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U/KBs' NPL Ratio Eases to 3.31 Percent in August

10.08.2010

As of end-August 2010, the non-performing loans (NPL) ratio of universal and commercial banks (U/KBs) eased by 0.06 percentage point to 3.31 percent from last month’s 3.37 percent and by 0.19 percentage point from year ago’s 3.50 percent. This is the twenty-third consecutive month that the NPL ratio has been below four percent.
 
The month-on-month improvement occurred as the 1.01 percent hike in NPLs was outpaced by the 2.84 percent expansion in total loan portfolio (TLP).  NPLs grew to P86.59 billion from last month’s P85.73 billion while TLP expanded to P2,617.90 billion from P2,545.58 billion.

Net of interbank loans, the NPL ratio also improved to 3.74 percent from last month’s 3.78 percent and year ago’s 3.99 percent ratio. The ratio fell from last month as the rise in NPLs was surpassed by the 2.06 percent growth in regular loans to P2,314.89 billion.

The restructured loans (RLs) to TLP ratio dropped to 1.68 percent from last month’s 1.73 percent and year ago’s 1.93 percent ratio. The month-on-month decline in the ratio took place as the 0.24 percent reduction in gross RLs to P44.42 billion was accompanied by the rise in loans.

Meantime, the real and other properties acquired (ROPA) to gross assets (GA) ratio got better to 2.26 percent from last month’s 2.31 percent and year ago’s 2.66 percent ratio. The decline in the ratio from last month occurred as the 0.29 percent drop in ROPA to P128.57 billion was complemented by the growth in GAs.

The non-performing assets (NPA) to GA ratio improved to 3.80 percent from last month’s 3.86 percent and year ago’s 4.29 percent ratio. The month-on-month development came about as the 0.23 percent rise in NPAs was outweighed by the expansion in GAs. The NPA level stood at P215.16 billion, up from last month’s P214.66 billion but down from year ago’s P222.14 billion.

U/KBs provided adequate provisioning against potential credit losses. The NPL coverage ratio strengthened to 114.24 percent from last month’s 112.33 percent. Likewise, the NPA coverage ratio widened to 59.49 percent from last month’s 58.09 percent. Year-on-year, this month’s NPL and NPA coverage ratios also fared better than their reference ratios of 105.31 percent and 52.01 percent, respectively.

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