Bad loans held by thrift banks up 11%, says BSP

Thrift banks incurred more bad loans as of end-June, while rural and cooperative banks had less, according to data released Tuesday by the Bangko Sentral ng Pilipinas (BSP). The soured loans of thrift banks rose 11 percent to P25.87 billion as of end June 2010 from P23.9 billion reported for the same period last year. BSP data also showed that the loan portfolio of thrift banks increased 4.6 percent to P326.27 billion from last year’s P311.96 billion. The total amount of soured loans of rural banks, however, fell 8.1 percent to P9.44 billion from P10.27 billion while the industry's total loan portfolio improved by 4.9 percent to P100.22 billion from P95.48 billion. This translated to a non-performing loans ratio or NPL ratio of 9.42 percent from 10.75 percent. The central bank said rural banks in Mindanao had better loan quality, obtaining an NPL ratio of 5.62 percent. Rural banks in Luzon posted an NPL ratio of 10.22 percent and those in the Visayas had an NPL ratio of 12.85 percent. The NPL ratio of cooperative banks also improved to 8.52 percent from 8.60 percent as the sector’s loan portfolio expanded by 8.5 percent to P10.88 billion from P10.02 billion. The non-performing loans of cooperative banks rose 7.4 percent to P927 million from P863 million, the BSP reported. As a measure, the NPL ratio defines the amount of bad loans as percentage of the total loans of a bank. NPLs consist of loans that have fallen due but remain unpaid for at least three months, or for a period depending of the terms of the transaction between borrowers and lenders. — DM/VS, GMANews.TV