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Thrift Banks Post 8.44% NPL Ratio in Q3 2009

02.05.2010

As of end-September 2009, the industry’s NPL ratio stood at 8.44 percent, increasing by 0.97 percentage point from last quarter’s 7.47 percent and up by 1.83 percentage points from year ago’s 6.61 percent ratio. The increase from last quarter was due to the 7.47 percent growth in NPLs with total loan portfolio (TLP) diminishing by 4.87 percent. Nevertheless, the industry was still able to sustain a single-digit NPL ratio for the past 18 quarters.

Exclusive of interbank loans (IBL), the NPL ratio also rose to 8.54 percent from 7.62 percent last quarter as the 4.12 percent contraction in core lending to P293.05 billion highlighted the increase in NPLs. Likewise, this quarter’s ratio was higher than year ago’s 6.91 percent as the NPL buildup outpaced the expansion in core lending, i.e., 27.71 percent vs. 3.37 percent.
 
Restructured loans shrunk slightly by 1.18 percent to P4.23 billion in September. Yet, the proportion of restructured loans (RLs) to TLP at 1.41 percent grew from the previous quarter’s 1.36 percent as the loan base decreased at a faster pace. This quarter’s ratio, on the other hand, is lower than the year ago’s 1.52 percent ratio.

The ratio of real and other properties acquired (ROPA) to gross assets (GA) moved up to 4.41 percent from last quarter’s 4.31 percent. This occurred as the decline of ROPA by 0.45 percent to P23.31 billion was surpassed by the 2.72 percent reduction in GAs. On the other hand, this quarter’s ratio chalked lower by 1.14 percentage points from year ago’s 5.55 percent ratio.

The non-performing assets (NPA) ratio went up to 9.18 percent from last quarter’s 8.63 percent as the 3.50 percent expansion in NPAs to P48.35 billion was accompanied by the drop in GAs. On a lighter note, this quarter’s ratio was 0.35 percentage point better than year ago’s 9.53 percent ratio.

The NPL coverage ratio settled at 49.80 percent, down by 2.96 percentage points from 52.76 percent last quarter. This stemmed from the relatively smaller expansion in LLRs at 1.45 percent compared to the increase in NPLs. Likewise, the NPA coverage ratio slid to 30.00 percent from 31.00 percent last quarter due to the faster growth in NPAs as opposed to the meager 0.17 percent gain in NPA reserves.

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