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U/KBs' NPL Ratio Stands at 3.37 Percent in October

12.11.2009

As of end-October 2009, the non-performing loans (NPL) ratio of universal and commercial banks (U/KBs) stood at 3.37 percent, up by 0.12 percentage point from last month’s 3.25 percent but down by 0.59 percentage point from year ago’s 3.96 percent ratio. This is the thirteenth consecutive month that the NPL ratio has been below four percent.

The month-on-month increase in the ratio came about as the 4.81 percent hike in NPLs outweighed the 1.12 percent growth in total loan portfolio (TLP). NPLs rose to P85.33 billion from last month’s P81.42 billion while TLP grew to P2,534.03 billion from P2,505.86 billion.

Net of interbank loans (IBL), the NPL ratio also went up to 3.89 percent from last month’s 3.74 percent but improved from year ago’s 4.47 percent ratio. The ratio rose from last month as the growth in NPLs was faster than the 0.63 percent expansion in regular loans to P2,191.39 billion.

Meantime, the real and other properties acquired (ROPA) to gross assets (GA) ratio favorably dropped to 2.55 percent from last month’s 2.59 percent and year ago’s 2.90 percent ratio. The month-on-month development transpired as the 0.89 percent reduction in ROPA to P137.16 billion was complemented by the expansion in GAs.

The non-performing assets (NPA) to GA ratio went up to 4.16 percent from last month’s 4.14 percent but got better from year ago’s 4.80 percent ratio. The ratio rose from last month as the 1.22 percent growth in NPAs outpaced the 0.68 percent expansion in GAs. The NPA level settled at P222.49 billion, up from last month’s P219.80 billion but down from year ago’s P237.16 billion.

The restructured loans (RLs) to TLP ratio climbed to 1.91 percent from last month’s 1.84 percent but dropped from year ago’s 2.44 percent ratio. The increase in the ratio from last month was fueled by the 5.01 percent growth in gross RLs to P48.82 billion.

In terms of provisioning for bad loans, the NPL coverage ratio narrowed to 106.37 percent from last month’s 111.27 percent. Similarly, the NPA coverage ratio slid to 53.04 percent from last month’s 53.48 percent.  Year-on-year, this month’s NPL and NPA coverage ratios fared better than their reference ratios of 95.16 percent and 48.93 percent, respectively.

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