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NPL Ratio of Rural and Cooperative Banks Improves Anew to 9.71 Percent


As of end-December 2007, the non-performing loans (NPL) ratio of rural and cooperative banks (R/CBs) improved anew by 0.39 percentage point to 9.71 percent from last quarter’s 10.10 percent and by 1.36 percentage points from last year’s 11.07 percent ratio.  This is the sixth consecutive quarter of loan quality improvement and the lowest post-crisis ratio. 

The quarter-on-quarter improvement in the NPL ratio occurred as the 1.31 percent hike in NPLs to P9.57 billion was outpaced by the 5.39 percent expansion in total loan portfolio (TLP) to P98.59 billion.

Based on the three major geographical regions, R/CBs in the Mindanao area exhibited better loan quality at 7.60 percent as against R/CBs in Luzon and Visayas which registered NPL ratios of 10.23 percent and 10.09 percent, respectively.

Meanwhile, the ratio of restructured loans (RLs), gross to TLP, gross went down to 1.09 percent from 1.18 percent last quarter as the 2.53 percent decline in RLs was accompanied by the expansion in TLP. 
The ratio of real and other properties acquired (ROPA), gross to gross assets ratio eased to 7.42 percent from last quarter’s 7.46 percent. The favorable decline in the ratio took place as the 4.40 percent growth in ROPA to P12.03 billion was outweighed by the faster expansion in gross assets.

The ratio of non-performing assets (NPAs) to gross assets improved to 10.97 percent from last quarter’s 11.41 percent. This came about as the 0.94 percent hike in NPAs to P17.71 was outpaced by the 4.92 percent growth in gross assets.

The NPL coverage ratio strengthened to 34.72 percent from 34.42 percent last quarter. Similarly, the NPA coverage ratio widened to 20.80 percent from 20.45 percent. Year-on-year, this month’s NPL coverage ratio is lower than the reference ratio of 35.23 percent whereas the NPA coverage ratio is better than the 20.57 percent ratio reported last year. 

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