1. Life after a Bank Run: The Bangko Kabayan Experience 2009 RBAP-MABS National Roundtable Conference May 12-13, 2009 Hyatt Hotel and Casino Manila Atty. Francis Ganzon President, Bangko Kabayan Bangko Kabayan Inc.

2. The Panic of 1978 : Mismanagement and Fraud Bangko Kabayan Inc.

3. Causes : Loose management Internal Fraud High delinquency – illiquidity    Bangko Kabayan Inc.

4. Effect : Loss of Public Confidence Panic withdrawals   Bangko Kabayan Inc.

5. Steps Taken : Reorganization Professionalization   Deposit Campaign  Bangko Kabayan Inc.

6. Communication Program Emergency Loan - BSP   Aggressive Collection of Past Due  Disposition of Acquired Assets  Bangko Kabayan Inc.

7. Reforms : Recruitment and Hiring based on Merit Tight Internal Control System   Better Process and Documentation in REM Loans  Deposits vs. Rediscounting as Source of Funds for loans  Bangko Kabayan Inc.

8. Growth at the Expense of Liquidity 1993: Bangko Kabayan Inc.

9. Reforms : Adoption of Higher Liquidity Level Policy Improve Treasury Functions   Bangko Kabayan Inc.

10. 1996: Closure of Other Banks Bangko Kabayan Inc.

11. Strategies : High visibility of CEO Transparency and Good Relations – Staff and Clients   Increase Liquidity – control loan releases, draw on credit lines  Bangko Kabayan Inc.

12. Maintaining Unity in the Organization Strength of Faith, Vision and Mission   Stockholder Support – personal funds and guarantees  Bangko Kabayan Inc.

13. 2001: Personal Tragedy Bangko Kabayan Inc.

14. Professional organization prepared to handle crisis Morale support and offers for help from fellow rural bankers   Support from understanding regulators  Bangko Kabayan Inc.

15. Fruits of years of relationship- building, transparency and good governance! Bangko Kabayan Inc.

16. Legacy Bank Closures - an Industry Crisis Bangko Kabayan Inc.

17. Seeking a Common Solution – putting up a united front Bangko Kabayan Inc.

18. Re-education of Public is Key Bangko Kabayan Inc.

19. Causes of Bank Run based on BK’s experience: Internal Factors  Mismanagement  Sacrificing liquidity for growth  Personal Tragedy SUMMARY Bangko Kabayan Inc.

20. External Factors  Political Upheaval  Closures of other financial institutions O causing crisis in public confidence 0 in the system  Peace and order breakdown Bangko Kabayan Inc.

21. Appropriate Responses:  Professionalization of the organization  Tight and effective internal control  Prudent liquidity management and O better treasury management Internal Factors Bangko Kabayan Inc.

22.  Strong Communication and a culture O of transparency  Strong collection infrastructure and O management of delinquent accounts  Effective and quick disposition of 0 Acquired Assets Bangko Kabayan Inc.

23. - a strong belief system that imbues everyone in the organization with inspiration and extraordinary persistence in the face of crisis.  Strong relationship management – O within the organization and with O clients, big and small, even when O there is no crisis.  Vision and Mission Bangko Kabayan Inc.

24. External Factors  Maintain a comfortable liquidity cover  Sources of funds lined up  Maintain high credibility with community, regulators and fellow rural bankers and financial institutions  Maintain high credibility with community, 0 regulators and fellow rural bankers and 0 financial institutions Bangko Kabayan Inc.

25. What can our microfinance clients do for us?  Provide liquidity  Spread good news and counter rumors Bangko Kabayan Inc.

26. Take care of all stakeholders – and they will take care of you in times of need! Bangko Kabayan Inc.