Nonperforming loans ratio eases modestly in November
From AB Capital's The Opening Bell: Three Moves
Event
The BSP reported that gross NPL ratio eased in November to 3.32% (vs 3.33% in Oct-25 and 3.54% in Nov-24) with improvements noted across consumer and corporate segments as repayment patterns slowly normalize.
View
We believe this modest improvement reflects ongoing monetary easing and stabilizing borrower cash flows. A softer rate environment likely reduced repayment stress, while gradual demand recovery helps service capacity. In our view, the trend signals resilience but does not yet denote a large structural credit turnaround.
Catalyst
Sustained NPL improvement is sensitive to employment and income trends, fiscal support, and credit growth. A significant GDP rebound could reduce NPL ratios further toward pre-pandemic levels; a renewed macro slowdown might stall or reverse progress, especially in consumer segments.
Action
For banks, we favor those with high CASA ratios and diversified books that can navigate credit cycles with limited margin deterioration. Continued monitoring of provisioning trends is warranted. Our top picks are BDO and BPI with CBC as a high-beta play.
Disclaimer: The information, analyses, and views contained herein is based on sources which we, AB Capital Securities, believe are reliable, but is not guaranteed by us and is not to be considered all inclusive. It is not to be construed as an offer or solicitation of an offer to sell or buy the securities herein mentioned. AB Capital Securities and its Directors and Officers and/or members of their families may have a position in the securities herein mentioned and may make purchases and/or sales of the securities from time to time in the open-market and otherwise.
- Latest
