Rural, coop banks post NPL ratio of 11.57%

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Rural and cooperative banks in the Philippines recorded an 11.57 percent-combined non-performing loans (NPL) at end-2012, the Bangko Sentral ng Pilipinas (BSP) reported on Tuesday.

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In a statement, the BSP said that rural and cooperative banks had a total loan portfolio of P127.47 billion at end-2012.

“Although the ratio is higher than the 10.14 percent figure as of December 2011, the banks’ loan loss reserves for NPLs rose significantly to 61.74 percent at the end of last year from 53.26 percent in June 2012,” the central bank stated.

It noted that an increase in loan loss provisioning indicates heightened prudence against credit losses.

Meanwhile, the BSP also reported that rural and cooperative bank loans represent 2.74 percent and 0.30 percent, respectively, of the Philippine banking system’s TLP at the end of last year.

Rural banks (RB) alone posted a 10.65 percent NPL ratio at end-2012, higher than 10.32 percent figure as of December 2011. RBs’ loan loss reserves for NPLs, however, jumped to 59.47 percent at the end of last year from 50.98 percent in June 2012, it added.

Cooperative banks, on the other hand, registered a 19.84 percent NPL ratio in December.

“This figure is more than twice their 9.49 percent NPL ratio six months earlier,” the BSP stated.

It added that the increase, however, was largely because of fortuitous events such as typhoons Gener, Habagat and Helen.

Furthermore, the central bank said that it continues to proactively monitor the NPLs of the various segments of the banking sector, to ensure that credit underwriting standards remain high in a low-interest rate environment.

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