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Updates on NPL Ratio of Universal and Commercial Banks


The industry’s non-performing loans (NPL) ratio at end-November 2004 stood at 13.57 percent, a 0.64 percentage point improvement from last month’s ratio of 14.21 percent.  This resulted from the simultaneous 2.5 percent decline in NPLs and the 2.0 percent growth in total loan portfolio (TLP).  This month’s ratio was also better by 1.22 percentage points from year ago’s 14.79 percent ratio. 

Net of interbank loans (IBL), the NPL ratio also improved to 15.78 percent or by 1.06 percentage points from last month’s 16.84 percent and by 1.42 percentage points from year ago’s 17.20 percent ratio. 

The ratio of restructured loans (RLs) to TLP slid to 7.31 percent from 7.49 percent last month as total RLs contracted by 0.3 percent to P131.87 billion.  Non-performing RLs fell at an even faster rate of 9.1 percent, bringing the ratio of non-performing RLs to total RLs down to 49.73 percent from 54.51 percent last month.

The ratio of real and other properties owned or acquired (ROPOA), gross to gross assets (GAs) went down by 0.16 percentage point to 5.45 percent from last month’s 5.61 percent. This was attributed to the 0.3 percent contraction in ROPOA to P207.45 billion which was complemented by the growth in GAs. 

The industry’s non-performing assets (NPA) ratio was also favorably down to 11.69 percent from 12.19 percent last month and year ago’s 13.24 percent ratio.  This transpired as the NPAs shrunk by 1.6 percent the effect of which was intensified by the 2.6 percent growth in GAs. 

The NPL coverage ratio and the NPA coverage ratio, were strengthened further to 53.35 percent (vs. 52.61 percent last month and 49.88 percent a year ago) and 32.76 percent (vs. 32.55 percent last month and 31.22 percent a year ago), respectively.  These resulted from the faster drop in NPLs and NPAs than the reduction in allowance for probable losses, particularly on loans.  As of end-November 2004, loan loss reserves stood at P129.05 billion while the NPA reserves were reported at P144.84 billion.

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