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NPL Ratio Of U/KBs Eases Further To 5.18 Percent In July

09.20.2007

As of end-July 2007, the non-performing loans (NPL) ratio of universal and commercial banks (U/KBs) eased further by 0.03 percentage point to 5.18 percent from last month’s 5.21 percent and by 1.99 percentage points from year ago’s 7.17 percent ratio. The improvement from last month transpired as the 1.93 percent reduction in NPLs outweighed the 1.48 percent drop in total loan portfolio (TLP).  NPLs fell to P102.36 billion from last month’s P104.37 billion while TLP dropped to P1,974.12 billion from P2,003.76 billion. The decline in bank lending was mainly attributed to the lower volume of interbank loan transactions during the month.

Exclusive of interbank loans, the NPL ratio likewise improved to 6.33 percent from last month’s 6.49 percent and year ago’s 8.54 percent ratio. The month-on-month development occurred as the reduction in NPLs was complemented by the 0.53 percent expansion in regular loans to P1,616.94 billion.

Meanwhile, the restructured loans (RLs) to TLP ratio went down to 3.57 percent from last month’s 3.63 percent and year ago’s 5.07 percent. The decline in the ratio from last month stemmed from the 3.07 percent reduction in gross RLs to P71.19 billion.

The real and other properties acquired (ROPA), gross to gross assets (GA) ratio dropped to 3.56 percent from last month’s 3.62 percent and year ago’s 4.51 percent ratios. This improvement was fueled by the 1.56 percent decline in ROPA to P159.57 billion.

The non-performing assets (NPA) to GA ratio stood better at 5.63 percent as against last month’s 5.73 percent and year ago’s 7.61 percent ratios. The month-on-month development resulted from the 1.72 percent drop in NPAs, which came with the 0.06 percent growth in GAs. The NPA level stood at P251.20 billion, down from last month’s P255.60 billion and year ago’s P313.15 billion.

The NPL coverage ratio strengthened to 85.29 percent from last month’s 83.91 percent. Likewise, the NPA coverage ratio stood better at 40.30 percent from 39.70 percent. Meantime, year-on-year comparison showed that this month’s NPL coverage ratio is stronger than the base figure of 80.66 percent while the NPA coverage ratio is lower than the 40.99 percent ratio posted a year ago.

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