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NPL Ratio of U/KBs Eases to 5.19% in September

12.17.2007

As of end-September 2007, the non-performing loans (NPL) ratio of universal and commercial banks (U/KBs) improved by 0.09 percentage point to 5.19 percent from last month’s 5.28 percent and by 2.24 percentage points from year ago’s 7.43 percent ratio. The month-on-month development transpired as the 0.58 percent increase in NPLs was outweighed by the 2.39 percent expansion in total loan portfolio (TLP).  NPLs went up to P103.85 billion from last month’s P103.25 billion while TLP expanded to P2,000.36 billion from P1,953.73 billion. The growth in bank lending was mainly attributed to the higher volume of interbank loan transactions during the month.

Net of interbank loans, the NPL ratio eased to 6.31 percent from last month’s 6.33 percent and year ago’s 8.96 percent ratios. This transpired as the hike in NPLs was outmatched by the 0.85 percent expansion in regular loans to P1,645.57 billion.

The restructured loans (RLs) to TLP ratio dropped to 3.44 percent from last month’s 3.58 percent and year ago’s 4.96 percent ratio. The decline in the ratio from last month came about as the 1.84 percent reduction in gross RLs to P69.28 billion came with the growth in loans.

Meanwhile, the real and other properties acquired (ROPA), gross to gross assets (GA) ratio got better to 3.57 percent from last month’s 3.59 percent and year ago’s 4.45 percent ratio. The improvement from last month stemmed from the 0.33 percent decline in ROPA to P158.12 billion.

The non-performing assets (NPA) to GA ratio continued to improve to 5.69 percent from the previous month’s 5.70 percent and year ago’s 7.68 percent ratio. The month-on-month movement took place as the 0.03 percent rise in NPAs was outpaced by the 0.16 percent growth in GAs. The NPA level stood at P251.06 billion, slightly up from last month’s P250.99 billion but favorably down from year ago’s P318.24 billion.

The NPL coverage ratio strengthened to 88.69 percent from last month’s 86.12 percent. Likewise, the NPA coverage ratio stood better at 42.51 percent from 40.98 percent. Meantime, year-on-year comparison showed that this month’s NPL coverage ratio is stronger than the base figure of 82.36 percent while the NPA coverage ratio is lower than the 42.85 percent ratio posted a year ago.

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