Landbank expects P1.5-B net profit for 2001

The Land Bank of the Philippines (Landbank) expects a full-year income of P1.5 billion for 2001 and is projecting a 10 percent increase or P1.6 billion net profit for this year.

"This is a fighting target, because we are facing more contraints," said Landbank president Margarito Teves.

Teves said that Landbank this year faces the difficult balancing act of expanding its agri-agra lending mandate, with that of trimming its loans or non-performing loans.

Agri-agra lending, because of their risky nature, exposes the bank to higher risks compared to industrial or commercial lending. Oftentimes, the bank could not recover its losses from its countryside lending.

Teves said the bank’s Comprehensive Agrarian Reform Program Fund related expenses this year alone is seen to reach P600 million.

On top of this, Landbank also has to deal with its NPLs which was estimated to be about P26.0 billion last year, along with foreclosed properties of P11.1 billion.

Previously, Teves said Landbank was studying several offers from various groups that expressed interest in the sale of its NPLs. These groups include Cerberus Ltd., LoneStar Asia-Pacific Investment Ltd., Lehman Brothers, Deutsche Bank AG., JP Morgan Chase & Co., and Bank of America.

Teves said Cerberus, LoneStar and Lehman told Landbank they are willing to put in about $1 billion that they could use to buy the bank’s bad debts.

The Landbank board recently allowed management to get rid of the bank’s P40 billion in bad assets and P10 billion in acquired assets through the creation of an asset management company. – Rocel Felix