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NPL Ratio of U/KBs Stands at 5.29 Percent in October

01.11.2008

As of end-October 2007, the non-performing loans (NPL) ratio of universal and commercial banks (U/KBs) stood at 5.29 percent, up by 0.10 percentage point from last month’s 5.19 percent but better by 1.81 percentage points than year ago’s 7.10 percent ratio. The increase in the ratio from last month transpired as the 0.10 percent hike in NPLs was accompanied by the 0.88 percent decline in total loan portfolio (TLP).  NPLs went up to P104.93 billion from last month’s P103.85 billion while TLP dropped to P1,982.83 billion from P2,000.36 billion. The decline in bank lending was mainly attributed to the lower volume of interbank loan transactions during the month.

Net of interbank loans, the NPL ratio eased to 6.16 percent from last month’s 6.31 percent and year ago’s 8.55 percent ratio. This month-on-month development occurred as the hike in NPLs was outmatched by the 3.53 percent expansion in regular loans to P1,703.69 billion.

Meanwhile, the restructured loans (RLs) to TLP ratio climbed to 3.54 percent from last month’s 3.44 percent but stood lower than year ago’s 4.75 percent ratio. The month-on-month increase in the ratio took place as the 1.94 percent increase in gross RLs to P70.63 billion came with the decline in loans.

The real and other properties acquired (ROPA), gross to gross assets (GA) ratio favorably dropped to 3.56 percent from last month’s 3.57 percent and year ago’s 4.39 percent ratios. The improvement from last month came about as the 1.15 percent decline in ROPA to P156.30 billion outweighed the contraction in GAs.

The non-performing assets (NPA) to GA ratio went up to 5.74 percent from last month’s 5.69 percent but improved from year ago’s 7.47 percent ratio. The month-on-month movement occurred as the 0.12 percent drop in NPAs was outmatched by the 0.88 percent contraction in GAs. The NPA level stood at P250.74 billion, favorably down from last month’s P251.06 billion and year ago’s P315.70 billion.

The NPL coverage ratio dropped to 88.45 percent from 88.69 percent last month. In contrast, the NPA coverage ratio widened to 42.80 percent from 42.51 percent. Meanwhile, year-on-year comparison showed that this month’s NPL and NPA coverage ratios remained stronger than year ago’s 79.24 percent and 41.23 percent, respectively.

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