NPL level of big banks remains stable – BSP

The Bangko Sentral ng Pilipinas (BSP) said the large banks’ gross nonperforming loans (NPLs) stayed stable at 1.96 percent of total loans as of endApril.

The BSP yesterday noted that NPLs – which are loans close to being in default – as quality indicator has been kept below two percent for the past six months or since November 2014. They also noted a continued decreasing trend. “(The BSP) monitors the loan quality of the (big banks) industry as it remains vigilant in ensuring the soundness of the banking system, in line with the broader objective of promoting financial stability.”

Compared to the gross NPL ratio in March of 1.95 percent, the current level is “practically unchanged” said the BSP. The 36 universal and commercial banks’ gross NPL, it added, has “moved sideways” with both the industry’s gross NPLs and total loan portfolio showing marginal increases.

At the end of the first four months, total loan portfolio increased to R5 trillion from R4.99 trillion in March, and from R4.374 trillion in 2014.

Gross NPLs, in the meantime, amounted to R97.87 billion, a minimal increase from the previous month’s R97.36 billion and R94.42 billion in the same period last year.

The gross NPLs of the 69 thrift banks, in the meantime, increased to 4.54 percent from 4.4 percent in March. The smaller banks’ total loan portfolio stood at R600.98 billion while its NPLs went up by 7.56 percent to R27.29 billion in April.

The BSP reported that thrift banks’ credit losses reserves also dipped to 74.96 percent during the period from 76.73 percent previously. “Despite the quarteron-quarter decrease in the NPL coverage ratio, this ratio has been generally rising since March 2010,” said the BSP.