Another Bank Bites the Dust: LBC Development Bank

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Category: Money and Finance

How safe is your money in the bank? We previously asked this question and a large majority answered that that they feel their money is safe in the bank. Still, it's normal for depositors to feel a bit nervous every time a bank encounters liquidity problems. Recently, the Philippine Deposit Insurance Corporation (PDIC) announced that it has placed the LBC Development Bank, a unit of the LBC Group, under receivership, pursuant to the 9 September 2011 resolution of the Bangko Sentral ng Pilipinas (BSP) Monetary Board (MB Resolution No. 1354).

In a news release, the PDIC noted that in addition to the head office in Makati City, LBC Bank has 19 branches all over the Philippines. The total deposit liabilities of LBC Bank, as of 30 June 2011, is estimated at P6.09 billion, with insured deposits amounting to P3.73 billion (99.4% of the 321,516 accounts). The PDIC has requested depositors to await further instructions on the claim procedures.

The PDIC assured depositors that "all valid accounts and deposit insurance claims will be paid as soon as possible." Deposits are ensured or guaranteed only until P500,000. Any excess amount shall await the full liquidation of the bank to see if there's enough left.

[See How Safe is Your Money in the Bank?]

The PDIC, as the receiver, took over LBC Bank on 9 September 2011, with the responsibility to "gather, verify and validate all bank records and administer and preserve its assets for the benefit of all creditors."

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