The gross non-performing loans (NPL) of universal and commercial banks (U/KBs) represented 1.60 percent of their total loan portfolio (TLP) at end-December 2015.
The U/KBs’ latest NPL ratio improved from the 1.75 percent registered at end-November last year as the banks’ gross NPLs declined amid a rise in their TLP. The end-2015 figure is the lowest posted by the U/KB industry within the last six years.
The banks’ gross NPLs of Php 91.60 billion in December 2015 decreased from the Php 95.37 billion reported a month earlier. The U/KBs’ TLP, meanwhile, grew to Php 5.72 trillion from the Php 5.44 trillion recorded in November last year.
Aside from keeping the NPL ratio low, the U/KB industry continued to set aside substantial reserves as buffer for potential credit losses. At end-December last year, the industry provisioned for 141.07 percent of its gross NPLs. This NPL coverage ratio stood at 139.98 percent a month earlier.
The U/KBs’ gross NPLs also remained manageable across economic sectors as seen in financial and insurance activities; real estate; manufacturing; wholesale and retail trade; and electricity, gas, steam and air-conditioning supply, which accounted for 69.2 percent of the banks’ TLP in December 2015.
The latest data on UKBs’ loan quality indicate their continued adherence to high credit standards. The Bangko Sentral ng Pilipinas monitors U/KBs’ loan quality as part of its supervisory efforts to promote financial stability.