News Column

BSP-TBs Post Lower NPL Levels

August 4, 2014

ENP Newswire - 04 August 2014

Release date- 04082014 - The gross non-performing loans (NPLs) of thrift banks (TBs) represented 4.94 percent of the banks' total loan portfolio (TLP) of Php 547.79 billion at the end of first quarter of the year.

The March figure improved from the 5.46 percent gross NPL ratio registered a quarter earlier as TBs' NPLs dropped amid a rise in their TLP.

The banks' NPLs stood at Php 27.06 billion in March, a 2.42 percent decrease from Php 27.73 billion recorded at end-2013. Their TLP, on the other hand, increased by 7.79 percent from Php 508.20 billion at the end of last year to Php 547.79 billion at the end of the first quarter of 2014.

Aside from low NPL levels, the banks set aside substantial reserves for potential credit losses. At end-March, TBs' allocated loan loss reserves equivalent to 69.37 percent of their gross NPLs, slightly lower than the 72.51 percent posted a quarter earlier.

The TBs' NPLs also remained low across economic activities as gleaned from manufacturing; real estate; other community, social and personal service act; private households with employed persons; loans to individuals for consumption purposes; and financial intermediation.

The Bangko Sentral ng Pilipinas (BSP) monitors the NPL levels and loan loss provisioning of all types of banks as part of its efforts to promote high credit standards. This is essential to the maintenance of financial stability, which is a key policy objective of the BSP.

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Source: ENP Newswire

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