Image via WikipediaThe Bangko Sentral ng Pilipinas (BSP) reported over the weekend that banks' non-performing loans (NPL) ratio last year dipped further to 2.88 percent, lower than end-2009's 2.97 percent due to the industry's improving capital health.
The end-December NPL ratio was also the lowest recorded ratio for universal and commercial banks since the 1997 Asian financial crisis, said the BSP, and the 27th consecutive month that the NPL ratio has been below four percent.
BSP in a statement said the NPL ratio eased by 0.19 percentage point compared to November's 3.07 percent and by 0.09 percentage point from the previous year's ratio.
Improvement to the ratio resulted from the 3.04 percent drop in total NPLs of P80.8 billion from P83.33 billion in November and the 3.34 percent growth in total loan portfolio of P2.8 trillion in December from P2.71 trillion a month before. NPLs are loans that have remained unpaid for 90 days
At the end of December, provisioning for bad loans led to the NPL coverage ratio improving to 118.35 percent from November's 116.53. The non-performing assets (NPA) coverage ratio widened to 60.04 percent from 59.68 percent in the previous month. Year-on-year, the BSP said NPL and NPA coverage ratios increased reference ratios of 112.34 percent and 54.88 percent, respectively. Total NPAs amounted to P205.5 billion.
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