Bad loans of thrift banks increase

Lawrence Agcaoili - The Philippine Star

MANILA, Philippines – Soured loans of thrift banks inched up amid the sharp increase in the industry’s total loan portfolio last year, the Bangko Sentral ng Pilipinas (BSP) reported over the weekend.

Data released by the central bank showed the gross non-performing loans (NPLs) of thrift banks rose to 4.53 percent of their total loan portfolio in 2015 from 4.40 percent in 2014.

The BSP said the total loan portfolio of thrift banks jumped 19.6 percent to P688.89 billion last year from P576.06 billion in 2014, while NPLs went up 23 percent to P31.2 billion from P25.37 billion.

Likewise, the loan loss reserves of thrift banks surged 18.4 percent to P23.05 billion or equivalent to 73.9 percent of gross NPLs last year.

“Aside from maintaining the NPL ratio, the industry also continued to set aside substantial reserves for potential credit losses,” the BSP said.

The central bank added gross NPLs of thrift banks also remained manageable across economic sectors as seen in loans to individuals for consumption purposes; real estate activities; wholesale and retail trade; and financial and insurance activities.

These sectors cornered 80 percent of the loan portfolio of thrift banks last year.

The BSP monitors banks’ loan quality as part of its supervisory efforts to ensure sound credit risk management.

“This is essential to the BSP’s policy objective of promoting financial stability,” it said.

BPI Family Savings Bank Inc., a unit of Ayala-led Bank of the Philippine Islands (BPI), topped the list of thrift banks last year in terms of assets with P266.38 billion followed by Philippine Savings Bank with P168.18 billion, and RCBC Savings Bank with P92.81 billion.

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