Loan quality of the industry was further downgraded this January as Non-Performing Loan (NPL) ratio climbed to 13.67 percent from 12.03 percent last month as the P3.70 billion or 21.91 percent expansion in NPLs to P20.62 billion overtook the 10.28 billion or 7.31 percent growth of total loan portfolio (TLP) from P140.53 billion a month ago to P150.81 billion. Previous year’s ratio level was even lower at 11.68 percent with NPLs and TLP at P15.48 billion and P132.62 billion, respectively. Net of Interbank Loans, NPL ratio also rose to 14.30 percent from 12.45 percent last month and 12.23 percent last year.
NPL coverage [loan loss reserves (LLR) to NPL] narrowed down to 47.35 percent from 51.13 percent a month ago as the 21.91 percent rise in NPL level outpaced the 12.88 percent hike in loan loss reserves.
Gross restructured loans (RLs) rose this month by 4.24 percent to P3.81 billion or equivalent to 2.53 percent of TLP from P3.66 billion or 2.60 percent of TLP last month. RLs, however, stood higher last year at P4.62 billion or 3.48 percent of TLP.
Overall asset quality weakened as reflected by the Non-Performing Assets [NPA] ratio (NPL+ ROPOA Gross to Gross Assets), which rose to 17.59 percent from 16.85 percent. This was due to the 9.76 percent expansion in NPAs, largely brought on by the 21.91 percent hike in NPLs, which overtook 5.15 percent growth in Gross Assets.
NPA coverage ratio slightly widened to 22.80 percent from 22.31 percent last month as the 12.19 percent growth in NPA reserves offset the 9.76 percent hike in NPAs. Year ago’s NPA coverage was still higher at 24.09 percent.