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Update on NPLs of Thrift Banks as of July 2002

10.14.2002

Loan quality of the thrift banking industry slightly improved in July as the Non-Performing Loan [NPL] ratio (NPL to total loan portfolio) dropped to 13.22 percent from 13.41 percent last month as NPLs fell by 0.48 percent from P20.31 billion to P20.21 billion while total loans increased by 0.89 percent from P151.51 billion to P152.86 billion. Previous year’s NPL ratio however stood lower at 11.96 percent. Net of Interbank Loans, NPL ratio stood at 14.20 percent compared to 14.16 percent last month and 12.50 percent last year.

NPL coverage [loan loss reserves (LLR) to NPL] inched up to 48.22 percent from 46.49 percent a month ago due to incremental loan loss reserves of 3.21 percent, accompanied by a 0.48 percent drop in NPLs. Last year’s ratio however was still higher at 48.97 percent.

Gross restructured loans (RLs) to TLP ratio shrunk to 2.60 percent this month from 2.72 percent last month and 3.55 percent last year as RLs dropped by 3.83 percent while loans grew by 0.89 percent.  

Overall asset quality also improved as shown by the Non-Performing Assets ratio (NPLs + ROPOA-gross to gross assets), which dropped to 17.84 percent from 18.36 percent last month as the 3.54 percent reduction in NPAs (largely influenced by the drop in ROPOA) counteracted the 0.72 percent contraction in gross assets. NPA ratio was still lower last year at 16.52 percent. 

NPA coverage ratio (LLR + provisions for ROPOA to NPA) expanded to 22.76 percent from 21.21 percent last month, as the 3.54 percent additional reserves accompanied the 3.54 percent NPA reduction. NPA coverage stood at 22.33 percent a year ago.

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