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Universal and Commercial Banks' NPL Ratio Improves

07.15.2004

The industry’s NPL ratio at end-May 2004 improved slightly by 0.03 percentage point to 13.55 percent from 13.58 percent last month. This was also better by 1.86 percentage points than the 15.41 percent NPL ratio as of end-May 2003. This transpired as the 1.2 percent or P21.89 billion growth in total loan portfolio (TLP) outmatched the 1.0 percent or P2.49 billion expansion in NPLs.  The rise in NPLs was on account of the P4.34 billion combined increase in the NPLs reported by 17 banks which surpassed the P1.85 billion combined decrease in the NPLs of 15 banks.  The remaining 10 banks reported no change in their NPLs.

 Net of interbank loans (IBL), the NPL ratio, likewise, went down by 0.01 percentage point to 16.56 percent from 16.57 percent last month and by 1.08 percentage points from 17.64 a year ago. This developed as the 1.1 percent or P15.89 billion expansion in TLP (net of IBL) outgrew the 1.0 percent rise in NPLs. 

The ratio of real and other properties owned or acquired (ROPOA), gross to GAs fell by 0.10 percentage point to 5.65 percent from 5.75 percent last month. This was attributed to the 0.3 percent or P0.59 billion decrease in ROPOA to P206.87 billion complemented by the 1.5 percent or P54.09 billion increase in GAs to P3,663.48 billion.  Exclusive of performing sales contract receivables, ROPOA decline was a bit larger, i.e., by 0.4 percent or P0.74 billion to P200.94 billion from P201.68 billion. 

Restructured loans (RLs) to TLP ratio reduced slightly by 0.02 percentage point to 7.41 percent from 7.43 percent last month.  This occurred as the 1.2 percent increase in TLP outweighed the 1.0 percent or P1.29 billion expansion in RLs to P135.70 billion from P134.41 billion last month. Meantime, past due RLs to RLs ratio remained high at 41.21 percent in spite of a 0.92 percentage point improvement from last month’s ratio of 42.13 percent.  This transpired as past due RLs declined by 1.2 percent or P0.70 billion to P55.92 billion from P56.62 billion last month.           

The non-performing assets (NPA) ratio improved to 12.25 percent or by 0.14 percentage point from 12.39 percent last month and by 1.41 percentage points from 13.66 percent a year ago.  This happened as the 1.5 percent or P55.25 billion growth in gross assets (GAs) to P3,644.07 billion surpassed the 0.4 percent or P1.74 billion rise in NPAs to P446.37 billion. 

Both the NPL coverage ratio (LLRs to NPLs) and the NPA coverage ratio (NPA reserves to NPAs) strengthened by 0.33 percentage point to 53.49 percent from last month’s 53.16 percent and by 0.16 percentage point to 32.70 percent from the previous month’s 32.54 percent, respectively.

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