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Update on NPLs of Thrift Banks as of End-February 2003

06.06.2003

Overall asset quality was maintained this month with only slight movements in the industry’s NPL (Non-Performing Loans) and NPA (Non-Performing Assets) ratios compared to the previous month.

The NPL ratio slightly rose to 12.24 percent from 12.22 percent last month as the 0.17 percent drop in NPL was offset by a 0.34 percent decline in TLP.

The NPA ratio slid to 17.46 percent from 17.51 percent last month as the 0.32 percent hike in NPAs was partially offset by the 0.60 percent increase in gross assets.

This month’s NPL and NPA ratios remained lower than previous year’s ratios of 12.61 percent and 17.70 percent, respectively.

Net of Interbank Loans (IBL), NPL ratio, on the other hand fell to 12.77 percent from last month’s 12.80 percent with the 0.17 percent drop in NPL, which was accompanied by a slight expansion in regular lending activities as manifested by the 0.02 percent increase in TLP (net of IBL).

The industry, nonetheless, posted favorable NPL and NPA coverages this month. The increase in Loan Loss Reserves (LLR) by 1.38 percent from to P7.62 billion coupled by the 0.17 percent reduction in NPL resulted in a higher NPL coverage ratio (LLR to NPL) of 42.29 percent compared to last month’s 41.64 percent. Likewise, NPA coverage ratio (LLR + provisions for ROPOA to NPA) climbed to 19.10 percent from 18.87 percent last month due to the 1.58 reserve expansion to P8.68 billion, which counteracted the 0.32 percent hike in NPAs.

Restructuring continued to be pursued by the industry as a measure to address delinquent accounts. Gross restructured loans increased by 4.31 percent to P3.45 billion. This resulted to a higher RL to TLP ratio of 2.33 percent from 2.22 percent last month. This month’s ratio, however, was still lower compared to last year’s 2.65 percent.

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