Merger between Landbank and UCPB to promote rural development and expand lending activities

The Land Bank of the Philippines (Landbank) has claimed that its upcoming merger with the United Coconut Planters Bank (UCPB) will strengthen the government’s efforts to build a stronger, unified banking institution capable of serving coconut farmers and others. workers in the agricultural sector.

Landbank Chief Executive Officer Cecilia Borromeo said the merger would foster unprecedented rural development, in line with President Rodrigo Duterte’s goal of expanding the financial inclusion of Filipinos, especially those in rural areas who belong to the underserved and unbanked sectors.

Borromeo said coconut farmers will be able to take advantage of Landbank’s established expertise in lending to the agriculture and agribusiness sectors.

“Landbank’s track record of consistently complying with the Agri Agra Act shows our commitment to fulfilling our mandate, to empower not only farmers but all workers in the agricultural sector,” she said.

Republic 10,000 Law, 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.

As of December 2020, Landbank’s agricultural loans reached 76.95% of its total loan portfolio, well above the minimum requirement of 15%. Land reform loans, meanwhile, 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 to 237.62 billion pesos in 2020.

At the end of May 2021, Landbank loans to agriculture reached 230.02 billion pesos, a net increase of 73 million pesos from the level of 229.29 billion pesos in April 2021.

The number of farmers and fishermen assisted by Landbank reached 2,734,572 in May 2021, an increase of 31,323 from 2,703,249 in April 2021.

Digital bank

“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 added that the proposed merger “will also be beneficial to existing UCPB customers, as they will be able to access Landbank’s largest branch and ATM network and will be able to benefit from a wider range of products and services such as as Landbank’s 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.

“The merger will also result in better financial services for UCPB clients, especially those in the agricultural sector. For clients of both banks, the merger will now allow them to rely on a stronger and better capitalized institution with strong government support, ”she said.

On the UCPB side, head Liduvino Geron said: “The merger allows 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, mid-market companies and small businesses nationwide. “

Under Executive Decree 142, Duterte ordered the Landbank and UCPB to complete a merger applicable to companies owned and controlled by the state and recognized by regulators.

Landbank, which is the country’s largest public sector bank, will be the surviving entity of the merger.

Once the merger is completed, Landbank will remain the second largest bank in the industry in terms of assets and deposits. (RP)

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