Loan quality of the thrift banking industry improved further in February 2000 as reflected in the steady decline in non-performing loans (NPL) ratio which fell to 12.48 percent from 13.46 percent last month and 17.36 percent a year ago. The improvement was mainly due to lower volume of NPLs as it fell from P16.4 billion in January to P15.6 billion this month. This was reinforced by the expansion of total loans during the period under review from P122.0 billion to P125.1 billion. Loan quality was further bolstered by the contraction of the volume of restructured loans which as a percentage of total loan portfolio leveled off at 1.57 percent from 1.67 percent a month ago.
Provisioning for loan losses tapered off by 11.4 percent from January as banks reacted to the trimming down of NPLs by 4.9 percent. While coverage ratio (LLR to NPL), as a result, shrunk to 44.4 percent from 47.9 percent last month, this was still significantly higher than the 29.9 percent coverage a year ago.
Overall asset quality also improved as reflected by the ratio of non-performing assets (NPLs + ROPOA (net) to Total Assets) which eased further to 16.3 percent from 16.6 percent a month ago due to the 4.9 percent contraction in NPLs which effectively neutralized the 0.8 percent rise in ROPOA (net) and 2.3 percent drop in total assets.