Big banks’ bad loans down in Sept – BSP

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Soured loans incurred by the country’s big banks remained low in September 2015, the central bank reported on Thursday.

Figures released by the Bangko Sentral ng Pilipinas (BSP) showed the non-performing loans (NPL) ratio of universal and commercial banks (U/KBs) declined to 1.82 percent from 2.04 percent a year earlier.

The central bank also noted that the gross NPL ratio in September was slightly lower than the 1.86 percent in August.

“Said loan quality indicator has been below 2 percent since November 2014,” it noted.
By absolute amount, bad loans declined to P95.24 billion in September from P97.05 billion in August and P96.18 billion a year earlier.


The banks’ total loans portfolio rose to a combined P5.245 trillion in September from P5.209 trillion in August. The new total also exceeded the P4.705 trillion recorded in September 2014.

The BSP defines NPLs as past due loans where the principal or interest is unpaid for 30 days or more after the due date, including the outstanding balance of loans payable in monthly installments when three or more installments are in arrears.

Loan loss provisions

Banks provisioned as much as 139.74 percent of gross NPLs to cover potential losses. This compares with the 141.19 percent in the preceding month but higher than the 139.02 percent registered a year earlier.

Gross NPLs across economic sectors remained manageable and were seen in financial and insurance activities, real estate, manufacturing, wholesale and retail trade, and electricity, gas, steam and air-conditioning supply, which accounted for 69 percent of the industry’s total loans portfolio in September.

The central bank said the latest numbers on bad loans indicate that big banks continue to adhere to high credit standards.

“The Bangko Sentral ng Pilipinas monitors loan quality indicators as part of its supervisory efforts to promote sound credit risk management in the banking system.  This is essential to financial stability, which is a key policy objective of the BSP,” it said.

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