The combined gross non-performing loans (NPLs) of rural (RBs) and cooperative banks (CBs) represented 12.24 percent of the banks’ total loan portfolio (TLP) of Php 134.61 billion at end-September last year.
The third quarter figure improved from the 13.45 percent gross NPL ratio registered a quarter earlier as the amount of NPLs carried by RBs and CBs decreased amid a rise in their TLP. The banks’ TLP increased by 1.30 percent from the Php 132.89 billion posted in June 2014.
The TLP of RBs and CBs represented 2.49 percent of the banking system’s TLP of Php 5.42 trillion in September last year. Meanwhile, the NPLs of the banks comprised 0.30 percent of the banking industry’s TLP during the period.
The top borrowers of the banks across economic sectors were agriculture, hunting, forestry and fishing; wholesale and retail trade; loans to individuals for consumption purposes; and real estate, renting and business activities.
Aside from keeping the NPL ratio low, RBs and CBs also set aside loan loss reserves equivalent to 57.58 percent of their gross NPLs in September. The figure is slightly higher than the 57.31 percent recorded a quarter earlier.
The latest NPL figures indicate the banks’ continued efforts to adhere to sound credit risk management systems and to maintain high loan quality. These are essential to sustaining the viability of individual banks and to maintaining the overall stability of the domestic financial system.