVINGS AND MORT BANK INC Thrift 1,696,860,530.70 1,231,401,672.29 137.80%
LUZON DEVELOPMENT BANK Thrift 678,766,438.87 501,008,291.74 135.48%
HIYAS BANKING CORPORATION Thrift 224,997,467.77 171,977,277.24 130.83%
PHILIPPINE BANK OF COMMUNICATIONS U/KB 6,254,822,665.43 4,791,341,160.87 130.54%
PHILIPPINE NATIONAL BANK U/KB 106,130,174,251.19 84,004,145,075.40 126.34%
SILANGAN SAVINGS & LOAN BANK INC Thrift 64,330,446.58 51,238,430.87 125.55%
PHILIPPINE VETERANS BANK U/KB 8,059,523,440.09 6,973,725,217.49 115.57%
SECURITY BANK SAVINGS CORPORATION Thrift 1,800,271,876.92 1,644,620,558.89 109.46%
MICROFINANCE MAXIMUM SB INC Thrift 60,007,268.16 55,697,972.23 107.74%
CHINA BANK SAVINGS INC Thrift 968,129,983.17 919,642,073.51 105.27%
THE HONGKONG & SHANGHAI BANKING CORPORATION U/KB 5,423,830,593.83 5,180,919,192.02 104.69%
Grand Total
327,558,229,664.87 170,652,432,265.99 191.94%



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' statement of condition as of June 30, 2013 as published in the BSP website ( 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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