Thrift banks Q1 bad loans ratio drop to 4.94%


BAD loans held by the country’s thrift banks dropped in the first quarter of 2014 from a year earlier despite an increase in lending, an indication that sound lending practices are in place, the central bank said on Monday.

According to Bangko Sentral ng Pilipinas (BSP) data, the gross non-performing loans (NPL) of thrift banks stood at P27.06 billion at end-March, representing 4.94 percent of the banks’ total loan portfolio (TLP) during the period.

This compares with an NPL ratio of 6.13 percent in the same period last year .

Thrift banks’ TLP was up at P547.7 billion at end-March from P439.14 billion in the first quarter last year.

Bad or soured loans are those that have remained unpaid 90 days from their due date.

With the drop in the bad loans ratio, thrift banks also reduced their loan-loss reserves to 69.37 percent as of end-March from 70.43 percent a year earlier.

The BSP said that among the country’s economic sectors, thrift banks’ top borrowers were manufacturing; real estate; other community, social and personal services; private households with employed persons; loans to individuals for consumption purposes; and financial intermediation.

“The Bangko Sentral ng Pilipinas monitors the NPL levels and loan-loss provisioning of all types of banks as part of its efforts to promote high credit standards. This is essential to the maintenance of financial stability, which is a key policy objective of the BSP,” the central bank said.


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