The Non-Performing Loans (NPLs) ratio of the 44 Commercial Banks in February 2002 moved up to 18.40 percent, 0.10 percentage points higher than last month’s ratio of 18.30 percent and 1.78 percentage points higher than last year’s 16.62 percent. Loan quality was slightly impaired as the 1.4 percent or P21.4 billion rise in total loan portfolio (TLP) to P1,606.3 billion this month from last month’s P1,584.9 billion fell short of the 1.9 percent or P5.6 billion rise in NPL levels to P295.6 billion from P290.0 billion last month. Net of interbank loans (IBL), NPL ratio also rose to 20.65 percent from last month’s 20.59 percent.
Three groups posted simultaneous increments in NPLs which aggregated to P6.7 billion (Private Domestic Expanded KBs – P4.9 billion, Other Private KBs – P825.0 million and Government Banks – P985.0 million) completely negated the P1.2 billion decline in NPL levels of Foreign Branches. To a large extent, incremental NPLs of Private Domestic EKBs (P4.9 billion) influenced the 1.9 percent or P5.6 billion net increase in the industry’s NPLs.
With the exception of Government Banks whose TLP dropped by P11.4 billion or P5.1 percent, all groups posted loan growths totaling to P32.7 billion (Private Domestic EKBs – P8.2 billion, Foreign Branches – P3.5 billion and Other Private KBs – P21.0 billion).
Loan loss reserves grew by 3.1 percent or P3.9 billion from P126.6 billion to P130.6 billion this month outpacing the 1.9 percent or P5.6 billion rise in NPLs. This propped up coverage ratio (loan loss reserves to NPLs) to 44.2 percent from 43.7 percent a month ago.
Gross restructured loans (RLs) further increased by P287.0 million or 0.3 percent to P115.0 billion from P114.7 billion last month but fell short of the 1.4 percent rise in TLP pushing down RLs to 7.16 percent of TLP from last month’s 7.24 percent. Past due portion of gross RLs slightly moved up to 39.5 percent from 39.4 percent last month.
The rise in holdings of Real and Other Properties Owned and Acquired (ROPOA,gross) by 2.2 percent from last month’s P158.0 billion to P161.5 billion outpaced the 0.9 percent growth in gross assets raising the ratio of ROPOA to gross assets to 5.2 percent from last month’s 5.1 percent. Likewise, ROPOA increased to 9.14 percent of ROPOA plus TLP from last month’s 9.07 percent.
Overall asset quality as measured by non-performing assets ratio (NPAs [NPLs plus gross ROPOA] to gross assets) deteriorated to 14.6 percent from previous month’s 14.4 as the 2.0 percent rise in NPAs from P448.1 billion to P457.1 outmatched the 0.9 percent rise in gross assets.
Using another broad definition of loan quality, the ratio of NPL plus current restructured loans plus gross ROPOA to TLP plus ROPOA inched up to 29.8 percent from 29.7 percent last month and last year’s 26.7 percent.
NPA coverage ratio (NPA reserves divided by NPAs) improved to 30.2 percent from 29.9 percent as NPA reserves (loan loss reserves plus provision for ROPOA) increased by 3.1 percent to P138.1 billion from last month’s P134.0 billion and outpaced the 2.0 percent rise in NPAs.