The gross nonperforming loans-to-total loans ratio of the country’s cooperative and rural banks slid while that of thrift banks inched up as of the end of June this year, the Bangko Sentral ng Pilipinas (BSP) said Friday.
The nonperforming loans or NPLs of rural and cooperative banks went down to 11.90 percent of their six-month total loan portfolio from 12.04 percent as of the end of March, as the BSP noted that rural and cooperative banks’ gross NPLs dropped at a faster rate than their total loan portfolio quarter-on-quarter.
Rural and cooperative banks’ gross soured loans worth P14.25 billion as of June were lower than the P16.76 billion recorded a quarter ago.
The end-June loan portfolio of rural and cooperative banks also declined to P119.78 billion from P139.14 billion as of March.
“To mitigate credit risks, the rural and cooperative banking industry set aside loan loss reserves equivalent to 62.51 percent of its gross NPLs at end-June this year. This is higher than the 57.56-percent NPL coverage ratio registered in March,” the BSP noted.
In the first six months, the biggest recipients of RCB loans were the following sectors: Agriculture, forestry and fishing; loans to individuals for consumption purposes; real estate activities, and wholesale and retail trade.
In the meantime, the ratio of the thrift banks’ gross NPLs to their total loan portfolio went up to 4.69 percent as of end-June from 4.54 percent in March.
The BSP said the thrift banks’ gross NPLs increased faster than their loan portfolio quarter-on-quarter.
The thrift banks’ gross NPLs rose to P29.95 billion in June from P27.29 billion in March, while their loan portfolio jumped to P638.15 billion as of June from P600.98 billion a quarter ago.
According to the BSP, “the thrift banking sector also continued to set aside substantial reserves as buffer for potential credit losses,” as thrift banks provisioned for 71.63 percent of gross NPLs in the first six months, although lower than the 74.96 percent in the first three months.
“The thrift banks’ gross NPLs also remained manageable across economic sectors as seen in real estate activities and loans to individuals for consumption purposes, which represented 64.1 percent of the banks’ total portfolio in June this year,” the BSP added.