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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