Landbank to raise add’l capital by end-June

MANILA, Philippines - State-run Landbank of the Philippines plans to raise additional capital in June to beef up its assets for lending to agriculture and other priority sectors.

Landbank President Gilda Pico told reporters the bank would issue either Hybrid Tier 11 or Tier 2 notes after its P6.9-billion lower Tier 2 capital notes matures in June. “We also intend to issue long term negotiable certificates of deposits, at P5 billion (in value),” Pico said.

“(Our) target date of issuance is before the end of the semester for both. That’s our target depending on the approvals,” she added.

Pico said that raising additional capital is meant to have more funds to lend to small farmers and fisherfolk, microenterprises and small and medium enterprises, and to other priority sectors.

“We will expand our lending especially to our priority sectors which is the agriculture sector,” Pico said.

“And of course to the priority projects of the government, including their PPP (public and private partnership) projects. We’re financing schools and hospitals and whatever projects they have,” she added.

The bank’s loan to priority sectors went up 19 percent to P244.6 billion last year from P205.3 billion in 2012.

The figure made up 80 percent of the bank’s total loan portfolio of P303.9 billion.

“Our target was 75 percent but ended the year with 80 percent. For this year our target is again 75 percent, so if we meet this, we’re okay,” Pico said.

Aside from borrowers from and projects related to the agriculture sector, priority sectors include communication, transportation, housing, education, healthcare, environment-related projects and tourism.

Landbank raked in P11.7 billion in net income last year, nine percent up from P10.7 billion in 202. This translated to a return on equity of 15.9 percent.