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Update on KB NPLs as of April

06.07.2002

Non-Performing Loans (NPLs) level as of month-end April 2002 which rose by 2.54 percent or P7.5 billion, surpassed the 1.22 percent or P19.9 billion growth in total loan portfolio (TLP), from P1,632.7 billion to P1,652.6 billion. This raised NPL ratio to 18.23 percent, 0.23 percentage points and 1.47 percentage points higher than last month’s 18.00 percent and last year’s 16.76 percent. Net of interbank loans (IBL), NPL ratio also increased to 20.81 percent from last month’s  20.38 percent (Annex 1).

The rise of NPLs by P7.5 billion from last month’s P293.8 billion to P301.3 billion was largely influenced by P6.8 billion rise in NPL levels of Private Domestic EKBs. Meanwhile TLP growth of 1.2 percent or P19.9 billion to P1,652.6 billion this month from P1,632.7 billion last month was traced to P23.6 billion increments posted by Private Domestic EKBs (P5.8 billion), Foreign Branches (P16.3 billion) and Other Private KBs (P1.4 billion).

Coverage ratio (LLRs to NPLs) lowered to 43.9 percent from 44.6 percent last month, as the incremental loan loss reserves of P1.5 billion or 1.1 percent fell short of the 2.5 percent or P7.5 billion rise in NPLs.

Gross restructured loans declined by 1.2 percent or P1.4 billion to P114.6 billion from last month’s P116.1 billion but up by 14.1 percent from last year’s P100.5 billion. With TLP rising by 1.2 percent, ratio of RLs dropped to 6.9 percent of TLP from 7.1 percent last month. Past due portion of RLs however rose to 43.1 percent from 40.4 percent last month.

 The 1.8 percent growth in gross assets from P3,190.0 billion to P3,245.9 billion overtook the 1.0 percent or P1.7 billion rise in holdings of ROPOA (gross) causing the ratio of ROPOA (gross) to gross assets to slide to 5.1 percent from 5.2 percent last month. Likewise, ROPOA also declined to 9.12 percent of ROPOA plus TLP from last month’s 9.14 percent. (Annex 2)

 Overall asset quality weakened slightly as reflected by the non-performing assets ratio (NPAs [NPLs plus gross ROPOA] to gross assets) which moved up to 14.39 percent this month from 14.36 percent last month as the 1.75 percent rise in gross assets was outpaced by the 2.0 percent growth in NPAs from P458.0 billion to P467.2 billion this month.

 Increased provisioning for NPA reserves (loan loss reserves plus provision for ROPOA) by 1.1 percent to P140.0 billion from P138.5 billion last month proved inadequate to fully cover the 2.0 percent rise in NPAs. As a result, NPA coverage ratio (NPA reserves divided by NPAs) trimmed down to 30.0 percent from 30.2 percent last month.

 Using another broad definition of loan quality, the ratio of NPL plus current restructured loans plus  gross  ROPOA  to  TLP plus  ROPOA  remained at 29.3 percent this month.

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