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U/KBs' NPL Ratio Stands at 3.49 Percent in July

09.11.2009

As of end-July 2009, the non-performing loans (NPL) ratio of universal and commercial banks (U/KBs) stood at 3.49 percent, up by 0.13 percentage point from last month's 3.36 percent but still better by 0.51 percentage point than year ago's 4.00 percent ratio. This is the tenth consecutive month that the NPL ratio has been below four percent.

The month-on-month increase in the NPL ratio occurred as the 2.06 percent decline in NPLs was outweighed by the 5.64 percent cut in total loan portfolio (TLP). NPLs dropped to P82.88 billion from last month's P84.62 billion. On the other hand, TLP declined to P2,376.21 billion from P2,518.34 billion.

Net of interbank loans (IBL), the NPL ratio also rose to 3.99 percent from last month's 3.79 percent but eased from year ago's 4.59 percent ratio. The ratio went up from last month as the drop in NPLs was outmatched by the 6.96 percent contraction in regular loans to P2,076.45 billion.

 Meantime, the real and other properties acquired (ROPA) to gross assets (GA) ratio went up to 2.72 percent from last month's 2.70 percent but got better from year ago's 3.16 percent ratio. The increase in the ratio from last month came about as the 0.78 percent drop in ROPA to P139.75 billion was surpassed by the larger decline in GAs.

The non-performing assets (NPA) to GA ratio rose to 4.35 percent from last month's 4.33 percent but improved from year ago's 5.16 percent ratio. The month-on-month increase in the ratio occurred as the 1.26 percent reduction in NPAs was outweighed by the 1.56 percent drop in GAs. The NPA level stood at P222.63 billion, down from last month's P225.47 billion and year ago's P239.93 billion.

The restructured loans (RLs) to TLP ratio climbed to 2.00 percent from last month's 1.82 percent but fell from year ago's 2.50 percent ratio. The increase in the ratio from the previous month was driven by the 3.84 percent growth in gross RLs to P47.93 billion.

The loan exposure of banks remained adequately covered. The NPL coverage ratio strengthened to 104.98 percent from last month's 102.33 percent. Similarly, the NPA coverage ratio widened to 51.52 percent from last month's 50.59 percent. This month's NPL and NPA coverage ratios also stood higher than year ago ratios of 97.85 percent and 48.43 percent, respectively.

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