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Thrift Banks' NPL Ratio Settles at 7.29% in April

06.25.2007

As of end-April 2007, the thrift banking industry’s non-performing loans (NPL) ratio settled at 7.29 percent. The current ratio did not change from last month as the 0.19 percent contraction in NPLs was matched by the 0.21 decline in total loan portfolio (TLP). Nonetheless, the industry was able to sustain a single-digit NPL ratio for the past 25 months now. Moreover, the current NPL ratio is better off by 1.49 percentage points from year ago’s 8.78 percent ratio.

Exclusive of interbank loans (IBL), the industry’s NPL ratio improved to 8.48 percent from last month’s 8.66 percent. This transpired as core lending went up by 1.96 percent (or P4.61 billion) to P239.79 billion. This month’s ratio is also better than year ago’s 9.51 percent ratio.
 
  Restructuring activities was dormant during the month of April. Thus, the proportion of RLs to TLP barely moved to 2.00 percent from last month’s 1.99 percent. Meanwhile, this month’s ratio is lower by 0.93 percentage point from year ago’s 2.93 percent ratio.

The ratio of real and other properties acquired (ROPA) over gross assets (GA) likewise ticked up to 7.42 percent from last month’s 7.41 percent. This transpired as ROPA grew while GA declined. Quite the opposite, this month’s ratio is an improvement by 1.26 percentage points from year ago’s 8.68 percent ratio.

The non-performing assets (NPA) ratio slightly went up to 10.76 percent from last month’s 10.74 percent as NPAs climbed by 0.13 percent to P51.82 billion. Year-on-year, this month’s ratio is 1.61 percentage points better than the reference ratio of 12.37 percent.

Meanwhile, the NPL coverage ratio was pared to 50.28 percent (vs. 50.46 percent last month). This was driven by the 0.55 percent shrinkage in loan loss reserves (LLRs) to P10.22 billion. Nonetheless, the NPL coverage ratio showed significant enhancement from the 49.51 percent ratio posted a year ago.

The NPA coverage ratio slid to 25.72 percent (vs. 25.74 percent in March) as NPA reserves at P13.33 billion hardly moved from last month. In contrast, this month’s ratio was comparatively stronger than year ago’s 24.82 percent ratio.

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