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Universal and Commercial Banks' NPL Ratio Improved

04.15.2004

The industry’s NPL (non-performing loans) ratio in February 2004 improved by 0.23 percentage point to 14.24 percent from 14.47 percent the previous month. This was also lower by 0.84 percentage point from the 15.08 percent ratio a year ago. This transpired as the 1.7 percent (or P4.23 billion) increase in NPLs was outweighed by a 3.4 percent (or P57.78 billion) rise in total loan portfolio.

Net of interbank loans, the NPL ratio, however, went up by 0.45 percentage point to 17.55 percent from 17.10 percent last month as regular lending activities declined by 0.9 percent (or P12.33 billion).

The industry continued to foreclose on collaterals in settlement of loans as real and other properties owned or acquired (ROPOA) went up by 0.6 percent (or P1.27 billion) from last month. This was outmatched by a higher 3.1 percent (or P106.35 billion) rise in gross assets (GAs) resulting to a lower ratio of ROPOA to GAs at 5.81 percent from 5.96 percent.

The NPA (non-performing assets) ratio, likewise, decreased by 0.25 percentage point to 12.84 percent from 13.09 percent last month. This developed as the 1.2 percent (or P5.25 billion) increment in NPAs was overshadowed by the 3.1 percent growth of GAs.

Meanwhile, both the NPL coverage ratio and the NPA coverage ratio went down. NPL coverage ratio fell by 1.17 percentage point to 51.97 percent from 53.14 percent while the NPA coverage ratio dropped by 0.56 percentage point to 32.16 percent from 32.72 percent last month.

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