LANDBANK seeks to tap capital markets faster through charter amendments

LAND BANK of the Philippines (LANDBANK) wants to be able to tap the capital markets faster as part of its proposed charter amendments, its top official said.

“We’re looking at a lot of different aspects with the aim of making LANDBANK more competitive and to allow us the ability to go to market in a swifter manner,” LANDBANK President and Chief Executive Officer Lynette V. Ortiz told BusinessWorld in an interview.

The official said part of the goals for the planned changes to its current charter is to improve LANDBANK’s “ability to be able to access the debt markets in a more nimble way, as well as proper representation in the board of a wider industry, including infrastructure.”

Department of Finance Secretary Ralph G. Recto said in March that bills seeking to amend the charters of LANDBANK and the Development Bank of the Philippines will be filed with Congress soon.

The charter changes will also increase the two state-run banks’ authorized capital stock and allow them to conduct an initial public offering (IPO).

Ms. Ortiz added that the amount LANDBANK will seek to raise through the IPO will depend on the provisions that will be approved by Congress, and that it will be a percentage of their capital.

Meanwhile, LANDBANK has also received regulatory relief following its capital contribution to the Maharlika Investment Corp. (MIC), she said.

LANDBANK was mandated to contribute P50 billion to the MIC for its initial funding.

“But generally, I think if you look at our financials, our common equity Tier 1 (CET1) ratio and capital adequacy ratio (CAR), we are well above [the mandated levels],” Ms. Ortiz said.

As of end-2023, LANDBANK’s CAR stood at 16.35%, while its CET1 ratio was at 15.46%, both above the Bangko Sentral ng Pilipinas’ (BSP) minimum requirements of a 10% CAR and 6% CET1 ratio.

BSP Governor Eli M. Remolona, Jr. previously said both LANDBANK and DBP remained compliant with the regulator’s capital requirements, even after remitting their contributions to the MIC.

LANDBANK’s net income grew by 34% to P40.3 billion last year, driven by revenues from loans and investments and improved cost management. — Aaron Michael C. Sy