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U/KBs' NPL Ratio Eases to 3.18 Percent in February

04.12.2010

As of end-February 2010, the non-performing loans (NPL) ratio of universal and commercial banks (U/KBs) eased by 0.04 percentage point to 3.18 percent from last month’s 3.22 percent and by 0.55 percentage point from year ago’s 3.73 percent ratio. This is the seventeenth consecutive month that the NPL ratio has been below four percent.

The month-on-month development occurred as the 1.12 percent reduction in NPLs was accompanied by the 0.08 percent expansion in total loan portfolio (TLP). NPLs went down to P82.28 billion from last month’s P83.21 billion while TLP grew to P2,584.67 billion from P2,582.64 billion.

Net of interbank loans, the NPL ratio also improved to 3.62 percent from last month’s 3.70 percent and year ago’s 4.19 percent ratio. The ratio favorably dropped from last month as the decline in NPLs came with the 1.05 percent growth in regular loans to P2,275.43 billion.

Meantime, the real and other properties acquired (ROPA) to gross assets (GA) ratio got better to 2.38 percent from last month’s 2.42 percent and year ago’s 2.79 percent ratio. The month-on-month movement took place as the 0.81 percent fall in ROPA to P132.98 billion was complemented by the rise in GAs.

The non-performing assets (NPA) to GA ratio improved to 3.87 percent from last month’s 3.94 percent and year ago’s 4.58 percent ratio. The ratio eased from last month as the 0.93 percent drop in NPAs was accompanied by the 0.78 percent growth in GAs. The NPA level amounted to P215.26 billion, down from last month’s P217.27 billion and year ago’s P231.70 billion.

The restructured loans (RLs) to TLP ratio went down to 1.72 percent from last month’s 1.75 percent and year ago’s 2.21 percent ratio. The month-on-month decline in the ratio transpired as the 1.11 percent drop in gross RLs to P44.93 billion came with the growth in loans.

The industry provided adequate provisioning against potential credit losses. The NPL coverage ratio strengthened to 111.50 percent from last month’s 110.70 percent. Similarly, the NPA coverage ratio widened to 55.60 percent from last month’s 55.12 percent. Year-on-year, this month’s NPL and NPA coverage ratios also fared better than their reference ratios of 96.29 percent and 49.13 percent, respectively.

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