Landbank reaffirms financial stability

MANILA, Philippines — Government-owned Land Bank of the Philippines (Landbank) reaffirmed its financial strength and stability, emphasizing that its capital adequacy ratio (CAR) remains at a healthy level of 16.42 percent.

In a statement, Landbank said it has consistently met and exceeded the minimum requirements of the Bangko Sentral ng Pilipinas (BSP) for CAR – a critical benchmark of financial health — as it stays financially robust with no urgent need for additional capital.

“As of Nov. 30, 2024, Landbank’s CAR remains at a healthy level of 16.42 percent which is well above the 10 percent regulatory threshold, further demonstrating the bank’s resilience against financial and operational risks,” the state-run bank said.

Earlier this year, the bank remitted P32.119 billion in cash dividends to the national government – the highest among all government owned and controlled corporations and in the bank’s history.

“This milestone reflects the bank’s sustained financial strength and ability to generate consistent revenues while fulfilling its developmental mandate,” Landbank said.

The bank also stressed that it remains financially stable following its P50-billion contribution to the Maharlika Investment Fund (MIF), adding that it remains fully committed to its mandate as a reliable partner to the national government’s inclusive development agenda.

In a recent recommendation to the BSP, the International Monetary Fund (IMF) said it believes that it is crucial to restore the Landbank as well as the Development Bank of the Philippines (DBP)’s startup capital to the Maharlika Investment Corp. (MIC), urging that they should exit their regulatory relief measures as soon as possible.

The IMF’s recommendation to the BSP aims to ensure the stability of the country’s financial system, with a focus on maintaining a resilient banking sector and a sound regulatory framework. 

“Implementing capital restoration plans for two state-owned banks following their contribution to the MIC’s start-up capital and exiting regulatory relief as soon as possible is important,” the IMF said.

“While the establishment of the MIC can help address the country’s investment needs, it should not come at the cost of a resilient financial system, sound regulatory framework and level-playing-field,” it said.

Landbank said that when if made its P50-billion seed capital allocation to the MIF in September 2023, its CAR stood at 16.2 percent remaining comfortably above regulatory requirements and reflecting the bank’s commitment to financial stability.

It also clarified that regulatory relief was sought from the BSP as a proactive measure to maintain resilience.