With regulatory approvals completed, the merger of state-run lenders Land Bank of the Philippines (Landbank) and United Coconut Planters Bank (UCPB) will take effect on March 1.

In a public notice on Wednesday, the two banks said the Bangko Sentral ng Pilipinas' (BSP) Monetary Board and the Securities and Exchange Commission (SEC) had green-lit the merger endorsed by the Governance Commission for Government-Owned and Controlled Corporations, which will leave Landbank as the surviving entity.

The Philippine Deposit Insurance Corp. (PDIC) also gave its consent to the merger set into motion by Executive Order No. 142 issued by President Duterte last year.

However, Inquirer's Biz Buzz column reported this week that the BSP and SEC approvals included provisions which will keep the regulators away from any liabilities arising from the transaction.

Industry sources last year said the government had moved to merge the two banks as UCPB's capital adequacy ratio (CAR) had been set to fall below the BSP's mandatory level.

Had it not been for the state-run PDIC's capital notes which saved UCPB in the past, the bank would have been noncompliant with the CAR requirement, sources said.

The banks also said their respective boards of directors and stockholders gave their go-ahead to the merger.

Once merged with UCPB, Landbank's total assets will rise to nearly P3 trillion, the second biggest after BDO Unibank's.

"Clients of both Landbank and UCPB are assured that banking services will remain unhampered during the implementation of the merger," the banks said. —Ben O. de Vera INQ