Land Bank of the Philippines, the country’s largest state-run lender, said Thursday net income in the first quarter declined by 18 percent to P10.8 billion from P13.2 billion in the same period last year.
LandBank president and chief executive Cecilia Borromeo said the first-quarter bottomline was P2 billion higher than its target for the period and accounted for 30.8 percent of the bank’s P35-billion income target for the full year.
“As we maximize yields from earning assets while being prudent with our expenses, LandBank’s robust financial position allows us to advance the national government’s development agenda,” Borromeo said.
“We are fully capable to continue extending intensified support to the agriculture sector and other key economic industries, while driving sustainable growth in local communities,” she said.
Higher interest income and lower operating costs drove the first-quarter net income. The unprecedented P13.2-billion net income a year ago was driven by non-recurring miscellaneous income.
Interest income from loans and investments climbed 54 percent to P20.9 billion, despite the higher cost of funds due to volume of deposits and rising interest rates. Operating expense fell by P797 million.
The bank grew its asset base by 11.7 percent to P3.1 trillion as deposits expanded to P2.8 trillion. The government sector remains its core depositor, contributing 71 percent to total deposits.
Meanwhile, the bank posted a modest capital growth year-on-year at 3.2 percent to P225.3 billion.
The expansion was driven by the bank’s net income, notwithstanding the dividend remittance to the national government in June 2022 worth P8.45 billion and the decline in other comprehensive income.
LandBank’s financial ratios remained at healthy levels, with a return on equity at 12.46 percent and net interest margin at 3 percent.
Land Bank is a universal bank owned by the Philippine government with a special focus on serving the needs of farmers and fishermen. While it provides the services of a universal bank, it is officially classified as a “specialized government bank” with a universal banking license.