Total LandBank-UCPB assets to reach P3T
Completion of the government-approved merger of Land Bank of the Philippines (LandBank) and United Coconut Planters Bank (UCPB) will result in combined assets of nearly P3 trillion.
“The merged assets will significantly increase LandBank’s loan portfolio aimed at serving the entire agricultural sector, especially coconut producers, alongside major development industries. The synergy created by the merger will put us in a much better position to meet the changing needs of our diverse clientele, particularly the underserved and unbanked, ”said LandBank President and CEO, Cecilia Borromeo , in a press release this weekend.
LandBank expects its acquisition of shares in UCPB and the concomitant absorption of its assets and liabilities to increase deposits, loans and capital.
The bank said due diligence had been performed and the transaction had been reviewed and approved by the Bangko Sentral ng Pilipinas (BSP) and the Monetary Board.
Based on LandBank’s initial projections, the Common Equity Tier 1 (CET1) combined ratio by the end of 2021 will remain above the BSP regulatory requirement of 11%.
“LandBank is more than capable of absorbing the financial impact of the merger with UCPB. Our ratios will remain comfortably above the standards set by the BSP,” said Borromeo.
LandBank is calling for regulatory incentives to be granted by BSP to banks for mergers and consolidations.
“These relief measures will provide the bank with the flexibility to manage its capital, achieve operational efficiency and minimize the expected impact of the absorption of UCPB,” said Borromeo.
LandBank’s total assets in the first quarter of the year amounted to 240 trillion pesos.
President Rodrigo Duterte, in an earlier executive decree, ordered LandBank and UCPB to complete a merger applicable to state-owned and controlled companies (GOCCs) recognized by regulators.
A technical working group (TWG) will be formed in accordance with circular 2015-03 of the GOCC Governance Commission (GCG). The group will be composed of the CEO of Landbank, responsible for the UCPB, and duly appointed representatives of the GCG, the Securities and Exchange Commission, the Ministry of Finance, the Ministry of Budget and Management and the Commission. audit. .
The TWG is responsible for formulating an integration plan and resolving all questions regarding the implementation of the merger.