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Update in NPLs of Thrift Banks as of June 2002

09.13.2002

Loan quality of the thrift banking industry improved this June as the Non-Performing Loan [NPL] ratio (NPL to total loan portfolio) dropped to 13.41 percent from 14.33 percent last month as NPLs declined by 2.47 percent from P20.83 billion to P20.31 billion, even as total loan portfolio grew by 4.24 percent from P145.34 billion a month ago to P151.51 billion. Previous year’s NPL ratio stood lower at 11.60 percent. Net of Interbank Loans, NPL ratio stood at 14.16 percent compared to 15.15 percent last month and 12.13 percent last year.

NPL coverage [loan loss reserves (LLR) to NPL] expanded to 46.49 percent from 45.98 percent a month ago as the reduction in NPLs by 2.47 percent exceeded the reduction in loan loss reserves by 1.38 percent from P9.58 billion to P 9.44 billion. Last year’s ratio however was still higher at 49.55 percent.

Gross restructured loans (RLs) to TLP ratio receded to 2.72 percent this month from 2.82 percent last month and 3.59 percent last year as the 4.24 percent loan expansion outweighed the 0.52 percent growth in RLs from P4.10 billion last month to P4.13 billion this month.

The 2.47 percent expansion in gross assets to P264.62 billion from P258.24 billion outsized the 0.43 percent growth in Non-Performing Assets (NPA) from P48.38 billion to P48.59 billion. This pushed down NPA ratio (NPLs + ROPOA-gross to gross assets) to 18.36 percent this month compared to 18.73 percent last month. NPA ratio was much lower at 16.26 percent last year.

NPA coverage ratio (LLR + provisions for ROPOA to NPA) tapered off to 21.21 percent from 21.57 percent last month as brought on by the 1.25 percent drop in NPA reserves from P10.43 billion to P10.30 billion and the simultaneous hike of 0.43 percent in NPAs. NPA coverage was higher at 22.59 percent the previous year.

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