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U/KBs' NPL Ratio Remains at 2.45 Percent

09.19.2011

The non-performing loans (NPL) ratio of universal and commercial banks (U/KBs) as of end-July 2011 was the same as the previous month's 2.45 percent, better by 0.85 percentage point from year ago's 3.30 percent ratio. The NPL level continued its downtrend path easing to P73.05 billion at end-July 2011, 1.48 percent lower than the P74.14 billion of the previous month. Meantime, the 1.67 percent drop in total loan portfolio (TLP) to P2,979.54 billion from P3,030.30 billion almost matched the rate of reduction in NPLs resulting to the retention of last month's NPL ratio.

Net of IBL, the NPL ratio was the same as last month's 2.62 percent, lower by 1.09 percentage points from year ago's 3.71 percent ratio. The ratio remained the same as last month with the fall in NPLs nearly balanced the 1.55 percent decrease in regular loans to P2,785.27 billion from P2,829.25 billion last month.

Likewise, the restructured loans (RLs) to TLP ratio stayed at last month's 1.36 percent, lower than year ago's 1.73 percent ratio. The ratio was the same as last month as the 1.16 percent growth in gross RLs was offset by the decline in TLP.

Meanwhile, the real and other properties acquired (ROPA), gross to gross assets (GAs) ratio stood at 1.89 percent, slightly higher than last month's 1.86 percent but better than year ago's 2.31 percent ratio. This month-on-month development transpired as the decline in GAs surpassed the 0.63 drop in ROPA, gross.

The non-performing assets (NPA) to GAs ratio went up to 3.07 percent from last month's 3.03 percent but improved from year ago's 3.83 percent ratio. The increase in the ratio from last month was due to the 2.39 percent reduction in GAs, which outpaced the 0.96 percent drop in NPAs.

The industry continued to provide adequate provisioning against potential credit losses.  The NPL coverage ratio (loan loss reserves to NPLs) widened to 126.24 percent from last month's 126.17 percent and year ago's 112.57 percent ratio. However, the NPA coverage ratio (NPA reserves to NPA) slightly narrowed to 62.50 percent from 62.59 percent last month but still better than year ago's 57.76 percent ratio.

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