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Turnaround in the KB NPLs as of January 2003


The Non-Performing Loans (NPL) ratio broke its downward trend as it posted a 0.17 percentage point increase to 15.12 percent as of end-January 2003 from its year-end result of 14.95 percent. Nevertheless, year-on-year comparison yielded significant improvement of 3.18 percentage points. Net of Interbank Loans (IBL), NPL ratio posted a mere 0.08 percentage point build up to 17.22 percent from 17.14 percent last month. Meanwhile, NPL level inched up by 0.96 percent or by P2.36 billion to P247.46 billion from P245.10 billion last month.

In the wake of a still expanding NPL level, efforts to restructure and foreclose on collateral securities continued. Restructured Loans (RL) marginally increased by 0.84 percent or P1.07 billion to P129.12 billion, whereas Real and Other Properties Owned or Acquired (ROPOA) grew from last month by 0.36 percent or P0.66 billion to P183.69 billion.

While Total Loan Portfolio (TLP) went down from last month by 0.16 percent or P2.60 billion to P1,636.78 billion, this was mainly due to IBL which substantially decreased by 4.62 percent or P9.66 billion to P199.40 billion from the previous month’s P209.05 billion. This meant that underlying regular lending activities further improved by 0.49 percent or P7.06 billion, as TLP, net of IBL, increased to P1,437.38 billion.

The NPL coverage ratio (Loan Loss Reserves to NPLs) dipped marginally to 50.39 percent as against last month’s ratio of 51.19 percent mainly due to the decline in LLR by 0.62 percent to P124.69 billion.

Overall asset quality deteriorated with a slightly padded Non-Performing Assets (NPA) of P431.15 billion, up by 0.70 percent from the previous month’s P428.13 billion. This induced a 0.26 percentage point growth in the NPA ratio from 13.06 percent last month to 13.32 percent during the period.

Likewise, NPA coverage ratio (NPA valuation reserves to NPAs) narrowed from 31.67 percent to 31.28 percent this month, as NPA reserves (LLRS plus provision for ROPOA) shrunk by 0.53 percent or P0.72 billion to P134.88 billion from P135.60 billion last month.

Although past due ratio slightly deteriorated to 16.05 percent from 15.69 percent last month, there was an improvement of 2.67 percentage points from a year ago of 18.72 percent. Total past due loans (past due plus items in litigation) of the industry surged by 2.22 percent or by P5.77 billion, from last month’s level of P259.68 billion to P265.45 billion compared with P296.66 billion a year ago.

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