Soured loans of rural banks reach P127 B in 2012
by Bianca Cuaresma, BusinessMirror
Posted at 06/19/2013 8:26 AM | Updated as of 06/19/2013 8:26 AM
MANILA -- The country's rural banks posted higher "soured" loans in 2012
totaling P127.47 billion, equal to 11.57 percent of aggregate portfolio,
the Bangko Sentral ng Pilipinas (BSP) said on Tuesday.
This was slightly higher than soured or nonperforming loans (NPLs)
totaling only 10.14 percent or P12.26 billion in 2011. This, according
to the BSP, is a reflection of higher risks rural and cooperative
bankers faced, an industry considered nearest the heart of borrowers in
the countryside.
During the period, the BSP said countryside lenders had to contend with
a higher incidence of calamity-induced events such as typhoons, forcing
borrowers to default on their commitments.
These temporary difficulties of rural and cooperative banks translated
to combined NPLs hitting P4.75 billion in 2012.
Still, the BSP said while the ratio of NPLs to the total loan portfolio
rose, provisioning for such losses, formally called loan-loss reserves,
of rural and cooperative banks also rose significantly.
This indicated the banks themselves recognized the need to put up buffer
funds in case the loans are written down and the lenders unnecessarily
exposed.
Provisions for banks' loan loss increased from 50.36 percent in 2011 to
about 61.74 percent in 2012, with banks showing a "heightened prudence
against credit losses," the BSP said in a statement.
"Industry figures indicate that rural banks and cooperative banks
continue to take proactive steps in maintaining the level of their
non-performing ratio as well as coverage ratios," the central bank said
in a statement.
Rural banks alone posted P12.22 billion worth of NPLs or about 10.65
percent of the total loan portfolio by end-2012, a slight increase from
end-2011's figure at 10.32 percent.
Cooperative banks registered a sharper increase of NPL ratio at P2.52
billion by the end of last year largely due to "fortuitous events such
as typhoons Gener, Habagat and Helen," said the BSP. The NPL ratio more
than doubled from 8.58 percent in end-December 2011 to about 19.84
percent last year.
The central bank said it would continuously oversee Philippine banks'
loan system to ensure that they have enough reserves to withstand loss
from nonperforming loans.
"The Bangko Sentral ng Pilipinas continues to proactively monitor the
nonperforming loans of various segments of the banking sector to ensure
that credit-underwriting standards remain high in a low interest-rate
environment," the central bank said.
Rural bank loans comprise 2.74 percent of the Philippine banking
system's total loan portfolio while cooperative bank loans represent 0.3
percent by the end of last year.
--
-----------------------------------------------------------
CARLOS ANI - SEEDFINANCE Corporation
# 6 E. Javier Street, JubileeVille Subd, Masaya, Bay, Laguna 4033
Philippines
Emails: carlosani@gmail.com , carlosani@seedfinance.net
Cellphone Numbers: +63908-1737072 (Smart)
+63926-4644235 (Globe)
+63933-4298481 (Sun)
My Websites:
CARLOSANI.COM - http://www.carlosani.com
SEEDFINANCE Corporation - http://www.seedfinance.net
DEVJOBS - http://www.devjobsmail.com
PHILDEVFINANCE - http://phildevfinance.blogspot.com
Family website - http://www.anifamily.net
FACEBOOK - HTTP://WWW.facebook/anicarlos
Skype name: carlosaniph
----------------------------------------------------------
