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U/KBs' NPL Levels Improve in September

12.23.2014

The gross non-performing loans (NPLs) of universal and commercial banks (U/KBs) represented 2.04 percent of the banks’ total loan portfolio (TLP) at end-September this year, the lowest since December 2009.

The U/KBs’ gross NPLs improved as their lending increased to Php 4.70 trillion in September from Php 4.59 trillion a month earlier. The banks’ gross NPLs, meanwhile, declined to Php 96.18 billion from Php 101.20 billion posted in August this year.

The banks gross NPL ratio eased from the 2.21 percent posted in August this year.

As a prudential banking measure, the banks’ loan loss reserves (LLR) for potential credit losses continued to surpass their NPLs. In September, the U/KBs’ LLR stood at 139.02 percent of their gross NPLs, up from the 133.95 posted in August.

Meanwhile, NPL levels across economic sectors 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 71.3 percent of the U/KBs’ TLP during the period. 

The Bangko Sentral ng Pilipinas continues to keep track of the loan quality of U/KBs in line with its supervisory efforts to foster high credit standards. This is essential to BSP’s policy objective of fostering financial stability.

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