The non-performing loans (NPL) ratio of the country’s big banks in November remained low even as the value of bad loans they incurred rose from a month earlier, the central bank reported on Friday.
The non-performing loans (NPL) ratio of universal and commercial banks (U/KBs) was at 1.75 percent for the month from 1.98 percent a year earlier, the Bangko Sentral ng Pilipinas (BSP) said.
The central bank noted that the ratio was slightly lower than October’s 1.77 percent and had stayed below 2 percent since November 2014.
In value terms, U/KBs’ bad loans rose to P95.37 billion in November from P94.52 billion in October, but eased slightly from P95.52 billion recorded year earlier.
Their total loan portfolio rose to a combined P5.440 trillion in November from P5.353 trillion in October. It also exceeded the P4.829 trillion recorded in November 2014.
The central bank 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.
Banks provisioned as much as 139.98 percent of gross NPLs to cover potential losses in November, lower than the 140.97 percent in the prior month and the 140.91 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 69.2 percent of November’s total loans.
The central bank said the latest bad loan numbers indicated that U/KBs were continuing to adhere to high credit standards.
“The Bangko Sentral ng Pilipinas monitors the loan quality of U/KBs as part of its supervisory efforts to ensure sound credit risk management in the banking system. This is essential to the BSP’s policy objective of fostering financial stability,” it said.
Thrift banks’ Q3 NPLs slightly higher
The BSP also reported that bad loans incurred by thrift banks rose in the in the third quarter of 2015.
Bad loans rose to P30.50 billion in the third quarter last year from P29.95 billion a quarter earlier and P26.05 in the year-earlier period.
Thrift banks’ third-quarter gross NPL ratio settled at 4.56 percent of their total loan portfolio, slipping from 4.69 percent in the preceding quarter, but rose from 4.52 percent a year earlier.
During the quarter, the segment’s TLP rose to P668.46 billion from P638.15 billion a quarter earlier and from the P575.78 billion in the third quarter of 2014.
At the end of the third quarter of 2015, the industry’s loan-loss reserves represented 72.24 percent of its gross NPLs, higher than the 71.63 percent posted in the second quarter of 2015. It was, however, lower than the 74.38 percent recorded in the year-earlier period.