The ratio between the gross non-performing loans (NPLs) of universal and commercial banks’ (U/KBs) and their total loan portfolio (TLP) stood at 1.95 percent at end-March this year.
The banks’ gross NPL ratio in March was practically unchanged from the 1.96 percent recorded in February and the 1.98 percent in January 2015. Said monthly banking indicator has been below two percent since November last year.
U/KBs’ gross NPLs increased to Php 97.36 billion in March from Php 95.66 billion in February this year. The banks’ TLP also rose month-on-month from Php 4.87 trillion to Php 4.99 trillion during the period.
While the NPL ratio remained low, the banks’ reserves for potential credit losses continued to exceed gross NPLs. At end-March this year, U/KBs provisioned for 138.19 percent of their gross NPLs. The NPL coverage ratio stood at 140.46 percent a month earlier.
The U/KBs’ gross NPLs also remained manageable across economic sectors as seen in financial intermediation; real estate; manufacturing; wholesale and retail trade; and electricity, gas, steam and air-conditioning supply, which accounted for 69 percent of the banks’ TLP at end-March 2015.
The Bangko Sentral ng Pilipinas (BSP) monitors the loan quality of the banking system in line with its efforts to foster high credit underwriting standards. This is essential to Financial Stability, which is the overarching policy objective of the BSP.