PH: three banks disappear — Westernbank, R-G and Eurobank

On April 30, 2010, Primera Hora reported a dramatic restructuring of local banking: R-G Premier Bank, Eurobank and Westernbank were acquired that day by Scotiabank, Oriental Bank and Banco Popular, respectively. The announcement came from Alfredo Padilla, head of the Office of the Commissioner of Financial Institutions (OCIF), alongside Sheila Bair, FDIC chair.

Padilla assured that account money is protected by the FDIC and that the consolidation process allows operations to continue “normally”: “No depositor was affected. The closure is transparent for people who can keep doing their transactions as usual.” Bair said she had come to Puerto Rico “to assure Puerto Ricans that their deposits are protected by the FDIC.”

By contrast, Padilla warned that holders of common shares in those banks lose their investment when the entity closes. On employment, he could not guarantee full staff retention, though he estimated a “high probability” of retaining most because acquirers need employees to serve clients. The conference was at Centro Europa (Santurce), with FDIC public-service announcements (Iván Cintrón).

The paper placed the announcement in the context of banking consolidation assisted by federal deposit insurance: the official message to the public was that, for depositors, “the only thing that changed was the name of their bank.”

Closure/acquisition ≠ theft of insured deposits. Equity loss ≠ criminal conviction. Primary: Primera Hora 2010-04-30.

Source: Primera Hora. https://www.primerahora.com/noticias/puerto-rico/notas/desaparecen-tres-bancos-en-puerto-rico/