Banks’ NPL ratio improves to 2.16% in April

Big banks’ bad loan ratio improved as of April on the back of a decline in soured loans, the Bangko Sentral ng Pilipinas reported yesterday.

The non-performing loan ( PL) ratio of universal and commercial banks ( KBs) went down to 2.1 percent as of April from 2. percent in the same period last year.

It was also the same as the 2.1 percent recorded as of March this year.

PLs refer to obligations that remain unpaid for at least days after the due date. The PL ratio pertain to the amount of bad loans as a fraction of the total loan portfolio.

Big banks during the period grew their total loans by 19 percent to P . trillion, while their soured loans slid six percent to P9 . 2 billion.

“The Bangko Sentral ng Pilipinas also monitors the quality of loans extended by banks according to sectoral borrowers,” the central bank said.

“In April, PL levels remained low across economic sectors as seen in financial intermediation real estate, renting and business activities manufacturing and wholesale and retail trade,” it added.

These sectors made up 1 percent of the banks’ total loan portfolio during the period.

niversal and commercial banks also continued to put aside enough reserves to cover possible losses from their bad loans.

Loan loss reserves of big banks climbed to 1 9.5 percent as of April from 12 . percent in the same period last year, BSP data showed.

“Keeping PL levels manageable and loan loss provisioning are essential to managing credit risks,” the central bank said.

“These measures are also crucial to achieving the BSP’s objective of fostering the stability of the financial system,” the BSP said.