Landbank, DBP to get P30B add’l capitalization

The government will infuse an additional P30-billion capital to Land Bank of the Philippines and the Development Bank of the Philippines next year, Budget Secretary Florencio Abad said yesterday.

“We have agreed to provide an additional P30 billion in capitalization—P20 billion to Landbank and P10 billion to DBP—to improve the resiliency and stability of the state-owned banks,” Abad said in a briefing.

Abad said the additional capital would help these banks better comply with the higher capital ratios implemented in 2014 under the stricter Basel III.

Basel III is an updated set of reforms meant to strengthen the regulation, supervision and risk management of banks.

Since January 2014, the Bangko Sentral ng PIlipinas required banks to maintain a minimum Tier 1 capital of 7.5 percent, a minimum common equity Tier 1 ratio of six percent, and a capital conservation buffer of 2.5 percent. The capital adequacy ratio (CAR), meanwhile, has been kept at 10 percent.

Latest data from the BSP showed universal and commercial banks kept their capital ratios above the mandated levels in end-2014, showing they have sufficient buffer against their risk-taking activities.

DBP reported a P2.35-billion net income in the first half of the year, up 19 percent from P1.97 billion seen in the same period lasy year.

Landbank, meanwhile, saw its net income jump 24 percent to P3.6 billion from January to March from P2.9 billion a year ago, latest data showed.