September 9, 2011 — The thrift bank LBC Bank or LBC Development Bank was closed by the Bangko Sentral ng Pilipinas and was placed under the receivership of the Philippine Deposit Insurance Corp. (PDIC).
According to the PDIC, the LBC head office is located at 809 J.P. Rizal St., Poblacion, Makati and its 19 branches are spread nationwide. It has 321,516 bank accounts, 99.4 percent of which are fully insured with the PDIC. Insured deposits total 3.73 billion pesos.
LBC branches are in Aklan, Angeles, Baguio, Balanga, Batangas City, Cagayan de Oro, Cebu, Dagupan, Davao City, Iloilo, Imus, Laoag, San Fernando La Union, Naga, Olongapo, San Pedro Laguna, Timog Quezon City, Urdaneta and Vigan.
The PDIC also said that it will pay all valid claims. Deposits of 500,000 pesos and below are insured, meaning they will be paid by the PDIC. Deposits in excess of the half-million peso insured-deposit limit will be paid or not paid depending on the results of sales of assets and number of claimants.
September 12, 2011 — The PDIC announced that it will hold forums for depositors at the head office and in all 19 branches to explain procedures in filing claims. Further info will be posted at the PDIC website.
September 14-20, 2011 — The forums were held on different dates in different branches.
Depositors can call the PDIC hotlines 841-4630 or 4631 or email the Public Assistance Department email@example.com.
Alleged Reasons for LBC’s closure:
– LBC Bank diverted funds to make advances for LBC Express remittances. Most of the advances were never paid back.
– LBC Bank engaged in unsafe banking practices, such as offering high one-year interest rates of 7 percent while most other banks were offering 1 percent.
– LBC Bank did not follow what the Bangko Sentral ng Pilipinas was instructing it to do regarding its advances for LBC Express.
September 14, 2011 — LBC Express came out with a one-page advertisement advising its customers not to worry about LBC Express and that their money is safe and that LBC Express is separate from LBC Bank.
LBC Express was founded in the 1950s and currently has 70 branches in the US and Canada and has branches in Taiwan, Japan, UK, Singapore, Saipan, Italy, Spain, Australia, Malaysia, Hong Kong, UAE, and Guam, in addition to more than 1,000 branches in the Philippines.