PH banks provide strength despite lending exposures to ABS-CBN

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Metro Manila (CNN Philippines, July 14) – A group of local banks have sought to allay market concerns about their exposure to ABS-CBN loans, saying the industry is strong enough to withstand the potential impact of the network shutdown.

In a statement, the Bankers Association of the Philippines expressed confidence in the ability of local actors to manage their portfolios following the denial of legislative voting rights from ABS-CBN, the country’s largest media network.

“The Philippine Bankers Association expresses its confidence in the ability of banks to manage their loan portfolios in relation to the non-renewal of the ABS-CBN broadcast franchise,” the group said Tuesday.

According to the financial statements for September 2019, ABS-CBN had outstanding loans worth £ 27.1 billion, which are owed to several institutions.

The network borrowed from the following companies, as reported in the quarterly report: BDO Unibank, BDO Unibank – Trust and Investment Group, Bank of the Philippine Islands, Insular Life Assurance Company, Philippine National Bank, PNB Life Insurance (now Allianz PNB Life) and Security Bank, which granted a syndicated loan of £ 10 billion in 2010; the Philippine American Life and General Insurance Company; and Union Bank of the Philippines.

In separate statements, Insular Life and Allianz PNB Life said they currently have no exposure to ABS-CBN loans, adding that the debt had already been settled in 2014.

ABS-CBN said it was on the terms of its loan agreements at the end of September.

For its part, the BAP said the sector remains liquid and armed with enough capital to manage credit risks, adding that regulatory ceilings set by the central bank provide broad buffers during possible crisis episodes.

“Amid the current pandemic and concerns over the non-renewal of the ABS-CBN broadcast franchise, we firmly believe that banks will continue to stand firm as they are backed by strong financial conditions, sound management systems. robust risks and good corporate governance. », Added the BAP. “Most importantly, we believe that our member banks are prudent and place the well-being of their depositors of the utmost importance. Your deposits are protected.”

RELATED: PH financial markets strong amid COVID-19 pandemic – Diokno

On July 10, the House Committee on Legislative Franchises voted to refuse the offer of the Kapamilya network for a new 25-year franchise after a series of hearings on issues allegedly brought against the media giant. Previously, the network had shut down its regular TV and radio broadcasts on May 5 due to an order from the National Telecommunications Commission after its existing franchise expired.

ABS-CBN shares have been suspended since Monday after the news broke, with the Philippine Stock Exchange saying the company must first disclose the full impact of not renewing its franchise on its business operations, financial condition and future. plans. His stock price fell ahead of historic Friday vote, while rival GMA Network’s share value climbed 10% yesterday.

LILY: Congress Didn’t Close ABS-CBN, We Just Ended One Family’s Privilege – Cayetano

Luis Limlingan, managing director of brokerage firm Regina Capital, said it was still unclear whether banks would stop lending to ABS-CBN with its rejected franchise. He added that the network will have to “show proof” that it can pay its debts to those who continue to lend, but added that there should be delays in payments.

This article has been updated with a statement from Insular Life.

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