As of end-June 2010, the NPL ratio of the cooperative banking industry rose to 8.52 percent from last quarter’s 7.06 percent. Nevertheless, this was 0.08 percentage point better than year ago’s 8.60 percent ratio.
The quarter-on-quarter growth in the NPL ratio came about as NPLs increased by 19.65 percent to P0.93 billion from P0.77 billion. Simultaneously, TLP contracted by 0.85 percent to P10.88 billion from P10.97 billion.
In terms of the three main geographical regions, cooperative banks in Luzon posted the best NPL ratio at 7.04 percent as against cooperative banks in Mindanao and Visayas which posted NPL ratios of 12.20 percent and 13.48 percent, respectively.
The ratio of restructured loans (RLs), gross to TLP went down to 1.11 percent from last quarter’s 1.90 percent. The quarter-on-quarter reduction came about as RLs, gross dropped by 42.11 percent to P0.12 billion.
Real and other properties acquired (ROPA), gross likewise declined to P0.32 billion from its previous quarter’s level of P0.36 billion. Consequently, the ratio of ROPA, gross to gross assets fell to 2.01 percent from 2.30 percent.
With higher level of delinquent loans surpassing the reduction in ROPA, the non-performing assets (NPA) increased from last quarter by 9.11 percent to P1.24 billion, resulting to a higher NPA ratio at 7.93 percent from 7.19 percent. Nonetheless, this quarter’s ratio was still better than year ago’s 9.04 percent.
The NPL coverage ratio narrowed to 59.15 percent from 71.92 percent last quarter. This resulted from the 1.60 percent decline in loan loss reserves (LLRs) to P0.55 billion from P0.56 billion simultaneous with the 19.65 percent rise in NPLs.
Likewise, the NPA coverage ratio of the industry slid to 45.34 percent from last quarter’s 50.13 percent but still better than year ago’s 38.37 percent ratio.