Tuesday, 9 February 2010

LBP’s profit hits P6.76B; assets balloon to P510B

Erik de la Cruz
Business Mirror

State-owned Land Bank of the Philippines (LandBank) posted a record-high net income of P6.76 billion and expanded its asset base to P510.64 billion in 2009, fortifying its rank as one of the country’s top five banks.

In a statement on Monday, LandBank said its net profit in 2009, which was 35 percent higher compared with the 2008 figure, topped by 22.909 percent the original target of P5.5 billion. Its profitability boosted its return on equity to 15.7 percent.

The improved profit reflected the “significant” growth in resources and deposits, it said.

“Amid the economic challenges and the spate of calamities that hit the country, 2009 proved to be another banner year for LandBank,” said Gilda Pico, LBP president and CEO. “With prudent management and a clear institutional focus, we were able to register a solid performance last year.”

Driven by continued increase in income from loans and investments, the bank’s top-line figure reached P31.4 billion, reflecting an 18-percent increase over the previous year.

The bank—the fourth-largest local bank in terms of assets, loans and deposits at the end of September 2009—posted an 18-percent increase in total assets over the previous year.

Its deposit base expanded 19 percent to P396.7 billion, while capital accounts grew 34 percent to P47.82 billion.

Regular loans increased 9 percent to P194.7 billion.

“These results further strengthen our financial standing, making LandBank well-positioned for continued growth in order to support our priority sectors,” Pico said.

In an interview in January, Pico said the bank was looking to boost its bottom line this year to P7.2 billion. Interest income should remain robust this year, she said, after the bank booked more loans in the past year.

The bank also planned to beef up its capital to be able to lend more this year.

Pico had said the bank would revive its plan to sell up to $150 million in hybrid Tier 1 notes within the first quarter. The capital-raising exercise was approved by the central bank in 2008, but was delayed due to the global financial crisis.

Hybrid notes are a debt instrument but have equity-like features, making them acceptable as Tier 1, or core, capital under the internationally accepted capital-adequacy framework of the Basel II accord.

LandBank has tapped Deutsche Bank and Citigroup to manage the debt issue.

According to Pico, proceeds from the notes sale will likely lift LandBank’s capital-adequacy ratio by about two percentage points from between 17 percent and 18 percent reported before the end of 2009. This level was already well above the minimum regulatory requirement of 10 percent.

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