LAND BANK of the Philippines (LANDBANK) is looking to surpass its net profit last year, its top official said.
LANDBANK President and Chief Executive Officer Lynette V. Ortiz told reporters on the sidelines of the central bank’s annual reception for the banking community on Friday that they are targeting to post a “better” income this year versus the 2022 level.
“We’re hoping. We’re working towards that. It’s midyear — all I can say is that our numbers look good midyear. There’s a lot of positive traction as far as our numbers are concerned, and so I’m very hopeful we get to deliver on the upside,” Ms. Ortiz said.
LANDBANK saw its net income rise by 38.2% year on year to P30.1 billion in 2022 amid improved interest earnings from loans and investments and gains from fees, commissions, and foreign exchange.
This surpassed its P25.71-billion target and was higher than the P21.7 billion recorded in 2021.
“It helps, of course, that even our securities portfolio is doing well despite the fact that interest rates have gone up,” Ms. Ortiz said when asked for income growth drivers.
“We are also very efficient in managing our costs. It’s a combination of those factors,” she added.
The lender has yet to report its second-quarter results. In the first quarter, LANDBANK’s net income declined by 18% year on year to P10.8 billion.
LANDBANK-DBP MERGERMeanwhile, Ms. Ortiz said the lender is ready for its proposed merger with the Development Bank of the Philippines (DBP).
“From LANDBANK’s perspective, we are prepared if it happens. We have a team who is actually prepared to execute the merger if it happens. We will be prepared to do it when we are asked to execute,” she said at the same event on Friday.
“If it does happen, it’s all about making sure we draw from the synergies of both institutions and that we’re able to retain good talent and that we’re able to manage the integration successfully,” she added.
In March, President Ferdinand R. Marcos, Jr. ordered the merger of the two state lenders.
The merger would leave LANDBANK as the surviving entity, which will serve as the sole authorized government depository bank.
Data from the Finance department showed that the merged entity will have an estimated asset size of about P4.18 trillion and a deposit base of P3.59 trillion.
The government is also estimated to generate up to P975 million in savings annually due to the consolidation of the banks’ operations, eliminations in redundancies, and cuts in personnel expenses.
Ms. Ortiz said the merger will also not impede the state banks’ mandates.
“We will be true to our mandate, to what we’re set out to do… We will be consistent in making sure there will be no diminution in terms of our priorities,” she added.
Under Republic Act No. 11901, both the LANDBANK and the DBP are mandated to “promote savings and credit in the rural areas by offering affordable deposit products such as the basic deposit account for deposits and low interest rates for loans.”
In a press chat on Friday, Finance Secretary Benjamin E. Diokno reaffirmed that the merger will likely be accomplished by the first half next year.
The Governance Commission for Government-Owned and -Controlled Corporations earlier said it can authorize the state-run banks’ merger without legislation.
Meanwhile, the DBP has said the merger would require legislation as both banks were created by law. — Aaron Michael C. Sy and Luisa Maria Jacinta C. Jocson