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Update on NPLs of Thrift Banks as of November 2001

03.01.2002

Loan quality of the thrift banking industry was upgraded for the month of November 2001, as the Non-Performing Loan (NPL) ratio dropped to 12.18 percent from 12.48 percent last month. Previous year’s ratio was however lower at 12.00 percent. Net of Interbank Loans, NPL ratio stood at 12.71 percent from 12.78 percent last month and 12.58 percent last year. NPLs this month fell by P0.27 billion or 1.55 percent to P17.08 billion from P17.35 billion last October and outmatched the P1.15 billion or 0.83 percent increase in total loan portfolio, which rose to P140.21 billion from P139.05 billion last month.

The 0.16 percent increase in provisioning for loan loss reserves to P8.52 billion accompanied by the 1.55 percent drop in NPL levels, boosted the industry NPL coverage ratio [loan loss reserves (LLR) to NPL] to 49.86 percent from 49.01 percent a month ago.

As in last month, the ratio of gross restructured loans (RLs) to TLP remained at 2.68 percent as increase in TLP of 0.83 percent approximated the 0.94 percent rise in RLs. Last year’s RLs however stood lower at 1.90 percent of TLP.

Overall asset quality was also strengthened as reflected by the ratio of Non-Performing Assets [NPA], i.e., NPLs+ Gross Real and Other Properties Owned and Acquired, to Total Assets, which leveled off at 16.79 percent from 17.07 percent a month ago. NPAs shrunk by 1.14 percent to P41.61 billion from P 42.09 billion while Total Assets (incl. of allowances) grew by 0.52 percent to P238.35 billion from P 237.12 billion a month ago. NPA coverage ratio (LLR + provision for ROPOA to NPA), meanwhile also improved to 22.79 percent from 22.47 percent last month as incremental reserves of 0.27 percent complemented the 1.14 percent drop in NPAs. Year ago’s NPA coverage ratio, stood higher at 24.60 percent.

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