Banking sector posted 9.6% rise in assets in September

The Philippine banking system has reported a 9.6-percent increase in total resources as of September 2011 from year-ago level.

A report of the Bangko Sentral ng Pilipinas showed that the banks’ total assets reached P7.4 trillion as of end September.

At the same time, the BSP said the banking system’s total deposit base grew by 5.6 percent to P3.8 billion during the same period.

Philippine banks continued to report strong showing despite the lingering effects of the global financial crisis. This was attributed by the BSP to the “public’s continued trust in the banking sector.”

Universal and commercial banks accounted for some 90 percent of total resources, with savings and time deposits remaining to be the main source of bank funds.

Savings deposits, which represented about half of the total resources, increased by 13.4 percent. However, time deposits decreased by 4.7 percent.

Monetary authorities said the Philippine banking system remained resilient and robust on the back of steady asset growth, growing deposit base, ample liquidity and above standard solvency ratios.

They said this was due to the sustained implementation of key financial sector reforms which, along with the improving macroeconomic environment, augured well for the Philippine system.

BSP data show that as of the first semester of 2011, the number of banking institutions fell to 739 from the year-ago level of 773.

The decrease indicates the continued consolidation of banks and the exit of weaker players.

By classification, there are 38 universal and commercial banks, 72 thrift banks and 629 rural banks.

Also, the number of bank branches increased to 8,915 in the second quarter last year from 8,685 in the same period of 2010.

New branches and agencies from commercial and rural banks drove the increase.

Last week, BSP Deputy Govenor Nestor A. Espenilla Jr. said monetary authorities were preparing the guidelines that would govern the tightening of the capital adequacy standards and requirements for local universal and commercial banks.

Espenilla said the move was meant to enable banks to fend off financial crises pursuant to the so-called Basel III accord.

Basel III introduces a package of reforms that were designed to improve the ability of bank capital to absorb losses, extended coverage of financial risks and have stronger firewalls against periods of stress.