Metrobank discloses exposure in Lehman Brothers

MANILA, Philippines - The Philippines’ second-largest lender said that it held bonds issued by a New York-headquartered investment bank that sought temporary reprieve against creditors on Monday. As a result, Metropolitan Bank & Trust Co. announced that it already made provisions worth $14 million for its $20 million bond exposure in Lehman Brothers, the lender said in a disclosure to the Philippine Stock Exchange (PSE). Metrobank, which was dislodged by Banco de Oro as the country’s largest bank in terms of assets, said it also had a loan exposure of P2.4 billion in Lehman’s Philippine subsidiary. The subsidiary is an asset management company which buys distressed assets, sources knowledgeable with the bank’s operations said. “Despite this development, the bank believes it is still on track with its income expectation for the whole year of 2008," Metrobank said. Metrobank was the second bank in the Philippines on Tuesday to announce its exposure to the American financial institution which had filed for bankruptcy, following Sy-controlled Banco de Oro Unibank Inc. Meanwhile, the asset management group of the Philippine subsidiary of insurance giant American International Group assured the public that its financials remained strong despite the financial fallout. “There has been a lot of disconcerting news recently surrounding AIG, however we wish to assure the public, most notably our investors that the PAMI (Philippine Asset Management Inc.)-managed Funds are separate legal and independent entities from that of AIG," the company said. “The funds are very stable and its investments are highly liquid," PAMI added. - Cheryl M. Arcibal, GMANews.TV