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Update on NPLs of Thrift Banks as of March 2005

07.28.2005

As of end-March 2005, the loan quality of the thrift banking industry further improved as the non-performing loans (NPL) ratio dropped to 10.12 percent from 10.25 percent last month and 12.36 percent a year ago. The month-on-month development was due to the 0.4 percent decline in NPLs, which was accompanied by a 0.9 percent expansion in total loan portfolio (TLP). 

Exclusive of interbank loans, the NPL ratio likewise improved to 10.56 percent from last month’s 10.70 percent and year ago’s 12.71 percent. This took place as the reduction in NPLs was complemented by a 1.0 percent expansion in regular loans to P166.54 billion from P164.97 billion last month.  

The ratio of real and other properties owned or acquired (ROPOA) to gross assets rose to 10.64 percent from last month’s 10.58 percent but improved from year ago’s 11.31 percent. The month-on-month increase developed as the 1.1 percent hike in ROPOA outpaced the 0.5 percent expansion in gross assets.

The restructured loans (RLs) to TLP ratio inched up to 2.60 percent from 2.51 percent last month and 2.49 percent a year ago. This was brought about by the 4.7 percent month-on-month growth in RLs to P4.57 billion.  

The non-performing assets (NPA) ratio was the same as last month’s 15.05 percent. This came about as the NPAs and gross assets both had a 0.5 percent month-on-month increase. This month’s ratio, nonetheless, was an improvement from the 17.11 percent ratio a year ago. 

The NPL coverage ratio favorably widened to 36.02 percent from 35.40 percent last month. This ratio, however, was still lower than the 39.03 percent ratio a year ago. The month-on-month development was attributed to the 1.3 percent increase in loan loss reserves, which accompanied the 0.4 percent decline in NPLs.  

The NPA coverage ratio also favorably moved up to 16.37 percent from 16.22 percent last month on account of the 1.4 percent growth in NPA reserves. This month’s ratio, however, was still lower than the 17.49 percent ratio a year ago.

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