Assets of Philippine banks up 7% to P21.4 trillion

MANILA, Philippines — The Philippine banking sector recorded a seven percent growth in total resources last year as the country bounced back from the pandemic-induced recession, according to the Bangko Sentral ng Pilipinas (BSP).

Total assets of banks operating in the country hit a record high of P21.41 trillion in 2021 from P20.03 trillion in 2020.

The total assets of universal and commercial banks increased by 6.6 percent to P19.74 trillion from P18.53 trillion, while that of thrift banks grew by a double-digit rate of 12 percent to P1.33 trillion from P1.19 trillion.

The total resources of rural banks went up by 8.4 percent to P334 billion as of end-September last year from P308 billion in the same period in 2020.

The country’s biggest lenders are led by BDO Unibank followed by Metropolitan Bank & Trust Co., Bank of the Philippine Islands, Philippine National Bank, China Bank, Rizal Commercial Banking Corp., Security Bank and Union Bank.

State-run Land Bank of the Philippines and Development Bank of the Philippines are also part of the country’s 10 largest lenders in terms of assets last year.

On the other hand, BPI Family Savings Bank emerged as the largest thrift bank in terms of assets, followed by Metrobank’s Philippine Savings Bank, Philippine Business Bank, City Savings Bank, and China Bank Savings.

However, BPI Family Savings Bank has been absorbed by its parent firm BPI through a merger that took effect at the start of 2022.

Latest data from the BSP also showed that earnings of Philippine banks surged by 44 percent to P223.66 billion in 2021 from P155.22 billion in 2020 on the back of the sharp drop in provisioning for bad debts

Aside from increasing assets and earnings, BSP Governor Benjamin Diokno earlier said the country’s banking system remains well capitalized.

Diokno said the sector’s capital adequacy ratio (CAR) was at 17.1 percent, well above the 10 percent minimum threshold set by the BSP and the eight percent threshold set by the Bank for International Settlements.

Amid massive liquidity in the financial system and the continued recovery of the economy, Diokno said credit growth accelerated to 8.5 percent in January from 4.8 percent in December.

On the other hand, the gross non-performing loan (NPL) ratio of Philippine banks picked up to 4.14 percent in January after easing to 3.99 percent in January due to the reimposition of strict COVID lockdowns with the emergence of the more contagious Omicron variant.

The BSP chief, however, noted that banks have ample loan-loss provisioning, with an NPL coverage ratio of 87.4 percent.

“The BSP will continue to closely monitor the impact of emerging COVID variants on the banking system. Supervisory and surveillance tools have been strengthened to ensure that appropriate focus and attention are placed on this area,” Diokno said.