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| English: Central Bank of the Philippines (Main) (Photo credit: Wikipedia) |
The Bangko Sentral ng Pilipinas (BSP) yesterday reported that the 37 major banks’ non-performing loans (NPL) ratio improved to 2.05 percent as of the end of the third quarter as soured loans continue to decline.
BSP’s latest data showed that NPL ratio as of end-September was 0.03 percentage point lower compared to end-August and by 0.41 percentage point lower than last year’s 2.46 percent. Net of interbank loans, the NPL ratio was lower by 0.03 percentage point to 2.15 percent.
Borrowers or debtors with unpaid loans for 30 days are considered NPL accounts while unpaid loans of more than 90 days will generally be considered in default.
The central bank in October revised the rules on banks’ NPL by including the net amount of NPLs as a “complementary measure” to gross NPLs. Net NPLs are gross NPLs less specific allowance for credit losses on the total loan portfolio.
In the first nine months of the year, the 37 universal/commercial banks have reported R69.94 billion-worth of borrowers’ past due loans. This is lower than August’s R70.43 billion and the same period in 2011 of R74.33 billion.
The big banks’ total loan portfolio, in the meantime, increased to R3.41 trillion from R3.378 trillion in the previous month and R3 trillion last year.
The BSP said NPL ratio improved because of the 0.69 percent reduction in total bad loans and the 0.96 percent expansion in total loan portfolio.
“The industry’s provisioning against potential credit losses remained adequate,” stated the BSP.
The NPL coverage ratio or loan loss reserves to NPLs strengthened to 136 percent from 135.81 percent in August and from last year’s 123.70 percent ratio.
The coverage ratio for non-performing assets (NPA) narrowed to 69.39 percent from 69.44 percent in August but it was higher compared to last year’s 62.68 percent ratio. As of end-September, the big banks’ NPAs declined to R176.34 billion from R177.12 billion in the previous month and R191.06 billion the same period in 2011.
NPAs are computed including NPL and real and other properties and acquired or ROPA
The banks’ restructured loans, on the other hand, totaled R35.5 billion, hardly changed on a monthly basis but considerably lower compared to last year’s R40.98 billion.
http://www.mb.com.ph/articles/383808/banks-npl-ratio-improves-further-to-205-in-third-quarter#.T8GjbOSmj3w
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