In the Philippine Commercial Banking Industry, DOSRI Loans stood at Php 207.015 billion, or 6.24% of a Total Loan Portfolio - Net (TLP-Net) of Php 3.316 trillion as of September 30, 2012. This is down significantly from the 6.59% ratio posted by the Philippine Commercial Banking Industry last June 30, 2012.
Editor's Note: Data is culled from the Published Statements of Condition of individual commercial banks found in www.bsp.gov.ph. Banks highlighted in yellow are classified as Distressed Banks. The level of distressed is measured by the Ratio of their Total Distressed Assets/Total Capital Cushion as of September 30, 2012. See a previous blog post: "Philippine U/KBs Improve in the 3rd Qtr. of 2012".
| Philippine Universal and Commercial Banking System | |||
| DOSRI as % of TLP-Net | |||
| September 30, 2012 | |||
| DOSRI | TLP-Net | DOSRI/TLP-Net | |
| Bank | (In Php) | (In PHP) | (In %) |
| Development Bank of the Philippines | 36,642,740,813.73 | 118,051,820,254.37 | 31.04% |
| Land Bank of the Philippines | 68,371,145,824.91 | 271,641,502,777.40 | 25.17% |
| Robinsons Bank Corporation | 1,879,406,389.63 | 17,205,257,401.15 | 10.92% |
| China Banking Corporation | 17,668,692,827.70 | 173,364,997,162.52 | 10.19% |
| Banco De Oro Unibank | 52,851,741,360.86 | 688,358,629,640.62 | 7.68% |
| Bank of America N.A. | 27,542,992.47 | 637,808,734.68 | 4.32% |
| Rizal Commercial Banking Corporation | 5,494,960,074.13 | 146,965,825,185.07 | 3.74% |
| Bank of Commerce | 1,107,256,720.11 | 31,839,372,828.97 | 3.48% |
| Metropolitan Bank & Trust Company | 9,458,617,913.57 | 377,185,115,837.56 | 2.51% |
| Philippine National Bank | 3,199,339,053.09 | 140,263,946,262.95 | 2.28% |
| Allied Banking Corporation | 1,987,466,182.56 | 87,176,987,927.85 | 2.28% |
| Maybank Philippines Inc. | 583,012,559.56 | 28,627,516,456.58 | 2.04% |
| Bank of the Philippine Islands | 4,871,779,945.93 | 345,114,889,334.95 | 1.41% |
| Union Bank of the Philippines | 890,230,198.85 | 97,437,908,105.57 | 0.91% |
| Asia United Bank Corporation | 238,866,787.16 | 28,180,538,188.66 | 0.85% |
| East West Banking Corporation | 328,413,837.11 | 60,335,407,618.04 | 0.54% |
| Citibank N.A. | 574,116,285.63 | 127,329,894,916.29 | 0.45% |
| United Coconut Planters Bank | 240,973,723.81 | 63,606,668,222.79 | 0.38% |
| HongKong & Shanghai Banking Corporation | 146,068,891.20 | 42,488,194,384.75 | 0.34% |
| Philippine Veterans Bank | 49,560,695.58 | 24,161,236,901.09 | 0.21% |
| Philippine Bank of Communications | 20,161,324.99 | 10,865,129,889.91 | 0.19% |
| Security Bank Corporation | 238,519,792.86 | 132,068,534,629.24 | 0.18% |
| ANZ Banking Group Ltd | 38,421,072.72 | 23,352,265,144.13 | 0.16% |
| Chinatrust (Philippines) Commercial Banking Corporation | 21,142,422.47 | 13,377,561,741.34 | 0.16% |
| JP Morgan Chase National Bank Association | 55,835,611.96 | 67,633,138,857.16 | 0.08% |
| BDO Private Bank, Inc. | 2,000,000.00 | 2,749,466,571.71 | 0.07% |
| The Bank of Tokyo - Mitsubishi UFJ Ltd | 9,130,475.82 | 19,718,112,654.58 | 0.05% |
| Standard Chartered Bank | 17,733,052.99 | 42,592,672,429.72 | 0.04% |
| Korea Exchange Bank | 250,200.00 | 5,536,424,200.74 | 0.00% |
| Al-Amanah Islamic Bank of the Philippines | 0.00 | 275,320,977.90 | 0.00% |
| Bangkok Bank Public Co. Ltd | 0.00 | 5,367,247,703.87 | 0.00% |
| Bank of China Limited - Manila Branch | 0.00 | 5,120,971,368.95 | 0.00% |
| Deutsche Bank AG | 0.00 | 31,267,685,638.38 | 0.00% |
| Internationale Nederlanden Groep BK | 0.00 | 22,498,415,647.01 | 0.00% |
| Mega International Commercial Bank Company Limited | 0.00 | 6,759,583,309.47 | 0.00% |
| Mizuho Corporate Bank Ltd. - Manila Branch | 0.00 | 20,321,409,561.32 | 0.00% |
| Philippine Trust Company | 0.00 | 36,085,097,702.73 | 0.00% |
| Grand Total | 207,015,127,031.40 | 3,315,562,556,170.02 | 6.24% |
Source: www.bsp.gov.ph
Of the 37 banks in this list, eight banks had no DOSRI loans as of September 30, 2012. Of the 29 banks that reported DOSRI loans, the ratio of DOSRI Loans to Total Loan Portfolio - Net as of September 30, 2012 was slightly lower (6.49%) than the 6.83% ratio reported for all commercial banks with DOSRI loans as of June 30, 2012. The banks with the highest ratio of DOSRI Loans to TLP-Net were government banks:
- Development Bank of the Philippines (31.04% of TLP-Net)
- Land Bank of the Philippines (25.17% of TLP-Net)
DOSRI rules indicate that DOSRI Loans, in the aggregate, should not exceed the total equity of the bank. Therefore banks with significantly high DOSRI Loans as a percentage of Total Stockholders Equity (SE) may be approaching DOSRI Limits. In this matter, two government banks again stand out:
- Development Bank of the Philippines (93.61% of SE)
- Land Bank of the Philippines (89.69% of SE)
A third bank, China Banking Corporation, has DOSRI Loans equivalent to 46.64% of SE as of September 30, 2012. Banco de Oro Unibank, which has DOSRI Loans equivalent to 35.13% of SE as of September 30, 2012, is down significantly from 58.23% as of June 30, 2012. On an overall basis, DOSRI Loans comprised 25.21% of Stockholders Equity as of September 30, 2012, down from 28.43% of Stockholders Equity as of June 30, 2012.
| Philippine Universal and Commercial Banking System | |||
| DOSRI as % of Stockholders Equity | |||
| September 30, 2012 | |||
| DOSRI | SE | DOSRI/SE | |
| Bank | (In Php) | (In PHP) | (In %) |
| Land Bank of the Philippines | 68,371,145,824.91 | 73,036,897,213 | 93.61% |
| Development Bank of the Philippines | 36,642,740,813.73 | 40,856,299,162 | 89.69% |
| China Banking Corporation | 17,668,692,827.70 | 37,882,503,414 | 46.64% |
| Banco De Oro Unibank | 52,851,741,360.86 | 150,450,853,758 | 35.13% |
| Robinsons Bank Corporation | 1,879,406,389.63 | 5,657,648,524 | 33.22% |
| Rizal Commercial Banking Corporation | 5,494,960,074.13 | 42,302,372,460 | 12.99% |
| Philippine National Bank | 3,199,339,053.09 | 30,067,965,289 | 10.64% |
| Allied Banking Corporation | 1,987,466,182.56 | 18,726,766,267 | 10.61% |
| Maybank Philippines Inc. | 583,012,559.56 | 5,664,922,891 | 10.29% |
| Metropolitan Bank & Trust Company | 9,458,617,913.57 | 109,337,191,786 | 8.65% |
| Citibank N.A. | 574,116,285.63 | 7,812,821,024 | 7.35% |
| Bank of Commerce | 1,107,256,720.11 | 17,911,548,955 | 6.18% |
| Bank of the Philippine Islands | 4,871,779,945.93 | 91,739,651,562 | 5.31% |
| Bank of America N.A. | 27,542,992.47 | 596,946,705 | 4.61% |
| JP Morgan Chase National Bank Association | 55,835,611.96 | 1,863,792,565 | 3.00% |
| HongKong & Shanghai Banking Corporation | 146,068,891.20 | 5,438,663,639 | 2.69% |
| Asia United Bank Corporation | 238,866,787.16 | 11,028,570,176 | 2.17% |
| Union Bank of the Philippines | 890,230,198.85 | 42,897,511,544 | 2.08% |
| East West Banking Corporation | 328,413,837.11 | 16,481,579,328 | 1.99% |
| ANZ Banking Group Ltd | 38,421,072.72 | 2,373,395,839 | 1.62% |
| The Bank of Tokyo - Mitsubishi UFJ Ltd | 9,130,475.82 | 716,591,348 | 1.27% |
| United Coconut Planters Bank | 240,973,723.81 | 19,385,897,395 | 1.24% |
| Standard Chartered Bank | 17,733,052.99 | 1,595,531,721 | 1.11% |
| Philippine Veterans Bank | 49,560,695.58 | 5,722,007,670 | 0.87% |
| Security Bank Corporation | 238,519,792.86 | 36,040,386,614 | 0.66% |
| Chinatrust (Philippines) Commercial Banking Corporation | 21,142,422.47 | 6,234,024,774 | 0.34% |
| Philippine Bank of Communications | 20,161,324.99 | 8,083,690,578 | 0.25% |
| Korea Exchange Bank | 250,200.00 | 595,597,134 | 0.04% |
| BDO Private Bank, Inc. | 2,000,000.00 | 5,098,086,069 | 0.04% |
| Al-Amanah Islamic Bank of the Philippines | 0.00 | 472,674,446 | 0.00% |
| Bangkok Bank Public Co. Ltd | 0.00 | 1,167,640,035 | 0.00% |
| Bank of China Limited - Manila Branch | 0.00 | 584,988,741 | 0.00% |
| Deutsche Bank AG | 0.00 | 1,863,242,321 | 0.00% |
| Internationale Nederlanden Groep BK | 0.00 | 2,876,741,574 | 0.00% |
| Mega International Commercial Bank Company Limited | 0.00 | 779,565,356 | 0.00% |
| Mizuho Corporate Bank Ltd. - Manila Branch | 0.00 | 1,337,545,845 | 0.00% |
| Philippine Trust Company | 0.00 | 16,338,935,062 | 0.00% |
| Grand Total | 207,015,127,031.40 | 821,021,048,782.89 | 25.21% |
Source: www.bsp.gov.ph
Banks often take pains to avoid DOSRI Loans from falling past due. Although bank policies often state that DOSRI Loans are made “on commercial, arm's length terms, i.e., substantially on the same terms as loans to other individuals and businesses of comparable risks” (See RCBC's Consolidated Financial Statements as of December 31, 2010), loan underwriting standards should be tighter because a past due DOSRI loan reflects badly on the bank. DOSRI Loans that fall past due are often:
- Written off as soon as possible;
- Refinanced or Restructured to become current; or are
- Technically reclassified as a general NPL (like if a loan to a former bank officer falls past due).
| Philippine Universal and Commercial Banking System | |||
| DOSRI Past Due as % of DOSRI | |||
| September 30, 2012 | |||
| DOSRI Past Due | DOSRI | DOSRI Past Due/DOSRI | |
| Bank | (In PHP) | (In PHP) | (In %) |
| Rizal Commercial Banking Corporation | 526,075,262.61 | 5,494,960,074.13 | 9.57% |
| Asia United Bank Corporation | 4,269,361.55 | 238,866,787.16 | 1.79% |
| United Coconut Planters Bank | 2,994,608.21 | 240,973,723.81 | 1.24% |
| Standard Chartered Bank | 187,061.02 | 17,733,052.99 | 1.05% |
| Chinatrust (Philippines) Commercial Banking Corporation | 39,266.48 | 21,142,422.47 | 0.19% |
| Philippine Bank of Communications | 34,589.32 | 20,161,324.99 | 0.17% |
| Bank of the Philippine Islands | 3,197,760.93 | 4,871,779,945.93 | 0.07% |
| Citibank N.A. | 21,836.61 | 574,116,285.63 | 0.00% |
| China Banking Corporation | 444,134.70 | 17,668,692,827.70 | 0.00% |
| Allied Banking Corporation | 0.00 | 1,987,466,182.56 | 0.00% |
| ANZ Banking Group Ltd | 0.00 | 38,421,072.72 | 0.00% |
| Banco De Oro Unibank | 0.00 | 52,851,741,360.86 | 0.00% |
| Bank of America N.A. | 0.00 | 27,542,992.47 | 0.00% |
| Bank of Commerce | 0.00 | 1,107,256,720.11 | 0.00% |
| BDO Private Bank, Inc. | 0.00 | 2,000,000.00 | 0.00% |
| Development Bank of the Philippines | 0.00 | 36,642,740,813.73 | 0.00% |
| East West Banking Corporation | 0.00 | 328,413,837.11 | 0.00% |
| HongKong & Shanghai Banking Corporation | 0.00 | 146,068,891.20 | 0.00% |
| JP Morgan Chase National Bank Association | 0.00 | 55,835,611.96 | 0.00% |
| Korea Exchange Bank | 0.00 | 250,200.00 | 0.00% |
| Land Bank of the Philippines | 0.00 | 68,371,145,824.91 | 0.00% |
| Maybank Philippines Inc. | 0.00 | 583,012,559.56 | 0.00% |
| Metropolitan Bank & Trust Company | 0.00 | 9,458,617,913.57 | 0.00% |
| Philippine National Bank | 0.00 | 3,199,339,053.09 | 0.00% |
| Philippine Veterans Bank | 0.00 | 49,560,695.58 | 0.00% |
| Robinsons Bank Corporation | 0.00 | 1,879,406,389.63 | 0.00% |
| Security Bank Corporation | 0.00 | 238,519,792.86 | 0.00% |
| The Bank of Tokyo - Mitsubishi UFJ Ltd | 0.00 | 9,130,475.82 | 0.00% |
| Union Bank of the Philippines | 0.00 | 890,230,198.85 | 0.00% |
| Al-Amanah Islamic Bank of the Philippines | 0.00 | 0.00 | NA |
| Bangkok Bank Public Co. Ltd | 0.00 | 0.00 | NA |
| Bank of China Limited - Manila Branch | 0.00 | 0.00 | NA |
| Deutsche Bank AG | 0.00 | 0.00 | NA |
| Internationale Nederlanden Groep BK | 0.00 | 0.00 | NA |
| Mega International Commercial Bank Company Limited | 0.00 | 0.00 | NA |
| Mizuho Corporate Bank Ltd. - Manila Branch | 0.00 | 0.00 | NA |
| Philippine Trust Company | 0.00 | 0.00 | NA |
| Grand Total | 537,263,881.43 | 207,015,127,031.40 | 0.26% |
Source: www.bsp.gov.ph
Given all the measures banks can take to prevent a DOSRI Loan from falling past due, it is not surprising to find past due rates of DOSRI Loans significantly below the NPL ratios of their Total Loan Portfolios. What is generally surprising is to find DOSRI Loans that fall past due in significantly higher proportions than the banks NPL ratio on their Total Loan Portfolios. Only three banks fall into this category:
- Rizal Commercial Banking Corporation (DOSRI Past Due Ratio of 9.57% versus an NPL Ratio of 1.00%)
The NPL Ratio of the Philippine Commercial Banking System has increased slightly to 2.22% of Total Loan Portfolio-Net as of September 30, 2012 from 2.21% of Total Loan Portfolio - Net as of June 30, 2012.
| Philippine Universal and Commercial Banking System | |||
| NPL as % of TLP-Net | |||
| September 30, 2012 | |||
| NPL | TLP-Net | NPL/TLP | |
| Bank | (In Php) | (In Php) | (In %) |
| Bank of Commerce | 4,339,138,145.29 | 31,839,372,828.97 | 13.63% |
| United Coconut Planters Bank | 4,583,161,471.53 | 63,606,668,222.79 | 7.21% |
| Philippine Veterans Bank | 1,204,729,630.89 | 24,161,236,901.09 | 4.99% |
| Philippine National Bank | 6,434,707,685.21 | 140,263,946,262.95 | 4.59% |
| East West Banking Corporation | 2,691,311,109.42 | 60,335,407,618.04 | 4.46% |
| Development Bank of the Philippines | 5,138,464,552.04 | 118,051,820,254.37 | 4.35% |
| Allied Banking Corporation | 3,597,456,235.72 | 87,176,987,927.85 | 4.13% |
| Robinsons Bank Corporation | 571,274,409.30 | 17,205,257,401.15 | 3.32% |
| Philippine Trust Company | 1,183,875,727.32 | 36,085,097,702.73 | 3.28% |
| Land Bank of the Philippines | 8,298,083,758.22 | 271,641,502,777.40 | 3.05% |
| Union Bank of the Philippines | 2,914,428,869.79 | 97,437,908,105.57 | 2.99% |
| Maybank Philippines Inc. | 826,359,674.76 | 28,627,516,456.58 | 2.89% |
| Asia United Bank Corporation | 769,661,355.78 | 28,180,538,188.66 | 2.73% |
| Standard Chartered Bank | 1,151,722,627.63 | 42,592,672,429.72 | 2.70% |
| Chinatrust (Philippines) Commercial Banking Corporation | 347,839,976.98 | 13,377,561,741.34 | 2.60% |
| China Banking Corporation | 4,160,169,499.25 | 173,364,997,162.52 | 2.40% |
| HongKong & Shanghai Banking Corporation | 802,736,925.20 | 42,488,194,384.75 | 1.89% |
| Banco De Oro Unibank | 11,494,982,457.16 | 688,358,629,640.62 | 1.67% |
| Bank of the Philippine Islands | 4,750,187,103.25 | 345,114,889,334.95 | 1.38% |
| Metropolitan Bank & Trust Company | 4,739,775,178.65 | 377,185,115,837.56 | 1.26% |
| Philippine Bank of Communications | 120,295,797.40 | 10,865,129,889.91 | 1.11% |
| Bangkok Bank Public Co. Ltd | 55,941,555.55 | 5,367,247,703.87 | 1.04% |
| Rizal Commercial Banking Corporation | 1,469,391,870.31 | 146,965,825,185.07 | 1.00% |
| Security Bank Corporation | 919,561,512.80 | 132,068,534,629.24 | 0.70% |
| Citibank N.A. | 883,300,366.16 | 127,329,894,916.29 | 0.69% |
| Korea Exchange Bank | 33,706,890.68 | 5,536,424,200.74 | 0.61% |
| Al-Amanah Islamic Bank of the Philippines | 1,232,146.27 | 275,320,977.90 | 0.45% |
| Bank of China Limited - Manila Branch | 8,660,895.91 | 5,120,971,368.95 | 0.17% |
| ANZ Banking Group Ltd | 23,339,114.85 | 23,352,265,144.13 | 0.10% |
| JP Morgan Chase National Bank Association | 744,584.10 | 67,633,138,857.16 | 0.00% |
| The Bank of Tokyo - Mitsubishi UFJ Ltd | 125,938.80 | 19,718,112,654.58 | 0.00% |
| Internationale Nederlanden Groep BK | 85.40 | 22,498,415,647.01 | 0.00% |
| Bank of America N.A. | 0.00 | 637,808,734.68 | 0.00% |
| BDO Private Bank, Inc. | 0.00 | 2,749,466,571.71 | 0.00% |
| Deutsche Bank AG | 0.00 | 31,267,685,638.38 | 0.00% |
| Mega International Commercial Bank Company Limited | 0.00 | 6,759,583,309.47 | 0.00% |
| Mizuho Corporate Bank Ltd. - Manila Branch | 0.00 | 20,321,409,561.32 | 0.00% |
| Grand Total | 73,516,367,151.62 | 3,315,562,556,170.02 | 2.22% |
Source: www.bsp.gov.ph
However, one bank has a significantly high NPL as a percentage of its stockholders equity as of September 30, 2012. This bank is Standard Chartered Bank (NPL/SE Ratio of 72.18%).
Other banks with NPLs that are more than 20% of their stockholders equity are:
- United Coconut Planters Bank (NPL/SE Ratio of 23.64%)
- Philippine National Bank (NPL/SE Ratio of 21.40%)
- Philippine Veterans Bank (NPL/SE Ratio of 21.05% of SE)
Again, any further deterioration in the value of these banks NPLs may lead to a significant reduction of the bank's capital, particularly if the bank has not adequately reserved capital for future losses on these NPLs. All of the banks listed above are listed as distressed.
See a previous blog post: "Philippine U/KBs Improve in the 3rd Qtr. of 2012".
| Philippine Universal and Commercial Banking System | |||
| NPL as % of SE | |||
| September 30, 2012 | |||
| NPL | SE | NPL/SE | |
| Bank | (In PHP) | (In PHP) | (In %) |
| Standard Chartered Bank | 1,151,722,627.63 | 1,595,531,721 | 72.18% |
| Bank of Commerce | 4,339,138,145.29 | 17,911,548,955 | 24.23% |
| United Coconut Planters Bank | 4,583,161,471.53 | 19,385,897,395 | 23.64% |
| Philippine National Bank | 6,434,707,685.21 | 30,067,965,289 | 21.40% |
| Philippine Veterans Bank | 1,204,729,630.89 | 5,722,007,670 | 21.05% |
| Allied Banking Corporation | 3,597,456,235.72 | 18,726,766,267 | 19.21% |
| East West Banking Corporation | 2,691,311,109.42 | 16,481,579,328 | 16.33% |
| HongKong & Shanghai Banking Corporation | 802,736,925.20 | 5,438,663,639 | 14.76% |
| Maybank Philippines Inc. | 826,359,674.76 | 5,664,922,891 | 14.59% |
| Development Bank of the Philippines | 5,138,464,552.04 | 40,856,299,162 | 12.58% |
| Land Bank of the Philippines | 8,298,083,758.22 | 73,036,897,213 | 11.36% |
| Citibank N.A. | 883,300,366.16 | 7,812,821,024 | 11.31% |
| China Banking Corporation | 4,160,169,499.25 | 37,882,503,414 | 10.98% |
| Robinsons Bank Corporation | 571,274,409.30 | 5,657,648,524 | 10.10% |
| Banco De Oro Unibank | 11,494,982,457.16 | 150,450,853,758 | 7.64% |
| Philippine Trust Company | 1,183,875,727.32 | 16,338,935,062 | 7.25% |
| Asia United Bank Corporation | 769,661,355.78 | 11,028,570,176 | 6.98% |
| Union Bank of the Philippines | 2,914,428,869.79 | 42,897,511,544 | 6.79% |
| Korea Exchange Bank | 33,706,890.68 | 595,597,134 | 5.66% |
| Chinatrust (Philippines) Commercial Banking Corporation | 347,839,976.98 | 6,234,024,774 | 5.58% |
| Bank of the Philippine Islands | 4,750,187,103.25 | 91,739,651,562 | 5.18% |
| Bangkok Bank Public Co. Ltd | 55,941,555.55 | 1,167,640,035 | 4.79% |
| Metropolitan Bank & Trust Company | 4,739,775,178.65 | 109,337,191,786 | 4.34% |
| Rizal Commercial Banking Corporation | 1,469,391,870.31 | 42,302,372,460 | 3.47% |
| Security Bank Corporation | 919,561,512.80 | 36,040,386,614 | 2.55% |
| Philippine Bank of Communications | 120,295,797.40 | 8,083,690,578 | 1.49% |
| Bank of China Limited - Manila Branch | 8,660,895.91 | 584,988,741 | 1.48% |
| ANZ Banking Group Ltd | 23,339,114.85 | 2,373,395,839 | 0.98% |
| Al-Amanah Islamic Bank of the Philippines | 1,232,146.27 | 472,674,446 | 0.26% |
| JP Morgan Chase National Bank Association | 744,584.10 | 1,863,792,565 | 0.04% |
| The Bank of Tokyo - Mitsubishi UFJ Ltd | 125,938.80 | 716,591,348 | 0.02% |
| Internationale Nederlanden Groep BK | 85.40 | 2,876,741,574 | 0.00% |
| Bank of America N.A. | 0.00 | 596,946,705 | 0.00% |
| BDO Private Bank, Inc. | 0.00 | 5,098,086,069 | 0.00% |
| Deutsche Bank AG | 0.00 | 1,863,242,321 | 0.00% |
| Mega International Commercial Bank Company Limited | 0.00 | 779,565,356 | 0.00% |
| Mizuho Corporate Bank Ltd. - Manila Branch | 0.00 | 1,337,545,845 | 0.00% |
| Grand Total | 73,516,367,151.62 | 821,021,048,782.89 | 8.95% |
Source: www.bsp.gov.ph
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