Philippine Banks stayed solvent through global financial crisis

Philippine Banks stayed solvent through global financial crisis
 
Published : Thursday, July 21, 2011 00:00 Article Views : 295 Written by : Lailany P. Gomez
 
THE Philippine banking system remained solvent last year, as capital adequacy ratios exceeded the minimum requirement despite the uneven phase of recovery of the global economy, the Bangko Sentral ng Pilipinas said on Wednesday.

In a statement, the BSP said the banking industry’s average CAR at end-December stood at 16.02 percent on solo basis and 16.97 percent on consolidated basis.

Similarly, the Tier 1 capital ratios stood at 13.64 percent and 13.69 percent on solo and consolidated bases, respectively.

Quarter-on-quarter, the banking system’s CAR hardly moved from 16.04 percent and 16.97 percent on solo and consolidated basis.

Qualifying capital grew by 3.93 percent to P27 billion on solo basis and by 3.72 percent to P28 billion on a consolidated basis.

Risk weighted assets increased by 4 percent to P171.1 billion on solo basis and 3.76 percent to P167.3 billion on a consolidated basis.

The universal and commercial bank’s’ solvency fell by 0.06 percentage point and 0.05 percentage point from the previous quarter’s 16.29 percent and 17.32 percent on solo and consolidated bases, respectively.

On solo basis, the CAR of the industry decreased from the previous quarter as the 3.94 percent growth in qualifying capital was offset by the 4.32 percent rise in risk weighted assets.

According to the BSP, the increase in the industry’s capital base was attributed to banks’ robust profits of P21.3 billion for the fourth quarter of 2010 and the P3.3 billion additional issuances of common shares by one commercial lender and one foreign bank subsidiary.

The increase in risk weighted assets stemmed from the general expansion of assets, the bulk of which was in the form of loans granted to various unrated counterparties, the BSP said.

The thrift banking industry’s CAR went up from 12.18 percent to 12.62 percent quarter-on-quarter, on both solo and consolidated bases.

The 0.44 percentage point improvement was due to the 7.61 percent growth in qualifying capital, which was higher than the 3.83 percent expansion in risk weighted assets.

The BSP said the increase in qualifying capital was sourced from the profits of thrift banks and issuances of common stock, while the growth in risk-weighted assets mainly came from the expansion of loan portfolios.

The rural and co-operative banking industry’s CAR stood at 19.16 percent at end-December, or 0.27 percentage point higher quarter-on-quarter.

By peer groups, the rural banking industry’s CAR was at 19.39 percent, while co-op banks’ CAR stood at 17.13 percent.

The improvement stemmed from the 3.31-percent decline in risk weighted assets vis-à-vis the lower decrease in qualifying capital of 1.94 percent.

The BSP and the Basel Accord require a standard ratio of 10 percent and 8 percent, respectively.

--
---------------------------------------------
CARLOS ANI - SEEDFINANCE Corporation - http://www.seedfinance.net
Email: carlosani@seedfinance.net
Landline: +63495010127 Cellphone: +639152919580
DEVJOBS - http://www.devjobsmail.com
PHILDEVFINANCE - http://phildevfinance.posterous.com http://phildevfinance.wordpress.com
CONSULTING - http://www.carlosani.com
My Clippings - http://www.myclipps.posterous.com
------------------------------------------