The country’s five biggest banks have a $412m loan exposure.
Five of the largest banks in the Philippines have joined forces to cover a combined loan exposure of $500 million after Multiply declared bankruptcy in a development shaping up to be the largest default in the country’s corporate history, reports Philippine Daily Inquirer (PDI).
Multiply’s big-ticket creditors include Rizal Commercial Banking Corp.; Land Bank of the Philippines; Metropolitan Bank and Trust Co.; Bank of the Philippine Islands, and Banco de Oro Universal Bank.
A source from an involved financial institution told PDI that the creditors have come to an agreement that no one lender will rush to seize collateral ahead of its peers in order to maintain the stability of the rehabilitation plan that has already been filed in local courts.
RCBC has a loan exposure of $3000m to Multiply followed by Land Bank with an estimated $90m; Metrobank, $75m; BPI, about $60m and BDO, $60m, revealed PDI, in loans lent largely without the security of collateral.
Apart from its debt to Philippine lenders, Multiply also owes around $2 billion to banks in Singapore and $900m to banks in South Korea.
The central bank shrugged off concerns as creditors are well-capitalised to handle the situation. "We are aware of this. We are monitoring. There is no cause for worry," Bangko Sentral ng Pilipinas deputy govenror Chuchi Fonacier was quoted in ABS-CBN News.
https://asianbankingandfinance.net/retail-banking/news/philippine-banks-scramble-after-korean-shipbuilder-default
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