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Updates on NPL Ratio of Universal and Commercial Banks

11.25.2004

The industry’s non-performing loans (NPL) ratio at end-September 2004 slightly moved up to 13.90 percent, higher by 0.04 percentage point from 13.86 percent last month but still an improvement of 0.59 percentage point from the 14.49 percent ratio a year ago. The increase in this month’s NPL ratio was due to the 0.3 percent climb in NPLs and the less than half of 0.1 percent drop in total loan portfolio (TLP). 

Net of interbank loans (IBL), this month’s 16.69 percent NPL ratio rose by 0.15 percentage point from last month’s 16.54 percent as a result of the 0.6 percent contraction in TLP (exclusive of IBL). 

The ratio of restructured loans (RLs) to TLP went down by 0.07 percentage point to 7.37 percent from 7.44 percent last month.  This transpired as the 1.1 percent decline in RLs outpaced the 0.1 percent contraction in TLP.  Meantime, the ratio of non-performing RLs to total RLs went up by 0.20 percentage point to 53.70 percent as the contraction in RLs overtook the 0.8 percent cut in non-performing RLs. 

The ratio of real and other properties owned or acquired (ROPOA), gross to gross assets (GAs) barely changed at 5.65 percent from last month’s 5.66 percent. During the month, the 0.5 percent increase in GAs surpassed the 0.2 percent rise in ROPOA, gross.  At the close of the third quarter of 2004, ROPOA, gross stood at P208.51 billion.  

The industry’s non-performing assets (NPA) ratio slightly improved to 12.27 percent or by 0.04 percentage point from 12.31 percent last month and by 0.98 percentage point from year ago’s ratio of 13.25 percent. This developed as the growth during the month in GAs outpaced the NPAs’ 0.1 percent increment to P450.41 billion. 

The NPL coverage ratio and NPA coverage ratio both reflected a 0.22 percentage point boost to 52.96 percent and 32.69 percent, respectively.  These improvements were results of additional P0.90 billion provisioning on loans and P0.31 billion on ROPOA.  As of end-September 2004, loan loss reserves stood at P131.74 billion while NPA reserves were reported at P147.23 billion

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