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U/KBsí NPL Ratio at 2.54 Percent


The U/KBs’ NPL ratio as of end-October 2011 stood at 2.54 percent, higher by 0.08 percentage point from the previous month’s 2.46  percent but better by 0.65 percentage point from year ago’s 3.19 percent ratio. The month-on-month rise in the NPL ratio stemmed from the 4.11 percent increase in NPLs to P77.38 billion from P74.33 billion, which outpaced the 0.91 percent expansion of the total loan portfolio (TLP) to P3,048.07 billion from P3,020.72 billion.  

Net of interbank loans (IBL), the NPL ratio went up by 0.07 percentage point to 2.69 percent from last month’s 2.62 percent but better by 0.79 percentage point than year ago’s 3.48 percent ratio. The ratio edged up from last month due to the 4.11 percent increase in NPLs, which exceeded the 1.39 percent hike in regular loans to P2,876.51 billion from P2,836.98 billion.

On the other hand, the restructured loans (RLs) to TLP ratio eased to 1.33 percent, lower by 0.01 percentage point from 1.34 percent last month and by 0.33 percentage point from year ago’s 1.66 percent ratio. The drop in the ratio from last month transpired as the 0.32 percent fall in gross RLs was accompanied by the expansion in TLP.

Real and other properties acquired (ROPA), gross to gross assets (GAs) ratio improved to 1.80 percent from last month’s 1.81 percent and year ago’s 2.19 percent ratio. The month-on-month cut in the ratio was due to the 1.06 percent reduction in ROPA, which more than offset the drop in GAs (per Circular No. 202) to P6,400.35 billion.

The non-performing assets (NPA) to GAs ratio edged up to 3.03 percent from last month’s 2.98 percent but improved from year ago’s 3.63 percent ratio. The hike in the ratio from last month was driven by the 0.95 percent rise in NPAs and the 0.72 percent decline in GAs. Despite the drop in ROPA to P115.50 billion, NPAs rose to P192.88 billion following the hike in NPLS.

The industry’s provisioning against potential credit losses remained adequate. The NPL coverage ratio (LLRs to NPLs) narrowed to 119.07 percent from last month’s 123.70 percent but widened from year ago’s 117.20 percent ratio. Likewise, the NPA coverage ratio (NPA reserves to NPA) narrowed to 62.15 percent from 62.68 percent last month but strengthened from year ago’s 59.62 percent ratio.

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