PRESIDENT AQUINO APPROVES MERGER OF LANDBANK AND DBP
(released 12 February, 2016)
President Benigno S. Aquino III signed on February 4, Executive Order 198 approving the merger of Land Bank of the Philippines (Landbank) and Development Bank of the Philippines (DBP).
The merger aims to strengthen the two state-owned banks in fulfilling their mandate of providing banking services to drive countryside development and contributing to the country’s sustainable and inclusive growth. It also creates an opportunity to optimize both banks’ business policies by choosing the best of both banks.
A stronger government bank is seen with the merger of Landbank and DBP, creating the 2nd largest universal bank in the country in terms of total assets at
P 1.6 trillion. The surviving bank will also be 2nd in terms of deposits at P 1.2 trillion. In terms of loans and capitalization, it will be 4th at P 582 billion and P 114 billion, respectively.
Further, it shall enhance financing of priority projects and sectors with a more diversified portfolio that shall support both growth in agriculture, SMEs, and other priority sectors, as well as investments in infrastructure and public utilities. It shall also provide a bigger fund base with its combined capital base and total deposit base thus allowing greater lending capacity.
The now bigger state-owned bank shall provide wider access to financial services by expanding its reach to more unbanked and underserved areas. By leveraging its combined presence in cities and municipalities, it shall also enhance the delivery of products and services for the agriculture-agrarian sector, OFWs, and beneficiaries of the government’s 4Ps program.
E.O. 198 increases the Authorized Capital Stock of Landbank, the surviving bank, to
P 200 billion. It also directs the National Government to provide a capital infusion of P 30 billion to allow room for loan growth and meet capital requirements.
GCG will begin implementation with the preparation of the integration and business plan in consultation with both banks, which is among the requirements for obtaining the approval of Bangko Sentral ng Pilipinas.
For clients and business partners of both banks, it will be business as usual under existing terms and conditions until further notice.
Bea Nadine V. Barte
(02) 328 – 2030 to 34