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U/KBs' NPL Ratio Improves Anew to 3.11 Percent in September

11.12.2010

As of end-September 2010, the non-performing loans (NPL) ratio of universal and commercial banks (U/KBs) improved by 0.14 percentage point to 3.11 percent from last month’s and year ago’s 3.25 percent ratio. This is the twenty-fourth consecutive month that the NPL ratio has been below four percent.

The improvement in the ratio from last month occurred as the 2.08 percent reduction in NPLs was complemented by the 2.07 percent expansion in total loan portfolio (TLP). NPLs fell to P83.14 billion from last month’s P84.91 billion while TLP expanded to P2,670.32 billion from P2,616.22 billion.

Net of interbank loans, the NPL ratio also eased to 3.46 percent from last month’s 3.67 and year ago’s 3.74 percent ratio. The month-on-month development transpired as the drop in NPLs came with the 3.74 percent growth in regular loans to P2,399.66 billion.

The real and other properties acquired (ROPA) was reduced from last month by 0.04 percent to P128.51 billion. This, together with the drop in NPLs, brought down non-performing assets (NPA) by 0.85 percent to P211.65 billion. As a result, the NPAs to Gross Assets (GA) ratio improved to 3.65 percent from the previous month’s 3.77 percent.  This month’s NPA ratio is also better than the 4.14 percent ratio posted last year. 

Meanwhile, the restructured loans (RLs) to TLP ratio went down to 1.64 percent from last month’s 1.68 percent and year ago’s 1.84 percent ratio. The ratio declined from last month as the 0.85 percent fall in gross RLs to P44.05 billion accompanied the rise in loans.

U/KBs provided adequate provisioning against potential credit losses. The NPL coverage ratio strengthened to 117.13 percent from last month’s 114.52 percent. Likewise, the NPA coverage ratio widened to 59.57 percent from last month’s 59.17 percent. Year-on-year, this month’s NPL and NPA coverage ratios also fared better than their reference ratios of 111.27 percent and 53.48 percent, respectively.

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