The rural banking system’s non-performing loans (NPL) ratio was lowered to 16.1 percent from 17.3 percent last quarter as the 9.0 percent decrease in NPLs outpaced the 2.5 percent decline in TLP level. Both RRBs and CRBs posted better performances this quarter as their delinquency ratio moved down to 16.0 percent and 17.7 percent from 16.6 percent and 24.2 percent over the last quarter, respectively.
Moreover, the NPL coverage ratio notably increased to 33.0 percent from 30.5 percent last quarter as the 9.0 percent drop in NPLs outmatched cut down in loan loss reserves which tapered off by 1.5 percent.
On the other hand, real/other property owned or acquired (ROPOA – gross) rose to 8.8 percent of total assets from 8.7 percent last quarter due to the 1.5 percent growth in ROPOA and the simultaneous contraction of 0.4 percent in total assets. Overall asset quality improved as non-performing assets (NPLs + ROPOA, gross) narrowed to 18.2 percent of total assets from 19.0 percent as NPAs decreased by 4.4 percent to P12,316.4 million from P12,879.5 million the previous quarter while NPA reserves tapered off by only 1.1 percent. This boosted NPA coverage ratio to 18.8 percent from 18.1 percent a quarter ago.
On a regional basis, Cagayan Valley posted the highest NPL ratio of 20.7 percent while CARAGA region was lowest at 7.6 percent. Coverage ratio ranged from 28.4 percent (Southern Tagalog) to 49.4 percent (CARAGA).