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Update on NPLs of Thrift Banks as of End-March 2004

06.18.2004

The non-performing loans (NPL) ratio of the thrift banking industry improved to 12.28 percent from 12.35 percent last month. This ratio is 0.44 percentage point lower than the 12.72 percent NPL ratio as of end-March 2003. This developed as NPLs declined by 0.3 percent while total loan portfolio (TLP), gross increased by 0.2 percent. The decline in NPLs was on account of the P0.39 billion combined reduction in their NPLs reported by 45 banks (or 50.0 percent of the 90 operating banks), which more than offset the P0.33 billion combined increase in NPLs of 30 banks. The remaining 15 banks reported no change in their NPLs.

Likewise, the industry’s NPL ratio, exclusive of interbank loans improved to 12.64 percent, or by 0.14 percentage point and 0.44 percentage point from last month’s 12.78 percent ratio and a year ago’s 13.08 percent ratio, respectively.

Month-on-month, restructured loans (RLs), gross fell to P3.91 billion (or by 1.4 percent). This resulted to a lower ratio of RLs, gross to TLP, gross at 2.50 percent from 2.54 percent last month. Nonetheless, this was still higher by 0.12 percentage point from the 2.38 percent ratio a year ago.

The non-performing assets (NPA) ratio of the industry stood at 16.67 percent, an improvement from 16.75 percent (or by 0.08 percentage point) last month and from 17.55 percent (or by 0.88 percentage point) last year. The improved NPA ratio was driven mainly by the 0.4 percent rise in gross assets as the NPA level remained almost the same as last month’s P47.77 billion.

Loan loss reserves (LLRs) rose by 0.7 percent to P7.51 billion from P7.46 billion last month. This bolstered the NPL coverage ratio to 39.28 percent or by 0.40 percentage from 38.88 percent point last month. Likewise, the NPA coverage ratio strengthened to 18.04 percent or by 0.13 percentage point from last month’s ratio of 17.91 percent. Year-on-year, however, this month’s NPL and NPA coverage ratios were still lower from year ago’s ratios of 39.67 percent and 18.52 percent, respectively.

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