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U/KBs' NPL Ratio Sustained at 5.56% in February

04.13.2007

In February 2007, both the total loan portfolio (TLP) and the non-performing loans (NPLs) of universal and commercial banks (U/KBs) further declined albeit at a much slower rate than the previous month.  Total Loan Portfolio (TLP) decreased by 0.80 percent (vs. 8.5 percent a month ago).  NPLs followed the same trend but its contraction shranked to 0.68 percent (vs. the 24.9 percent decline posted in January).  Consequently, the NPL ratio remained basically unchanged at 5.56 percent as compared to the NPL ratio of 5.55 percent last month and is significantly lower (i.e, by 2.46 percentage points) than the year ago’s 8.02 percent ratio. 

The industry’s NPL ratio, exclusive of interbank loans, followed the same trend.  It moved to 7.00 percent from 6.95 percent last month, as regular loans contracted by 1.39 percent. Nonetheless, this month’s ratio is still better than the 9.88 percent ratio the previous year.

This month’s restructured loans (RLs) likewise minimally declined, i.e., by 0.19 percent. Hence, the rise of RLs proportion to TLP was somewhat contained to 3.82 percent from 3.79 percent last month.   This ratio is much lower than the 5.16 percent ratio posted a year ago.

Meanwhile, the ratio of real and other properties acquired (ROPA) to gross assets (GAs) is maintained at 3.82 percent as both accounts decreased at almost the same pace. This ratio is 1.04 percentage points better than the base figure of 4.86 percent a year ago.

The non-performing assets (NPAs) and Gross Assets (GAs) also exhibited almost equal decrements, i.e., 0.75 percent and 0.69 percent, respectively.  Hence, NPA ratio is unchanged at 6.21 percent and remained lower than the year ago’s 8.51 percent ratio.

On the other hand, the NPL and NPA coverage ratios both improved to 80.19 percent (vs. 79.76 percent last month) and 39.34 percent (vs. 39.11 percent), respectively. These developments were largely due to downtrends in NPLs and NPAs bases since loan loss reserves (LLRs) at P91.80 billion and NPA reserves at P107.23 billion are basically equal their last month’s levels. This month’s NPL coverage ratio is better than the 78.57 percent ratio a year ago. In contrast, the current NPA coverage ratio is less than the 41.66 percent ratio last year.

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