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KB's NPL Ratio Improves in May 2003


The industry’s Non-Performing Loans (NPL) ratio improved to 15.41 percent from 15.52 percent last month as the relatively higher growth of 2.02 percent or P33.00 billion in Total Loan Portfolio (TLP) dampened the 1.29 percent or P3.28 billion increase in NPLs during the period.

Likewise, the Non-Performing Assets (NPA) ratio recovered to 13.66 percent from 13.72 percent last month even as the industry posted continuous build-up of NPAs. The 0.84 percent increase in NPA from a month ago to P446.31 billion was outmatched by a higher increment of 1.28 percent in Gross Assets (GA) to P3,266.21 billion.

Net of Interbank Loans (IBL), the NPL ratio slightly increased to 17.64 percent from 17.44 percent last month even as TLP, net of IBL expanded by a mere 0.15 percent or P2.13 billion.

Breaking the previous months’ upward trend in the level of Restructured Loans (RL), the industry posted a slowdown in its restructuring efforts by a minimal 0.06 percent decline to P135.04 billion. However, foreclosure of collateral securities continued with a 0.23 percent hike in the level of Real and Other Properties Owned or Acquired (ROPOA) to P189.28 billion.

The industry posted declining NPL and NPA coverages. Although both Loan Loss Reserves (LLRs) and NPA reserves (LLRs plus provision for ROPOA) rose from last month by 0.70 percent and 0.65 percent, respectively, such increases were offset by the relatively higher growth rates of NPLs (1.29 percent) and NPAs (0.84 percent). Thus, the NPL coverage ratio (LLRs to NPLs) slipped to 50.31 percent from 50.61 percent last month while the NPA coverage ratio (NPA valuation reserves to NPAs) subsided to 31.87 percent from 31.93 percent last month.

The ratio of Gross RLs to TLP dropped by 0.17 percentage point to 8.01 percent as gross RLs were reduced from last month by 0.06 percent to P135.04 billion.

Moreover, past due ratio improved to 16.41 percent from last month’s 16.51 percent. This developed as the increment in past due loans of 1.39 percent to P276.55 billion was outmatched by the 2.03 percent expansion in TLP to P1,685.15 billion.

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