Universal and commercial banks’ gross non-performing loans (NPL) ratio remained manageable. At end-August this year, the U/KBs’ NPLs accounted for 2.21 percent of the banks’ total loan portfolio (TLP), slightly higher than the 2.11 percent registered a month earlier but lower from year ago’s 2.67 percent.
The 2.21 percent gross NPL ratio of U/KBs in August came about as banks posted Php 101.20 billion in NPLs while TLP stood at Php 4,588.79 billion.
The U/KBs’ NPLs increased by 6.3 percent from the figure recorded in July, the highest month-on-month NPL growth during the first eight months of 2014.
The latest figure, however, is slightly lower than the Php 101.93 billion posted in August last year.
Moreover, the banks’ loan loss reserves continued to surpass their NPLs. In August, U/KBs’ reserves for potential credit losses represented 134 percent of their NPLs. The ratio, however, decreased from the 140 percent posted in July.
Across economic sectors, NPL levels remained low as seen in financial intermediation; real estate, renting and business activities; manufacturing; wholesale and retail trade; and electricity, gas and water supply. These sectors accounted for 71.4 percent of the industry’s TLP during the period.
The BSP keenly monitors the loan quality of U/KBs as part of its efforts to ensure adherence to high credit standards. This is vital to maintaining the stability of individual banks and of the financial system.