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Updates on NPL Ratio of Universal and Commercial Banks

10.14.2004

The industry’s non-performing loans (NPL) ratio at end-August 2004 improved to 13.84 percent or by 0.08 percentage point from 13.92 percent last month and by 1.12 percentage points from the 14.96 percent ratio a year ago. The slight decrease in this month’s NPL ratio was mainly de to the 1.8 percent rise in total loan portfolio (TLP) which dampened the 1.2 percent increase in NPLs. 

Net of interbank loans (IBL), this month’s 16.51 percent NPL ratio slightly improved by 0.03 percentage point from last month’s 16.54 percent as a result of the 1.4 percent rise  in TLP, net of IBL which surpassed the climb in NPLs. 

The ratio of restructured loans (RLs) to TLP went down by 0.14 percentage point to 7.44 percent from 7.58 percent last month.  This came about as the reduction in RLs (now reported at P134.76 billion from last month’s P134.79 billion) was complemented by the rise in TLP.  The ratio of non-performing RLs to total RLs likewise fell during the month by 1.03 percentage points to 53.50 percent as a result of the contraction in non-performing RLs. 

The ratio of real and other properties owned or acquired (ROPOA), gross to gross assets (GAs) almost leveled at 5.66 percent from last month’s 5.70 percent. The 1.0 percent increase in GAs to P3,673.54 billion surpassed the 0.5 percent rise in ROPOA, gross to P208.09 billion.  

The industry’s non-performing assets (NPA) ratio was cut to 12.30 percent or by 0.2 percentage point from 12.32 percent last month and by 1.02 percentage points from year ago’s ratio of 13.32 percent. This developed as the growth during the month in GAs outpaced the NPAs’ 0.9 percent increment to P449.26 billion. 

The NPL coverage ratio  and NPA coverage ratio both fell by 0.33 and 0.05 percentage points to 52.65 and 32.39 percent, respectively.  These were results of growths in NPLs and ROPOA which overtook the hikes in loan loss reserves (LLRs) and NPA reserves.  As of end-August 2004, LLRs stood at P130.36 billion while NPA reserves were reported at P145.53 billion

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