BAD DEBT held by the quasi-banking industry dropped as of end-December, central bank data showed.

Latest data from the Bangko Sentral ng Pilipinas (BSP) showed the nonperforming loan (NPL) ratio of nonbanks with quasi-banking functions stood at 9.9% as of end-December, lower than the 10.3% seen as of end-September.

However, it was still higher than the 9.6% ratio in December 2020.

Financial institutions with quasi-banking functions include financing companies and investment houses.

NPLs held by quasi-banks amounted to P14.081 billion as of end-December last year, up 4.1% from the P13.523 billion a year earlier and down by 2.9% from the P14.501 billion as of end-September.

The downtrend in the share of NPLs in total loans of quasi-banks was similar to the ratio for the entire banking industry, which reached an 11-month low of 3.99% as of end-December.

Meanwhile, the gross loan portfolio of the quasi-banking industry inched up by 0.7% to P141.976 billion as of end-December from P140.948 billion a year earlier.

Their nonperforming assets, which include real and other properties acquired, rose by 2.9% year on year to P15.432 billion from P15 billion.

The industry’s restructured loans also increased by 67% to P2.106 billion from P1.26 billion. This was at 1.5% of their entire loan book from 0.9% a year earlier.

As of end-December, the NPL coverage of the quasi-banking industry stood at 40.1%, while covered nonperforming assets was equivalent to 37.7%. Both improved from the 32.8% and the 30.9% seen a year earlier.

Quasi-banks continued to ramp up their loan loss reserves, which increased by 27.5% to P5.646 billion from P4.43 billion. This is equivalent to 4% of their loan portfolio from 3.1% a year earlier. — L.W.T. Noble