OFWs affected by LBC Bank shutdown; forum on Friday

A college student in Cebu City went to the ATM yesterday to get cash for his tuition.

A married couple arrived to withdraw funds for their daughter, who was hospitalized for a uterus operation.

Like thousands of clients of LBC Development Bank around the country, they got a nasty shock on Monday morning when they found the bank shuttered and operations suspended by the Banko Sentral ng Pilipinas.

“I need the money for rent and my tuition. I won’t be able to take my exams if I can’t  pay my tuition,” said a glum Raniel Villanueva, who went to the thrift bank branch in Gorordo Avenue, the lone unit in Cebu City.

Couple Elsa and Eleuterio Lamberte were unable to withdraw from their three-year-old account. Their daughter just got discharged from the hospital after an operation.

“Her medicines cost much. We need to get the money because we have to complete her medication as soon as possible. Our deposit in the bank is all we have,” said Elsa.

It was a delayed discovery for bank clients in Cebu City since last Friday, Sept. 9, was a non-working Osmeña holiday in the city.

The thrift bank was placed under receivership on Sept. 9 due to liquidity problems.

The Monetary Board of the Bangko Sentral ng Pilipinas ordered the bank, which is the financial services arm of the LBC Group, placed under receivership of the Philippine Deposit Insurance Corp.

In Manila, Nestor Espenilla, BSP deputy governor for bank supervision, said the bank has turned insolvent, meaning the liabilities of the bank have already exceeded its assets.

He said the thrift bank was engaged in unsafe and unsound banking practices,  offering interest rates higher than the average commercial interest rate.

The thrift bank has 19 branches around the country and its head office in J. P. Rizal Street, Makati City.

PDIC executive vice president Cristina Orbeta said the thrift bank had many OFW families as depositors given the bank’s tie-up with courier and remittance firm LBC Express.

She said the PDIC had the interest of OFW families and all depositors in mind.

In Cebu, LBC Development Bank has only one branch along Archbishop Reyes Avenue corner Gorordo Street in Cebu City.

Eleuterio Lamberte said he and his wife had moved their savings to LBC, because it offered an attractive 6.5 percent annual interest and tax-free incentives for time deposits.

“We trusted the bank because we know LBC. They are popular. I’m so disappointed. They should tell us what happened. Where is all our money?” he asked.

Lamberte said he was still able to make a deposit last week and wondered why the bank personnel did not inform him about the closure.

Constancia Gonzales of Mambaling, Cebu City, was dismayed to learn from radio news that the bank was shut down.  She said her retirement benefit of almost a million pesos was deposited there.

“The owners deserve to be jailed,” she said in frustration.

Gonzales said she was attracted by the bank’s 9 percent interest rate compared to her previous bank’s 5 percent.

The Monetary Board placed LBC Development Bank under receivership of the PDIC by virtue of MB Resolution No. 1354.

In a statement issued  by Auramar D. Calbario of the PDIC corporate communications group,  PDIC shall gather, verify and validate all bank records and administer and preserve its assets for the benefit of all creditors.

“We officially took over on Sept. 9 and started our verifications today (yesterday),” Calbario said. Calbario said that they want to assure LBC bank depositors that all valid accounts and deposit insurance claims will be paid as soon as possible and that updates on the status of their operations will be issued as soon as examination and validation of accounts are completed.  As of June 30, 2011, insured deposits amount to P3.73 billion.

There are 321,516 LBC bank accounts nationwide and 99.4 percent of these accounts are fully covered by deposit insurance or those with deposit values of P500,000 below.

Calbario said schedules of Depositors Forums in different cities and provinces are being set up.

“Schedules of the forums will be announced as soon as possible in the bank premises and in our website or in the bank premises. Our representatives will explain the requirements and procedures in filing deposit insurance claims.” With reports of correspondents Jhunnex Napallcan and Norman Mendoza