Urban Bank

Urban Bank was a Philippine banking institution established in 1980 as a private development bank. It began operations later that year as a one-branch thrift bank in the area now associated with Pasig. The bank occupied a notable position in the Philippine financial sector because it became the first non-commercial bank in the country to obtain a public listing, doing so in 1987 on the Manila Stock Exchange and the Makati Stock Exchange, the predecessors of the modern Philippine Stock Exchange. Its shares traded under the symbol UBI, which also became a common shorthand for the institution. The bank developed beyond its original branch-based thrift operation and became a middle-sized Philippine bank with related subsidiaries, including Urbancorp Investments. In 1995, it achieved another industry distinction by becoming the first Philippine bank to issue securities backed by assets and registered with the Securities and Exchange Commission. This transaction reflected the institution's participation in the development of local capital-market and structured-finance practices rather than relying solely on conventional deposits and lending. By the late 1990s and early 2000, Urban Bank faced increasing financial and liquidity pressure. In early 2000 it was involved in proposed merger discussions with Panasia Bank, a smaller rival. Those negotiations did not reach completion after the Bangko Sentral ng Pilipinas introduced additional requirements affecting bank mergers. Urban Bank subsequently faced panic withdrawals. On April 25, 2000, the bank and its two subsidiaries declared a voluntary bank holiday in an effort to halt the run and prevent further withdrawals. The bank holiday did not stabilize the institution. On April 26, 2000, less than a day after the declaration, the Monetary Board of the Bangko Sentral ng Pilipinas ordered the summary closure of Urban Bank. The bank and its subsidiaries were placed under mandatory receivership of the Philippine Deposit Insurance Corporation. Failed negotiations with Bank of Commerce also followed, leaving no immediate rescue transaction through that route. Urban Bank's shareholders ultimately approved a merger in August 2001 involving Urban Bank, Urbancorp Investments, and Export and Industry Bank. Export and Industry Bank, commonly known as Exportbank, was the surviving entity. Urban Bank therefore ceased to operate as an independent bank, while its shares were later re-listed under Exportbank's Philippine Stock Exchange ticker, EIB. The collapse also produced prolonged legal proceedings involving former executives and other associated individuals. A Philippine court dismissed charges against former chairman Arsenio Bartolome III and company secretary Corazon Bejasa, while finding probable cause against other respondents. In 2008, the Supreme Court of the Philippines reinstated a PHP 4.5 billion estafa case involving several former Urban Bank executives. The available reference material identifies the case and its respondents but does not establish a final resolution in the supplied record. Urban Bank is consequently remembered both for its early role in Philippine banking-market development and for one of the country's prominent bank closures at the beginning of the 2000s. Its historical profile combines thrift banking, public-market innovation, asset-backed securities, attempted consolidation, a liquidity crisis, regulatory receivership, and eventual absorption into Export and Industry Bank.

Urban Bank was incorporated on July 8, 1980, as a private development bank in the Philippines. Later that year it opened as a one-branch thrift bank in what is now Pasig. The institution subsequently expanded its banking activities and became a middle-sized bank with affiliated entities, including Urbancorp Investments. In 1987 Urban Bank became the first Philippine non-commercial bank to list its shares publicly. The listing took place on both the Manila Stock Exchange and the Makati Stock Exchange, which were later consolidated into the Philippine Stock Exchange. The bank traded under the symbol UBI. This distinction gave Urban Bank a visible role in the development of publicly traded Philippine financial institutions outside the commercial-bank segment. The bank also participated in the emerging domestic securities market. In 1995 it became the first Philippine bank to issue asset-backed securities registered with the Securities and Exchange Commission. The transaction represented an important step in the use of structured finance by a Philippine bank and was one of the institution's principal historical innovations. Urban Bank's financial position deteriorated around the turn of the century. In early 2000 it nearly completed a merger with Panasia Bank, but the proposed combination failed after the Bangko Sentral ng Pilipinas introduced new requirements for bank mergers. The institution later became subject to panic withdrawals. On April 25, 2000, Urban Bank and its two subsidiaries declared a voluntary bank holiday to stop the withdrawals. The attempted holiday was short-lived. On April 26, 2000, less than 24 hours after the announcement, the Monetary Board of the Bangko Sentral ng Pilipinas ordered Urban Bank's summary closure. The Philippine Deposit Insurance Corporation then placed the bank and its subsidiaries under mandatory receivership. Subsequent negotiations with Bank of Commerce also failed to produce a rescue merger. In August 2001, Urban Bank shareholders approved a merger involving Urban Bank, Urbancorp Investments, and Export and Industry Bank. Export and Industry Bank, also known as Exportbank, became the surviving institution. Urban Bank consequently ceased to exist as an independent operating bank. Its shares were later re-listed under Exportbank's ticker, EIB. The bank's failure led to criminal and civil proceedings involving former officers and other respondents. Judge Zeus Abrogar dismissed charges against Arsenio Bartolome III, identified as the former chairman, and Corazon Bejasa, identified as company secretary, while finding probable cause against other respondents. On April 18, 2008, the Second Division of the Supreme Court of the Philippines reinstated a PHP 4.5 billion estafa case involving former executives including Nida S. Santos, Milagros Santiago, Rowena Punzalan, Chulla Formanes, Loida O. Payonga, and Amalia Ordas. The supplied reference material does not provide the ultimate disposition of that case.

• 2008

  Supreme Court reinstates estafa case

  [1]Urban Banken.wikipedia.org

  The Philippine Supreme Court reinstated a PHP 4.5 billion estafa case against several former executives.

• 2001

  Merger with Export and Industry Bank

  [1]Urban Banken.wikipedia.org

  Shareholders approved a merger involving Urban Bank and Urbancorp Investments, with Export and Industry Bank as the surviving entity.

• 2000

  Voluntary bank holiday and regulatory closure

  [1]Urban Banken.wikipedia.org

  The bank holiday declared on April 25 was followed by summary closure by the Bangko Sentral ng Pilipinas on April 26 and receivership by the Philippine Deposit Insurance Corporation.

• 1995

  First SEC-registered asset-backed securities issued by a Philippine bank

  [1]Urban Banken.wikipedia.org

  Urban Bank became the first Philippine bank identified in the source to issue asset-backed securities registered with the Securities and Exchange Commission.

• 1987

  First Philippine non-commercial bank to list publicly

  [1]Urban Banken.wikipedia.org

  Urban Bank listed on the Manila Stock Exchange and Makati Stock Exchange under the ticker UBI.

• 1980

  Incorporation as a private development bank

  [1]Urban Banken.wikipedia.org

  Urban Bank was incorporated on July 8, 1980, in the Philippines.

• 1980

  Opening of the first branch

  [1]Urban Banken.wikipedia.org

  The bank began operations later in 1980 as a one-branch thrift bank in the area now associated with Pasig.

A Philippine middle-sized thrift and development bank that emphasized conventional banking services while also participating in early domestic capital-market innovation.

• Retail banking · 1980

  Thrift banking services

  Urban Bank began as a one-branch thrift bank and provided the deposit-taking and lending services associated with Philippine thrift banking. The supplied sources do not identify particular account names, branch counts, or consumer product specifications.

• Development finance · 1980

  Development banking

  The institution was incorporated as a private development bank, indicating an initial focus broader than ordinary savings operations. Specific development-finance programs and sector allocations are not detailed in the supplied material.

• Capital-markets product · 1995

  Asset-backed securities

  In 1995 Urban Bank issued asset-backed securities registered with the Philippine Securities and Exchange Commission. The available reference identifies the transaction as a national first for a Philippine bank but does not provide the underlying asset pool or issuance terms.

• 2008

  Estafa proceedings involving former executives

  The Supreme Court of the Philippines reinstated a PHP 4.5 billion estafa case involving several former Urban Bank executives. The supplied material does not state the final outcome.

  Source

• 2000

  Bank failure, panic withdrawals, and regulatory receivership

  Urban Bank declared a voluntary bank holiday after facing panic withdrawals. The Bangko Sentral ng Pilipinas closed the bank the following day, and the Philippine Deposit Insurance Corporation placed it and its subsidiaries under mandatory receivership.

  Source

Read more

• 2001

  Approve merger with Export and Industry BankM&A

  Background

  After the bank's closure, mandatory receivership, and unsuccessful negotiations with Bank of Commerce, a consolidation route was pursued.

  Action taken

  Urban Bank shareholders approved a merger involving Urban Bank, Urbancorp Investments, and Export and Industry Bank in August 2001.

  Aftermath

  Export and Industry Bank became the surviving entity, ending Urban Bank's existence as an independent bank. Urban Bank shares were later re-listed under Exportbank's EIB ticker.

  Source

• 2000

  Declare a voluntary bank holidayStrategy

  Background

  Urban Bank faced panic withdrawals and sought to prevent further depletion of deposits while broader merger discussions were unresolved.

  Action taken

  The bank and its two subsidiaries declared a voluntary bank holiday on April 25, 2000.

  Aftermath

  The measure did not prevent regulatory intervention. The Monetary Board ordered the bank's summary closure less than 24 hours later.

  Source

1. 1Urban Banken.wikipedia.org