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U/KBs' NPL Ratio Eases Further to 4.17 Percent in May

08.08.2008

As of end-May 2008, the non-performing loans (NPL) ratio of universal and commercial banks (U/KBs) eased further by 0.11 percentage point to 4.17 percent from last month’s 4.28 percent and by 1.16 percentage points from year ago’s 5.33 percent. This is the lowest recorded NPL ratio of the industry since year 1998. The improvement in the ratio from last month occurred as the 0.60 percent hike in NPLs was outweighed by the 3.17 percent expansion in total loan portfolio (TLP). NPLs grew to P96.04 billion from last month’s P95.46 billion while TLP expanded to P2,301.23 billion from P2,230.46 billion.

Net of interbank loans, the NPL ratio improved to 4.98 percent from last month’s 5.04 percent and year ago’s 6.64 percent ratios. The month-on-month movement transpired as the increase in NPLs was outpaced by the 1.73 percent growth in regular loans to P1,927.24 billion.

The restructured loans (RLs) to TLP ratio fell to 2.67 percent from last month’s 2.77 percent and year ago’s 3.71 percent ratios. The decline in the ratio from last month took place as the 0.45 percent reduction in gross RLs to P61.71 billion was accompanied by the expansion in loans.

Meantime, the real and other properties acquired (ROPA), gross to gross assets (GA) ratio eased to 3.15 percent from last month’s 3.24 percent and year ago’s 3.68 percent ratios. The decline in the ratio from last month transpired with the simultaneous growth in GAs and the 1.32 percent reduction in ROPA to P146.94 billion.

The non-performing assets (NPA) to GA ratio improved to 5.21 percent from last month’s 5.33 percent and year ago’s 5.89 percent ratios. The favorable month-on-month decline in the ratio came about as the 0.57 percent drop in NPAs was complemented by the 1.62 percent growth in GAs. The NPA level settled at P242.98 billion, better than last month’s P244.37 billion and year ago’s P259.20 billion. 

The NPL coverage ratio strengthened to 94.78 percent from 94.62 percent last month. Likewise, the NPA coverage ratio widened to 47.97 percent from 47.35 percent.  This month’s NPL and NPA coverage also stood higher than year ago ratios of 82.74 percent and 39.46 percent, respectively.

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