Thrift bank sector assets grow in Q1 with credit expansion

THE THRIFT banking industry posted growth in the first quarter on the back of credit expansion among lenders.
Chamber of Thrift Banks President Gregorio B. Anonas III, speaking during the group’s general membership meeting, said the industry “continued to be vibrant.”
Mr. Anonas reported that total assets of the industry stood at P1.168 trillion as of end-March, 5.8% higher than the P1.103 trillion logged in the same period last year.
He attributed the higher assets to the credit growth among lenders as well the banks’ ability to serve its communities.
Total capital reached P150 billion, up 7.5% from year-ago’s P140 billion.
Core lending rose by 9.3% to P864.4 billion, higher than last year’s P790 billion with “sustained lending activity in the niche market” thrift banks serve.
“Thrift banks occupy a very special relationship with the communities it serves and has its customers’ trust and loyalty,” Mr. Anonas explained in a text message following the meeting.
Deposit liabilities, meanwhile, also grew by 4% to P935 billion from P900 billion year-on-year.
Mr. Anonas urged the savings lenders to provide and access data from the state-run Credit Information Corp. (CIC).
“[Although] all [of our] members have enrolled, we encourage the members to continue to send data as required by law,” he said.
He added that through CIC, the lenders will have a repository of the credit dealings of its borrowers.
“This will enable the banks to be more informed of the borrowers’ credit behavior and get a full (picture) of their total loan exposure, thereby evaluate more precisely their ability to service their loans,” Mr. Anonas said.
Last month, S&P Global Ratings upgraded the risk assessment on the Philippine banking industry, supported by the sector’s “improved credit fundamentals.”
It cited the CIC, which is mandated to collect credit-related data from financial institutions and other potential sources of credit information.
“Better data availability of credit history is positive for this segment where credit quality has historically been constrained by lack of information,” S&P said, adding that clarity on creditworthiness should foster risk-based pricing.
With the centralized credit information database, Mr. Anonas said this will address the rising nonperforming loans (NPL) among thrift lenders.
According to the latest central bank data, NPLs held by thrift banks reached P44.633 billion in March, 11.4% higher than the P40.069 billion in the same period last year.
The rise in bad loans outpaced the growth in total lending, which picked up by 9.3% to hit P865.484 billion.
NPLs refer to unsettled debts for at least 30 days past due date. These are considered as risky assets due to a high risk of default, which would spell losses for the bank.
“Definitely, it will address the pickup in NPLs. However, the growth of loans in comparison with the NPLs is worth looking at,” Mr. Anonas said. — Karl Angelo N. Vidal