Quasi-banks’ NPL ratio hits 10.4%

SOURED DEBT held by quasi-banks picked up to P14.593 billion as of end-June for a 10.4% nonperforming loan (NPL) ratio, based on data from the Bangko Sentral ng Pilipinas.

These bad loans climbed 87.7% from the P7.776 billion seen in the same period of 2020. Quasi-banks’ NPL ratio as of end-June 2020 was at 5.8%.

Meanwhile, the gross loan portfolio of these quasi-banks increased 5% to P139.979 billion as of end-June from the P133.367 billion a year earlier.

Their nonperforming assets (NPA), which include real and other properties acquired, likewise rose 81.9% to P16.055 billion from the P8.825 billion a year ago.

Meanwhile, their restructured loans stood at P2.065 billion as of end-June, more than four times (360%) the P449 million seen in the same period of 2020. This brought their share in their entire loan book to 1.5% from 0.3% a year earlier.

As asset quality deteriorated, quasi-banks beefed up their loan loss reserves to P5.259 billion in the first half of the year, increasing by 90% from the P2.768 billion in the same period of 2020. These buffers are equivalent to 3.8% of their entire loan portfolio, up from 2.1% a year ago.

With this, their NPL coverage ratio stood at 36% as of end-June, improving slightly from the 35.6% a year earlier.

Meanwhile, quasi-banks’ allowance for NPAs reached P5.432 billion in the first semester, jumping 85.9% from the 2.923 billion in the same period of 2020.

This brought NPA coverage to 33.8% as of end-June, a tad higher than the 33.1% a year earlier.

Financial institutions with quasi-banking functions include financing companies and investment houses. — L.W.T. Noble