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KB NPLs as of November 2002 Fell Anew

01.24.2003

The Non-Performing Loans (NPL) ratio as of month-end November 2002 fell anew to 16.27 percent, down by 0.09 percentage point from last month’s ratio of 16.36 percent and by 2.49 percentage points from 18.76 percent a year ago. For the month of November 2002, the implementation of BSP Circular No. 351 reduced the NPL ratio of the KB industry by 0.52 percentage point. Under BSP Circular No. 202, the NPL ratio was at 16.79 percent, a marginal improvement of 0.09 percentage point from last month’s ratio of 16.88 percent.

NPL level fell by 0.62 percent or by P1.65 billion to P263.91 billion from P265.57 billion last month. The re-definition reduced the NPL volume by P10.08 billion this month and by P10.24 billion last month. Otherwise, NPL levels under the previous definition would have been P273.99 billion, still lower by 0.66 percent or by P1.82 billion from last month’s P275.81 billion.

Apart from the impact of BSP Circular No. 351, the reduction in NPL level was achieved through restructuring and foreclosure proceedings. Restructured Loans (RL) slightly increased by 1.20 percent, or P1.51 billion, to P127.58 billion, whereas Real and Other Properties Owned or Acquired (ROPOA) grew from last month by 0.48 percent, or P0.86 billion, to P177.52 billion.

Regular lending activities were sustained as Total Loan Portfolio (TLP), net of Interbank Loans (IBL) grew by 0.61 percent to P1,433.26 billion from P1,424.57 billion a month ago. IBL, on the other hand, contracted by 5.18 percent, or P10.32 billion, to P188.78 billion this month.

The NPL coverage ratio (Loan Loss Reserves to NPLs) further improved to 48.86 percent as against last month’s ratio of 48.68 percent despite the 0.24 percent or P0.31 billion decrease in LLRs, from P129.27 billion last month to P128.95 billion this month. The improvement was due to higher reduction of 0.62 percent or P1.65 billion in the NPL level.

Ratio of Gross RLs to TLP increased further to 7.87 percent from 7.76 percent last month, as gross RLs continued to move up by 1.20 percent to P127.58 billion this month, even as TLP decreased by 0.10 percent to P1,622.04 billion from P1,623.68 billion last month. Past due ratio of RLs improved to 38.30 percent from the previous month’s 39.81 percent and last year’s 44.44 percent.

The ratio of ROPOA to Gross Assets (GA) was at 5.52 percent, down by a mere 0.03 percentage point from the previous month’s 5.55 percent. The rise in GA by 1.00 percent to P3,215.71 billion this month outmatched the upward movement in the holdings of ROPOA (gross) by 0.48 percent to P177.52 billion from last month’s P176.66 billion.

Improvement in the overall asset quality was sustained with the drop in Non-Performing Assets (NPA) by 0.18 percent to P441.43 billion which induced a 0.16 percentage point reduction in the NPA ratio from 13.89 percent to 13.73 percent this month. Sans the redefinition, this ratio would have been 14.00 percent or higher by 0.27 percentage point.

NPA coverage ratio (NPA valuation reserves to NPAs) increased from 31.33 percent last month to 31.35 percent this month even with the decline in the NPA reserves (LLRs plus provision for ROPOA) by 0.13 percent to P138.38 billion from P138.57 billion last month. The NPA coverage ratio under the old definition showed a higher ratio of 32.88 percent.

Past due ratio improved to 16.70 percent from 16.77 percent last month as total past due loans (past due plus items in litigation) of the industry declined by 0.50 percent, or by P1.37 billion, from last month’s level of P273.93 billion to P272.57 billion. On a year-on-year, past due ratio had substantially gone down by 2.72 percent from 19.42 percent at end-November 2001.

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