Postal Bank may pay gov’t due to negative valuation

THE Philippine Postal Savings Bank (Postal Bank) may pay the Land Bank of the Philippines (Landbank) despite the latter taking over the former due to its negative valuation, the Finance chief said late last week.

As the government works on the takeover to transform Postal Bank into a subsidiary of Landbank, which will then act as the bank specialized for overseas Filipino workers (OFWs), Finance Secretary Carlos G. Dominguez III said the smaller lender might have to pay its buyer P580 million.

“They have to pay us about P600 million to take it, negative value. No, if we are strict about it…if we take over the bank, then the owner of the bank will have to pay us P600 million because it’s negative,” he told reporters.

However, the settlement still has to be studied, together with the Bureau of the Treasury.

“But the valuation made by Landbank is negative value of P580 million, that’s their valuation of the bank. This bank has been struggling for many years, but you know that is an internal negotiation between two government agencies, so we will settle it among ourselves. It’s not like we are bidding it out with the private sector, it’s the same pocket in the end. It’s the Treasury’s pocket in the end. It’s ourselves,” he added.

In 2015, Postal Bank recorded a 10% income growth to P134.71 million, but fell short of its P150.02 million target, according to its annual report.

Despite this, Mr. Dominguez said the promised OFW bank should remain on track for its September implementation as the negative valuation is a minor issue.

“The valuation is not really important, what is important is that we establish a bank that is focused on marketing its services to the OFWs to make their banking transactions easier — remittances as well as servicing the loan requirements of the families of OFWs, families or business enterprises they want to get into. So it’s a specialized bank that will focus on this market,” he said.

National Treasurer Rosalia V. De Leon, meanwhile, said the government’s next move is to approach concerned regulators to secure approval for the planned takeover.

“We have already on board the valuation for the Postal Savings Bank by Landbank, so the next step is really to go to regulators for the approval of the process, and also to the board on the valuation. Following that, we are going to approach the [Philippine] Postal Corporation and negotiate on the price,” she told reporters.

Landbank needs to secure clearances from the Governance Commission for Government

Owned and Controlled Corporations, Philippine Competition Commission, Bangko Sentral ng Pilipinas, and from the Securities and Exchange Commission, before making the OFW bank operational.

The government said earlier that it aims to get the approvals by the first semester.

Postal Bank ranked 16th of the 57 thrift banks in the country in 2016 with an asset base of P11.67 billion, according to Bangko Sentral ng Pilipinas data.

Landbank, on the other hand, is the fourth largest universal bank of the 42, with P1.40 trillion worth of assets. —