MANILA, Philippines — The Bangko Sentral ng Pilipinas (BSP) said commercial and universal banks’ non-performing loans (NPL) ratio improved to 2.95 percent in April, 0.04 percentage points lower compared to March’s ratio.
The lowest NPL ratio before the 1997 Asian financial crisis was 2.8 percent at the end of 1996.
The BSP pointed out that the bad loans ratio has stayed below three percent for three months now due to banks’ improving capital adequacy and steady loan loss provisioning.
NPLs, which are past due loans and unpaid after 30 days, increased in April to P83.44 billion from March’s P82.41 billion, but lower compared to the same period last year of P85.1 billion.
Based on central bank data, the 38 commercial and universal banks’ provisioning against potential credit losses or loan loss reserves totaled P101.01 billion as of April, up from the previous month’s P99.2 billion and April 2010’s P92.67 billion.
The NPL coverage ratio, which refers to the ratio of allowance for probable losses on NPLs to total NPL, strengthened to 121.06 percent from March's 120.37 percent.
In the same statement, BSP said the non-performing assets (NPA) coverage ratio increased to 62.88 percent from previous month's 62.07 percent. Total NPAs slightly increased to P205.37 billion in the first four months from P205.14 billion at the end of the first quarter. NPA was higher the same period last year at P216.67 billion.
The big and second-tier banks’ total loan portfolio, said the BSP, increased to P2.83 trillion as of end April, from P2.759 trillion in March and P2.55 trillion in April 2010.
BSP said that net of inter-bank loans, the NPL ratio dipped to 3.16 percent from 3.21 percent in March and 3.79 percent last year. The ratio declined from previous month as the growth in NPLs was offset by the 2.93 percent increase in regular loans to P2.642 trillion from P2.567 trillion in March.
In the meantime the restructured loans to total loan portfolio ratio, dropped to 1.48 percent from 1.54 percent in March and 1.74 percent in April 2010. The central bank attributed the month-on-month decrease in the ratio to the 1.45 percent decline in gross restructured loans to P42.21 billion.