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U/KBs' NPL Ratio Stands at 5.33 Percent in May

07.30.2007

Universal and commercial banks (U/KBs) posted a non-performing loans (NPL) ratio of 5.33 percent as of end-May 2007. Although higher than the previous month’s 5.27 percent, this month’s ratio is an improvement by 2.24 percentage points from the 7.57 percent ratio registered a year ago. The month-on-month movement took place as the 2.93 percent reduction in NPLs was outweighed by the 4.00 percent decline in total loan portfolio (TLP). NPLs fell to P106.99 billion while TLP dropped to P2,007.54 billion. The decline in bank lending was largely due to the lower volume of reverse repurchase transactions as several U/KBs placed more funds in special deposit accounts (SDA) of the Bangko Sentral ng Pilipinas.

Exclusive of interbank loans, the industry’s NPL ratio rose to 6.64 percent from last month’s 6.45 percent. This transpired as the reduction in NPLs was outmatched by the 5.73 percent contraction in regular loans to P1,611.26 billion. Nevertheless, this month’s ratio stood better by 2.48 percentage points than year ago’s 9.12 percent ratio.

Meantime, the ratio of restructured loans (RLs) to TLP climbed to 3.71 percent from last month’s 3.59 percent as the 0.68 percent drop in gross RLs to P75.30 billion was slower than the contraction in TLP. Still, this month’s RLs share to TLP is lower than year ago’s 5.10 percent ratio.

The ratio of real and other properties acquired (ROPA), gross to GAs rose to 3.68 percent from last month’s 3.57 percent as the 1.27 percent growth in ROPA to P163.11 billion came with the decline in GAs. But this month’s ratio is favorably lower than year ago’s 4.60 percent ratio.

The non-performing assets (NPA) to gross assets (GAs) ratio went up to 5.89 percent from 5.79 percent last month. This transpired as the 0.43 percent reduction in NPAs was surpassed by the 1.99 percent drop in GAs. Nonetheless, this month’s ratio is an improvement by 2.07 percentage points than year ago’s 7.96 percent ratio. The NPA level stood at P259.20 billion, down from last month’s P260.34 billion and year ago’s P323.97 billion.

The NPL coverage ratio strengthened to 82.74 percent (vs. 80.54 percent last month). Likewise, the NPA coverage ratio widened to 39.46 percent (vs. 39.39 percent). Year-on-year, this month’s NPL coverage ratio is stronger than the base figure of 78.31 percent while the NPA coverage ratio is lower than the 40.99 percent ratio reported a year ago.

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