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Update on NPLs of Thrift Banks

07.14.2005

As of end-January 2005, the loan quality of the thrift banking industry improved anew as the NPL ratio fell to 10.81 percent from 10.96 percent last month and 12.32 percent a year ago. The month-on-month development was due to the 0.02 percent drop in NPLs, which was accompanied by a 1.36 percent growth in total loan portfolio (TLP).

Exclusive of interbank loans (IBL), the NPL ratio, in contrast, slightly rose to 11.39 percent from last month’s 11.37 percent. This transpired as the reduction in NPLs was offset by a higher 0.18 percent decline in regular lending to P162.79 billion. Nevertheless, this month’s ratio is an improvement from year ago’s 12.83 percent.

Meanwhile, the real and other properties owned or acquired (ROPOA) to gross assets ratio dropped to 10.78 percent from 10.99 percent last month. This took place as the 0.14 percent growth in ROPOA to P34.71 billion was outmatched by the expansion in gross assets. This month’s ratio, however, is still higher than the 9.83 percent ratio a year ago.

The restructured loans (RLs) to TLP ratio inched up to 2.56 percent from 2.51 percent last month but receded from 2.61 percent a year ago. The increase in the ratio from last month was fueled by the 3.68 percent growth in RLs to P4.44 billion.

The non-performing assets (NPA) ratio improved to 15.60 percent from 15.85 percent last month and 15.87 percent a year ago. The month-on-month improvement came about as the 0.31 percent increase in NPAs was dampened by the 1.95 percent rise in gross assets. 

The NPL coverage ratio contracted to 35.64 percent from 37.04 percent last month as the 3.79 percent reduction in LLRs to P6.61 billion outweighed the drop in NPLs. This month’s ratio is also lower than the 38.16 percent ratio a year ago.

Similarly, the NPA coverage ratio narrowed to 16.58 percent from 17.18 percent last month as the NPA reserves receded by 3.21 percent. This month’s ratio was also lower than the 19.11 percent ratio a year ago.

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