Bank deposits up 8.5% as of end-April

Total bank deposits grew by 8.5 percent as of end-April this year, reaching P3.7 trillion or P300 billion higher than the P3.4 trillion booked in the same period last year, the Bangko Sentral ng Pilipinas (BSP) reported over the weekend. According to the BSP, the continued growth in deposits “reflected sustained depositor confidence in the banking system," noting that savings and time deposits remained the primary sources of funds for banks. Savings deposits accounted for nearly half of the funding base. Data showed that savings deposits grew 10.8 percent as of end-April while demand deposits expanded by 12.9 percent. Time deposits, on the other hand, posted a moderate growth of 1.3 percent. The increase in deposits in the first four months of the year resulted to a robust expansion of the total resources of the country’s banking sector, as assets of banks went up by 8.4 percent to P7 trillion as of end-April. Universal and commercial banks accounted for almost 90 percent of the total resources of the banking system, while thrift, rural, and cooperative banks cornered the remaining 10 percent. "The increase could be traced to the growth in currency and deposits, indicative of the public's continued trust in the banking sector," the BSP said, adding that Philippine banking system remains stable as lending, deposits, and profitability helped sustain the industry's healthy growth. The BSP said banks operating in the Philippines are adequately capitalized, exceeding the 10 percent capital adequacy ratio (CAR) of the BSP and the eight percent international standard under the Basel Accord. The CAR is a ratio of a bank’s capital to its risk and the central bank tracks this indicator to ensure that banks have the capability to absorb a reasonable amount of loss and that they are complying with their statutory capital requirements. Latest data showed that CAR of the banking system remained healthy at 16.02 percent on solo basis and 16.97 percent on a consolidated basis as of end-December 2010. Similarly, the Tier 1 capital ratios of the banking system remained high at 13.64 percent on a solo basis and 13.69 percent on a consolidated basis. The banking system's CARs hardly moved from the last quarter's 16.04 percent on a solo basis and 16.97 percent on a consolidated basis. - KBK, GMA News