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MANILA – The amount of non-performing loans of the country’s biggest banks in May fell further to 2.18 percent of their total loan portfolio that month, the Bangko Sentral ng Pilipinas said over the weekend.
This was an improvement from the 2.3 percent last April and the 2.8 percent in May last year.
In a statement, the BSP attributed the improvement to the combined effect of the half-a-percent increase in the total loan portfolio of the country’s universal and commercial banks, and the 4.52 percent drop in the amount of their combined NPL.
Excluding loans the banks extended each other, their NPL ratio averaged 2.29 percent last May from 2.43 percent in April and 3 percent in May of last year.
Restructured loans inched up to 1.07 percent of banks’ total loan portfolio from last April’s 1.06 percent, but eased from May of last year’s 1.39 percent. The month-on-month increase stemmed from the faster increase in the amount of banks’ restructured loans.
Banks’ real and other properties acquired last May also fell to 1.63 percent of their combined assets from April’s 1.64 percent and May of last year’s 1.94 percent.
This led banks to shed their non-performing assets – which is the sum of NPL and ROPA - to 2.71 percent of their combined assets last May from 2.77 percent in April and 3.26 percent in May of 2011.
Amid declining bad assets, universal and commercial banks increased their provisions for potential credit losses, with their NPL coverage ratio rising to 128.93 percent last May from 125.73 percent in April and 123.31 percent in May of 2011.
Similarly, banks’ NPA coverage ratio improved to 66.16 percent last May from 65.77 percent in April and 63.49 percent in May of last year.
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