Bank resources up 5% to P7.7T in H1

Resources of the banking sector grew further to hit a new high in the first semester.

This, according to monetary officials, indicated the banking sector’s ability to help keep a robust economic growth through increased lending activities.

Data from the Bangko Sentral ng Pilipinas showed that the banking system’s resources—composed mainly of deposits, capital and retained earnings—hit P7.67 trillion as of the end of June, the highest on record. This was up by nearly 5 percent from P7.31 trillion in the same period last year.

The BSP said the healthy financial standing of banks showed they had continued benefiting from the country’s favorable macroeconomic fundamentals.

A general increase in income levels encouraged people to deposit more money in banks, thereby boosting the lenders’ resources and ability to engage in lending and other investment activities.

The central bank also said banks in the country were enjoying a sustained public confidence.

Of the total resources of the banking sector, P6.88 trillion was held by universal and commercial banks (UKBs). This was up year on year by 5 percent from P6.55 trillion. UKBs cater to the financial services needs of conglomerates and large firms.

Thrift banks, which consider consumers and medium-sized corporations as their niche market, accounted for P606 billion, up by 4 percent year on year from P581 billion.

Rural banks, which serve the financial services mostly of individuals and enterprises in the countryside, accounted for P187 billion of the total resources. This was up by one percent from P185 billion as of the same period last year.

The BSP said the growing resources of banks should be credited for increased lending to both to consumers and enterprises in the first six months of the year.

Based on its earlier report, outstanding loans from universal and commercial banks reached P2.98 trillion as of the end of June, up by 14.9 percent from 2.59 trillion a year ago.

Despite the double-digit growth in the banks’ loan portfolio, the BSP agreed with the observation of economists that there was still much room for credit expansion.—Michelle V. Remo