Stock News 2012: Banks’ NPL Ratio Improves Further To 2.05% In Third Quarter

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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Stock News 2012: PDIC pushes passage of bank liquidation law

Seal of Bangko Sentral ng Pilipinas (1993-2010) (Photo credit: Wikipedia)
State-run Philippine Deposit Insurance Corp. (PDIC) is pushing for the enactment of a law that would govern the takeover, liquidation and winding up operations of banks that are closed by the Bangko Sentral ng Pilipinas (BSP).

PDIC president Valentin Araneta said in an interview with reporters that the proposed Closed Bank Liquidation Act (CBLA) would serve as a comprehensive law to hasten the liquidation of closed banks through the seamless transition from bank closure to liquidation.

“Our legislative agenda includes the proposed CBLA which will greatly smoothen the transition from a live bank in distress to a closed bank and minimize the disruption to the system,” Araneta stressed.

He pointed out that the proposed law that would govern the liquidation of closed banks has been presented to the Senate and House of Representatives.

The agency’s Legal Affairs Sector vigorously pursued legal action to recover and collect the receivables of closed banks and at the same time vigorously prosecuted legally liable erring closed bank officers and principals.

The PDIC official said Sen. Edgardo Angara and Albay Rep. Al Francis Bichara are looking at sponsoring the proposed billion.

Last year alone, 29 banks were closed by the BSP with a total of P26.4 billion of deposits outstanding accounted for by over 290,000 bank accounts of which nearly P13 billion were insured.

He said the total deposits of the closed banks were equal to 1.6 percent of the total national budget for 2011.

“Our concern here is not only for the insured deposits but for all the deposits because of the disruption that the closures inflict on our banking system and the destruction it causes on the value and the savings of depositors, as well as the costs to the insurance fund,” he lamented.

In 2008, the Legacy Group was ordered closed by the BSP, affecting P14 billion worth of deposits of which over P11.7 billion has been settled by PDIC.

Araneta said other legislative issues being pursued by PDIC include the institutionalization of the required Deposit Insurance Fund (DIF) and for more flexibility for the board to determine the DIF requirements.

The DIF serves as the funds backing up the insured deposits of the banking system. It is invested in Philippine government securities and government guaranteed instruments prescribed in the PDIC charter.

http://www.philstar.com/Article.aspx?publicationSubCategoryId=66&articleId=820265

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Stock News 2012: BSP maintains key policy rates

Seal of Bangko Sentral ng Pilipinas (1993-2010) (Photo credit: Wikipedia)
The Bangko Sentral ng Pilipinas (BSP) yesterday maintained its key policy rates, noting that easing inflation has given it more room to pause after two rates cuts this year.

As such, interest rates remained at a record low of four percent for the overnight borrowing rate and at a record low of six percent for the overnight lending rate.

“The Monetary Board’s assessment of a favorable inflation environment formed the primary basis for the latest monetary policy decision,” BSP Governor Amando Tetangco Jr. said.

He said the latest baseline forecasts continue to indicate that inflation will likely settle near the lower half of the three- percent to five-percent target range in 2012 and 2013, while inflation expectations have remained well anchored.

Because of easing inflation, the BSP has revised downward its inflation forecast for 2013 to 3.3 percent from a previous forecast of 3.4 percent.

At the same time, monetary authorities noted that the balance of risks to the inflation outlook now leans toward the upside as oil prices have remained elevated and at risk from ongoing tensions in the Middle East as well as strong demand from emerging economies.

Moving forward, the BSP will continue to pay close attention to the outlook for inflation and growth to ensure that monetary policy settings remain consistent with price stability while being supportive of non-inflationary economic growth.

The first BSP rate cut was made last Jan. 19 followed by another 25-basis point reduction on March 1 on the back of a benign inflation outlook and slower than expected global economic growth.

Inflation eased to 2.6 percent in March from 2.7 percent in February, latest data from the National Statistics Office (NSO) said.

http://www.philstar.com/Article.aspx?publicationSubCategoryId=66&articleId=798657

Stock News 2011: Robinsons seeks comm’l bank license

Image via Wikipedia
Robinsons Bank Corp. will operate as a commercial bank once the Bangko Sentral ng Pilipinas grants it the necessary license.

A KB license will allow RobinsonsBank to offer its clients a wider array of innovative financial products such as foreign letters of credit and other trade instruments and put the bank in an even greater capacity to serve as it aims to be among the country’s top 10 commercial banks.

The Securities and Exchange Commission’s recent approval of the merger between Robinsons Savings Bank and Robinsons Bank Corp. completes the legal and regulatory requirements needed by the BSP to award Robinsons Bank Corp., the surviving commercial bank entity from the merger of the two Gokongwei-owned banks, a KB license.

http://mb.com.ph/node/321434/robin

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Stock News 2011: Meralco says customers to see lower bills

Image via Wikipedia
The 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.

http://www.mb.com.ph/node/306536/bank