Luzon Development Bank gross income hit P35M

The Luzon Development Bank (LDB) recorded a gross income of P35 million last year, or over a 25-percent drop from the P44 million recorded in 2002.

However, the drop was due mainly to increased provisioning for loan losses of up to P14 million.

Bank president Tom V. Clemente Jr. explained that the after tax income figure could only be 10 to 15 percent lower than the net income recorded in 2002. Exact figures were still unavailable as of presstime.

"Like most thrift and development banks, growth will be basically modest due to minimal borrowings and a poor investment climate leading to greater provisioning by banks," Clemente added.

He estimates that they will still record a return on investment of 14 percent. The LDB has assets worth over P2 billion.

Looking forward, the development bank executive believes that 2004 would again record minimal growth for the banking sector. The May national elections is one factor that would definitely dictate heavily on the year’s performance.

"That is still an unknown factor," he said.

Nonetheless, the LDB has started various products to keep the bank competitive not only among the thrift and development banking sector but in the face of the expanding influences of the commercial banks. In Calamba alone, there are 34 bank branches of rural, thrift and commercial banks.

The small and medium enterprises (SMEs) remain its main market in its coverage areas. The bank has 33 branches located in Metro Manila, the Calabarzon, the Quezon province, and Nueva Ecija.

Bulk of the SME lending will go to the agriculture-based activities, property development and the commercial-trading-industrial sectors.

It is also looking at expanding its lending activities for prospective overseas Filipino workers (OFWs). That is mainly in the placement fees which amount in the vicinity of P150,000 to P200,000.

One of the key conditions for a loan to prospective OFWs is that they must show proof of the credibility, reliability and anthenticity of the recruiter. "We will not only ensure their protect but also the loan."

The interest rate would be a minimal 1.5 percent monthly on balance of up to two years repayment period. – Ted Torres