In a statement, the Bangko Sentral ng Pilipinas (BSP) said that the NPL ratio of universal and commercial banks (U/KBS) fell 0.16 percentage point to 2.23 percent versus the previous month’s 2.39 percent.
The ratio likewise dropped from 2.86 percent in December 2010. The December 2011 NPL ratio, which is a measure of the industry’s financial vulnerability, is the lowest recorded for U/KBs since the 1997 Asian financial crisis.
Non-performing loans, or bad loans, refer to past due loan accounts whose principal or interest are unpaid 30 days or more after due date.
This comes after a 4.56-percent drop in NPLs to P71.94 billion in December, from P75.37 billion in November. There was likewise a 2.05-percent increase in total loan portfolio to P3.22 trillion in December from P3.15 trillion in November.
Data from the BSP revealed that net of interbank loans (IBL), the NPL ratio also went down by 0.18-percentage point to 2.35 percent from the previous month’s 2.53 percent, and by 0.75-percentage point from the 3.10-percent ratio that was recorded in December 2010.
On month-on-month, on the other hand, the ratio narrowed as a result of the combined effect of the contraction in NPLs and the 2.89-percent expansion in regular loans to P3.07 trillion from P2.98 trillion.
With respect to the restructured loans (RLs) to total loan portfolio (TPL), however, ratio stood at 1.24 percent at end-December 2011, better than November’s 1.28 percent, and December 2010’s 1.56 percent ratio. The month-on-month cut in the ratio was driven by the 1.12-percent fall in gross RLs, which was complemented by the rise in TLP.
Real and other properties acquired (ROPA), gross to gross assets (GAs) tapered to 1.67 percent from last month’s 1.75 percent and last year’s 1.99 percent ratio. This was attributed to the 3.04-percent decrease in ROPA, as well as the increase in GAs (per Circular No. 202) to P6.69 trillion.
The BSP said that non-performing assets (NPA) to GAs ratio eased to 2.76 percent from last month’s 2.91 percent. The ratio also fell from December 2010’s 3.28 percent. The ratio lessened from the previous month because of the simultaneous 3.64-percent decline in NPAs and the 1.85-percent increase in GAs. The industry’s provisioning against potential credit losses remained adequate. The NPL coverage ratio (LLRs to NPLs) strengthened to 126.36 percent from last month’s 122.2 percent and from last year’s 118.48 percent ratio.
The NPA coverage ratio (NPA reserves to NPA) also widened to 64.44 percent from 62.86 percent in November. The same ratio stood at 59.92 percent in December 2010.
Source: The Manila Times.net
Written by: Katrina Mennen A. Valdez, Reporter
Published: February 28, 2012
https://www.manilatimes.net/index.php/business/top-business-news/18103-banks-non-performing-loan-ratio-drops
