Landbank mulls OFW Bank listing

MANILA, Philippines – State-owned Land Bank of the Philippines plans to list Postal Savings Bank, which will be converted into a lender catering to overseas Filipino workers, by September next year.

“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 will be paid up by Landbank,” said Landbank president Alex Buenaventura.

Buenaventura said another P1 billion would be open for subscription to OFWs interested in buying shares in the bank.

He said Landbank, with the assistance of the Commission on Audit and the Bangko Sentral ng Pilipinas (BSP), would start the conversion process of Postal Bank by Jan. 2 next year. The process would take eight months to complete.

Buenaventura said Landbank would have to draw up a purchase agreement and amend its articles and bylaws to formalize its acquisition of Postal Bank.

Apart from this,  Landbank would also need to seek clearances from the Governance Commission for Government Owned and Controlled Corporations, the Philippine Competition Commission, the Monetary Board, the Securities and Exchange Commission and the BSP for the OFW Bank to be operational by September.

“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.

A bank dedicated to the needs of the OFWs is one of the promises of President Rodrigo Duterte during his campaign.

Luis Limlingan, managing director at Regina Capital, welcomed the possible listing of the bank in the local bourse.

“The market is always on the lookout for new listings given the limited options in the market,” he said.

While private companies are normally not allowed to be listed upon establishment, Limlingan said the SEC could relax the rules for the OFW Bank since it is a state-owned company.

He added the business would still be “viable” even with Landbank only providing a third of the authorized capital.

Meanwhile, Finance Secretary Carlos Dominguez III said Landbank would set up a representative office in Saudi Arabia while the OFW Bank has yet to be established.

 It is aimed to address the banking needs of the 800,000 OFWs in the said country for the time being.

Buenaventura said the representative office would be set up in Riyadh, Saudi Arabia,  possibly near the Philippine labor office or near  an area where OFWs in the city usually converge.

He said the Riyadh unit would initially offer financial education and investment counseling services to OFWs.