Thrift banks’ NPL ratio improves

MANILA, Philippines - The non-performing loans (NPLs) of thrift banks went down to 4.94 percent of their total outstanding portfolio in the first quarter of the year, the Bangko Sentral ng Pilipinas reported yesterday.

The latest figure is an improvement from the 5.46 percent ratio in the fourth quarter of 2013, and from the 6.13 percent a year ago.

Also called bad or soured loans, NPLs are obligations that remain unpaid for at least 30 days after their original due date.

Soured loans of thrift banks went up to P27.06 billion as of March from P26.93 billion last year, while their total loan portfolio climbed 25 percent to P547.79 billion from P439.24 billion.

“Thrift banks’ bad loans remained low across economic activities as gleaned from manufacturing; real estate; other community, social and personal service act; private households with employed persons; loans to individuals for consumption purposes; and financial intermediation,” the central bank said.

“Aside from low NPL levels, the banks set aside substantial reserves for potential credit losses,” it said.

Loan loss reserves of thrift banks settled at 69.37 percent of their gross NPLs as of March, lower than the 70.43 percent recorded in the same period last year.

“The Bangko Sentral ng Pilipinas (BSP) monitors the NPL levels and loan loss provisioning of all types of banks as part of its efforts to promote high credit standards,” the central bank said.

“This is essential to the maintenance of financial stability, which is a key policy objective of the BSP,” it said.