In the business world, the merger of two companies into a greater whole is often a significant enough occurrence to catch the eye of the news. Contrary to the usual perception, mergers are not always the last desperate measure of one or both of the companies involved in order to survive even as merely part of a new entity. Sometimes, companies merge because they each have strengths or advantages that the other needs, with their union leading to mutual benefits. This is the reason in the official decision from last year to merge government-controlled banking institutions Landbank and United Coconut Planters Bank (UCPB), the reality of which will happen tomorrow.
The Manila Bulletin has it that Landbank of the Philippines and United Coconut Planters Bank are both ready to go for their Presidentially-mandated merger effective March 1. This is the fruit of Presidential Executive Order No. 142, which President Rodrigo Duterte signed June 25, 2021, in which UCPB will be absorbed into Landbank. The latter’s President and CEO Cecilia Borromeo gave a statement this Monday, February 28, reiterating the purpose of the merger to more effectively fund agriculture and rural development with strong, unified capital and resources, plus greater resiliency.
And the value involved is no mean amount. The Landbank-UCPB merger will see the former go up to P2.9 trillion worth in terms of total assets. With the conversion of UCPB branches, Landbank will soon have 677 branches nationwide, along with 2,800 ATMs and 228 cash deposit machines. With this significantly increased reach, according to Borromeo, Landbank will be able to service more farmers, fishing industry, and the rest of the agri-business value chain network. In this regard, the unified banking entity can play a greater role in the development and financial inclusion plans being undertaken by the National Government.
Post-merger with UCPB, Landbank will further cement itself as the second-largest lending institution in the Philippines, just behind BDO Unibank, privately held by the SM Group. Even after the two banks become one in March 1, UCPB branches will continue operating under the name to serve UCPB clients, while system integration and accounts migration are ongoing. Until then, UCPB ATM cardholders will still be charged service fees when using their cards on Landbank ATMs. Landbank hopes to make a further public announcement soon regarding which UCBP branches will finish conversion into Lanbank branches to begin serving customers from the latter.
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