The merger between the Land Bank of the Philippines and the United Coconut Planters Bank will strengthen the government’s efforts to build a stronger, unified banking institution capable of serving coconut farmers and other workers in the agricultural sector, said Tuesday. a senior officer of LandBank. President Rodrigo Duterte ordered LandBank and UCPB under Executive Decree 142 to complete a merger applicable to companies owned and controlled by the state and recognized by regulatory bodies. LandBank, the country’s largest public sector bank with total assets of 2,362 billion pesos at the end of 2-2020, will be the surviving entity of the merger. The UCPB declared total assets of 358 billion pesos at the end of 2019. LandBank President and CEO Cecilia Borromeo said the merger would foster unprecedented rural development, in line with the government’s goal of ” Expand the financial inclusion of Filipinos, especially those in rural areas who belong to underserved and unbanked sectors. “LandBank’s track record of consistently complying with the Agri Agra Law shows our commitment to fulfilling our mandate, to empower not only farmers but all workers in the agricultural sector,” she said. Republic Law No. 10000, or Agri Agra Law, requires banks to allocate 15 percent of their total loan portfolio to agricultural loans and 10 percent of their loanable funds to beneficiaries of land reform. LandBank said that as of December 2020, its agricultural loans reached 76.95% of its total loan portfolio, above the minimum requirement of 15%. Land reform loans reached 11.52 percent during the same period, also above the 10 percent required by Agri Agra law. LandBank’s agricultural loans have steadily increased from 222.05 billion pesos in 2018 to 236.31 billion pesos in 2019 and 237.62 billion pesos in 2020. LandBank said that this year its loans to agriculture reached 230.02 billion pesos in May, an increase of 73 pesos million from P229.29 billion in April 2021. The number of farmers and fishermen assisted by the bank reached 2,734,572 in May 2021 , an increase of 31,323 compared to 2,703,249 in April 2021.
“With the merged resources of LandBank and UCPB, we can bring our services closer to farmers, as we are able to operate a combined total of 722 branches and service units, including those in the provinces,” Borromeo said. . She said the proposed merger “will also be beneficial to existing UCPB customers as they can access LandBank’s largest branch and ATM network and will be able to benefit from a wider range of products and services. such as digital banking service “. LandBank’s management expertise is also expected to support the UCPB, thus protecting the interest of coconut producers in potential merged banks. “Our goal is to ensure that we are able to effectively manage and protect the government resources in these banks for the ultimate benefit of the Filipino people. With the merger, we will be in a better position to grow our loan portfolio to meet the needs of the population, especially the unbanked and underserved Filipinos, ”Borromeo said. “The merger will also mean better financial services for UCPB clients, especially those in the agricultural sector. For clients of both banks, the merger means that they can now rely on a stronger and better capitalized institution with strong support from the government, ”she said. Liduvino Geron, head of UCPB, said the merger would allow UCPB and its clients to benefit from the strength, stability, scale and reach of LandBank. “It also allows us to continue our original mandate of serving coconut growers nationwide while providing a wider range of products and services to our clients consisting of individuals, private and government institutions, d ‘middle market businesses and small businesses nationwide,’ Geron said. Once the merger is completed, LandBank will remain the second largest bank in the industry in terms of assets and deposits.
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