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Non-performing loans down by 4% to P115B


The banking industry’s non-performing loans (NPL) dropped by 3.89 percent to P115.5 billion last year, from P120 billion in 2008, according to the Bangko Sentral ng Pilipinas. Banks pursued an assets clean up strategy that brought down the NPL ratio to the industry's total loan portfolio to 3.7 percent from 4.1 percent, the BSP said in a statement. “On annual basis, this was the lowest post-crisis ratio and a significant 13.2 percentage-points reduction from a high of 16.9 percent posted in 2001," BSP Gov. Amando M. Tetangco Jr. said. Banks used earnings to cover up to 93 percent of NPL, from 86 percent, the central bank said. The improved quality of loans helped shrunk the industry’s non-performing assets (NPA) by 5.2 percent to P283.5 billion from P298.9 billion, Tetangco said. “Annually, the banks posted the lowest post-crisis NPA ratio of 4.5 percent from as high as 14.6 percent in 2001. The provisioning for such losses similarly improved as the NPA coverage ratio was better at 48.7 percent from 45 percent in 2008, " Tetangco said. NPL are past due accounts whose principal and interest are unpaid 30 days after these were supposed to have been paid by the borrower. The industry last year consisted of 672 classifications of banks, including 19 universal and regular commercial banks, 46 thrift banks, 565 rural banks, and 42 cooperative banks. —VS, GMANews.TV

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