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NPL Ratio of R/CB Industry Eases to 11.07 Percent in Fourth Quarter

04.25.2007

As of end-December 2006, the NPL ratio of the rural and cooperative banks (R/CBs) improved by 0.56 percentage point to 11.07 percent from last quarter’s 11.63 percent. This developed as the 1.47 percent decline in NPLs was complemented by a 3.51 percent rise in total loan portfolio (TLP). On a year-on-year basis, this period’s ratio is still higher by 0.11 percentage point than the base figure of 10.96 percent.

R/CBs located in Mindanao continued to have the lowest NPL ratio at 8.98 percent (down from 9.88 percent last quarter) compared to Luzon and Visayas, which posted relatively higher ratios of 11.40 percent (down from 11.70 percent) and 12.25 percent (down from 13.76 percent), respectively.

Restructured loans (RLs), gross went up by 3.54 percent to P0.86 billion but the proportion of RLs, gross to TLP, gross was maintained at 1.04 percent from last quarter. Nonetheless, this period’s ratio was still lower by 0.17 percentage point than last year’s ratio of 1.21 percent.  

Real and other properties acquired (ROPA), gross grew by 18.04 percent to P11.12 billion from last quarter. Consequently, the ratio of ROPA, gross to gross assets also increased to 8.07 percent from 7.28 percent.

Meanwhile, the ratio of non-performing assets (NPAs) to gross assets eased to 12.41 percent from 13.73 percent last quarter. This transpired as the 3.66 percent reduction in NPAs to P17.03 billion was accompanied by the 6.59 percent rise in gross assets.

The NPL coverage ratio widened to 35.23 percent from 34.33 percent last quarter. This took place as the growth in loan loss reserves by 1.11 percent to P3.19 billion complemented the decline in NPLs.

NPA reserves rose by 2.02 percent to P3.50 billion. This, accompanied by the 3.66 percent drop in NPAs, resulted in a stronger NPA coverage ratio of 20.57 percent as against 19.42 percent last quarter. However, this period’s NPA coverage ratio was still lower than last year’s 21.39 percent ratio.

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