Banking system's NPL ratio remains low at 3.2% in October, says BSP

Banking system's NPL ratio remains low at 3.2% in October, says BSP

By LEE C. CHIPONGIAN

December 19, 2010, 12:04am

 MANILA, Philippines – The banking system’s non-performing loans (NPL) ratio slid to 3.2 percent in October, the 25th consecutive month that the bad loans ratio has been below four percent, the Bangko Sentral ng Pilipinas (BSP) yesterday said.

Compared to September, NPL ratio improved by 0.09 percentage points from 3.11 percent.

BSP said the big banks provided adequate provisioning against potential credit losses. The NPL coverage ratio strengthened to 117.15 percent from the previous month’s 117.13 percent.

NPLs, or loans that have remained unpaid for 90 days, was lower at P83.35 billion in October from P84.14 billion in September.

The big banks’ total loan portfolio in the meantime declined to P2.6 trillion from P2.67 trillion in September.

In first 10 months, BSP said non-performing assets (NPA) to gross assets ratio improved to 3.63 percent from September’s 3.65 percent and year ago’s 4.16 percent ratio. The improvement from September occurred as the 0.22 percent drop in NPAs came with the growth in gross assets.

The NPA level stood at P211.19 billion, down from September’s P211.65 billion and year ago’s P222.49 billion.

BSP said the NPA coverage ratio widened to 59.67 percent from last month’s 59.57 percent. Year-on-year, October’s NPL and NPA coverage ratios fared better than their reference ratios of 106.37 percent and 53.04 percent, respectively.

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