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Thrift Banks Post 6.92% NPL Ratio in November

01.25.2008

As of end-November 2007, the thrift banking industry’s non-performing loans (NPL) ratio stood at 6.92 percent, moving up by 0.12 percentage point from last month’s 6.80 percent but easing by 1.51 percentage points from year ago’s 8.44 percent ratio. The month-on-month movement was due to the 0.11 percent buildup in NPLs and the 1.62 percent contraction in total loan portfolio (TLP). Nonetheless, the industry was able to sustain a single-digit NPL ratio for the past 32 months now.

Exclusive of interbank loans (IBL), the industry’s NPL ratio at 8.77 percent improved from last month’s 8.95 percent as core lending increased by 2.22 percent to P244.55 billion. Likewise, this month’s ratio is better than year ago’s 9.40 percent ratio.
 
Restructured loans hardly changed from end-October’s P5.37 billion level. Yet, the proportion of RLs to TLP climbed to 1.72 percent from last month’s 1.70 percent as TLP declined.

The ratio of real and other properties acquired (ROPA) over gross assets (GA) crawled to 6.93 percent from last month’s 6.90 percent. This occurred as ROPA grew by 0.17 percent to P35.40 billion. In contrast, this month’s ratio is an improvement by 1.26 percentage points from year ago’s 8.19 percent ratio.

The non-performing assets (NPA) ratio rose slightly to 10.31 percent from last month’s 10.29 percent as GAs shrunk at a quicker pace of 0.21 percent compared with NPAs’ 0.03 percent trim to P52.50 billion. Year-on-year, this month’s ratio is 1.58 percentage points better than the reference ratio of 11.89 percent.

Meanwhile, the NPL coverage ratio slid to 47.64 percent from 49.54 percent last month and 50.19 percent a year ago. The month-on-month development transpired as loan loss reserves (LLRs) slipped by 3.73 percent to P10.22 billion.

The NPA coverage ratio was also pared to 25.59 percent (from 26.60 percent in October) due to the 3.09 percent shrinkage in NPA reserves to P13.43 billion. Similarly, this month’s ratio was comparatively leaner than year ago’s 26.05 percent ratio.

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