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U/KBs' NPL Ratio Eases to 3.36 Percent in June

08.14.2009

As of end-June 2009, the non-performing loans (NPL) ratio of universal and commercial banks (U/KBs) eased by 0.33 percentage point to 3.36 percent from last month's 3.69 percent and by 0.65 percentage point from year ago's 4.01 percent ratio. This month's NPL ratio is the lowest recorded figure since the ratio peaked at 18.81 percent at end-October 2001.

The month-on-month improvement in the ratio took place as the 5.18 percent decline in NPLs was complemented by the 4.09 percent growth in total loan portfolio (TLP). NPLs dropped to P84.62 billion from last month's P89.25 billion. TLP grew to P2,518.34 billion from P2,419.28 billion.

Net of interbank loans (IBL), the NPL ratio also improved to 3.79 percent from last month's 4.20 percent and year ago's 4.69 percent ratio. The month-on-month development came about as the reduction in NPLs was accompanied by the 5.08 percent expansion in regular loans to P2,231.72 billion.

 Meantime, the real and other properties acquired (ROPA) to gross assets (GA) ratio favorably dropped to 2.65 percent from last month's 2.70 percent and year ago's 3.03 percent ratio. The month-on-month development took place as the 0.74 percent reduction in ROPA to P138.34 billion came with the expansion in GAs.

The non-performing assets (NPA) to GA ratio eased to 4.29 percent from last month's 4.46 percent and year ago's 5.01 percent ratio. The improvement in the ratio from last month was fueled by the 2.48 percent reduction in NPAs to P222.96 billion.

The restructured loans (RLs) to TLP ratio fell to 1.82 percent from last month's 2.03 percent and year ago's 2.49 percent ratio. The ratio declined from last month as the 6.78 percent drop in gross RLs to P46.16 billion was accompanied by the rise in loans.

In terms of provisioning for bad loans, the NPL coverage ratio strengthened to 102.33 percent from last month's 96.16 percent. Similarly, the NPA coverage ratio widened to 50.03 percent from last month's 48.52 percent. This month's NPL and NPA coverage ratios also stood higher than year ago ratios of 96.66 percent and 48.65 percent, respectively.

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