The state-run Land Bank of the Philippines (Landbank) opened the year with 141% growth in net income as the company posted one-time gains from its merger with the United Coconut Planters Bank ( UCPB).
Over the weekend, the Landbank said its net income rose to 13.2 billion pesos in the first quarter from 5.48 billion pesos in the same quarter last year, translating into a return equity of 14.27%.
The lender attributed the increase to higher interest income on loans, as well as the merger with UCPB which took effect on March 1, after obtaining approval from the Monetary Board of Bangko Sentral ng Pilipinas (BSP) and the Securities and Exchange Commission (SEC).
“Landbank’s revenue expansion goes hand in hand with the country’s strong economic recovery,” said Chief Executive Officer Cecilia Borromeo.
“We will build on this growth trajectory to continue to assist key development sectors and contribute to our collective recovery, to boost our broader goal of serving the nation,” she continued.
The lender ended the first quarter with 2.792 billion pesos in assets, up 16% from 2.405 billion pesos last year.
The merger with UCPB brought 291.93 billion pesos of additional assets, pushing major asset accounts such as loans and investments up double digits.
Landbank’s mandate is to promote rural development while remaining financially viable. It implements the Comprehensive Land Reform Program (CARP), provides assistance to small farmers and fishers, and serves as the official depository of public funds.
In 2015, the government considered privatizing UCPB, with more than 10 local and foreign banks expressing their intention to take over. The plan initially covered the stake of 73.9 members of government equivalent to 1.106 billion shares and was valued at 1.1 billion pesos.
It would have included a recapitalization of at least 15 billion pesos through the subscription of a maximum of 37.2 billion primary ordinary shares.
This however ran into some difficulties as the Supreme Court on June 30, 2015 issued a Temporary Restraining Order (TRO) against the sale of all assets acquired using the coir levy funds. This has since been lifted.
Finance Secretary Carlos Dominguez III indicated in 2019 that the plans may not materialize as the administration seeks to recoup capital and deposit investments in the UCPB through means other than privatization.
In 2020, the government completely abandoned privatization plans for UCPB and increased its stake to 97%. —LBG, GMA News