Banks’ non-performing loan ratio hits 3.36% in June, lowest since October 2001

MANILA, Philippines – The country’s universal and commercial banks’ recorded its lowest non-performing loan (NPL) ratio in June, hitting 3.36 percent, the lowest figure since October 2001 when the ratio peaked at 18.81 percent, the Bangko Sentral ng Pilipinas (BSP) reported yesterday.

The 3.36 percent ratio was lower by 0.33 percentage point than the 3.69 percent recorded in May and by 0.65 percentage point from the year ago figure of 4.01 percent.

The BSP said the ratio improved as banks’ total loan portfolio improved alongside the decline in bad loans.

Bad loans declined by 5.18 percent to P84.62 billion from the previous month’s P89.25 billion while banks’ total loan portfolio grew by 4.09 percent.

Total loans grew to P2.518 trillion in June from P2.419 trillion in May, data from the BSP also showed.

Net of interbank loans (IBL), the NPL ratio also improved to 3.79 percent in June from the previous month’s 4.20 percent and the year-ago ratio of 4.69 percent.

The BSP attributed this to the reduction in NPLs, accompanied by the 5.08 percent expansion in regular loans to P2.231 trillion.

The ratio of real and other properties acquired (ROPA) to gross assets (GA) dropped to 2.65 percent from the previous month’s 2.70 percent and the year ago ratio of 3.03 percent.

The BSP attributed this to the 0.74 percent reduction in ROPA to P138.34 billion and the expansion in gross assets.

The non-performing assets (NPA) to gross assets ratio eased to 4.29 percent in June from the previous month’s 4.46 percent and the year ago ratio of 5.01 percent. The improvement in the ratio from last month was fueled by the 2.48 percent reduction in NPAs to P222.96 billion.

The ratio of restructured loans (RLs) to the total loan portfolio fell to 1.82 percent from the previous month’s 2.03 percent and the year ago ratio of 2.49 percent.

The ratio declined from the previous month as the 6.78 percent drop in gross RLs to P46.16 billion was accompanied by the rise in loans, the BSP said.

In terms of provisioning for bad loans, the NPL coverage ratio strengthened to 102.33 percent from the previous month’s 96.16 percent. Similarly, the NPA coverage ratio widened to 50.03 percent from the previous month’s 48.52 percent, data from the BSP also showed.

This month’s NPL and NPA coverage ratios also stood higher than the year ago ratios of 96.66 percent and 48.65 percent, respectively. –Iris C. Gonzales (The Philippine Star)