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Update on Thrift Banks' NPLs


As of August 31, 2000, the industry’s loan quality improved significantly as ratio of non-performing loans (NPL) further declined to 11.26 percent from 11.93 percent last month and 15.27 percent a year ago. NPLs this month shrunk by P0.7 billion or 4.3 percent even as total loan portfolio (TLP) grew by 1.4 percent NPLs of all the three subgroups, namely: Savings and Mortgage Banks, Private Development Banks and Stock Savings and Loan Associations, followed a downtrend. 

Increases in reserves for loan losses by 0.4 percent to P6.8 billion despite the cutdown in NPLs propped up coverage ratio (loan loss reserves to NPL) to 46.0 percent from 43.9 percent. Savings and Mortgage Banks (SMBs) provided the biggest cover at 66.5 percent followed by Stock Savings and Loan Associations (SSLAs) at 31.9 percent and Private Development Banks (PDBs) at 30.5 percent.             

 Restructured loans marginally increased to 2.0 percent of total loan portfolio (TLP) from 1.7 percent a month ago and 1.6 percent last year. SSLAs’ ratio decreased by 8.3 percent, in contrast to the 33.7 percent increase in SMBs’ and PDBs’ 11.9 percent.             

ROPOA (net) holdings of the industry grew by 0.7 percent from P19.4 billion to P19.5 billion while total assets declined by 0.04 percent. This raised ROPOA (net) to assets ratio from 8.98 percent to 9.04 percent. SSLAs held the highest ratio at 12.2 percent, followed by PDBs at 10.9 percent and SMBs at 7.9 percent.  

Overall asset quality improved as manifested by ratio of NPAs (NPLs + ROPOA-net) to total assets which decreased to 15.8 percent from 16.1 percent a month ago, largely as a result of cutdown in NPLs which offset the rise in ROPOA-net and simultaneous drop in assets.  NPAs leveled at P34.2 billion, down by P0.5 billion or 1.5 percent from last month’s P34.8 billion.

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