MANILA – The Land Bank of the Philippines (Landbank) is prepared to execute the proposed merger with the Development Bank of the Philippines (DBP), a deal expected to be completed during the first half of 2024.
The merger is projected to generate more than PHP900 million in savings per year through the consolidation of branch operations, on top of the expected reductions in personnel expenses.
"As far as the merger is concerned, I understand what the government, what our Secretary of Finance, wants to achieve. From Landbank's perspective, we are prepared when it happens," Landbank president and chief executive officer Lynette Ortiz said on the sidelines of the Bangko Sentral ng Pilipinas' 30th Anniversary Reception for the Banking Community over the weekend.
Ortiz said they have a team prepared to execute the merger if it happens, except the legal opinion it may need, such as if the deal needs to go through the Governance Commission for Government-Owned or -Controlled Corporations or Congress.
“As far as we are concerned we will be prepared to do it when we are asked to execute," she added.
The Department of Finance has been pushing for the merger between Landbank and DBP.
"If it does happen, it's really all about making sure that we draw from the synergies of both institutions and that we're able to retain good talent and that we're able to manage that integration successfully," said Ortiz.
The consolidated bank will have an estimated asset size of about PHP4.18 trillion while the deposit base is about PHP3.59 trillion.
After the merger, Landbank will be the surviving entity given its higher authorized capital stock of PHP800 billion.
When asked to comment on whether a consolidated bank with such a big asset size would be "too scary,” Ortiz said "when you're managing a financial institution, you abide by principles of being able to manage your capital well, manage your risks well."
"We will, I assure you, we will be true to our mandate, to what we are really set out to do. We are a development policy bank and institution so we will be consistent in making sure that there will be no diminution in terms of our priority and objectives," she said.
Ortiz also assured that Landbank will continue to provide funding for agriculture and fisheries and support local government units.
"We continue to expand our portfolio along those lines and we're committed to continuing to do it whether alone or with other institutions," said Ortiz. (PNA)
