The industry’s NPL ratio dropped to 15.0 percent from 15.2 percent last quarter as the 3.8 percent rise in TLP outpaced the 2.8 percent increase in NPL level. NPL ratios of regular rural banks (RRBs) improved to 14.9 percent from 15.1 percent while cooperative rural banks (CRBs) deteriorated to 16.2 percent from 15.5 percent a quarter ago.
Normally Operating (NO) banks followed a downtrend as their NPL ratio leveled off at 12.2 percent from 12.4 percent and 14.3 percent, a quarter ago and year ago, respectively, in contrast to Under Preferential Attention (UPA) banks whose delinquency ratio moved up to 26.7 percent from 25.8 percent and 27.2 percent, a quarter ago and year ago, respectively.
The 6.5 percent increment in loan loss reserves (LLRs) boosted the NPL coverage ratio (LLRs to NPLs) to 36.4 percent from 35.1 percent last quarter despite the higher NPL level. All groups posted higher coverage ratios this quarter.
The ratio of ROPOA-gross to total assets rose to 9.4 percent from 9.1 percent last quarter due to the 9.1 percent growth in ROPOA which outweighed the 5.0 percent growth in total assets. All groups reported bigger ROPOA holdings this quarter. Meanwhile, the ratio of NPAs (ROPOA + NPLs) to total assets slightly weakened to 18.3 percent from 18.2 percent last quarter.
NPA coverage ratio (LLRs + Reserves for ROPOA to NPAs) slightly widened to 19.4 percent from 19.3 percent in the previous quarter as the 6.4 percent increase in NPA reserves this quarter outmatched the 5.8 percent hike in NPA level. All other sub-groups posted higher coverage ratios except for NO banks, which slid to 21.4 percent.
The ratio of the reported gross restructured loans (RLs) to TLP declined to 2.7 percent from 3.0 percent a quarter ago as loan level grew by 3.8 percent and RLs contracted by 7.1 percent.
On a regional basis, Western Visayas still posted the highest NPL ratio at 20.5 percent while Metro Manila was lowest at 7.5 percent. Coverage ratio ranged from 3.2 percent (Southern Tagalog) to 54.6 percent (Cordillera Administrative Region).