MANILA, Philippines - The combined non-performing loan (NPL) ratio of thrift, rural and cooperative banks improved in the third quarter versus the same period in 2012, the Bangko Sentral Ng Pilipinas (BSP) said.
The central bank said the small banks’ bad loan ratio eased to 7.33 percent as of September 2013 from 7.53 percent in the same period in 2012. The improvement came on the back of a 15-percent rise in the banks’ total loan portfolio to P617.49 billion, while soured loans went up by 11 percent to P45.29 billion.
“The latest NPL figures indicate the banks’ continued efforts to adhere to sound credit risk management systems and to maintain high loan quality,” the BSP said.
“These are essential to sustaining the viability of individual banks and to maintaining the overall stability of the domestic financial system,” the central bank continued.
The total credit portfolio of thrift, rural, and cooperative banks make up 13.6 percent of the Philippine banking system’s gross total loan portfolio. Borrowings extended by the small banks went mainly to real estate, consumption, agriculture, wholesale and retail trade, and financial intermediation.
Thrift banks alone saw their NPL ratio improve to 5.89 percent in the third quarter from 6.29 percent in the same period in 2012. The bad loan ratio of rural banks, however, worsened to 12.95 percent from 11.22 percent, while cooperative banks saw their soured loan ratio improve to 12.74 percent from 13.82 percent.