Landbank taking over UCPB | Inquirer Business
Close  

Landbank taking over UCPB

Merger to create banking powerhouse with P2.7T in assets
/ 04:08 AM June 30, 2021

Logos of Landbank and UCPB

Government-controlled lenders Land Bank of the Philippines and United Coconut Planters Bank (UCPB) are set to merge, creating a local banking powerhouse with about P2.7 trillion in combined assets, with Landbank as the surviving entity.

Under Executive Order No. 142, which was signed on June 25, President Duterte ordered the two banks to merge, a move seen to solidify Landbank’s position as the second largest bank in the country in terms of resources, next to BDO Unibank, which has P3.25 trillion in assets.

ADVERTISEMENT

The two banks were directed to work on the merger within six months after the EO signing. A technical working group would be created to draw up the roadmap.

In a joint statement on Tuesday, the leaders of both banks said the transaction would create a “win-win” scenario for coconut farmers and other agricultural workers. As of end-2020, Landbank had P2.36 trillion in resources while UCPB, which ranked 13th among the 46 commercial banks in the country in terms of size, had P327.39 billion in assets.

FEATURED STORIES

Cecilia Borromeo, president and chief executive officer of Landbank, said the merger would promote “unprecedented” rural development, in keeping with the goal to expand financial inclusion among Filipinos, especially the underserved and unbanked sectors.

Track record in agri lending

Borromeo, herself a former scholar of Philippine Coconut Producers Federation Inc. (Cocofed), said coconut farmers would be able to take advantage of the expertise of Landbank in lending to the agriculture and agribusiness sectors.

“Landbank’s track record of being consistently compliant with the Agri-Agra law shows our commitment to perform our mandate, to empower not only the farmers but all workers in the agriculture sector,” she said.

Wider branch, ATM network

The Agri-Agra law mandates banks to allot 15 percent of their total lending portfolio for agriculture loans and 10 percent to agrarian reform beneficiaries.

“The merger enables UCPB and its clients to benefit from the strength, stability, scale and reach of Landbank. This also allows us to pursue our mandate to serve coconut farmers nationwide,” said UCPB officer in charge Liduvino Geron said.

In the past, legal disputes on ownership have constrained UCPB’s ability to raise capital and better compete in the banking arena, forcing the government provide financial support when needed. When the coco levy controversy was resolved in court, the government had considered bidding out UCPB to new investors but this did not push through.

Merging UCPB into Landbank allows the government to boost the former’s position without shelling out more money.

ADVERTISEMENT

As of end-2020, Landbank’s agriculture loans reached 76.95 percent of its total loan portfolio. Agrarian reform lending, meanwhile, hit 11.52 percent in the same period.

“With the merged resources of Landbank and UCPB, we can bring closer to the farmers our services, as we are able to tap a combined 722 branches and servicing units, including those in the provinces,” Borromeo said. INQ

Read Next
Don't miss out on the latest news and information.

Subscribe to INQUIRER PLUS to get access to The Philippine Daily Inquirer & other 70+ titles, share up to 5 gadgets, listen to the news, download as early as 4am & share articles on social media. Call 896 6000.

TAGS: Business, Landbank, Landbank takeover of UCPB, UCPB
For feedback, complaints, or inquiries, contact us.

Subscribe to our business news

By providing an email address. I agree to the Terms of Use and acknowledge that I have read the Privacy Policy.



© Copyright 1997-2021 INQUIRER.net | All Rights Reserved

We use cookies to ensure you get the best experience on our website. By continuing, you are agreeing to our use of cookies. To find out more, please click this link.