Landbank income surges 21% to P2-B

The Land Bank of the Philippines (LBP) chalked up a net income of P2 billion last year, an increase of 21 percent from the P1.65-billion profit registered in 2002.

The positive gains in the past year, plus its optimistic views towards the possible reduction of its non-performing loans (NPLs), thus prompted the bank to set a full year 2004 net income target of P2.15 billion.

LBP president and chief executive officer Margarito B. Teves said in a press briefing that the P2-billion net income last year was a "historic high, making the 40th year of the bank a banner year."

Teves said he remains bullish that the government financial institution (GFI) would be able to expand its mandated lending to the agri-aqua sector while increasing its culture of corporate governance.

The only "sad" point is the continued inability of the national government to remit over P3 billion from advances made by the bank for the comprehensive agrarian reform program (CARP).

NPL ratio to the total loan portfolio slipped to 14.7 percent from 18.5 in end-2002. In absolute figures, it stood at P23.3 billion last year from P25.1 billion in 2002.

Real and other properties owned or acquired (ROPOA), however increased to P16.4 billion as of end December, from P15.5 billion in 2002.

Meanwhile, LBP financial advisor Ernst and Young (E&Y) will spearhead the disposal of some P20 billion in bad assets, or P15 billion in NPLs and another P5 billion in ROPOA.

Teves said that within the next six months, E&Y would hold a public auction for interested asset management companies (AMCs) to form a special purpose vehicle (SPV) and acquire the P20-billion bad assets.

He also revealed that the Comission on Audit (COA) would not interfere in the pricing mechanism that would be formulated by the financial advisor. "They are more concerned on the transparency of the selection process."

The LBP expects to earn at least P1 billion from the sale of the bad assets.