BSP closes 2 small local banks




By Rose de la Cruz


Two small banks were closed by the Monetary Board, the policy-making body of the Bangko Sentral ng Pilipinas recently. Their closures have no impact on the banking industry as their total assets are equivalent to less than 0.02 and 0.002 percent of the entire banking system.


The AMA Rural Bank of Mandaluyong, the banking arm of the AMA Group of Companies of Amable Aguiluz and the 5th largest capitalized rural bank in the country, has been placed under receivership of the Philippine Deposit insurance Corp. by virtue of an order issued by BSP, which prohibited the bank from further engaging in the banking business.


The other one is Maximum Savings Bank Inc., which has a network of three branches with its main branch located in Batangas City and others are in Sabang and Calapan City, both in Mindoro Oriental.


The closures of AMA Rural Bank of Mandaluyong, Inc. and Maximum Savings Bank, Inc. are not expected to adversely affect the Philippine banking system, the BSP said.


AMA Rural Bank of Mandaluyong, Inc. has a network of ten (10) branches with its main branch located in Mandaluyong City and the other branches in Pasig City; Cainta and Morong, Rizal; Bacoor, Cavite; San Pablo and Calamba Cities in Laguna; Baliuag, Bulacan; San Fernando, Pampanga and Baguio City.   AMA Rural Bank of Mandaluyong, Inc. has related companies but are not under the supervision of the BSP.  


The BSP said the overall Philippine banking system remains sound and stable with ample liquidity and high level of capitalization as BSP continues to promote good governance among its supervised institutions to ensure the soundness of the banking system and to protect the interest of the banking public.


The Philippine Deposit Insurance Corporation (PDIC) stands ready to service valid deposit claims from depositors of AMA Rural Bank of Mandaluyong, Inc. and Maximum Savings Bank, Inc. and complete the processing of claims in accordance with the guidelines of the PDIC.


The Inquirer reported that this is the eighth bank to be placed under PDIC receivership and liquidation proceedings so far this year. The others were Rural Bank of Lemery, Rural Bank of Larena (Siquijor), East Coast Rural Bank of Hagonoy, Rural Bank of Guihulngan (Negros Oriental), Valiant Bank, The Palawan Bank and Rural Bank of Basey (Samar).


PDIC posted an advisory in the premises of AMA Bank’s 13 branches notifying clients about the receivership order, industry sources told the Inquirer. Based on data from PDIC’s public assistance unit, the bank had 10 operating branches and three non-deposit taking offices.


PDIC is mandated to take over banks that are insolvent, or those that did not have enough assets to cover liabilities.


Based on its latest financial statement filed in the BSP, AMA Banks is the 15th largest rural bank in the country in terms of assets. Total resources stood at P2.83 billion as of end-June. AMA is the fifth largest in capitalization with P1.04 billion.


It has a loan book of P2.06 billion, the 13th largest among rural banks. Its portfolio consisted mainly of consumer loans.


The closure will affect holders of deposit accounts worth about P1.45 billion.


Under the law, PDIC covers valid deposits and claims worth up to P500,000.


Incorporated in 1953, AMA Bank’s shareholders are Amable Aguiluz IX and Amable Aguiluz V. AMA Computer College Inc. and First Women’s Credit Corp. also hold shares in the bank.