Deposits boost bank assets to P6.8 T

Deposits boost bank assets to P6.8 T


By Lawrence Agcaoili (The Philippine Star) Updated February 02, 2011 12:00 AM Comments (0) 

MANILA, Philippines -  Total assets of the local banking sector expanded 8.6 percent in the first 10 months of last year as Filipinos continued to save more on the back of the public’s increasing confidence in the country’s financial system.

Data released by the BSP showed that the country’s bank resources reached P6.8 trillion as of end-October last year from P6.2 trillion as of end-October in 2009.

The BSP said universal and commercial banks cornered 90 percent of the industry’s total resources while thrift, rural, and cooperative banks shared the remaining 10 percent.

The central bank traced the steady increase in the total resources of the banking system to the growth in currency and deposits.

“Savings and time deposits remained the banks’ main sources of funds,” the BSP said in a report.

Total bank deposits increased 7.8 percent to P3.5 trillion in the first 10 months of last year from P3.3 trillion in the same period in 2009. Savings deposits posted a double-digit growth of 10.1 percent followed by demand deposits with 13.3 percent, and time deposits with 0.5 percent.

“The growth in deposits reflected sustained depositor confidence in the banking system,” the BSP added.

Monetary authorities led by BSP Governor Amando Tetangco Jr. believed that 2010 was a banner year for Philippine banks contributing largely to the country’s stronger-than-expected economic growth amid the fragile recovery in advanced economies led by the US as well as the debt crisis in Europe.
 
Tetangco earlier said that the country’s sound, stable, and liquid banking system was one of the reasons behind the sustained economic growth after the industry posted healthy growth rates in lending, deposits, and profitability in 2010.

Latest data showed that bank lending growth accelerated to nine percent as loans reached P2.24 trillion as of end-November last year from P2.059 trillion as of end-November in 2009.

Likewise, latest data from the BSP showed that the income of Philippine banks doubled to about P41.1 billion as of end-June last year from P20.5 billion as of end-June in 2009.

The BSP said the banking system posted a capital adequacy ratio of 15.23 percent on a solo basis and 16.21 percent on consolidated basis as of end-June last year. The ratio was well above the 10 percent minimum requirement of the BSP and the eight percent standard ratio of the Basel Accord.

“Average capital adequacy ratio of over 15 percent remained comfortably above the BSP’s 10 percent minimum requirement; and non-performing loans remained generally low at 3.0 percent,” Tetangco explained.

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