07.06.2012 As of end-September 2011, the non-performing loans (NPL) ratio of the cooperative banking industry improved further by 0.67 percentage point to 7.44 percent from last quarter’s 8.11 percent and by 0.91 percentage point from 8.35 percent ratio a year ago.
The industry’s NPL ratio eased from last quarter as NPLs contracted by 4.17 percent to P0.93 billion from last quarter’s P0.97 billion while total loan portfolio (TLP) simultaneously expanded by 4.45 percent to P12.43 billion from P11.90 billion.
In terms of the three main geographical regions, cooperative banks in Mindanao reported the best NPL ratio at 5.26 percent compared with cooperative banks in Luzon and Visayas which posted NPL ratios of 7.93 percent and 8.98 percent, respectively.
Meanwhile, the ratio of restructured loans (RLs), gross to TLP slightly rose to 0.98 percent from last quarter’s 0.96 percent due to the 7.08 percent rise in RLs to P0.12 billion outpacing the growth in TLP.
On the other hand, real and other properties acquired (ROPA), gross, declined by 0.99 percent to P0.40 billion from last quarter’s P0.41 billion resulting to a lower ratio of ROPA to gross assets of 2.34 percent from 2.42 percent last quarter.
With lower levels of delinquent loans and ROPA, non-performing assets (NPA) decreased by 3.22 percent to P1.33 billion from last quarter’s P1.37 billion. Hence, the NPA ratio of the industry eased to 7.75 percent from 8.21 percent last quarter as a result of the decline in NPAs coupled with the rise in gross assets.
As a result of the combined effect of the contraction in NPLs and the 5.45 percent expansion in loan loss reserves to P0.73 billion from last quarter’s P0.69 billion, the NPL coverage ratio strengthened to 79.03 percent from 71.82 percent last quarter.
Likewise, the NPA coverage ratio widened to 57.79 percent from last quarter’s 53.07 percent as the 5.40 percent growth in NPA reserves to P0.77 billion from P0.73 billion last quarter was complemented by the reduction in NPAs.
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