PSE Circular for Brokers No. 052-99

January 12, 1999 PSE CIRCULAR FOR BROKERS NO. 052-99 January 8, 1998 PHILIPPINE STOCK EXCHANGE, INC . Disclosure Department LISTINGS AND DISCLOSURES GROUP 4/F PSE Center, Exchange Road Ortigas Center, Pasig City Attention : Ms . EILEEN M . LACORTE Analyst GENTLEMEN : This refers to your faxed letter dated January 7, 1998 requesting for clarification on a news article which appeared in the Philippine Daily Inquirer dated January 7, 1998 regarding the purported merger talks between Urban Bank and two (2) other regular commercial banks particularly, Westmont Bank. Please be advised that we have no knowledge of the source of said news article and said news article did not originate from our Corporate Affairs Department. aisadc We wish to point out that while increasing the branch network has been one of the Bank's corporate goals, considering the refocusing to the Virtual Banking Project and Home Mortgage Securitization, the Bank can effectively extend its geographical reach without increasing its overhead, and at the same time, expand prudently but effectively the Bank's balance sheet portfolio. Urban Bank, with its present capital, is significantly underleveraged , and is in fact one of the most solvent banks in the industry. The Bank's total assets-to-capital ratio currently stands at 4.0x while the commercial banking system is at 8.3x. For the past 10 years, Urban Bank's total assets have been growing at 31% per annum compounded annually. Its capital has grown even more phenomenally at a rate of 47% per annum compounded annually during the same 10-year period. Rest assured that we will advise you should there be merger plans being undertaken by the Bank. We trust that we have sufficiently clarified this matter. Very truly yours, (SGD.) CORAZON M. BEJASA Corporate Secretary (SGD.) JUAN ANTONIO R. LOPEZ Assistant Manager