Bring down borrowing cost of cooperatives, Palace tells Teves
Malacañang has instructed Finance Secretary Margarito Teves to look into the possibility of lowering the current interest rate for loans granted by the Land Bank of the
In a memorandum to Teves, Cabinet Secretary Ricardo Saludo said the DOF is instructed to: “review the possibility of lowering the current interest rate for loans granted by Landbank to cooperatives from 18 percent down to 11 percent or 12 percent considering the current rate of commercial banks on loans at 10.5 percent.”
Saludo said this was the request conveyed to Malacañang by provincial governors around the country.
The DOF and Landbank have yet to announce changes on the current interest rates for loans granted by the financial institution.
Landbank is the country’s fourth largest bank in terms of assets, loans and deposits.
Last year, it posted a net income of P4.2 billion last year or 19 percent higher than the P3.5 billion registered in 2006.
Income from loans, investments and foreign exchange allowed Landbank’s gross revenues to expand by five percent or P1.24 billion.
The bank also reported that its total assets grew to P381.8 billion last year from P360.8 billion.
In terms of deposits, Landbank recorded a seven percent growth in deposits last year to P287.4 billion from P267.8 billion in 2006.
Capital, meanwhile, expanded by 11 percent or P3.7 billion to P37.4 billion last year from P33.7 billion in 2006.
In terms of non-performing loans, Landbank’s non-performing loan ratio dropped to 4.17 percent or slower than the industry average of 4.99 percent.
This came after a significant improvement in the bank’s non-performing loans to P7.4 billion last year from P10 billion in 2006.
Landbank’s NPL coverage ratio stood at 179 percent or more than double the industry average of 88.52 percent.
Last December, Landbank sold P3.5 billion worth of NPLs and real and other properties acquired (ROPA) through a second public auction under the Special Purpose Vehicle Act.
This helped reduce Landbank’s nonperforming assets to P17.6 billion as of end-2007 from P21.5 billion in 2006.
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