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U/KBs' NPL Ratio Improves to 2.93 Percent in February


As of end-February 2011, the non-performing loans (NPL) ratio of universal and commercial banks (U/KBs) improved by 0.08 percentage point to 2.93 percent from last month's 3.01 percent and by 0.25 percentage point from year ago's 3.18 percent ratio. This is the twenty-ninth consecutive month that the NPL ratio has been below four percent.

The month-on-month development transpired as the 0.49 percent increase in NPLs was outpaced by the 2.98 percent expansion in total loan portfolio (TLP).  NPLs grew to P81.79 billion from last month's P81.38 billion while TLP increased to P2,787.16 billion from P2,706.53 billion.
Net of interbank loans, the NPL ratio also eased to 3.18 percent from last month's 3.24 and year ago's 3.62 percent ratio. The ratio dropped from last month as the hike in NPLs was outweighed by the 2.42 percent rise in regular loans to P2,575.24 billion.

The restructured loans (RLs) to TLP ratio went down to 1.57 percent from last month's 1.65 percent and year ago's 1.72 percent ratio. The month-on-month decline in the ratio was driven by the 1.90 percent reduction in gross RLs to P44.10 billion.
Meantime, the real and other properties acquired (ROPA) to gross assets (GA) ratio got better to 2.02 percent from last month's 2.06 percent and year ago's 2.38 percent ratio. The ratio fell from last month as the 0.02 percent drop in ROPA to P124.35 billion was accompanied by the growth in GAs.

The non-performing assets (NPA) to GA ratio improved to 3.37 percent from last month's 3.42 percent and year ago's 3.87 percent ratio. The easing of the ratio from last month occurred as the 0.18 percent hike in NPAs was surpassed by the larger rise in GAs. The NPA level stood at P206.14 billion, up from last month's P205.77 billion but down from year ago's P215.26 billion.

The industry provided adequate provisioning against potential credit losses. The NPL coverage ratio strengthened to 119.57 percent from last month's 117.47 percent. Similarly, the NPA coverage ratio widened to 61.00 percent from last month's 59.94 percent. Year-on-year, both NPL and NPA coverage ratios also fared better than their reference ratios of 111.50 percent and 55.60 percent, respectively.

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