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Update on NPLs of Thrift Banks as of August 2002

11.15.2002

Loan quality of the industry slightly deteriorated this August as the Non-Performing Loans ratio [NPL to total loan portfolio (TLP)] rose to 13.50 percent from 13.22 percent last month due to the increase in NPL by 1.97 percent from P20.21 billion to P20.61 billion, accompanied by a 0.15 percent contraction in TLP from P152.86 billion to P152.64 billion. The NPL ratio last year was lower at 12.27 percent. Net of Interbank loans, NPL ratio moved up to 14.34 percent compared to 14.20 percent last month and 12.71 percent last year.

NPL coverage [loan loss reserves (LLR) to NPL] narrowed down to 47.08 percent from 48.22 percent a month ago as LLRs fell by 0.44 percent even as NPLs grew by 1.97 percent. Last year’s ratio however was higher at 48.28 percent.

Gross restructured loans (RLs) to TLP ratio was trimmed down to 2.57 percent this month from 2.60 percent last month as the 1.04 percent reduction in RLs outmatched the 0.15 percent contraction in TLP. This month’s ratio was also an improvement from the previous year’s 3.45 percent.

Asset quality was slightly upgraded as the Non-Performing Assets (NPA) ratio (NPLs + ROPOA-gross to gross assets) tapered off to 17.82 percent from 17.84 percent last month as the 0.37 percent gross asset growth outpaced the 0.26 percent expansion in NPAs. The ratio a year ago was still lower at 17.05 percent.

NPA coverage ratio (LLR + provisions for ROPOA to NPA) lowered to 22.65 percent from 22.76 percent last month, as a result of the 0.24 percent drop in reserves and the simultaneous rise by 0.26 percent in NPAs. NPA coverage stood at 22.14 percent the previous year.

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