Banks’ NPL ratio improves

MANILA, Philippines - Universal, commercial, and thrift banks cut their bad loans as of October from a year ago, the Bangko Sentral ng PIlipinas reported yesterday.

Universal and commercial banks’ non-performing loans or those left unpaid for at least 30 days after the due date fell four percent to P96.538 billion during the period from P100.356 billion a year ago.

Their total loan portfolio, meanwhile, went up 20 percent to P4.712 trillion from P3.927 trillion.

This resulted in an improvement in the big banks’ NPL ratio, which pertains to the amount of bad loans computed against the total credit portfolio.

Universal and commercial banks’ NPL ratio improved to 2.05 percent as of October from 2.56 percent in the same period last year.

At the same time, thrift banks slashed their bad loans by 11 percent to P26.061 billion as of October from P29.14 billion in the same period a year ago.

This developed as their total loan portfolio grew 17 percent to P580.458 billion during the period from P496.908 billion last year.

Thrift banks also improved their NPL ratio to 4.49 percent as of October from 5.86 percent in the same period last year.

The BSP monitors the soured loans of banks as part of its efforts in promoting high credit standards, essential to keeping the domestic financial system stable.

As of October, universal, commercial, and thrift banks set aside substantial reserves for any possible credit losses.

Universal and commercial banks’ loan loss reserves reached 138.64 percent of their gross NPLs as of October, higher than the 130.53 percent recorded in the same period last year.

Thrift banks, meanwhile, held loan loss reserves amounting to 74.85 percent of their gross bad loans, up from the 70.01 percent a year ago.