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Update on NPLs of Thrift Banks

07.21.2005

As of end-February 2005, the loan quality of the thrift banking industry improved as the non-performing loan (NPL) ratio dropped to 10.25 percent from 10.81 percent last month and 12.35 percent a year ago. The month-on-month improvement was due to the 4.8 percent reduction in NPLs, which was complemented by a 0.5 percent expansion in total loan portfolio (TLP).       

Exclusive of interbank loans, the NPL ratio likewise improved to 10.70 percent from last month’s 11.39 percent and year ago’s 12.78 percent. This transpired as the decline in NPLs was accompanied by a 1.3 percent hike in regular lending to P164.97 billion. 

The ROPOA to gross assets ratio stood at 10.58 percent, favorably lower than last month’s 10.78 percent and year ago’s 10.91 percent. This came about with the 0.4 percent reduction in ROPOA to P34.56 billion from P34.71 billion last month. 

The restructured loans (RLs) to TLP ratio slid to 2.51 percent from 2.56 percent last month and 2.54 percent a year ago. This took place with the cutback in RLs to P4.37 billion from P4.44 billion a month ago. 

The non-performing assets (NPA) ratio improved to 15.05 percent from 15.60 percent last month and 16.75 percent a year ago. This developed as the month-on-month 2.1 percent reduction in NPAs came with the 1.5 percent expansion in gross assets.   

The NPL coverage ratio narrowed to 35.40 percent from 35.64 percent last month and 38.88 percent a year ago. The decline in the ratio from last month was brought about by the 5.4 percent reduction in LLRs to P6.25 billion, which outweighed the 4.8 percent drop in NPLs. 

Likewise, the NPA coverage ratio trimmed to 16.22 percent from 16.58 percent last month and 17.91 percent a year ago. The contraction in the ratio from last month was mainly due to the 4.3 percent cut in NPA reserves to P7.92 billion.

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