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NEWS UPDATES 21 August  2010

Philippines’ bad loan ratio eases

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THE bad loan ratio of the Philippines’ biggest banks improved as their total loan portfolio grew faster than their non-performing loans (NPL).

Data from the Bangko Sentral ng Pilipinas (BSP) showed that the industry’s bad loan ratio eased by 0.10 percentage points to 3.27 percent in June from 3.37 percent in May, and by 0.09 percentage points from 3.36 percent in June of last year. This was the 21st consecutive month that the NPL ratio stayed below 4 percent.

The BSP said the lower NPL ratio was brought about by the 4.29 percent rise in banks’ total loan portfolio, outpacing the 1.21-percent hike in NPL.

Net of inter-bank loans, the NPL ratio also eased to 3.71 percent in June from 3.77 percent in May and 3.79 percent in June of last year.

This was attributed to the expansion in regular loans amounting to P2.362 trillion.

The restructured loans to TLP ratio went up to 1.67 percent from May’s 1.63 percent, but fell from June last year’s 1.82 percent ratio. The month-on-month hike was brought about by the 6.74-percent growth in gross restructured loans to P45.12 billion.

Banks’ real and other properties acquired also eased to 2.26 percent of their gross assets in June, from 2.29 percent in May and 2.70 percent in June of last year.

Lenders’ non-performing assets likewise eased to 3.80 percent of their gross assets.

Their NPL coverage ratio narrowed to 108.81 percent from 109.97 percent in May. Their NPA coverage ratio slid to 57.01 percent from 57.03 percent over the same period.

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