As of end-October 2008, the thrift banking industry’s non-performing loans (NPL) ratio stood at 6.47 percent, easing by 0.13 percentage point from last month’s 6.60 percent and by 0.33 percentage point from year ago’s 6.80 percent ratio. The improvement from last month was due to the 3.78 percent contraction in NPLs.
Moreover, the industry was able to sustain a single-digit NPL ratio for the past 43 months; and pinned it below the pre-crisis ratio of 7.74 percent (as of end-June 1997) for the past 16 months.
Exclusive of interbank loans, the NPL ratio went up to 6.93 percent from 6.91 percent last month as core lending contracted by 4.02 percent to reach P272.10 billion. Nonetheless, this month’s ratio registered better than year ago’s 8.95 percent as core lending rose by 13.73 percent on an annual basis.
The proportion of restructured loans (RLs) to total loan portfolio (TLP) stuck to last month’s 1.52 percent as the 2.09 percent drop in RLs nearly matched the reduction in TLP.
The ratio of real and other properties acquired (ROPA) over gross assets went down to 5.52 percent from last month’s 5.56 percent. This occurred as ROPA slipped by 2.38 percent to P27.02 billion. Likewise, this month’s ratio chalked better by 1.38 percentage points from year ago’s 6.90 percent ratio.
The non-performing assets (NPA) ratio got better to 9.43 percent from last month’s 9.54 percent as NPAs were trimmed by 2.96 percent to P45.87 billion. In addition, this month’s ratio was 0.86 percentage point better than year ago’s 10.29 percent ratio.
Meanwhile, the NPL coverage ratio broadened to 55.03 percent, or by 2.23 percentage points from 52.80 percent last month. The enhancement stemmed mainly from the ample drop in NPLs, bundled with the marginal 0.29 percent increase in loan loss reserves (LLRs) to P10.38 billion. In addition, this month’s NPL cover was wider than year ago’s 49.54 percent ratio.
The NPA coverage ratio widened to 28.98 percent (from 28.66 percent in September) due to the slower 1.88 percent shrinkage in NPA reserves to P13.29 billion versus the cut in NPAs. In the same way, this month’s ratio was comparatively wider than year ago’s 26.40 percent ratio.