Universal, commercial banks’ NPLs rise in September

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SOURED DEBTS held by big banks rose further in September, but its share in their total loans remained modest despite bigger credit lines extended during the period, latest central bank data showed.

Non-performing loans (NPLs) held by universal and commercial banks grew to P112.762 billion as of end-September, up by seven percent from the P105.36 billion problem loans held as of September 2017.

However, the amount declined from P112.936 billion in bad loans held as of August, according to the Bangko Sentral ng Pilipinas (BSP).

NPLs refer to loans left unpaid least 30 days past due date. These are considered as risky assets given a slim chance for borrowers to actually pay for their outstanding balances, which would mean losses for lenders.

Past due loans, which cover all types of loans which missed the payment deadline, surged faster by 28% to hit P159.479 billion. However, restructured debts — or those which were enrolled for a longer repayment period — slipped by 12.5% to P31.151 billion as of September.

The climb in bad debts is modest compared to the 16.5% increase in total lending. Outstanding loans granted by banks reached P8.659 trillion, compared to the P7.436 trillion loan portfolio a year ago.

Still, the share of NPLs in banks’ total loans dropped to 1.3% from 1.42% in September 2017.

Lenders also hiked the allowance they set aside for potential credit losses to P155.904 billion, 8.7% higher than the P143.486 billion of loan loss reserves a year ago.

On the other hand, non-performing assets held by banks was steady at P69.793 billion, representing the value of properties seized from non-paying clients. Lenders can recover the loan principal by forfeiting assets which were posted as collateral from defaulting borrowers.

Banks also saw a sustained rise in total assets in September. Deposits rose by a tenth to hit P11.265 trillion, according to BSP data.

Big banks also enjoyed bigger profits so far this year, as they reported a cumulative net income of P116.074 billion for the first nine months, 9.2% higher than the P106.26 billion which they booked during the comparable year-ago period. — Melissa Luz T. Lopez