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U/KBs' NPL Ratio Stands at 3.65 Percent in April

06.15.2009

As of end-April 2009, the non-performing loans (NPL) ratio of universal and commercial banks (U/KBs) stood at 3.65 percent, up by 0.09 percentage point from last month’s 3.56 percent. This month’s ratio is still an improvement from year ago’s 4.28 percent ratio. This is the seventh consecutive month that the NPL ratio has been kept below four percent.

The month-on-month increase in the ratio transpired as the 2.03 percent reduction in NPLs was outpaced by the 4.45 percent decline in total loan portfolio (TLP). NPLs were reduced to P86.78 billion from last month’s P88.58 billion. TLP also dropped to P2,376.00 billion from P2,486.52 billion.

Net of interbank loans (IBL), the NPL ratio also rose to 4.11 percent from last month’s 3.98 percent but improved from year ago’s 5.03 percent ratio. The increase in the ratio from last month occurred as the drop in NPLs was surpassed by the 5.03 percent reduction in regular loans to P2,113.59 billion.

Meantime, the real and other properties acquired (ROPA) to gross assets (GA) ratio climbed to 2.78 percent from last month’s 2.74 percent but eased from year ago’s 3.24 percent ratio. The increase in the ratio from last month took place as the 0.02 percent hike in ROPA to P140.46 billion was accompanied by the decline in GAs.

The non-performing assets (NPA) to GA ratio went up to 4.51 percent from last month’s 4.49 percent but improved from year ago’s 5.33 percent ratio. The month-on-month increase in the ratio came about as the 0.77 percent drop in NPAs was outweighed by the 1.30 percent fall in GAs. The NPA level stood at P227.23 billion, down from last month’s P229.00 billion and year ago’s P244.55 billion.

The restructured loans (RLs) to TLP ratio climbed to 2.08 percent from last month’s 2.03 percent but fell from year ago’s 2.77 percent ratio. The increase in the ratio from the previous month transpired as the 1.54 percent drop in gross RLs to P49.97 billion was surpassed by the larger contraction in loans.

In terms of provisioning for bad loans, the NPL coverage ratio strengthened to 99.65 percent from last month’s 99.30 percent. In contrast, the NPA coverage ratio narrowed to 48.85 percent from 49.11 percent, driven by the 1.30 percent decline in NPA reserves to P111.00 billion. Year-on-year, this month’s NPL and NPA coverage ratios widened from their reference ratios of 94.74 percent and 47.38 percent, respectively.

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