The gross non-performing loans (NPLs) of rural (RBs) and cooperative banks (CBs) represented 11.53 percent of the rural and cooperative banks’ total loan portfolio (TLP) at end-September 2015.
The latest NPL ratio marginally declined from the 11.90 percent registered at end-June last year amid the decline in RCBs’ gross NPLs quarter-on-quarter and an expansion in TLP.
RCBs’ lending grew by 1.37 percent to Php 121.42 billion in September 2015 from Php 119.78 billion posted in June. Meanwhile, the banks’ NPLs declined by 1.81 percent to Php 14.0 billion in September from Php 14.25 billion recorded a quarter earlier.
As a buffer against potential credit losses, the industry set aside loan loss reserves equivalent to 65.70 percent of its gross NPLs in September. This is higher than 62.51 percent NPL coverage ratio registered in June.
The top borrowers of the banks across economic sectors were agriculture, forestry, and fishing; wholesale and retail trade; and loans to individuals for consumption purposes which represented 60 percent of the banks’ TLP at end-September last year.
The latest NPL figures indicate the banks’ continued efforts to adhere to sound credit risk management principles and to maintain loan quality. These are essential to sustaining the viability of individual banks and to maintaining the overall stability of the domestic financial system.