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Friday, March 29, 2024

LandBank sees profit rising to P16.6b in 2019

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State-run Land Bank of the Philippines, the fourth-largest lender in terms of assets, expects a 7-percent growth in net income this year to P16.6 billion from P15.5 billion in 2018, on sustained credit demand from different industries, president and chief executive Alex Buenaventura said over the weekend.

“We expect strong credit demand from different sectors,” Buenaventura said in an interview with reporters. 

“Credit demand will be strong especially for the ‘Build, Build, Build’ projects,” he said.

The P8.4-trillion infrastructure program of the Duterte administration aims to build more roads, bridges, airports, seaports, railways, and water and irrigation projects to spur economic growth.

Included in the program is a subway in Metro Manila that is expected to decongest the metropolis of heavy traffic that has been causing around P3.5 billion in economic losses daily, according to a recent study of Japan International Cooperation Agency.

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Buenaventura said the bank’s lending business would continue to grow by double-digit, like what was achieved in 2018 when net loan portfolio grew by 37 percent.

“This year will be better because of lower interest rates,” Buenaventura said, adding the Bangko Sentral ng Pilipinas might ease its policy stance because of the decelerating inflation rate.

Inflation hit a nine-year high of 6.7 percent in October 2018 before easing to 6 percent in November and 5.1 percent in December as the government’s immediate measures to curb inflation took effect. 

This brought the full-year average to 5.2 percent, albeit higher than the target range of 2 to 4 percent for the year.

LandBank hit a record net income of P15.5 billion in 2018, a 10-percent improvement from P14.1 billion a year ago.

Buenaventura said the bank achieved the exceptional performance last year with net loan portfolio expanding significantly by 37 percent or more than P220 billion to reach P840 billion.

“We are pleased to have improved on our net income performance in 2018 as we continued to expand support to our priority sectors, especially the farmers and fishers, cooperatives, agribusiness, small and medium enterprises and local government units,” he said.

He said LandBank’s 2018 net income was driven by the significant growth in loans.

“However, we incurred a significant increase in manpower cost last year because of the implementation of the Salary Standardization Law which affected our income,” Buenaventura said.

LandBank’s deposit base grew 17 percent to P1.66 trillion from P1.42 trillion, as the government and private sector deposits increased.

Capital also increased 26 percent to P131.62 billion from P104.6 billion a year ago.

Meanwhile, Buenaventura branded as “fake news” earlier reports that he would be replaced as president and chief executive of the state-owned bank.

He said he was in his office until Friday afternoon and waited for his replacement to come but nothing of that sort happened. “ So it was a fake news,” Buenaventura said.

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