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: BDO, 5 other banks eye shuttered EIB

Original BSP Seal (1949-1993) (Photo credit: Wikipedia)
State-run Philippine Deposit Insurance Corp. (PDIC) said yesterday that six banks, led by BDO Unibank Inc. of retail and shopping mall magnate Henry Sy, have expressed interest in acquiring the assets of shuttered Export & Industry Bank (EIB).

PDIC executive vice president Cristina Orbeta said in a press conference during the agency’s 49th anniversary celebration that interested strategic third party investors would be allowed to conduct due diligence on the assets of the closed bank starting July 2.

Orbeta pointed out that invitation for interested parties to commence due diligence would be released today and the bidding for the bank’s assets would either be on the last week of July or early August.

She revealed that the agency has engaged Alba Romeo & Co. – a unit of British-owned Binder Dijker Otte International – as financial auditor to determine the financial condition of EIB.

According to her, the financial auditor would take full accounting of the assets and liabilities of the bank and ascertain the reasonable valuation of the bank that was ordered closed by the Bangko Sentral ng Pilipinas (BSP).

Orbeta refused to divulge the identity of the interested investors saying the agency was bound by a confidentiality agreement.

She explained that a rehabilitation proposed for EIB should address the requirements for capital strengthening, liquidity, sustainability, viability, and governance.

The PDIC official said agency would no longer extend financial assistance to interested investors.

“The rehabilitation of EIB shall involve no additional cost to PDIC,” she clarified.

Orbeta said the agency would determine the rehabilitation proposal that is most advantageous to depositors, creditors, and taxpayers.

PDIC took over EIB last April 27 as receiver. The bank has a nationwide network of 50 branches and 47 automated teller machines (ATMs).

Orbeta said the insured deposits of EIB amounted to P3.4 billion while uninsured deposits reached P10.4 billion. Of the total insured deposits, PDIC has so far paid P34.17 million involving 22,636 accounts.

The maximum deposit insurance coverage was doubled to P500,000 per depositor in 2009 from P250,000 per depositor.

http://www.philstar.com/Article.aspx?articleId=819570&publicationSubCategoryId=66

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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 2012: RCBC nets P5 billion in 2011

Rcbc plaza (Photo credit: Wikipedia)
Rizal Commercial Banking Corp. (RCBC) registered an 18-percent increase in net earnings in 2011 to P5.01 billion from P4.25 billion in 2010.

In a statement, the bank said huge gains were realized from trading, service fees, commissions and trust fees which grew to P7.11 billion, representing 74 percent of non-interest income.

Meanwhile, net interest income stood at P10.75 billion, slightly lower than the P10.8 billion in 2010.

RCBC officials said the bank continued to build on its financial strength following a deliberate strategy of prudent balance sheet management.

Total consolidated resources reached P345.77 billion, or 8.06 percent higher than the prior year.

Loans grew to P184.67 billion with corporate accounts rising 30 percent, SME loans by 37 percent, and consumer loans by 15 percent. Net interest margin was high at 4.09 percent.

Its non-performing loan (NPL) ratio dropped to 1.47 percent from the previous year’s 3.10 percent. Likewise, NPL provisioning coverage improved to 103.4 percent.

Capital funds grew 25.10 percent to P40.55 billion from P32.41 billion a year ago on the back of higher earnings and the P5.8-billion Tier 1 equity investments by the World Bank’s International Finance Corp. (IFC) and CVC Capital Partners, one of the top five largest private equity firms in the world.

The consolidated capital adequacy ratio (CAR), an international measure of estimating the general health of a bank, stood at 19.31 percent as of end-2011, with much leeway for asset growth from the minimum regulatory requirement of 10 percent. The CAR Tier 1 ratio of 14.58 percent also exceeded the BSP’s six percent requirement.

Total deposits ballooned to P255.46 billion as the bank continued to focus on growing its low cost deposits, which grew 20.33 percent, while prudently reducing higher costing time deposits.

Operating expenses reached P12.15 billion as the bank continued to expand its branch and ATM network in order to increase reach and improve customer convenience.

http://www.philstar.com/ArticleListBySubCategory.aspx?publicationSubCategoryId=66

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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