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Update on NSSLAs as of June 2002

12.23.2002

The competitive stance of the country’s 85 operating non-stock savings & loan associations (NSSLAs) stands out viz their small bank counterparts as shown by the exceptional performance of the industry. While these financial institutions do not transact with the general public and confine its membership to a well-defined group of persons, asset levels as of month end June 2002, have already reached P52.152 billion, representing a growth of P6.579 billion or 14.44 percent on a year-on-year basis and a 2.72 percent increment from its level three months ago. The industry’s profitability while on a downtrend has been remarkable as highlighted by bottom line figures which showed return on assets (ROA) of 35.18 percent and return on equity (ROE) of 40.86 percent compared to 37.56 percent and 43.39 percent, a year ago, respectively.  NSSLAs registered net income after tax of P3.568 billion, leaping by 60.94 percent three months ago but slightly lower by 3.13 percent a year ago.

Overall liquidity position was further enhanced as Cash and Due from Banks rose by 7.26 percent from end June 2001 levels even if lower by 8.42 percent compared to the preceding quarter.  Total loans (gross) amounting to P42.960 billion or 82.37 percent of total assets, grew by 3.45 percent three months ago and 14.76 percent a year ago.  Loans to deposit ratio rose to 1,141.95 percent from 1,055.08 percent three months ago as deposits dropped by P0.174 billion or 4.42 percent, from P3.936 billion to P3.762 billion. Deposits consisted mainly of members’ funds.

The quality of loan portfolio, however, was slightly impaired caused by gradual rise in non-performing loans from P2.369 billion last year to P2.624 billion a quarter ago to P2.724 billion this quarter. The 3.81 percent increase in NPLs was tempered by 3.45 percent loan growth.  Hence, NPL ratio was little unchanged at 6.34 percent from 6.32 percent three months ago and 6.33 percent last year. To bolster the industry’s loan quality, NSSLAs continued to build up their allowance for probable loan losses as NPL coverage ratio widened to 80.07 percent from 77.55 percent last quarter and 66.91 percent a year ago.

Overall asset quality remained relatively stable despite the increase in non-performing assets (NPA) as a result of the simultaneous increase in NPLs and ROPOAs which aggregated P2.980 billion. This raised NPA to total assets ratio to 5.71 percent from 5.66 percent three months ago and 5.76 percent a year ago. Real and Other Properties Owned/Acquired (ROPOA) increased by 2.81 percent and leveled at P0.256 billion.  Levels stood at P0.249 billion and P0.257 billion, last quarter and same quarter last year.

The industry was highly solvent with its total capital accounts to total assets ratio at 86.57 percent, up from 85.93 percent three months ago and 85.55 percent last year.  Capital accounts compared to last quarter further expanded by P1.522 billion or 3.49 percent and reached P45.150 billion, of which 91.92 percent or P41.501 billion consisted mainly of members’ contribution.   Year ago level was at P38.987 billion.

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