The Non-Performing Loans (NPL) ratio of the 44 commercial banks operating in the country increased to 18.81 percent in October 2001, 0.89 percentage points higher than the 17.92 percent in September 2001, as NPL levels rose by 3.39 percent or P9.55 billion even as total loan portfolio (TLP) contracted by 1.49 percent or P23.49 billion. NPL to TLP (net of interbank loans) ratio also deteriorated to 20.68 percent from 20.09 percent last month.
All groups registered increments in NPL levels (Private Domestic Expanded Commercial Banks - P7.37 billion, Foreign Branches - P170 million, Other Private Commercial Banks - P1.82 billion and Government Banks - P193 million). Meanwhile, the huge cutdown in TLP of P24.11 billion of Private Domestic Expanded Commercial Banks (P1.46 billion), Foreign Branches (P14.66 billion) and Government Banks (P7.99 billion) completely negated the P620-million loan growth of Other Private Commercial Banks.
Coverage ratio (Loan Loss Reserves to NPLs) lowered to 42.17 percent from 43.49 percent last month, as the incremental loan loss reserves of P300 million or 0.24 percent fell short of the P9.55 billion or 3.39 percent rise in NPLs.
Gross restructured loans (RLs) increased to 7.19 percent of TLP (from 6.96 percent last month). Gross RLs grew by P1.97 billion or 1.80 percent (from P109.46 billion to P111.43 billion).
The rise in holdings of Real and Other Properties Owned/Acquired (ROPOA) - gross by 1.60 percent (from P148.69 billion to P151.06 billion) and the simultaneous drop in gross assets (total assets plus loan loss reserves plus provision for ROPOA) by 1.17 percent raised the ratio of ROPOA to gross assets to 4.87 percent from 4.73 percent last month. Likewise, ROPOA also increased to 8.89 percent of ROPOA plus TLP from last month’s 8.64 percent.
Overall asset quality as measured by the non-performing asset (NPA) ratio deteriorated to 14.25 percent from 13.71 percent last month as non-performing assets (NPL plus gross ROPOA) rose by 2.77 percent while gross assets tapered off by 1.17 percent.
The 0.41 percent increment in NPA reserves (loan loss reserves plus provision for ROPOA) to P130.26 billion this month from last month’s P129.73 billion was outmatched by the 2.77 percent rise in NPAs. This trimmed down NPA coverage ratio (NPA reserves divided by NPAs) to 29.44 percent from last month’s 30.13 percent.