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Loan Quality of TBs, RBs and Coop Banks Improves


The combined gross non-performing loans (NPL) of thrift (TBs) rural (RBs) and cooperative banks represented 7.04 percent of the banks’ total loan portfolio (TLP) of Php 639.99 billion at the end of 2013.

The gross NPL ratio of TBs, RBs and cooperative banks improved slightly from the 7.33 percent recorded a quarter earlier as the banks kept their NPL levels in check amid a rise in lending. The banks’ TLP at end-2013 was a 3.64 percent increase from the Php 617.49 billion posted in September last year.

The TLP of TBs, RBs and cooperative banks at end-2013 represented 13.07 percent of the Philippine banking system’s TLP of Php 4.90 trillion during the period.

Among the country’s economic sectors, the banks’ top borrowers were real estate; individuals who use the loans for consumption; agriculture; wholesale and retail trade; and other community, social and personal service.

Aside from keeping the NPL ratio low, the banks also set aside substantial reserves for potential credit losses. In December last year, the banks’ loan loss reserves stood at 67.58 percent of their gross NPLs, higher than the 66.10 percent posted a quarter earlier.

TBs’ gross NPL ratio improved slightly to 5.46 percent at end-2013 from 5.89 percent at the end of the third quarter last year. TBs’ loan loss reserves also rose to 72.51 percent last December from 69.90 percent in September 2013.

The gross NPL ratio of RBs and cooperative banks, meanwhile, rose to 13.13 percent at the end of the previous year from 12.93 percent a quarter earlier. Their loan loss reserves, however, increased slightly to 59.68 percent at end-2013 from 59.40 percent in September last year.

The latest NPL figures indicate an overall improvement in the banks’ loan quality. The BSP keenly monitors this indicator as part of its efforts to promote adherence to high credit standards and to foster the stability of the financial system.

View Tables: Thrift Banks  |  Rural Banks  |  Coop Banks  |  TBs, RBs, and Coop Banks

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