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The Commercial Banking System


The consolidated assets of the country’s 52 operating commercial banks as of end-November 1999 stood at P2,651.7 billion, an improvement of P60.4 billion or 2.3 percent from last month’s level of P2,591.2 billion. On year-on-year basis, total asset growth was 5.7 percent.

Total assets of expanded commercial banks (EKBs) and non-expanded commercial banks (NEKBs) followed an uptrend, rising by P49.9 billion or 2.4 percent, and P12.3 billion or 5.4 percent, respectively. Branches of foreign banks (FXBs), on the other hand, reflected an asset decrement of P1.8 billion or 0.6 percent.

The gains during the period were largely manifested in a higher net loan portfolio that increased by 3.4 percent from last month’s P1,422.2 billion to P1,470.7 billion (accounting for 55.5 percent of total assets). Cash and due from banks and other asset accounts also rose by P6.1 billion or 2.1 percent to reach P295.1 billion and by P7.4 billion or 1.8 percent to reach P429.1 billion, respectively.

The expansion in assets were mainly funded from additional deposits generated which accounted for bulk of 75.7 percent of the P77.2 billion total funds inflow. The balance came from increases in borrowings and additional capital which accounted for 21.8 percent and 0.5 percent, respectively, of funds inflow. Additional liquidity was also generated from the partial liquidation of investments.

The non-performing loans (NPL) ratio further increased to 14.6 percent of total loan portfolio (TLP) from 14.5 percent last month and last year’s 11.8 percent. The increase was brought about by the 4.2 percent increase in NPL that offset the 3.4 percent increase in TLP.

Capital adequacy of the industry remained strong, even as its net worth-to-risk assets ratio receded to 17.3 percent from 17.9 percent a month ago. Nevertheless , this still represented a substantial margin over the 10 percent minimum statutory requirement. Excess capital went down to P138.5 billion from last month’s P146.2 billion.

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