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NPL Ratio of U/KBs Eases to 5.21 Percent in June

09.07.2007

As of end-June 2007, the non-performing loans (NPL) ratio of universal and commercial banks (U/KBs) improved by 0.12 percentage point to 5.21 percent from the previous month’s 5.33 percent. This occurred as the 2.45 percent reduction in NPLs outpaced the 0.19 percent decline in total loan portfolio (TLP). NPLs fell to P104.37 billion from last month’s P106.99 billion while TLP dropped to P2,003.76 billion from P2,007.54 billion. Year-on year, this month’s ratio stood better by 2.01 percentage points than the base figure of 7.22 percent.

Exclusive of interbank loans, the industry’s NPL ratio eased to 6.49 percent from last month’s 6.64 and year ago’s 8.71 percent ratios. The month-on-month development transpired as the reduction in NPLs outweighed the 0.18 percent contraction in regular loans to P1,608.43 billion from P1,611.26 billion.
The ratio of restructured loans (RLs) to TLP went down to 3.63 percent from last month’s 3.71 percent and year ago’s 5.11 percent. The decline in the ratio from last month stemmed from the 2.46 percent decline in gross RLs to P73.45 billion from P75.30 billion.

Real and other properties acquired (ROPA), gross stood at P162.11 billion, down from P163.11 billion last month and P187.85 billion a year ago. Similarly, the ratio of ROPA, gross to gross assets (GAs) fell to 3.62 percent from last month’s 3.68 percent and year ago’s 4.51 percent ratios.

The non-performing assets (NPA) ratio favorably dropped to 5.73 percent from 5.89 percent last month and year ago’s 7.59 percent ratios. The improvement from last month resulted from the 1.39 percent drop in NPAs, which came with the 1.24 percent growth in GAs. The NPA level stood at P255.60 billion, down from last month’s P259.20 billion and year ago’s P314.73 billion.

The NPL coverage ratio strengthened to 83.91 percent (vs. 82.74 percent last month). Similarly, the NPA coverage ratio widened to 39.70 percent (vs. 39.46 percent). Year-on-year, this month’s NPL coverage ratio is better than the reference ratio of 80.97 percent whereas the NPA coverage ratio is lower than the 41.02 percent ratio reported a year ago. 

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