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U/KBs' NPL Ratio at 2.52 Percent

10.14.2011

The non-performing loans (NPL) ratio of universal and commercial banks (U/KBs) as of end-August 2011 rose to 2.52 percent, higher by 0.07 percentage point from the previous month’s 2.45 percent but better by 0.73 percentage point from year ago’s 3.25 percent ratio. The month-on-month hike in the NPL ratio stemmed from the 5.35 percent increase in NPLs to P76.96 billion from P73.05 billion, which outpaced the 2.64 percent expansion of total loan portfolio (TLP) to P3,058.20 billion from P2,979.54 billion.

Net of interbank loans (IBL), the NPL ratio also edged up to 2.68 percent from last month’s 2.62 percent but better than year ago’s 3.67 percent ratio. The ratio went up from last month due to the increase in NPLs, which outweighed the 2.97 percent rise in regular loans to P2,867.94 billion from P2,785.27 billion.

Meantime, the restructured loans (RLs) to TLP ratio improved to 1.34 percent, lower than last month’s 1.36 percent and year ago’s 1.68 percent. Despite the 0.54 percent increase in gross RLs to P41.22 billion, the ratio eased from last month due to the larger rise in TLP.

Likewise, real and other properties acquired (ROPA), gross to gross assets (GAs) ratio dropped to 1.82 percent, better than last month’s 1.89 percent and year ago’s 2.26 percent ratio. This month-on-month decline in the ratio was on account of the 0.95 percent cut in ROPA, gross accompanied by the rise in GAs.

The non-performing assets (NPA) to GAs ratio also improved to 3.03 percent from last month’s 3.07 percent and year ago’s 3.77 percent ratio. The decrease in the ratio from last month was due to the larger 2.96 percent expansion in GAs compared with the 1.45 percent increase in NPAs.

The industry’s provisioning against potential credit losses remained adequate despite some decline. The NPL coverage ratio (LLRs to NPLs) narrowed to 121.50 percent from last month’s 126.24 percent but still better than year ago’s 114.52 percent ratio. The NPA coverage ratio (NPA reserves to NPA) also narrowed to 62.31 percent from 62.50 percent last month but widened from year ago’s 59.17 percent ratio.

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