LandBank to set up OFW Bank by September 2017

0
392
File Photo of returning OFWs from loansolutions.ph

THE Land Bank of the Philippines (LandBank) will set up a bank co-owned by overseas Filipino workers (OFWs) by September 2017, with an authorized capital of P3 billion, to be able to actively cater to the banking needs of Filipinos working abroad.

Finance Secretary Carlos G. Dominguez III said  that, while the requirements and procedures to establish the OFW Bank are still being completed, LandBank will set up a representative office in Saudi Arabia to cater to the banking needs of 800,000 Filipino workers based in that country.

The finance chief said the OFW Bank will be established through LandBank’s acquisition of the Philippine Postal Savings Bank Inc. (Postal Bank), which will be converted into a LandBank subsidiary that will be owned 30 percent by OFWs.

“The acquisition of the Postal Bank will be completed by the third quarter of 2017, after all required procedures are completed and approvals are secured. The LandBank has sufficient resources to complete this transaction,” Dominguez said.

As of September 30 this year, the LandBank ranked as the country’s fourth-largest commercial bank, with a total capital of P90.9 billion and assets amounting to P1.3 trillion.

LandBank President Alex V. Buenaventura said it will take eight months to accomplish the requirements that would convert the Postal Bank into a LandBank subsidiary.

“The OFW Bank will be a listed company with an authorized capital of P3 billion and a subscribed capital of P2 billion, of which P1 billion is paid up by LandBank. Another P1 billion will be open for subscription to OFWs who can acquire them by buying shares in the bank,” Buenaventura said.

LandBank will have to seek clearances from the Governance Commission for Government-owned and -controlled Corporations and the Philippine Competition Commission, as well as approvals from the Monetary Board, Securities and Exchange Commission and the Bangko Sentral ng Pilipinas (BSP) for the OFW Bank to be operational by September 1, 2017.

“We are going to do focus-group discussions with representatives of our target markets to determine where and what services are needed, and what name and logo to adopt for the bank,” Buenaventura said.

The finance chief said LandBank “will seek to establish a unit in Saudi Arabia to assist the OFWs there” while the OFW bank has yet to be established.

Buenaventura said LandBank decided to open the Saudi unit in Riyadh, because 40 percent of OFWs based in that country reside there.

“The LandBank unit will be opened near the Philippine labor office or near a place where OFWs usually converge and meet,” he said.

Buenaventura also said starting January 2, 2017, LandBank, with the involvement of the Commission on Audit and the BSP, will begin undertaking due diligence to start the process of converting the Postal Bank into a LandBank subsidiary.

In earlier reports, Dominguez said the transaction involving the buyout of the Postal Bank may take 11 months to finish. The thrift bank has total assets amounting to P12.07 billion as of March this year.

President Duterte has approved the proposal by Labor Secretary Silvestre H. Bello III establishing the Postal Bank becoming the “Workers’ Bank” during a Cabinet meeting on December 5.