But can these banks do so? The answer is: yes but only for some banks. As can be seen from the table below, only three banks have the Stockholders Equity (SE) to absorb these Deferred Charges:
- United Coconut Planters Bank (Deferred Charges of 48.62% of SE)
- Bank of Commerce (Deferred Charges of 5.42% of SE)
- Banco De Oro Unibank, Inc. (Deferred Charges of 0.14% of SE)
For one of the banks, booking their Deferred Charges immediately will only serve to impair 25% or more of their Stockholders Equity:
- United Coconut Planters Bank (Deferred Charges of 48.62% of SE)
Retained Earnings
Only one bank has sufficient Retained Earnings (RE) to absorb their unbooked losses:
- Banco de Oro Unibank Inc. (Deferred Charges of 0.75% of RE)
For one of the banks, Deferred Charges will exceed their Retained Earnings:
- United Coconut Planters Bank (Deferred Charges of 321.10% of RE)
One of the banks with substantial Deferred Charges have negative Retained Earnings. As such, it does not have the capacity to absorb additional losses.
- Bank of Commerce (Retained Earnings of - PhP 3.662 billion vs. Deferred Charges of PhP 0.973 billion)
It should be noted that several banks highlighted in previous blog posts have entirely eliminated their unbooked losses or deferred charges in 2012.
Deferred Charges eliminated in the 4th Qtr of 2012 are as follows:
- Philippine Bank of Communications (Deferred Charges of 45.99% of SE as of 3Q 2012)
- Rizal Commercial Banking Corporation (Deferred Charges of 3.82% of SE as 3Q 2012)
- Philippine National Bank (Deferred Charges of 23.65% of SE as of 2Q 2012)
- Land Bank of the Philippines (Deferred Charges of 4.78% of SE as of 2Q 2012)
- Philippine Veterans Bank (Deferred Charges of 1.02% of SE as 2Q 2012)
It is not clear why Banco De Oro Unibank, Inc., whose Deferred Charges amounted to only 0.14% of SE, has not followed suit.
For more information of these Deferred Charges, please consult five previous blog posts: "Can Philippine Universal and Commercial Banks Charge their Unbooked Losses Against Retained Earnings? - September 30, 2012", "Can Philippine Universal and Commercial Banks Charge their Unbooked Losses Against Retained Earnings? - June 30, 2012", "Can Philippine Commercial Banks Charge their Unbooked Losses Against Retained Earnings?", "Philippine Commercial Banks with Overstated Capital as of December 31, 2011" and "BSP's Ampaw Accounting System".
Philippine Commercial Banking System | ||||
Deferred Charges Not Yet Written Down | ||||
Impact on Stockholders Equity | ||||
In PHP | ||||
December 31, 2012 | ||||
Bank | Unbooked Losses | SE | Adjusted SE | Impact on SE |
United Coconut Planters Bank | 9,841,900,553.53 | 20,242,922,858.72 | 10,401,022,305.19 | 48.62% |
Bank of Commerce | 972,700,587.57 | 17,938,069,569.84 | 16,965,368,982.27 | 5.42% |
Banco De Oro Unibank | 215,637,287.11 | 155,069,452,971.95 | 154,853,815,684.84 | 0.14% |
Al-Amanah Islamic Bank of the Philippines | 0.00 | 460,318,999.12 | 460,318,999.12 | 0.00% |
Allied Banking Corporation | 0.00 | 21,307,175,097.24 | 21,307,175,097.24 | 0.00% |
ANZ Banking Group Ltd | 0.00 | 2,347,138,920.44 | 2,347,138,920.44 | 0.00% |
Asia United Bank Corporation | 0.00 | 11,517,775,066.30 | 11,517,775,066.30 | 0.00% |
Bangkok Bank Public Co. Ltd | 0.00 | 1,183,788,778.87 | 1,183,788,778.87 | 0.00% |
Bank of America N.A. | 0.00 | 596,946,705.20 | 596,946,705.20 | 0.00% |
Bank of China Limited - Manila Branch | 0.00 | 558,019,357.44 | 558,019,357.44 | 0.00% |
Bank of the Philippine Islands | 0.00 | 92,347,246,015.92 | 92,347,246,015.92 | 0.00% |
BDO Private Bank, Inc. | 0.00 | 5,184,586,582.92 | 5,184,586,582.92 | 0.00% |
China Banking Corporation | 0.00 | 38,947,137,997.92 | 38,947,137,997.92 | 0.00% |
Chinatrust (Philippines) Commercial Banking Corporation | 0.00 | 6,304,196,679.74 | 6,304,196,679.74 | 0.00% |
Citibank N.A. | 0.00 | 8,038,267,923.48 | 8,038,267,923.48 | 0.00% |
Deutsche Bank AG | 0.00 | 2,164,092,348.17 | 2,164,092,348.17 | 0.00% |
Development Bank of the Philippines | 0.00 | 42,258,443,278.49 | 42,258,443,278.49 | 0.00% |
East West Banking Corporation | 0.00 | 16,938,383,492.18 | 16,938,383,492.18 | 0.00% |
HongKong & Shanghai Banking Corporation | 0.00 | 203,247,681,335.23 | 203,247,681,335.23 | 0.00% |
Internationale Nederlanden Groep BK | 0.00 | 2,916,417,050.90 | 2,916,417,050.90 | 0.00% |
JP Morgan Chase National Bank Association | 0.00 | 1,642,109,496.65 | 1,642,109,496.65 | 0.00% |
Korea Exchange Bank | 0.00 | 641,341,686.61 | 641,341,686.61 | 0.00% |
Land Bank of the Philippines | 0.00 | 74,604,257,815.40 | 74,604,257,815.40 | 0.00% |
Maybank Philippines Inc. | 0.00 | 5,886,136,977.37 | 5,886,136,977.37 | 0.00% |
Mega International Commercial Bank Company Limited | 0.00 | 785,231,548.35 | 785,231,548.35 | 0.00% |
Metropolitan Bank & Trust Company | 0.00 | 114,682,415,970.32 | 114,682,415,970.32 | 0.00% |
Mizuho Corporate Bank Ltd. - Manila Branch | 0.00 | 1,283,451,561.81 | 1,283,451,561.81 | 0.00% |
Philippine Bank of Communications | 0.00 | 5,775,710,961.51 | 5,775,710,961.51 | 0.00% |
Philippine National Bank | 0.00 | 32,243,410,311.17 | 32,243,410,311.17 | 0.00% |
Philippine Trust Company | 0.00 | 17,176,795,759.77 | 17,176,795,759.77 | 0.00% |
Philippine Veterans Bank | 0.00 | 7,110,732,960.79 | 7,110,732,960.79 | 0.00% |
Rizal Commercial Banking Corporation | 0.00 | 42,096,014,872.58 | 42,096,014,872.58 | 0.00% |
Robinsons Bank Corporation | 0.00 | 5,820,635,601.13 | 5,820,635,601.13 | 0.00% |
Security Bank Corporation | 0.00 | 36,745,605,061.62 | 36,745,605,061.62 | 0.00% |
Standard Chartered Bank | 0.00 | 2,277,966,955.65 | 2,277,966,955.65 | 0.00% |
The Bank of Tokyo - Mitsubishi UFJ Ltd | 0.00 | 1,942,812,476.19 | 1,942,812,476.19 | 0.00% |
Union Bank of the Philippines | 0.00 | 44,579,598,110.83 | 44,579,598,110.83 | 0.00% |
Grand Total | 11,030,238,428.21 | 1,044,862,289,157.82 | 1,033,832,050,729.61 | 1.06% |
Source: www.bsp.gov.ph
Philippine Commercial Banking System | ||||
Deferred Charges Not Yet Written Down | ||||
Impact on Retained Earnings | ||||
In PHP | ||||
December 31, 2012 | ||||
Bank | Unbooked Losses | RE | Adjusted RE | Impact on RE |
United Coconut Planters Bank | 9,841,900,553.53 | 3,065,040,659.33 | -6,776,859,894.20 | 321.10% |
Banco De Oro Unibank | 215,637,287.11 | 28,873,980,046.72 | 28,658,342,759.61 | 0.75% |
Bank of Commerce | 972,700,587.57 | -3,661,869,300.71 | -4,634,569,888.28 | -26.56% |
Grand Total | 11,030,238,428.21 | 28,277,151,405.34 | 17,246,912,977.13 | 39.01% |
Source: www.bsp.gov.ph
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