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U/KBís NPL Ratio Eases Further to 3.78 Percent in November

01.29.2009

As of end-November 2008, the non-performing loans (NPL) ratio of universal and commercial banks (U/KBs) eased further by 0.19 percentage point to 3.78 percent from last month’s 3.97 percent and by 1.21 percentage points from year ago’s 4.99 percent ratio. This month’s NPL ratio is the lowest recorded ratio since the onset of the 1997 Asian financial crisis.

The improvement in the NPL ratio from last month took place as the 0.28 percent decline in NPLs was complemented by the 4.77 percent expansion in total loan portfolio (TLP). NPLs dropped to P93.32 billion from last month’s P93.58 billion while TLP grew to P2,470.18 billion from P2,357.77 billion.

Exclusive of interbank loans, the NPL ratio also improved to 4.18 percent from last month’s 4.47 percent and year ago’s 5.87 percent ratios. The favorable month-on-month movement came about as the reduction in NPLs was accompanied by the 6.84 percent growth in regular loans to P2,234.49 billion.

Meantime, real and other properties acquired (ROPA) to gross assets (GAs) ratio favorably dropped to 2.76 percent from last month’s 2.87 percent and year ago’s 3.44 percent ratios. The easing of the ratio from the previous month occurred as the 2.69 percent decline in ROPA to P138.65 billion was complemented by the expansion in GAs.

The non-performing assets (NPA) to GAs ratio got better to 4.63 percent from last month’s 4.78 percent and year ago’s 5.55 percent. The favorable movement from the previous month came about as the 1.74 percent decline in NPAs was accompanied by the 1.42 percent growth in GAs. The NPA level settled at P231.97 billion, down from last month’s P236.07 billion and year ago’s P250.45 billion.

The restructured loans (RLs) to TLP ratio dropped to 2.30 percent from last month’s 2.44 percent and year ago’s 3.22 percent ratios. The decline in the ratio from last month occurred as the 1.41 percent reduction in gross RLs to P57.16 billion was complemented by the expansion in loans.

In terms of provisioning for bad loans, the NPL coverage ratio narrowed to 94.97 percent from last month’s 95.17 percent. Likewise, the NPA coverage ratio dropped to 48.50 percent from 48.70 percent.  Year-on-year, this month’s NPL and NPA coverage ratios fared better than their reference ratios of 88.52 percent and 43.35 percent, respectively.

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