Bank resources post 10.8% on-year growth in Nov. – BSP

The local banking sector had total resources of R13.473 trillion as of end-November 2016, up 10.83 percent from the previous year’s R12.156 trillion, according to the Bangko Sentral ng Pilipinas (BSP).

The BSP continue to assess a “solid and resilient” banking system during the period with bank lending continuing to expand and “accompanied by improvements in bank capitalization and loan exposure coverage.”

The industry is topped by 41 of the largest banks or commercial banks and most of these have universal banking license. As a percent of gross domestic product (GDP), banking resources was at 93 percent.

The big banks accounted for R12.156 trillion of the total which was higher compared to the same period in 2015 of R10.941 trillion.

The 64 thrift banks, on the other hand, had total resources of R1.09 trillion as of end-November, it was up from the previous year’s R1 trillion.

Data from the BSP also showed that the entire resources of the financial system went up by 9.52 percent to R16.571 trillion as of end-November compared to the same period in 2015 of R15.131 trillion.

Non-banks’ resources in the meantime amounted to R3.097 trillion (still as of end-March) while rural banks had R223.4 billion. Non-banks are investment houses, finance companies, investment firms, pawnshops and securities dealers/brokers.

More than 90 percent of the banking sector’s total resource base is controlled by the big lenders. Other than deposits, the growth in total resources also came from the expansion in securities and other non-financial assets.

According to the BSP, “the Philippine banking system continued to be resilient in supporting the economy’s long-term growth and financial conditions. This was evident in the steady growth in assets and deposits of banks’ balance sheets during the review quarter. Furthermore, asset quality indicators improved while capital adequacy ratios remained above international standards, even with the implementation of the tighter Basel 3 framework.”

Banks’ main sources of funds are from savings and demand deposits.

BSP Governor Amando M. Tetangco Jr. said last week that the Philippine banking industry has a significant role in “helping sustain the pace of growth of our economy.” Bank lending continued to expand by double-digit rates and went mostly to productive sectors.

As of November 2016, the central bank reported that consolidated bank loans grew by 18.5 percent year-on-year to R7.4 trillion. “Indeed, the banking sector kept pace with the growth of our economy,” Tetangco told bankers attending the BSP’s annual bankers’ night.

“Total assets of the banking industry reached R13.2 trillion, over 12 percent growth from the November 2015 level, while deposits increased by more than 13 percent to R10.1 trillion, an all-time high,” he said.