U/KBs remain well capitalized in Q1

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Universal and commercial banks (U/KBs) maintained its strong capitalization in the first quarter of the year, the Bangko Sentral ng Pilipinas (BSP) said on Wednesday.

BSP data showed that U/KBs recorded a capital adequacy ratio (CAR) of 17.75 percent at end-March. It said that when consolidated with their subsidiary banks and quasi-banks, U/KBs registered a CAR of 18.89 percent during the period.

The data noted that the industry’s Tier 1, which represents high-quality and loss-absorbent capital, is still robust at 15.87 and 16.06 percent of the banks’ risk-weighted assets (RWAs) on a solo and consolidated basis, respectively.

Quarter-on-quarter, the first-quarter CAR are expand slightly than the 17.28-percent solo and 18.35-percent consolidated CAR at end-2012.


“The rise was due to a higher increase in U/KBs qualifying capital vis-à-vis their RWAs,” the BSP stated.

Furthermore, the data said that the qualifying capital of banks grew by 3.63 percent on solo and 4.10 percent on consolidated basis, because of the hefty net profits during the first quarter of 2013 and additional issuances of common stocks.

It added that RWAs of the banks went up by 0.85 percent on solo and 1.15 percent on a consolidated basis, as “assets grew because of higher loans to corporations and additional investments in various debt and equity securities.”

The BSP said that the industry’s CAR figures indicate the banks’ continued efforts to maintain robust capitalization.

“A strong capital position promotes financial stability by providing individual banks and the industry with an adequate buffer against unexpected losses that may arise during times of stress,” it added.

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