State-owned Land Bank of the Philippines (LANDBANK) received a viability rating upgrade to BB+ from BB- from the global institution Fitch Ratings. The bank said this affirms its robust income from lending and other core businesses.
"With a solid capital base and an improving profitability outlook, we are well-positioned to drive stronger financial performance," LANDBANK President and Chief Executive Officer Lynette Ortiz said.
LANDBANK mainly lends funds to agricultural workers and enterprises. It is also the largest government-owned and controlled corporation in the country.
As of the end of 2024, LANDBANK maintained a strong common equity tier 1 ratio of 15.1 percent, higher than the minimum requirement of 10.25 percent set by the Bangko Sentral ng Pilipinas.
Given its more-than-adequate capital to fulfill debts, Fitch Ratings also reaffirmed LANDBANK's investment grade level for Long-Term Issuer Default Rating at ‘BBB’/Stable.
Aside from this, the global credit rater gave LANDBANK's Government Support Rating a ‘bbb’, which indicates strong capital aid from the state but is more closely monitored by Fitch due to some risks.
LANDBANK announced these assessments by Fitch Ratings after the International Monetary Fund (IMF) recommended that LANDBANK and the Development Bank of the Philippines craft plans for recapitalization due to their combined capital infusion of P75 billion into the Maharlika Investment Fund, the country's first sovereign wealth fund.
However, the country's Central Bank Governor Eli Remolona Jr. said the IMF's evaluation was outdated.
Given its strong capital ratio, Ortiz stressed that LANDBANK has no need for regulatory relief or an extension to meet the Central Bank's capital adequacy requirements.
"This is despite the P32 billion dividends we remitted to the government last year and the P50 billion to the Maharlika," Ortiz said.