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Thrift Banks Post 7.89% NPL Ratio In June

08.30.2007

The thrift banking industry posted a non-performing loans (NPL) ratio of 7.89 percent as of end-June 2007. Though higher than the previous month’s 7.80 percent, this month’s NPL ratio was an improvement of 0.38 percentage point over the 8.27 percent ratio recorded a year ago. The month-on-month rise in ratio was due to the 0.86 percent increment in NPLs and the 0.34 percent contraction in total loan portfolio (TLP). Nonetheless, the industry was able to sustain a single-digit NPL ratio for the past 27 months now.

Exclusive of interbank loans (IBL), the industry’s NPL ratio at 8.94 percent was also higher than last month’s 8.87 percent. This transpired as core lending barely moved to P239.38 billion from P239.17 billion last month. Yet, this month’s ratio is better than year ago’s 9.02 percent ratio.
 
Restructured loans shrunk to P5.47 billion in June. Thus, the proportion of RLs to TLP slid to 2.01 percent from last month’s 2.04 percent and year ago’s 2.69 percent ratio.

The ratio of real and other properties acquired (ROPA) over gross assets (GA) likewise eased to 7.32 percent from last month’s 7.69 percent. This came about as ROPA declined by 3.87 percent to P35.20 billion. Moreover, this month’s ratio is an improvement by 1.12 percentage points from year ago’s 8.44 percent ratio.

The non-performing assets (NPA) ratio got better to 10.93 percent from last month’s 11.31 percent as NPAs decreased by 2.44 percent to P52.35 billion. Year-on-year, this month’s ratio is 1.05 percentage points better than the reference ratio of 11.98 percent.

Meanwhile, the NPL coverage ratio tapered to 50.52 percent (vs. 51.79 percent last month). This was brought on by the 1.62 percent contraction in loan loss reserves (LLRs) to P10.81 billion. Similarly, the NPL coverage ratio is leaner than the 51.58 percent ratio recorded a year ago.

The NPA coverage ratio advanced to 26.87 percent (vs. 26.32 percent in May) as NPA reserves barely changed at P14.07 billion while NPAs declined. Likewise, this month’s ratio was comparatively wider than year ago’s 25.17 percent ratio.

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