By Melissa Luz T. Lopez,
Senior Reporter

Landbank takeover of Postal Bank seen ‘very doable’ by next year

Posted on December 29, 2016

THE planned takeover by the Land Bank of the Philippines (Landbank) of the Philippine Postal Savings Bank, Inc. (Postal Bank) by next year would be “very doable,” a senior central bank official said, with the process before the regulator seen to go smoothly.

Bangko Sentral ng Pilipinas (BSP) Deputy Governor Nestor A. Espenilla, Jr. said Landbank’s acquisition of Postal Bank is unlikely to hit any snags as far as the central bank is concerned, even as the state-owned lender has not yet formally filed its acquisition proposal before the regulator.

Landbank corporate planning officer Erwin Rommel A. Almacen has said that the state-run lender eyes to secure the BSP’s approval to acquire Postal Bank and turn it into a special facility to cater to overseas Filipino workers (OFWs) within the “first semester of 2017,” on track with the Finance department’s goal to have the new bank operational by end-September.

“[T]heir timetable is very doable. BSP wouldn’t take long to process this kind of application once they submit it since parties involved are both GFIs (government financial institutions) anyway,” Mr. Espenilla said in a text message.

The BSP regulates the country’s financial system, including banks and other industry players.

The Finance department announced last week that it targets to convert Postal Bank by the third quarter of 2017, in keeping with President Rodrigo R. Duterte’s campaign promise to put up a bank specifically for migrant workers. In particular, the bank will be 30% owned by OFWs.

Landbank President Alex V. Buenaventura said in a statement last week that Postal Bank will be a listed firm with an authorized capital of P3 billion and a subscribed capital of P2 billion, of which P1 billion is paid-up by the Landbank. Another P1 billion will be open for subscription to OFWs who would buy such shares.

Currently, Postal Bank is a thrift lender run by the state-owned Philippine Postal Corp. It is the 14th biggest among 63 thrift banks as of end-June with a P12.117-billion asset base, according to BSP data.

As planned, Landbank will seek to acquire this lender as one of its subsidiaries by next year, but must first secure approvals from the BSP, Commission on Audit, the Governance Commission for Government Owned and Controlled Corporations, the Philippine Competition Commission, and the Securities and Exchange Commission.

Landbank is the fourth largest lender in terms of assets as of end-June worth P1.288 trillion.

In setting up the OFW bank, Landbank is poised to open a representative office in Saudi Arabia to capture some 800,000 Filipinos based in that country.