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Thrift Banks' NPL Ratio Reaches 8.21 Percent

03.11.2011

As of end-September 2010, the thrift bank industry's NPL ratio increased by 0.28 percentage point to 8.21 percent from quarter ago's 7.93 percent but improved by 0.23 percentage point from year ago's 8.44 percent. The quarter-on-quarter movement was brought by the faster expansion in NPLs at 8.93 percent than the 5.14 percent rise in total loan portfolio (TLP).

 Exclusive of interbank loans (IBL), the NPL ratio also rose by 0.39 percentage point to 8.58 percent from 8.19 percent last quarter. The increase was driven mainly by the much slower growth in TLP, net of interbank borrowings, of only 3.95 percent to P328.49 billion from last quarter's P315.99 billion in contrast with the growth in NPLs. Likewise, the ratio for this period was slightly higher by 0.04 percentage point from year ago's 8.54 percent.
 
 The proportion of restructured loans (RLs) to TLP slightly improved to 1.30 percent from last quarter's 1.34 percent and year ago's 1.41 percent ratio. The quarter-on-quarter development transpired as the growth in TLP was more than thrice the 1.69 percent expansion in RLs.

 Meanwhile, the real and other properties acquired (ROPA) to gross assets (GAs) ratio improved to 4.17 percent from last quarter and year ago's 4.41 percent. This occurred as ROPA grew at a much slower rate than the expansion in GAs. ROPA expanded by 1.60 and 6.79 percent on a quarter-on-quarter and year-on-year basis, respectively.
 
 The non-performing assets (NPA) ratio improved to 8.92 percent or by 0.16 percentage point from last quarter's 9.08 percent and year ago's 9.18 percent ratio. The quarter-on-quarter easement transpired as the 5.36 percent expansion in NPAs to P53.07 billion was slower than the 7.29 percent growth in GAs.

 The NPL coverage ratio fell to 51.46 percent from 53.05 percent last quarter as the 5.66 percent build-up in loan loss reserves to P14.50 billion was slower than the 8.93 percent increase in NPLs. Nonetheless, the NPL cover for the quarter was still better by 1.66 percentage points from year ago's 49.80 percent ratio.
 
 The NPA coverage ratio widened to 32.06 percent from 31.94 percent last quarter and year ago's 30.00 percent ratio. The quarter-on-quarter movement was due to the faster expansion in NPA reserves at 5.77 percent as opposed to the 5.36 percent growth in NPAs.

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