Central Luzon’s profits grew 47.2 percent to P48 million, Southern Mindanao up 33.8 percent to P34 million, and Caraga by 43.3 percent to P20 million.
In terms of cost efficiency, the top regional performers were the Autonomous Region of Muslim Mindanao or ARMM (57.9 percent), Northern Mindanao (58.2 percent) and Caraga (60.7 percent). The least efficient were the National Capital region (123.6 percent), Southern Tagalog (100.2 percent), and Bicol region (90.5 percent).
However, the traditional top five regions continued to dominate the rural banking system at the start of July this year.
The traditional leaders accounted for 67 percent of total assets, 63.9 percent in terms of loan portfolio, 71.1 percent in terms of deposits, and in terms of capital accounts, 66.2 percent.
In terms of assets, Southern Tagalog was tops with 23.4 percent followed by Central Luzon (12.7 percent), Ilocos (6.3), National Capital Region (4.8 percent), and Central Visayas (4.2 percent).
In terms of deposits, Southern Tagalog was tops again with 17 percent, Central Luzon with 8.9 percent, Ilocos with 4.8, NCR 3.5, and Central Visayas 2.9. In terms of capital accounts and loans, the order remained unchanged.
There were 1,914 rural and cooperative banks consisting of 776 head offices and 1,138 branches by the start of July. That can be broken down to 727 head offices of rural banks and 49 head offices of cooperative banks.
In the same period, three new rural banks were established, while six rural banks and one cooperative bank shutdown.
The new players are Bangko Pangasinan Rural Bank, Crown Bank, and Cavite Rural Banking Corp. While those that closed shop were the Rural Bank of Lavezares, Rural Bank of Pili, Bangko Rural ng Sta. Lucia, Rural Bank of Victoria (Laguna), Rural Bank of Catbalogan, Cooperative Bank of Lanao del Sur, and Bangko Rural ng Minalabac.
The BSP reported that the only merger activity was between the Rural Bank of Infanta (Pangasinan) and Maharlika Rural Bank of Sta. Cruz (Zambales).
The report, prepared by the Supervisory Reports and Studies Office (Supervision and Examination Sector) of the BSP, took note of the fact that most of the newly-opened banks were located in the Southern Tagalog and Central Visayas regions.
On the other hand, most of the closures occurred in the regions of Bicol and Eastern Visayas.
"Almost half of the rural and cooperative banks can be located around the NCR area (NCR, Central Luzon and Southern Tagalog) with 891 offices or 46.6 perent of total offices," the report said. "Northern Luzon area (regions 1, 2 and the Cordillera Autonomous region or CAR) followed with 351 or 18.3 percent of total while Mindanao accounted for 302 offices or 15.8 percent. The remaining 370 offices were scattered around the Visayas and Bicol areas.
Earlier, the BSP reported that the net income after tax of the rural and cooperative banking system grew by 21 percent in the first six months of this year as against the 12.9 percent registered in the same period last year.
However, the rural banks are slowly increasing its market share as it increased to 93.5 percent against the 6.5 percent of the cooperative banks in the period in question.
The rural banking system benefited mainly from the good performance of both the agricultural and services sectors over the past consecutive years, according to a study.
The BSP said that all key profitability indicators showed improvements. Funding cost was down to 7.8 percent from 8.7 percent at end June 2001; interest spread widened to 10.8 percent from 10 percent; cost-to-income ratio fell to 84.5 percent from 87.5 percent; average return on assets and on equity improved to 1.6 percent and 10 percent, respectively.
The rural banking system improved its overall asset quality particularly with the non-performing loan (NPL) ratio falling from 17.1 percent in June 2001 to 14.8 percent after the first six months this year.
The reduction in NPL ratio outstripped the increase in real and other properties owned or acquired (ROPOA) resulting in an overall drop in the non-performing asset (NPA) ratio to 17.9 percent this year from 18.9 percent last year.
At the start of July 2002, the combined resources reached P76.7 billion or 11.6 percent better than the same period last year driven mainly by the rural banks. The cooperative banks actually contracted by 7.2 percent.
"All asset components advanced led by liquid assets," the BSP said.