Loan quality of the industry was downgraded significantly this March as reflected by the Non-Performing Loans (NPL) ratio which rose to 14.42 percent from 12.61 percent last month due to the 15.53 percent hike in NPLs which watered down the 1.02 percent expansion in loan portfolio. NPL levels climbed to P20.49 billion this month from P17.73 billion last month while total loan portfolio went up to P142.07 billion from P140.64 billion. Previous year’s NPL ratio stood even lower at 11.53 percent. Net of Interbank Loans, NPL ratio climbed to 15.05 percent compared to 13.08 percent last month and 12.03 percent last year.
NPL coverage ratio [loan loss reserves (LLR) to NPL] narrowed to 45.72 percent from 53.38 percent a month ago as a result of the 1.04 percent reduction in loan loss reserves to P9.37 billion despite the 15.53 percent hike in NPL level. Last year’s NPL coverage stood at 49.64 percent.
Meanwhile, the ratio of gross restructured loans (RLs) to TLP rose this month to 2.71 percent from 2.65 percent last month as 3.43 percent growth in restructured loans from P3.72 billion to P3.85 billion, outpaced loan expansion by 1.02 percent. Last year’s ratio however was lower at 2.43 percent.
Overall asset quality weakened as represented by the Non-Performing Assets [NPA] ratio (NPL+ ROPOA Gross to Gross Assets) which rose to 18.67 percent from 17.70 percent. NPAs, which increased by 5.62 percent to P46.93 billion from P44.44 billion outweighed the 0.10 percent growth in gross assets, which expanded to P251.35 billion from P251.10 billion.
NPA coverage ratio (LLR + provisions for ROPOA to NPA) dropped to 21.78 percent from 23.05 percent last month as a result of the 5.62 percent rise in NPAs and the 0.22 percent cut in NPA reserves. Previous year’s NPA coverage was higher at 23.42 percent.