The government has proposed a merger between the Landbank of the Philippines (LBP) and the Development Bank of the Philippines (DBP) to create a bigger, stronger, and more resilient bank that can better serve the country’s development needs.
“By merging the two, it will now become the number one bank in the Philippines,” Finance Secretary Benjamin Diokno said during a press briefing with the Malacañang Press Corps (MPC) on March 28, 2023.
The consolidated bank will establish its position as the largest bank in the Philippines with an estimated asset size of about PHP4.18 trillion and a deposit base amounting to PHP3.59 trillion.
After the merger, the LBP will be the surviving entity given its higher authorized capital stock of PHP 800 billion and stronger financial position.
The consolidated books will allow the merged entity to better withstand economic shocks. The merger will also enhance retail and wholesale banking operations than when functioning as separate banks.
“The President expressed the desire to merge the two to make the biggest bank in the country because of the recent financial developments abroad. That’s really the best practice. The biggest bank is usually owned by the State,” Secretary Diokno said.
To date, the LBP has a total of 752 branches, while the DBP has 147 branches. The combined branches of both banks will result in a wider network for banking operations. However, only 22 branches of the DBP will be retained as a result of the merger.
Secretary Diokno reasoned that the merger will eliminate redundancy and inefficiency in operations, resulting in savings.
He also assured the public that the services provided by both banks will continue post-merger. Furthermore, fair separation benefits will be offered for those who will be affected by the merger.
The government plans to have the merger effective before the end of the year. DOF.GOV
