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Update on NPLs of Thrift Banks

10.07.2005

As of end-June 2005, the loan quality of the thrift banking industry improved anew as the NPL ratio dropped to 8.86 percent from 9.51 percent last month and 12.14 percent a year ago. This favorable development was due to the 4.3 percent decline in NPLs, which was accompanied by a 2.8 percent growth in total loan portfolio (TLP) from last month. 

Exclusive of interbank loans, the NPL ratio also improved to 9.38 percent from last month’s 10.03 percent and year ago’s 12.56 percent. This came about as the reduction in NPLs was complemented by a 2.4 percent expansion in regular lending. 

The real and other properties owned or acquired (ROPOA) to gross assets ratio favorably declined to 10.36 percent from last month’s 10.50 percent and year ago’s 11.44 percent. This mainly stemmed from the 0.1 percent contraction in ROPOA to P34.69 billion from P34.73 billion last month. Meanwhile, ROPOA (net of performing sales contract receivables) was also down to P31.23 billion from P31.29 billion.

The restructured loans (RLs) to TLP ratio declined to 2.32 percent from last month’s 2.50 percent and year ago’s 2.47 percent. The month-on-month contraction in ratio took place as the 4.4 percent reduction in RLs to P4.32 billion came with the growth in loans. 

The non-performing assets (NPA) ratio at 14.27 percent was better than the 14.68 percent last month and 17.05 percent ratio a year ago. This developed as the 1.6 percent drop in NPAs this month was accompanied by a 1.2 percent expansion in gross assets. 

Meanwhile, the NPL coverage ratio also favorably strengthened to 42.88 percent from 40.38 percent last month and 38.01 percent a year ago. This transpired as the 1.6 percent growth in LLRs to P7.01 billion from last month came with the reduction in NPLs. 

The NPA coverage ratio also favorably expanded to 18.89 percent from 18.18 percent last month and 16.92 percent a year ago. The increase in ratio from last month was attributed to the 2.2 percent growth in NPA reserves which was complemented by a 1.6 percent drop in NPAs.

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