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Updates on NPLs of Thrift Banks

10.21.2005

As of end-August 2005, the non-performing loan (NPL) ratio of the industry slightly increased to 8.84 percent from 8.69 percent last month as the 1.0 percent decline in NPLs was outweighed by the 2.7 percent contraction in total loan portfolio (TLP). This month’s ratio, nonetheless, was an improvement from the 11.60 percent ratio recorded a year ago. 

Exclusive of interbank loans (IBL), the NPL ratio likewise rose to 9.38 percent from last month’s 9.29 percent. This took place as the decline in NPLs was surpassed by the 2.0 percent cut in regular loans to P174.70 billion from P178.27 billion last month. Notwithstanding, this month’s ratio was favorably lower than year ago’s 12.06 percent.  

The real and other properties owned or acquired (ROPOA) to gross assets ratio went up to 10.26 percent from last month’s 10.13 percent as the 0.5 percent hike in ROPOA to P34.81 billion from P34.64 billion was accompanied by a 0.8 percent drop in gross assets. This month’s ratio, nevertheless, was still better than year ago’s 11.38 percent.   

The restructured loans (RLs) to TLP ratio inched up to 2.35 percent from last month’s 2.28 percent but fell from year ago’s 2.59 percent. The increase in the ratio from last month mainly stemmed from the 0.6 percent growth in RLs to P4.40 billion from P4.37 billion. 

The non-performing assets (NPA) ratio favorably declined to 13.97 percent from last month’s 13.98 percent and year ago’s 16.73 percent. The month-on-month improvement took place as the 0.9 percent reduction in NPAs outmatched the 0.8 percent contraction in gross assets. 

The NPL coverage ratio strengthened to 44.19 percent from 42.92 percent last month and from the 38.91 percent ratio a year ago. This development was fueled by the 1.9 percent growth in loan loss reserves (LLRs) to P7.24 billion from P7.11 billion last month. 

The NPA coverage ratio was enhanced to 19.32 percent from 19.16 percent last month and 17.71 percent a year ago. This developed as the 0.1 percent cut in NPA reserves to P9.12 billion from P9.13 billion last month was surpassed by the 0.9 percent decline in NPAs.

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