Latest Stories

Thrift banks report rising soured loans


Aggressive lending to the real estate sector led to an increase in bad loans held by thrift banks at the end of last year, data released by the central bank Wednesday showed.

The Bangko Sentral ng Pilipinas (BSP), the financial sector’s main regulator, was quick to downplay the risk, saying the thrift bank industry accounted for just 10 percent of all loans in the country’s banking system.

In a statement, the BSP said non-performing loans (NPL) held by thrift banks reached 5.34 percent of the sector’s total loan portfolio at the end of 2012, higher than the 4.97 percent posted as of the end of the first semester of the same year.

The industry’s coverage for possible losses also slipped to 64.59 percent of total NPLs in December from 71.55 percent in the previous semester. The BSP said while coverage was lower semester-on-semester, it was still better than the 58.97 percent in December of 2011.

“This indicates that the industry’s credit risk remains well-contained amid the current low-interest rate market environment and growing domestic economy,” the BSP said.

“The expansion in the NPL (in) real estate, wholesale and retail trade loans of most thrift banks triggered the build-up in the industry’s NPL,” the BSP said.

The BSP remained optimistic, saying the end-December NPL was still better than the 5.72 percent recorded in December of 2011.

In contrast, the NPL ratio for universal and commercial banks, which make up bulk of the banking industry, stood at just 1.87 percent at the end of December 2012. This record-low ratio was kept steady as of last May, BSP data showed.

Consumer loans accounted for the bulk of the total amount extended by thrift banks as of the end of 2012.

The BSP also pointed out that loans extended by thrift banks, at P446.56 billion, was just 10.65 percent of the entire banking industry’s portfolio.

The central bank said it would continue to monitor the quality of loans held by banks to see if certain adjustments in regulations were warranted.

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: bad loans , Banking , Philippines , thrift banks

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


  • Cardinal Tagle: Start new life with true peace
  • ‘Dry spell’ delayed, thanks to busted valve
  • At 77, Erap has Easter treat for Manila cops but keeps City Hall folk in agony
  • Joy Belmonte defends council, waste-to-energy tech
  • House bill seeks special body to manage, protect Manila Bay
  • Sports

  • Pacquiao top Mayweather contender
  • Rain or Shine, Ginebra clash for No. 6 spot
  • Ateneo eyes quarterfinal spot vs Benilde
  • Style contrast marks OneFC ‘Rise of Heroes’
  • ‘Pacquiao a great ambassador for basketball’
  • Lifestyle

  • Levine designs womenswear with help from fiancee
  • Gabriel Garcia Marquez, Nobel laureate, dies at 87
  • Ford Mustang turns 50 atop Empire State Building
  • Pro visual artists, lensmen to judge Pagcor’s photo contest
  • ‘Labahita a la bacalao’
  • Entertainment

  • Why ‘Noah’ can’t dock his ark at Philippine theaters
  • Acclaimed artist goes wild while on holiday
  • Believing in this mermaid
  • Missing Xian
  • Awarded TV couple brings Jesus’ life to the big screen
  • Business

  • Top-selling insurance agent opens her dream café
  • Connecting and transacting with one another
  • Building wealth for health
  • Why Mandaue Foam buys, rather than rents, space
  • A workplace of new possibilities
  • Technology

  • Nasa’s moon-orbiting robot crashes down
  • Netizens pay respects to Gabriel Garcia Marquez
  • Nokia recalls 30,000 chargers for Lumia 2520 tablet
  • Facebook rolls out ‘nearby friends’ feature
  • Netizens seethe over Aquino’s ‘sacrifice’ message
  • Opinion

  • Epiphany
  • Unpaid creditor vs distressed debtor
  • Moving on
  • From culinary desert to paradise
  • Response to China: ‘Usjaphil’
  • Global Nation

  • Cesar Chavez movie sparks memories of Fil-Am labor leaders
  • Filipinos in US poised for success
  • Visas for priests and other faith leaders
  • DOH to continue tracking co-passengers of OFW infected with MERS virus
  • 5 Filipinos with MERS in UAE reported in stable condition
  • Marketplace