LAND Bank of the Philippines (LandBank) wants to expand lending to farmers and micro, small and medium enterprises (MSMEs) while offsetting income losses from waived digital transfer fees, its president and CEO Lynette Ortiz told reporters at a Bangko Sentral ng Pilipinas event on Monday.
“We’re hoping to eke out some growth by the end of the year. We’re making every effort to do that,” Ortiz said.
The state-run lender was balancing the financial impact of the fee waivers with its developmental and financial inclusion mandates.
It initially cut its InstaPay transfer fee from P15 to P8 in May, before fully waiving the charge following the BSP’s call to lower transaction costs.
LandBank also stopped charging fees on eligible person-to-government (P2G) transactions through QRPh-enabled payment platforms from June 1 to Dec. 31.
Ortiz said P2G transactions increased in June and July following the fee removal, although the bank has yet to quantify the resulting income loss. A full-year assessment would provide a clearer picture of the financial impact, she added.
LandBank is also considering extending the zero-fee P2G arrangement beyond December, subject to internal approvals.
Despite the forgone fee income and challenging economic conditions, Ortiz said LandBank was aiming to post full-year earnings growth while carefully managing credit provisioning and risks.
Its net income fell 4 percent to P24.2 billion in the first half from P25.2 billion a year earlier.
Net interest income, however, rose 8.6 percent to P57.9 billion as interest income increased 4.7 percent to P79.1 billion.
Investment income climbed nearly 20 percent to P34.6 billion, helping offset a 1.5-percent decline in loan income to P43.5 billion.
Interest expenses fell 4.5 percent to P21.2 billion.
Meanwhile, the bank is considering raising more than P10 billion through a bond issuance next year.
It is inclined to wait until next year because of currently high interest rates. An issuance would likely have to exceed P10 billion to make the fundraising exercise worthwhile, Ortiz added.
