BAD DEBT held by quasi-banks stood at P14.501 billion for a nonperforming loan ratio (NPL) of 10.3% as of September 2021, data from the Bangko Sentral ng Pilipinas (BSP) showed.

Quasi-banks’ bad loans rose by 6.9% year on year from the P13.562 billion seen as of September 2020. Their NPL ratio inched up from the 10.2% a year earlier, but was a tad lower than the 10.4% seen as of end-June.

Meanwhile, the industry’s gross loan portfolio rose by 5.6% year on year to P140.801 billion as of September from P133.335 billion a year ago.

Nonperforming assets (NPAs) of quasi-banks, which include real and other properties acquired, increased by 9.5% year on year to P16.044 billion from P14.654 billion.

The industry’s restructured loans hit P2.138 billion, surging 79.5% from the P1.191 billion last year.

Quasi-banks boosted their loan loss reserves by 36.9% year on year to P5.414 billion from P3.955 billion. These buffers made up 3.8% of their total loan portfolio, increasing from the 3% seen as of end-September 2020.

This brought their NPL coverage ratio to 37.3%, improving from the 29.2% seen a year earlier.

Meanwhile, allowance on NPAs also climbed 36.2% year on year to P5.607 billion from P4.118 billion.

With this, their NPA coverage rose to 35% from 28.1% from a year earlier.

BSP-supervised financial institutions with quasi-banking functions include financing companies and investment houses.

Last week, the Department of Finance said five asset management companies have been set up to will help financial institutions unload their nonperforming assets to clean their balance sheets. This is in line with the Financial Institutions Strategic Transfer (FIST) Law, which took effect in February 2021.

Quasi-banks may also sell their nonperforming assets to FIST corporations that are registered with the Securities and Exchange Commission. — L.W.T. Noble