The combined non-performing loans (NPLs) of rural and cooperative banks represented 11.57 percent of their total loan portfolio (TLP) of Php 127.47 billion at end-2012.
Although the ratio is higher than the 10.14 percent figure as of December 2011, the banks’ loan loss reserves for NPLs rose significantly to 61.74 percent at the end of last year from 53.26 percent in June 2012. An increase in loan loss provisioning indicates heightened prudence against credit losses.
Rural and cooperative bank loans represent 2.74 percent and 0.30 percent, respectively, of the Philippine banking system’s TLP at the end of last year.
Rural banks (RB) alone posted a 10.65 percent NPL ratio at end-2012, higher than 10.32 percent figure as of December 2011. RBs’ loan loss reserves for NPLs, however, jumped to 59.47 percent at the end of last year from 50.98 percent in June 2012.
Cooperative banks, meanwhile, registered a 19.84 percent NPL ratio last December. This figure is more than twice their 9.49 percent NPL ratio six months earlier. The increase, however, was largely due to fortuitous events such as typhoons Gener, Habagat and Helen.
The Bangko Sentral ng Pilipinas continues to proactively monitor the NPLs of the various segments of the banking sector to ensure that credit underwriting standards remain high in a low interest rate environment. Industry figures indicate that RBs and cooperative banks continue to take proactive steps in maintaining the level of their NPL as well as coverage ratios.
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