Merger with UCPB boosts Landbank first quarter profit by 141 percent
MANILA, Philippines—Land Bank of the Philippines’ (Landbank) merger with United Coconut Planters Bank (UCPB) has bloated its first-quarter bottom line by 141 percent year-on-year to P13.2 billion.
In a statement last Sunday (May 1), the state-run Landbank said its end-March net income climbed from P5.5 billion in 2021, partly due to one-time gains from absorbing troubled UCPB. Their merger took effect last March 1.
Landbank also attributed the jump in its first-quarter profit to “higher interest income from loans and investments” amid economic recovery.
Given its higher net income, Landbank’s return-on-equity reached 14.3 percent at the end of the first quarter, above the domestic banking industry’s average of 9.1 percent as of end-2021.
“Landbank’s income expansion runs parallel with the country’s strong economic resurgence. We will build on this growth trajectory to continue assisting key development sectors and contribute to our collective recovery, to drive our broader thrust of serving the nation,” Landbank president and chief executive Cecilia Borromeo said.
Landbank said its “sound financial position furthered its capacity to provide financial and support services to the agriculture sector and other development industries,” citing a total of over P822 billion in outstanding loans to priority borrowers to date, including P236.9 billion to farmers and fisherfolk.
Its merger with UCPB hiked Landbank’s asset base to P2.79 trillion as of March, up 16 percent from P2.41 trillion a year ago, as the shuttered state-run bank funded by Marcos-era coco levy funds added P291.8-billion worth of assets. At present, Landbank is the country’s second-biggest lender in terms of assets, next only to BDO Unibank.
“Major asset accounts, including loans and investments, likewise increased in double-digits,” Landbank said.
Landbank’s capital also grew 12 percent year-on-year to P218.4 billion in the first quarter from P194.6 billion a year ago, “mainly due to the record net income in 2021.”
Its full-year profit jumped 27 percent to P21.8 billion last year as losses provisioning declined by more than two-fifths compared to 2020 during the onset of the COVID-19 pandemic.
In 2020, Landbank’s net income dropped 7.4 percent to P17.1 billion from P18.5 billion in 2019, which it had blamed on “provisioning for probable losses which is significant at P9.3 billion.”
In 2019, Landbank’s provisioning for losses was merely P5.2 billion, such that it had said the 2020 amount was “the highest provisioning ever made in the history of Landbank.”
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