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U/KBs' NPL Ratio Stands at 3.20 Percent in October

12.17.2010

As of end-October 2010, the non-performing loans (NPL) ratio of universal and commercial banks (U/KBs) stood at 3.20 percent. This is higher by 0.09 percentage point than last month’s 3.11 percent but an improvement by 0.17 percentage point from year ago’s 3.37 percent ratio. This is the twenty-fifth consecutive month that the NPL ratio has been below four percent.

The month-on-month movement came about as the 0.25 percent rise in NPLs was accompanied by the 2.48 percent decline in total loan portfolio (TLP). NPLs rose to P83.35 billion from last month’s P83.14 billion while TLP dropped to P2,604.05 billion from P2,670.32 billion.

Net of interbank loans, the NPL ratio rose to 3.49 percent from last month’s 3.46 but eased from year ago’s 3.89 percent ratio. The increase in the ratio from last month transpired as the growth in NPLs came with the 0.53 percent reduction in regular loans to P2,387.04 billion.

The restructured loans (RLs) to TLP ratio went up to 1.66 percent from last month’s 1.64 percent but fell from year ago’s 1.91 percent ratio. The ratio increased from last month as the 0.74 percent reduction in gross RLs to P43.72 billion was outweighed by the larger contraction in loans.

Meantime, the real and other properties acquired (ROPA) to gross assets (GA) ratio got better to 2.19 percent from last month’s 2.21 percent and year ago’s 2.55 percent ratio. The ratio fell from last month as the 0.52 percent decline in ROPA to P127.84 billion came with the growth in GAs.

The non-performing assets (NPA) to GA ratio improved to 3.63 percent from last month’s 3.65 percent and year ago’s 4.16 percent ratio. The improvement from last month occurred as the 0.22 percent drop in NPAs came with the growth in GAs. The NPA level stood at P211.19 billion, down from last month’s P211.65 billion and year ago’s P222.49 billion.

U/KBs provided adequate provisioning against potential credit losses. The NPL coverage ratio strengthened to 117.15 percent from last month’s 117.13 percent. Likewise, the NPA coverage ratio widened to 59.67 percent from last month’s 59.57 percent. Year-on-year, this month’s NPL and NPA coverage ratios also fared better than their reference ratios of 106.37 percent and 53.04 percent, respectively.

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