Equitable’s BSP loan cut down to P5.1B

Equitable PCI Bank has brought down to P5.1 billion its outstanding loans from the Bangko Sentral ng Pilipinas (BSP) after settling P1 billion of its obligations to the central bank.

BSP Deputy Governor and officer-in-charge Alberto Reyes said the bank should be able to settle its entire debts from the central bank by early next year. Prior to the latest installation of its payment, Equitable PCI Bank’s loans totaled P6.1 billion.

Equitable PCI Bank was able to settle about 80 percent of a P30-billion emergency loan which the bank availed itself of during the height of the impeachment trial against then and now imprisoned former president Joseph Estrada.

The bank sought the emergency assistance from the BSP when it suffered massive withdrawals because of its involvement in the illegal numbers game scandal. One of the top executives of Equitable PCI Bank revealed that Estrada opened an account under an assumed name, the money came from proceeds of the gambling scandal.

After the controversy died down, Equitable PCI Bank slowly gained back the bulk of its depositors and moved to further restore confidence by reorganizing the management of the bank.

Reyes said Equitable PCI Bank has since then realized significant revenues from its dollar remittance business, especially toward the end of the fourth quarter when dollar inflows are heavy, mostly coming from overseas Filipino workers.

The bank had wanted to settle all its loans with the BSP at the shortest time possible since the loan carried an interest of three percentage points over Treasury bill rates.

After the full payment is made, Equitable PCI Bank officials said the bank could focus on implementing its strategies for the bank’s steady growth and profitability.

Equitable PCI Bank president Deogracias Vistan said the steady inflow of deposits is a strong indication of its depositors’ confidence in the bank.

The bank posted a net income of P113.7 million for the first nine months of the year.

Despite this however, ratings agencies have yet to revise their downgraded outlook on the bank.

The Go family owns 30 percent of the bank while state-run pension funds Social Security System and the Government Insurance System hold 25 percent and 12 percent, respectively.

The bank said it will also pursue a capital-raising activity to beef up its capital.

Vistan said this would be an option that will depend on the bank’s balance sheet by the end of the year.

Banks are mandated by law to maintain a 10-percent minimum capital adequacy ratio at all times, this is more stringent than the international best practice of an eight-percent capital adequacy.