Landbank sees 200% profit hike

The Land Bank of the Philippines (LBP) is projecting a net income of P1.5 billion this year, 200 percent more than the P509 million recorded in 2000.

LBP president and chief executive officer Margarito B. Teves said the increase will come from higher interest income on loans and increases in income from investments. At the same time, the bank will implement cost-management measures focused on overhead expenses, and controlled increase in interest expense on deposits.

Teves said increased earnings from deposits will come as a result of increased focus on low-cost private deposits, and current deposit generation through a deposit campaign expected to earn P5 billion.

"We have organized eight dedicated teams working on the deposit-generation campaign alone," the LBP chief executive told The STAR.

The government-run financial institution is likewise looking at a decrease in loan portfolio this year of P89 billion which is six percent lower than the P95 billion in 2000.

"That is due to higher valuation reserves of P2.4 billion, and the reduction in non-priority loans by P5 billion."

Teves said the bank will intensify its lendings to three priority sectors, namely small farmers and fisherfolk; small and medium enterprises; and mass housing.

For this year, LBP has programmed for lending to farmers’ cooperatives a total of P15.9 billion or 21 percent higher than the P13.1 billion last year. Credit assistance to the priority sectors should account for 28 percent of the bank’s gross loan portfolio.

LBP’s investment portfolio should increase by 48 percent this year to P103 billion from last year’s P69 billion.

"The increment in the investment portfolio will be mainly in government securities, and sustained expansion in deposits but softening in over-all loan portfolio will lead to higher investments," Teves said.

Branch expansion will be moderate in 2001 and 2002. LBP has 345 "good" branches in its network nationwide. The LBP is the only bank that has a branch in every province. It has an ATM network of 202 units or 136 on-site and 66 off-site.

"We are rationalizing our branch network. Although we have a mandate to open at least one branch per province, we have to be careful as in the long run it is the sustainability and profitability of these branches that must prevail," the LBP president explained.

This year, it will introduce a rediscounting window for countryside financial institutions for mass housing development. The bank is also offering a rediscounting facility for countryside financial institutions for long-term agricultural projects (e.g., long gestation crops such as mango, oil palm, rubber) of small and medium enterprises.