• BSP: Banks’ bad loans down in Oct

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    Bad loans incurred by the country’s big banks remained low as of October last year, the central bank reported on Friday.

    The non-performing loans (NPL) ratio of universal and commercial banks (U/KBs) was at 1.77 percent for the month from 2.06 percent a year earlier, the Bangko Sentral ng Pilipinas (BSP) said.

    The central bank noted that the ratio was slightly lower than September’s 1.82 percent and had stayed below 2 percent since November 2014.

    In value terms, U/KBs’ bad loans declined to P94.52 billion in October from P95.24 billion in September and the P96.54 billion recorded year earlier.

    Their total loan portfolio rose to a combined P5.353 trillion in October from P5.244 trillion in September. It also exceeded the P4.712 trillion recorded in October 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 140.97 percent of gross NPLs to cover potential losses in October, higher than the 139.74 percent in the prior month and the 138.64 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 69.3 percent of October’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 keeps track of the loan quality of U/KBs as part of its supervisory efforts to ensure the soundness of the banking system. This is in line with the BSP’s policy objective of financial stability,” it said.

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