Bank deposits climb 8.4% to P5T in H1

MANILA, Philippines - State-run Philippine Deposit Insurance Corp. (PDIC) reported yesterday that total peso and foreign currency-denominated deposits in banks climbed 8.4 percent to breach the P5-trillion level in the first semester of the year, as more Filipinos continued to save in the formal banking sector despite the closure of several problematic rural and thrift banks.

The PDIC’s Quarterly Report on Deposits released yesterday showed that total deposits in the banking system reached P5.1 trillion as of end-June this year or P400.9 billion higher than the P4.7 trillion booked as of end-June last year.

“Deposits in the Philippine banking system exceeded the P5-trillion mark for the first half of the year,” PDIC said in a statement.

PDIC traced the increase in the banking industry’s total deposits to the 12-percent increase in savings deposits, followed by the 8.5-percent rise in demand or checking account deposits, and the 3.9-percent improvement in time deposits.

Data showed that savings deposits cornered 47.2 percent of total deposits, followed by time deposits with 34 percent and demand deposits with 18.8 percent.

Likewise, individual depositors accounted for 55.9 percent of total deposits, followed by private companies with 29.7 percent and the National Government with 11.3 percent.

The state-run deposit insurer said peso-denominated deposits reached P4 trillion and accounted for 78.5 percent of total deposits while foreign currency deposits amounted to P1.1 trillion for a share of 21.5 percent.

Universal and commercial banks accounted for 88.7 percent of total deposits of the banking system while thrift and rural cornered a share of 8.9 percent. Cooperative banks accounted for 2.4 percent of total.

The Bangko Sentral ng Pilipinas (BSP) earlier said the Philippine banking system remained stable as lending, deposits and profitability helped sustain the industry’s healthy growth.

The BSP said banks operating in the Philippines are adequately capitalized, exceeding the 10-percent capital adequacy ratio (CAR) of the BSP and the eight percent international standard under the Basel Accord.

Latest data showed that the CAR of the banking system remained healthy at 16.02 percent on solo basis and 16.97 percent on a consolidated basis as of end-December 2010. Similarly, the Tier 1 capital ratios of the banking system remained high at 13.64 percent on a solo basis and 13.69 percent on a consolidated basis.

The banking system’s CARs hardly moved from last quarter’s 16.04 percent on a solo basis and 16.97 percent on a consolidated basis.

The CAR is a ratio of a bank’s capital to its risk and the central bank tracks this indicator to ensure that banks have the capability to absorb a reasonable amount of loss and that they are complying with their statutory capital requirements.

The total number of banks operating in the Philippines was reduced by 33 to 746 in the first quarter of the year from 779 in the same quarter last year as the bank regulator stepped up its campaign against problematic banks while major players in the banking industry continued to consolidate.

Data showed that the number of universal and commercial banks was steady at 38 while the number of thrift banks was also unchanged at 73. However, the number of rural banks decreased to 635 in the first three months of the year compared to 667 in the same period last year and 647 as of end-2010 due primarily to the closure of weaker banks.

The BSP reported that the number of branches of universal and commercial banks, thrift banks, and rural banks increased by 240 to 8,124 in the first quarter of the year from 7,884 in the same period in last year.