LandBank posts 20% growth in first-half profit

State-owned Land Bank of the Philippines reported sustained growth in its net income in the first half of the year.

The bank attributed the growth to the strong performance of its lending and investment activities.

In a statement, Land Bank said it posted a net income of P5.52 billion in January to June, rising by 20 percent from the P4.6 billion registered in the same period last year.

“We continuously strive to improve our performance,” said Land Bank president Gilda Pico.

Pico said the bank continued to perform consistently with its mandate of helping achieve the government’s development objectives through financial support to fisherfolk, micro, small and medium enterprises (SMEs) and other priority sectors.

The bank also reported that its assets rose by 15 percent, or nearly P80 billion, to P609.5 billion in the first semester of the year from P529.6 billion a year ago.

The bank said it was able to support more lending activities due to the increase in deposits it had generated in the first six months.

Deposits as of end-June, according to LandBank, reached P479.8 billion, up by 17 percent year on year from P408.7 billion.

Its capital—which is used as a buffer to cover risks, such as defaults by borrowers—stood at P64.1 billion as of end-June. The figure marked a 27-percent increase from P50.7 billion in the same period a year ago.

Aided by the growth in its capital, the bank’s capital adequacy ratio (CAR), the proportion of capital to risk exposed assets, stood at 18.2 percent by the end of the first half. This was higher than the central bank’s 10-percent minimum CAR requirement and the 8 percent prescribed by international standards.

LandBank said its continually rising resources enabled it to help support the government’s development objectives.

The government-run bank is tasked with helping boost the MSME sector, which economic managers said had the ability to achieve a sustainable and robust growth for the country if well supported.

MSMEs account for more than 90 percent of enterprises in the country.

LandBank helps the MSME sector partly through its participation in the establishment of credit surety funds (CSFs) in various rural areas in the country.

The CSF is a pool of funds that serves as a guarantee to loans being applied for by micro enterprises. The objective of the CSF is to make micro-enterprises access loans from banks, which would normally require collateral if not for a credit guaranty.