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KB NPLs Up in March

05.16.2003

The March 2003 Non-Performing Loans (NPL) ratio of the commercial banking industry went up again by 0.42 percentage point to 15.50 percent from the previous month’s 15.08 percent as a result of the rise in NPLs and the simultaneous contraction in Total Loan Portfolio (TLP). This ratio, however, is a significant improvement from year ago level which stood higher at 18.00 percent. Net of Interbank Loans (IBL), NPL ratio likewise deteriorated by 0.29 percentage point from 17.19 percent last month to 17.48 percent.

NPL level rose by 1.23 percent or by P3.08 billion to P253.92 billion from P250.83 billion last month. On the other hand, TLP shrunk by 1.49 percent or P24.74 billion to P1,638.49 billion from P1,663.24 billion last month. Similarly, IBL d ipped by 9.13 percent or P18.65 billion to P185.51 billion from the previous month’s P204.16 billion. Regular lending activities contracted as manifested by the 0.42 percent or P6.10 billion decrease in TLP, net of IBL, to P1,452.98 billion from P1,459.08 billion.

The NPL coverage ratio (Loan Loss Reserves to NPLs) tapered off to 49.93 percent compared to last month’s ratio of 50.16 percent as the 1.23 percent increase in the NPL level outmatched the 0.76 percent rise in LLR to P126.77 billion. Consistently, Foreign Branches had the highest coverage ratio at 154.12 percent (down by 3.68 percentage points month-on-month), trailed by Government Banks at 58.15 percent (which went up by 3.57 percentage points month-on-month).

As in the previous months, Restructured Loans (RL) increased by 0.32 percent or P0.41 billion to P129.92 billion, whereas Real and Other Properties Owned or Acquired (ROPOA) grew from last month by 0.57 percent or P1.05 billion to P185.40 billion.

Ratio of Gross RLs to TLP inched up to 7.93 percent from 7.79 percent last month as gross RLs increased by 0.32 percent to P129.92 billion and further induced by the contraction of TLP by 1.49 percent to P1,638.49 billion. Past due ratio of RLs likewise increased to 41.18 percent from the previous month’s 39.91 percent, surpassing last year’s 40.41 percent.

As in last month, the ratio of ROPOA to Gross Assets (GA) stood even at 5.67 percent as 0.57 percent growth in ROPOA (gross) closely matched 0.50 percent rise in GA. ROPOA (gross) stood at P185.40 billion, up by P1.05 billion, while GA leveled at P3,270.12 billion, an increase of P16.35 billion.

Overall asset quality slightly deteriorated with a 0.95 percent build-up of Non-Performing Assets (NPA), i.e., NPLs plus ROPOA, to P439.31 billion from P435.18 billion last month. Consequently, NPA ratio (NPA to Total Assets) went up to 13.43 percent from 13.37 percent last month.

Even with the propping up of NPA reserves (LLRs plus provisions for ROPOA) by 0.83 percent or P1.12 billion to P137.14 billion, the industry NPA coverage ratio (NPA reserves to NPAs) slightly slipped by 0.03 percentage point to 31.22 percent from 31.25 percent a month ago. NPA coverage ratio receded as increase of 0.95 percent or P4.13 billion in NPAs overtook 0.83 percent rise in NPA reserves.

Past due ratio went up further to 16.34 percent from 16.08 percent last month as total past due loans of the industry moved up by 0.11 percent or by P0.28 billion from P270.20 billion last month to P270.48 billion.

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