LAND BANK of the Philippines (LANDBANK) is targeting a net income of P35 billion this year, higher than the P30.1-billion profit it recorded in 2022, amid partnerships and increased digitalization to provide better banking services, especially to the agriculture sector.
“As the biggest lender to the agriculture sector, LANDBANK targets to increase the number of small farmers and fishers it has cumulatively assisted to 3.6 million in 2023, among other key players in the agribusiness value chain,” the lender said in a statement on Tuesday.
“The state-run bank is also determined to increase its net income by at least 16% to P35 billion, by optimizing resources, maximizing yields from earning assets, generating return from non-earning assets, and expanding trust banking and bancassurance business,” it added.
The bank posted a 38.2% year-on-year increase in its net profit in 2022 and surpassed its target of P25.71 billion amid improved interest income from loans and investments and gains from fees, commissions, and foreign exchange.
This translated to a return on equity of 14.37% and return on assets of 1.05%.
During the inauguration of the LANDBANK Leadership and Development Center in Manila on Tuesday, LANDBANK President and Chief Executive Officer Cecilia C. Borromeo said they plan to sustain their various lending programs to the agriculture sector and expand their digital banking services.
“We’re looking to support not only the small farmers but all the players of the agribusiness value chain, even the large agribusiness corporations, with very good business models and have proven themselves to be very profitable. We will continue to support them as well,” she told reporters at the sidelines of the event.
Ms. Borromeo said the bank was able to end 2022 with more than P261 billion in loans to the agriculture sector. She added that the bank’s agriculture loan portfolio continues to expand faster than the sector itself.
LANDBANK mainly provides credit to the agriculture and fisheries sector, micro, small and medium businesses, countryside financial institutions, local government units (LGUs), and government institutions.
Republic Act 10000 or the Agri-Agra Reform Credit Act of 2009 mandates banks to set aside 15% of their loanable funds to the agriculture sector and 10% for agrarian reform-related projects.
“Also, we want to expand our digital banking services because we believe that is a very good way of including many Filipinos into the mainstream banking. We use our digital banking channels to deliver social amelioration programs or assistance not only by the national government, but also the programs that the various local governments are embarking under,” Ms. Borromeo said.
“We already have all the LGUs in our ecosystem. All of them have deposit accounts with us, so that is a good start. So, slowly but surely, we will encourage them to join our digital banking portals as well.”
LANDBANK is looking to onboard more LGUs as merchants in eGov Pay and the Link.BizPortal, among its other digital channels. This includes growing the number of government and private merchants in its Link.BizPortal to over 1,600 merchants by end-2023.
The state-run lender is also targeting to grow its digital transactions by 60% in terms of both volume and value, driven by the expansion of its retail customer base.
“LANDBANK is also set to establish touchpoints in all 1,634 LGUs nationwide, further solidifying its position as the biggest development partner for local and countryside development,” the bank said.
The bank on Tuesday also launched a new scholarship program for students to support dependents of agrarian reform beneficiaries, small farmers and fisherfolk, allotting P128 million to cover the educational expenses of 360 scholars from 2023 to 2028. The scholarship will support 60 new scholars annually and provide each with P100,000 per year.
“Our primary purpose is really to help the families of the farmers and fishers. Also, to encourage the younger generation to pursue the agriculture field. As you know, the Filipino farmers are aging, so we need younger Filipinos to join that very important sector,” Ms. Borromeo said. — Keisha B. Ta-asan