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Universal and Commercial Banks' NPL Ratio Went Up to 7.20 Percent

10.16.2006

As of end-August 2006, the non-performing loan (NPL) ratio of universal and commercial banks (U/KBs) stood at 7.20 percent, slightly up by 0.03 percentage point from 7.17 percent last month.  NPLs expanded by 0.78 percent, faster than the 0.23 percent rise in total loan portfolio (TLP).  Nonetheless, this month’s ratio is still better by 2.20 percentage points than year ago’s 9.40 percent ratio. 
 
Exclusive of interbank loans (IBL), the NPL ratio also climbed to 8.69 percent from last month’s 8.54 percent with regular lendings in August down by 0.93 percent to   P1,580.50 billion.  Year-on-year, this month’s ratio still reflects a 2.47 percentage points improvement from the base figure of 11.16 percent. 

The industry’s restructured loans (RLs) to TLP ratio came down to 5.02 percent from 5.07 percent last month, prompted by the 0.84 percent cutback in gross RLs to P96.71 billion.   Meanwhile, the non-performing RLs to total RLs ratio hiked by 1.17 percentage points to 47.18 percent as non-performing RLs expanded by 1.65 percent. 

The real and other properties acquired (ROPA), gross to gross assets (GA) ratio of the industry further eased to 4.61 percent from 4.62 percent last month and 5.02 percent ratio a year ago.  The stock of ROPA stood at P190.75 billion, down from P191.17 billion last month and P200.69 billion a year ago.

For the month, the industry’s non-performing assets (NPA) ratio slightly moved up to 7.74 percent from 7.72 percent last month.  This was triggered by the 0.23 percent expansion in NPAs over a negligible growth in GAs.  Nevertheless, this month’s ratio still fared better by 1.42 percentage points than year ago’s 9.16 percent ratio. 

The NPL coverage ratio of the industry continued to strengthen at 80.92 percent, up from 80.66 percent last month and 72.45 percent a year ago.  On the other hand, the industry’s NPA coverage ratio slightly abated by 0.04 percentage point to 40.90 percent from 40.94 percent last month, as the 0.23 percent increment in NPAs outpaced the 0.15 percent hike in NPA reserves.  As of end-August 2006, LLRs and NPA reserves amounted to P111.18 billion and P130.26 billion, respectively.

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