Universal and commercial banks (U/KBs) has kept its gross nonperforming loans (NPLs) low in September this year, data from the Bangko Sentral ng Pilipinas (BSP) showed on Monday.
The banks’ gross NPLs, which are the actual level of “bad loans,” represented 2.6 percent of their total loan portfolio (TLP).
“The gross NPL ratio stayed low amid a year-on-year decline in soured loans and the continued rise in lending,” the BSP stated.
The central bank data added that U/KBs posted P102.09 billion in NPLs in September, lower than the P103.42 billion recorded a year earlier.
Meanwhile, the banks’ TLP increased to P3.92 trillion in September from P3.44 trillion during the same month last year.
The BSP noted that the industry also continued to set aside substantial reserves for potential credit losses as U/KBs provisioned for 128.80 percent of their gross NPLs in September.
On the other hand, the NPLs net of specific allowances for potential credit losses of big banks also remained low at 0.45 percent of TLP in September.
“The U/KBs NPL levels also continue to remain low across economic sectors. This is seen in the financial intermediation, real estate, manufacturing and wholesale and retail trade sectors which together accounted for 62.8 percent of the banks’ TLP in September,” the BSP said.
It added that low NPL ratios and robust loan loss provisioning indicate prudent management of credit risks.
“The BSP continues to monitor these indicators as part of its objective to maintain the stability of individual banks and of the domestic financial system,” the BSP also said.