The industry’s NPL ratio as of end-June 2005 increased anew by 0.12 percentage point to 11.86 percent from previous quarter’s 11.74 percent. This was brought on by the 3.7 percent growth in NPLs outpacing the 2.7 percent expansion in total loan portfolio (TLP). Nonetheless, this quarter’s ratio is still an improvement by 0.45 percentage point from the 12.31 percent ratio a year ago.
Across the three major geographical regions, R/CBs located in Mindanao continued to have better loan quality at 9.34 percent (down from 9.38 percent last quarter) compared to Luzon and Visayas which posted 12.20 percent (up from 12.05 percent) and 14.08 percent (up from 13.78 percent), respectively.
The industry was able to dispose some foreclosed assets as real and other properties owned or acquired (ROPOA), gross contracted from last quarter by 1.2 percent to P8.13 billion. Outmatched by the 2.2 percent expansion in gross assets, the ROPOA, gross to gross assets improved to 7.32 percent from 7.52 percent.
The quarter-on-quarter growth in NPLs resulted to higher non-performing assets (NPAs) by 1.6 percent to P16.03 billion. However, with the faster expansion in gross assets by 2.2 percent, the ratio of NPAs to gross assets favorably declined by 0.10 percentage point to 14.49 percent.
Even with higher levels of NPLs, the NPL coverage ratio strengthened to 37.43 percent from 36.81 percent last quarter. This developed as loan loss reserves grew by 5.5 percent to P2.96 billion, surpassing the 3.7 percent increase in NPLs.
Likewise, the NPA coverage ratio improved to 20.15 percent from the 19.40 percent ratio last quarter as the 5.5 percent expansion in NPA reserves offset the 1.6 percent increase in NPAs. Likewise, this month’s NPA coverage ratio was 2.39 percentage points better than year ago’s 17.76 percent ratio.