PBCom ranks first in NPLs as % of Total Loan Portfolio as of March 31, 2013

DOSRI.  Short for DOSRI Loans and Transactions.  Otherwise known as loans to Directors, Officers, Stockholders, and Related Interests (DOSRI).  Regulators and Legislators have established laws and regulations that limit DOSRI loans.  The General Banking Act and BSP regulations limit the amount of the loans granted by a bank to a single borrower to 25% of equity.  The amount of individual loans to DOSRI, of which 70% must be secured, should not exceed the amount of the deposit and book value of the investment in the bank.  In the aggregate, loans to DOSRI generally should not exceed the total equity or 15% of the total loan portfolio of the bank, whichever is lower.

In the Philippine Universal and Commercial Banking Industry, DOSRI Loans stood at Php 185.625 billion, or 5.12% of a Total Loan Portfolio of Php 3.625 trillion as of March 31, 2013.  This is down significantly from the 5.86% ratio posted by the Philippine Universal and Commercial Banking Industry last December 31, 2012.  (Weak banks are highlighted in yellow.  For more information regarding this, please check out a previous blog post: "The Top Distressed Philippine Banks as of March 31, 2013")

Philippine Universal and Commercial Banking System
DOSRI as % of TLP
March 31, 2013
	DOSRI	TLP	DOSRI/TLP
Bank	(In Php)	(In PHP)	(In %)
Land Bank of the Philippines	68,325,595,839.04	284,555,923,201.41	24.01%
Development Bank of the Philippines	32,913,767,784.79	143,320,002,820.71	22.97%
Banco De Oro Unibank	58,903,170,029.35	767,965,546,750.32	7.67%
Robinsons Bank Corporation	699,042,998.73	17,548,028,027.56	3.98%
Rizal Commercial Banking Corporation	4,919,020,977.68	157,791,938,926.88	3.12%
Bank of Commerce	1,106,778,250.32	42,092,731,441.89	2.63%
East West Banking Corporation	1,698,941,227.81	70,474,220,600.73	2.41%
China Banking Corporation	3,982,039,464.63	173,314,145,403.80	2.30%
Bank of America N.A.	39,047,412.69	1,959,819,918.27	1.99%
Bank of the Philippine Islands	6,621,571,268.07	383,146,380,802.19	1.73%
Philippine National Bank	4,130,991,416.49	239,486,975,887.80	1.72%
Union Bank of the Philippines	825,861,373.00	96,022,940,076.99	0.86%
HongKong & Shanghai Banking Corporation	470,598,011.80	74,408,879,626.64	0.63%
Asia United Bank Corporation	183,898,898.32	32,511,134,608.49	0.57%
United Coconut Planters Bank	206,902,585.09	74,815,142,407.66	0.28%
Security Bank Corporation	312,697,675.41	124,269,364,156.97	0.25%
Philippine Veterans Bank	51,776,620.70	24,689,724,906.48	0.21%
Philippine Bank of Communications	19,402,583.91	11,861,249,940.75	0.16%
Chinatrust (Philippines) Commercial Banking Corporation	19,977,554.75	13,108,092,774.73	0.15%
ANZ Banking Group Ltd	36,004,301.68	25,243,044,187.77	0.14%
JP Morgan Chase National Bank Association	51,515,189.50	53,909,061,409.71	0.10%
Standard Chartered Bank	19,218,892.39	32,162,180,072.48	0.06%
The Bank of Tokyo - Mitsubishi UFJ Ltd	11,714,621.76	27,129,037,192.55	0.04%
Citibank N.A.	61,177,511.77	150,272,516,723.18	0.04%
Maybank Philippines Inc.	13,459,020.01	34,359,929,778.81	0.04%
Korea Exchange Bank	466,212.03	4,764,043,769.98	0.01%
Al-Amanah Islamic Bank of the Philippines	0.00	111,427,366.32	0.00%
Bangkok Bank Public Co. Ltd	0.00	5,107,744,328.99	0.00%
Bank of China Limited - Manila Branch	0.00	5,901,510,449.51	0.00%
BDO Private Bank, Inc.	0.00	6,763,931,793.17	0.00%
Deutsche Bank AG	0.00	20,629,748,036.91	0.00%
Internationale Nederlanden Groep BK	0.00	27,053,118,995.48	0.00%
Mega International Commercial Bank Company Limited	0.00	7,531,512,184.25	0.00%
Metropolitan Bank & Trust Company	0.00	430,628,262,183.59	0.00%
Mizuho Corporate Bank Ltd. - Manila Branch	0.00	24,560,114,742.29	0.00%
Philippine Trust Company	0.00	35,573,308,930.74	0.00%
Allied Banking Corporation*	NA	NA	NA
Grand Total	185,624,637,721.72	3,625,042,734,426.00	5.12%

* Merged with Philippine National Bank

Source: www.bsp.gov.ph

Of the 37 banks in this list, ten banks had no DOSRI loans as of March 31, 2013.  Of the 26 banks that reported DOSRI loans, the ratio of DOSRI Loans to Total Loan Portfolio - Net as of December 31, 2012 was imperceptibly lower (6.06%) than the 6.08% ratio reported for all commercial banks with DOSRI loans as of December 31, 2012.  The banks with the highest ratio of DOSRI Loans to TLP-Net were government banks:

1. Development Bank of the Philippines (24.01% of TLP)
2. Land Bank of the Philippines (22.97% of TLP)

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:

1. Development Bank of the Philippines (76.67% of SE)
2. Land Bank of the Philippines (74.87% of SE)

A third bank, Banco de Oro Unibank, has DOSRI Loans equivalent to 33.88% of SE as of March 31, 2013.  On an overall basis, DOSRI Loans comprised 19.39% of Stockholders Equity as of March 31, 2013, down from 24.35% of Stockholders Equity as of December 31, 2012.

Philippine Universal and Commercial Banking System
DOSRI as % of Stockholders Equity
March 31, 2013
	DOSRI	SE	DOSRI/SE
Bank	(In Php)	(In PHP)	(In %)
Development Bank of the Philippines	32,913,767,784.79	42,929,191,158.40	76.67%
Land Bank of the Philippines	68,325,595,839.04	91,259,545,903.56	74.87%
Banco De Oro Unibank	58,903,170,029.35	173,866,230,648.58	33.88%
Robinsons Bank Corporation	699,042,998.73	6,151,937,855.15	11.36%
Rizal Commercial Banking Corporation	4,919,020,977.68	47,643,616,278.44	10.32%
HongKong & Shanghai Banking Corporation	470,598,011.80	4,781,045,440.48	9.84%
East West Banking Corporation	1,698,941,227.81	17,858,284,000.87	9.51%
China Banking Corporation	3,982,039,464.63	43,001,565,849.86	9.26%
Bank of the Philippine Islands	6,621,571,268.07	100,230,894,475.56	6.61%
Bank of America N.A.	39,047,412.69	596,946,705.20	6.54%
Bank of Commerce	1,106,778,250.32	19,197,827,867.71	5.77%
Philippine National Bank	4,130,991,416.49	80,105,100,648.55	5.16%
JP Morgan Chase National Bank Association	51,515,189.50	2,421,333,323.53	2.13%
Union Bank of the Philippines	825,861,373.00	48,228,662,513.03	1.71%
Asia United Bank Corporation	183,898,898.32	11,906,072,196.42	1.54%
ANZ Banking Group Ltd	36,004,301.68	2,676,259,564.58	1.35%
United Coconut Planters Bank	206,902,585.09	21,725,109,221.46	0.95%
Standard Chartered Bank	19,218,892.39	2,050,871,175.77	0.94%
Security Bank Corporation	312,697,675.41	38,065,480,632.77	0.82%
Citibank N.A.	61,177,511.77	7,664,105,443.06	0.80%
The Bank of Tokyo - Mitsubishi UFJ Ltd	11,714,621.76	1,925,492,931.38	0.61%
Philippine Veterans Bank	51,776,620.70	9,096,313,444.16	0.57%
Chinatrust (Philippines) Commercial Banking Corporation	19,977,554.75	6,473,083,695.37	0.31%
Philippine Bank of Communications	19,402,583.91	7,109,040,036.29	0.27%
Maybank Philippines Inc.	13,459,020.01	10,182,436,458.59	0.13%
Korea Exchange Bank	466,212.03	543,771,939.45	0.09%
Al-Amanah Islamic Bank of the Philippines	0.00	431,547,413.87	0.00%
Bangkok Bank Public Co. Ltd	0.00	1,145,898,151.12	0.00%
Bank of China Limited - Manila Branch	0.00	672,028,344.23	0.00%
BDO Private Bank, Inc.	0.00	6,022,759,830.20	0.00%
Deutsche Bank AG	0.00	2,247,713,611.93	0.00%
Internationale Nederlanden Groep BK	0.00	2,795,170,643.11	0.00%
Mega International Commercial Bank Company Limited	0.00	649,152,544.54	0.00%
Metropolitan Bank & Trust Company	0.00	122,188,510,670.78	0.00%
Mizuho Corporate Bank Ltd. - Manila Branch	0.00	1,272,915,083.49	0.00%
Philippine Trust Company	0.00	22,248,019,776.86	0.00%
Allied Banking Corporation*	NA	NA	NA
Grand Total	185,624,637,721.72	957,363,935,478.35	19.39%

* Merged with Philippine National Bank

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:

1. Written off as soon as possible;
2. Refinanced or Restructured to become current; or are
3. Technically reclassified as a general NPL (like if a loan to a former bank officer falls past due). 

As a result, only Php 0.552 billion of DOSRI Loans or 0.30% are past due out of a Total DOSRI Loan Portfolio of Php 185.624 billion as of March 31, 2013, basically flat since December 31, 2012.  

Philippine Universal and Commercial Banking System
DOSRI Past Due as % of DOSRI
March 31, 2013
	DOSRI Past Due	DOSRI	DOSRI Past Due/DOSRI
Bank	(In PHP)	(In PHP)	(In %)
Rizal Commercial Banking Corporation	525,587,243.04	4,919,020,977.68	10.68%
United Coconut Planters Bank	2,763,830.82	206,902,585.09	1.34%
Philippine Bank of Communications	112,234.85	19,402,583.91	0.58%
East West Banking Corporation	4,042,592.33	1,698,941,227.81	0.24%
Bank of the Philippine Islands	3,864,351.52	6,621,571,268.07	0.06%
Land Bank of the Philippines	13,600,000.00	68,325,595,839.04	0.02%
Banco De Oro Unibank	1,488,227.70	58,903,170,029.35	0.00%
China Banking Corporation	8,003.24	3,982,039,464.63	0.00%
Philippine National Bank	1,927.70	4,130,991,416.49	0.00%
ANZ Banking Group Ltd	0.00	36,004,301.68	0.00%
Asia United Bank Corporation	0.00	183,898,898.32	0.00%
Bank of America N.A.	0.00	39,047,412.69	0.00%
Bank of Commerce	0.00	1,106,778,250.32	0.00%
Chinatrust (Philippines) Commercial Banking Corporation	0.00	19,977,554.75	0.00%
Citibank N.A.	0.00	61,177,511.77	0.00%
Development Bank of the Philippines	0.00	32,913,767,784.79	0.00%
HongKong & Shanghai Banking Corporation	0.00	470,598,011.80	0.00%
JP Morgan Chase National Bank Association	0.00	51,515,189.50	0.00%
Korea Exchange Bank	0.00	466,212.03	0.00%
Maybank Philippines Inc.	0.00	13,459,020.01	0.00%
Philippine Veterans Bank	0.00	51,776,620.70	0.00%
Robinsons Bank Corporation	0.00	699,042,998.73	0.00%
Security Bank Corporation	0.00	312,697,675.41	0.00%
Standard Chartered Bank	0.00	19,218,892.39	0.00%
The Bank of Tokyo - Mitsubishi UFJ Ltd	0.00	11,714,621.76	0.00%
Union Bank of the Philippines	0.00	825,861,373.00	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
BDO Private Bank, Inc.	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
Metropolitan Bank & Trust Company	0.00	0.00	NA
Mizuho Corporate Bank Ltd. - Manila Branch	0.00	0.00	NA
Philippine Trust Company	0.00	0.00	NA
Allied Banking Corporation*	NA	NA	NA
Grand Total	551,468,411.20	185,624,637,721.72	0.30%

* Merged with Philippine National Bank

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 one bank falls into this category:

1. Rizal Commercial Banking Corporation (DOSRI Past Due Ratio of 10.68% versus an NPL/TLP Ratio of 2.19%)

The NPL Ratio of the Philippine Commercial Banking System has increased slightly to 2.74% of Total Loan Portfolio as of March 31, 2013 from 2.45% of Total Loan Portfolio as of December 31, 2012.

Philippine Universal and Commercial Banking System
NPL as % of TLP
March 31, 2013
	NPL	TLP	NPL/TLP
Bank	(In Php)	(In Php)	(In %)
Philippine Bank of Communications	1,300,909,578.87	11,861,249,940.75	10.97%
Union Bank of the Philippines	10,021,970,612.36	96,022,940,076.99	10.44%
Bank of Commerce	4,132,117,770.09	42,092,731,441.89	9.82%
United Coconut Planters Bank	5,418,731,461.34	74,815,142,407.66	7.24%
Philippine Veterans Bank	1,277,353,913.18	24,689,724,906.48	5.17%
East West Banking Corporation	3,452,105,848.56	70,474,220,600.73	4.90%
Asia United Bank Corporation	1,477,115,456.05	32,511,134,608.49	4.54%
Philippine National Bank	10,699,349,926.21	239,486,975,887.80	4.47%
Robinsons Bank Corporation	676,510,259.51	17,548,028,027.56	3.86%
Development Bank of the Philippines	5,397,014,664.74	143,320,002,820.71	3.77%
Standard Chartered Bank	1,144,762,620.59	32,162,180,072.48	3.56%
Philippine Trust Company	1,178,187,927.53	35,573,308,930.74	3.31%
Land Bank of the Philippines	8,730,969,434.67	284,555,923,201.41	3.07%
Banco De Oro Unibank	21,483,519,007.09	767,965,546,750.32	2.80%
China Banking Corporation	4,824,401,314.13	173,314,145,403.80	2.78%
Maybank Philippines Inc.	913,055,368.13	34,359,929,778.81	2.66%
Chinatrust (Philippines) Commercial Banking Corporation	311,170,716.63	13,108,092,774.73	2.37%
Rizal Commercial Banking Corporation	3,449,440,469.94	157,791,938,926.88	2.19%
Bank of the Philippine Islands	7,032,452,845.12	383,146,380,802.19	1.84%
Al-Amanah Islamic Bank of the Philippines	1,156,048.97	111,427,366.32	1.04%
HongKong & Shanghai Banking Corporation	756,520,291.29	74,408,879,626.64	1.02%
Metropolitan Bank & Trust Company	4,088,237,670.97	430,628,262,183.59	0.95%
Citibank N.A.	894,521,167.50	150,272,516,723.18	0.60%
Security Bank Corporation	730,721,150.39	124,269,364,156.97	0.59%
Korea Exchange Bank	24,799,819.20	4,764,043,769.98	0.52%
Bank of China Limited - Manila Branch	8,660,895.91	5,901,510,449.51	0.15%
Bangkok Bank Public Co. Ltd	5,234,155.55	5,107,744,328.99	0.10%
ANZ Banking Group Ltd	23,339,114.85	25,243,044,187.77	0.09%
JP Morgan Chase National Bank Association	734,885.22	53,909,061,409.71	0.00%
Internationale Nederlanden Groep BK	83.60	27,053,118,995.48	0.00%
Bank of America N.A.	4.00	1,959,819,918.27	0.00%
BDO Private Bank, Inc.	0.00	6,763,931,793.17	0.00%
Deutsche Bank AG	0.00	20,629,748,036.91	0.00%
Mega International Commercial Bank Company Limited	0.00	7,531,512,184.25	0.00%
Mizuho Corporate Bank Ltd. - Manila Branch	0.00	24,560,114,742.29	0.00%
The Bank of Tokyo - Mitsubishi UFJ Ltd	0.00	27,129,037,192.55	0.00%
Allied Banking Corporation*	NA	NA	NA
Grand Total	99,455,064,482.19	3,625,042,734,426.00	2.74%

* Merged with Philippine National Bank

Source: www.bsp.gov.ph

However, one bank has a significantly high NPL as a percentage of its stockholders equity as of March 31, 2013.  This bank is Standard Chartered Bank.  Its NPL/SE Ratio of 55.82% is extremely elevated - more than double the ratio of the bank with the next highest ratio.

Other banks with NPLs that are more than 20% of their stockholders equity are:

1. United Coconut Planters Bank (NPL/SE Ratio of 24.94%)
2. Bank of Commerce (NPL/SE Ratio of 21.52%)
3. Union Bank of the Philippines (NPL/SE Ratio of 20.78%)

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, with the exception of Union Bank of the Philippines are listed as distressed.

Philippine Universal and Commercial Banking System
NPL as % of SE
March 31, 2013
	NPL	SE	NPL/SE
Bank	(In PHP)	(In PHP)	(In %)
Standard Chartered Bank	1,144,762,620.59	2,050,871,175.77	55.82%
United Coconut Planters Bank	5,418,731,461.34	21,725,109,221.46	24.94%
Bank of Commerce	4,132,117,770.09	19,197,827,867.71	21.52%
Union Bank of the Philippines	10,021,970,612.36	48,228,662,513.03	20.78%
East West Banking Corporation	3,452,105,848.56	17,858,284,000.87	19.33%
Philippine Bank of Communications	1,300,909,578.87	7,109,040,036.29	18.30%
HongKong & Shanghai Banking Corporation	756,520,291.29	4,781,045,440.48	15.82%
Philippine Veterans Bank	1,277,353,913.18	9,096,313,444.16	14.04%
Philippine National Bank	10,699,349,926.21	80,105,100,648.55	13.36%
Development Bank of the Philippines	5,397,014,664.74	42,929,191,158.40	12.57%
Asia United Bank Corporation	1,477,115,456.05	11,906,072,196.42	12.41%
Banco De Oro Unibank	21,483,519,007.09	173,866,230,648.58	12.36%
Citibank N.A.	894,521,167.50	7,664,105,443.06	11.67%
China Banking Corporation	4,824,401,314.13	43,001,565,849.86	11.22%
Robinsons Bank Corporation	676,510,259.51	6,151,937,855.15	11.00%
Land Bank of the Philippines	8,730,969,434.67	91,259,545,903.56	9.57%
Maybank Philippines Inc.	913,055,368.13	10,182,436,458.59	8.97%
Rizal Commercial Banking Corporation	3,449,440,469.94	47,643,616,278.44	7.24%
Bank of the Philippine Islands	7,032,452,845.12	100,230,894,475.56	7.02%
Philippine Trust Company	1,178,187,927.53	22,248,019,776.86	5.30%
Chinatrust (Philippines) Commercial Banking Corporation	311,170,716.63	6,473,083,695.37	4.81%
Korea Exchange Bank	24,799,819.20	543,771,939.45	4.56%
Metropolitan Bank & Trust Company	4,088,237,670.97	122,188,510,670.78	3.35%
Security Bank Corporation	730,721,150.39	38,065,480,632.77	1.92%
Bank of China Limited - Manila Branch	8,660,895.91	672,028,344.23	1.29%
ANZ Banking Group Ltd	23,339,114.85	2,676,259,564.58	0.87%
Bangkok Bank Public Co. Ltd	5,234,155.55	1,145,898,151.12	0.46%
Al-Amanah Islamic Bank of the Philippines	1,156,048.97	431,547,413.87	0.27%
JP Morgan Chase National Bank Association	734,885.22	2,421,333,323.53	0.03%
Internationale Nederlanden Groep BK	83.60	2,795,170,643.11	0.00%
Bank of America N.A.	4.00	596,946,705.20	0.00%
BDO Private Bank, Inc.	0.00	6,022,759,830.20	0.00%
Deutsche Bank AG	0.00	2,247,713,611.93	0.00%
Mega International Commercial Bank Company Limited	0.00	649,152,544.54	0.00%
Mizuho Corporate Bank Ltd. - Manila Branch	0.00	1,272,915,083.49	0.00%
The Bank of Tokyo - Mitsubishi UFJ Ltd	0.00	1,925,492,931.38	0.00%
Allied Banking Corporation*	NA	NA	NA
Grand Total	99,455,064,482.19	957,363,935,478.35	10.39%

* Merged with Philippine National Bank

Source: www.bsp.gov.ph

Can Philippine Banks Charge their Unbooked Losses Against Retained Earnings? - March 31, 2013

Last July 25, 2012, the Bangko Sentral ng Pilipinas (BSP) encouraged banks that continue to reflect unbooked losses or "deferred charges" on their balance sheets to charge those losses against retained earnings.  This implies that the BSP now considers that these banks have amassed so much in retained earnings that "they can now afford to absorb higher charges without impairing their capital and also without making their shareholders unhappy."

But can these banks do so? The answer is: yes but only for some banks.  As can be seen from the table below, only eleven banks have the Stockholders Equity (SE) to absorb these Deferred Charges:

1. Planters Development Bank (Deferred Charges of 48.75% of SE)
2. United Coconut Planters Bank (Deferred Charges of 48.30% of SE)
3. World Partners Bank (Deferred Charges of 33.98% of SE)
4. Bataan Development Bank (Deferred Charges of 27.50% of SE)
5. Bank of Commerce (Deferred Charges of 4.70% of SE)
6. Card SME Bank, Inc. (Deferred Charges of 2.46% of SE)
7. City Savings Bank, Inc. (Deferred Charges of 1.64% of SE)
8. Wealth Development Bank Corporation (Deferred Charges of 1.55% of SE)
9. Security Bank Savings Corporation (0.12% of SE)
10. Banco De Oro Unibank, Inc. (Deferred Charges of 0.11% of SE)
11. Farmers Savings and Loan Bank (Deferred Charges of 0.03% of SE)

It must be noted that six of these banks are considered borderline insolvent (highlighted in yellow):

1. United Coconut Planters Bank (Distressed Ratio of 529.04%)
2. Planters Development Bank  (Distressed Ratio of 257.29%)
3. Bataan Development Bank (Distressed Ratio of 213.99%)
4. Bank of Commerce (Distressed Ratio of 173.39%)
5. Farmers Savings and Loan Bank (Distressed Ratio of 169.98%)
6. Security Bank Savings Corporation (Distressed Ratio of 110.40%)

 For more information on distressed banks, please see the previous blog post: "The Top Distressed Philippine Banks as of March 31, 2013.

For four of the banks, booking their Deferred Charges immediately will only serve to impair 25% or more of their Stockholders Equity:

1. Planters Development Bank (Deferred Charges of 48.75% of SE)
2. United Coconut Planters Bank (Deferred Charges of 48.30% of SE)
3. World Partners Bank (Deferred Charges of 33.98% of SE)
4. Bataan Development Bank (Deferred Charges of 27.50% of SE)

Naturally, these banks are considered distressed.

Retained Earnings

Only five banks have sufficient Retained Earnings (RE) to absorb their unbooked losses:

1. Planters Development Bank (Deferred Charges of 83.74% of RE)
2. Wealth Development Bank Corporation (Deferred Charges of 9.89% of RE)
3. City Savings Bank, Inc. (Deferred Charges of 1.92% of RE)
4. Banco De Oro Unibank (Deferred Charges of 0.47% of RE)
5. Farmers Savings and Loan Bank, Inc. (Deferred Charges of 0.09% of RE)

For two of the banks, Deferred Charges will exceed their Retained Earnings:

1. Bataan Development Bank (Deferred Charges of 334.68% of RE)
2. United Coconut Planters Bank (Deferred Charges of 321.10% of RE)

Four of the banks with  Deferred Charges have negative Retained Earnings.  As such, they do not have the capacity to absorb additional losses.

1. World Partners Bank (Retained Earnings of - Php 22.310 million vs. Deferred Charges of Php 53.331 million)
2. Card SME Bank (Retained Earnings of - Php 18.725 million vs. Deferred Charges of Php 5.110 million)
3. Bank of Commerce (Retained Earnings of - PhP 4.043 billion vs. Deferred Charges of PhP 0.903 billion)
4. Security Bank Savings Corporation (Retained Earnings of - Php 914.300 million vs. Deferred Charges of Php 1.356 million) 

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:

1. Philippine Bank of Communications (Deferred Charges of 45.99% of SE as of 3Q 2012)
2. Rizal Commercial Banking Corporation (Deferred Charges of 3.82% of SE as 3Q 2012)

Deferred Charges eliminated in the 3rd Qtr of 2012 are as follows:

1. Philippine National Bank (Deferred Charges of 23.65% of SE as of 2Q 2012)
2. Land Bank of the Philippines (Deferred Charges of 4.78% of SE as of 2Q 2012)
3. 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 the previous blog posts: "Can Philippine Universal and Commercial Banks Charge their Unbooked Losses Against Retained Earnings? - December 31, 2012" and "Can Philippine Thrift Banks Charge their Unbooked Losses Against Retained Earnings? - December 31, 2012"

Philippine Banking System
Deferred Charges Not Yet Written Down
Impact on Stockholder's Equity
In Php
March 31, 2013
Bank	Unbooked Losses	SE	Adjusted SE	Impact on SE
Planters Development Bank	1,898,568,467.82	3,894,550,868.90	1,995,982,401.08	48.75%
United Coconut Planters Bank	9,841,900,553.53	21,725,109,221.46	11,883,208,667.93	45.30%
World Partners Bank	53,331,214.32	156,960,687.78	103,629,473.46	33.98%
Bataan Development Bank	17,487,365.73	63,580,789.69	46,093,423.96	27.50%
Bank of Commerce	902,587,565.94	19,197,827,867.71	18,295,240,301.77	4.70%
Card SME Bank, Inc.	5,110,330.07	207,351,272.15	202,240,942.08	2.46%
City Savings Bank, Inc.	40,477,588.53	2,472,118,775.49	2,431,641,186.96	1.64%
Wealth Development Bank Corporation	6,117,443.37	393,951,279.14	387,833,835.77	1.55%
Security Bank Savings Corporation	1,355,985.76	1,123,967,139.31	1,122,611,153.55	0.12%
Banco De Oro Unibank	197,154,091.09	173,866,230,648.58	173,669,076,557.49	0.11%
Farmers Savings and Loan Bank, Inc.	31,349.51	101,626,945.31	101,595,595.80	0.03%
Al-Amanah Islamic Bank of the Philippines	0.00	431,547,413.87	431,547,413.87	0.00%
Allied Savings Bank	0.00	997,482,772.75	997,482,772.75	0.00%
ANZ Banking Group Ltd	0.00	2,676,259,564.58	2,676,259,564.58	0.00%
Asia United Bank Corporation	0.00	11,906,072,196.42	11,906,072,196.42	0.00%
Bangkok Bank Public Co. Ltd	0.00	1,145,898,151.12	1,145,898,151.12	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	672,028,344.23	672,028,344.23	0.00%
Bank of the Philippine Islands	0.00	100,230,894,475.56	100,230,894,475.56	0.00%
Bank One Savings and Trust Corporation	0.00	530,389,484.18	530,389,484.18	0.00%
Bataan SLA	0.00	75,118,952.34	75,118,952.34	0.00%
BDO Elite Savings Bank, Inc.	0.00	1,587,605,708.24	1,587,605,708.24	0.00%
BDO Private Bank, Inc.	0.00	6,022,759,830.20	6,022,759,830.20	0.00%
BPI Direct Savings Bank, Inc.	0.00	803,918,092.43	803,918,092.43	0.00%
BPI Family Savings Bank, Inc.	0.00	17,306,461,368.33	17,306,461,368.33	0.00%
BPI Globe BanKO, Inc.	0.00	499,613,168.62	499,613,168.62	0.00%
Business and Consumers Bank	0.00	77,927,239.65	77,927,239.65	0.00%
Century Savings Banking Corporation	0.00	901,370,505.91	901,370,505.91	0.00%
China Bank Savings, Inc.	0.00	1,336,209,020.05	1,336,209,020.05	0.00%
China Banking Corporation	0.00	43,001,565,849.86	43,001,565,849.86	0.00%
Chinatrust (Philippines) Commercial Banking Corporation	0.00	6,473,083,695.37	6,473,083,695.37	0.00%
Citibank N.A.	0.00	7,664,105,443.06	7,664,105,443.06	0.00%
Citibank Savings, Inc.	0.00	1,472,870,648.62	1,472,870,648.62	0.00%
CityState Savings Bank Inc.	0.00	795,043,341.21	795,043,341.21	0.00%
Comsavings Bank	0.00	382,581,265.01	382,581,265.01	0.00%
Cordillera Savings Bank	0.00	97,373,694.03	97,373,694.03	0.00%
Deutsche Bank AG	0.00	2,247,713,611.93	2,247,713,611.93	0.00%
Development Bank of the Philippines	0.00	42,929,191,158.40	42,929,191,158.40	0.00%
Dumaguete City Development Bank	0.00	233,849,354.48	233,849,354.48	0.00%
Dungganon Bank	0.00	64,479,298.55	64,479,298.55	0.00%
East West Banking Corporation	0.00	17,858,284,000.87	17,858,284,000.87	0.00%
Enterprise Bank Inc.	0.00	195,255,759.76	195,255,759.76	0.00%
Equicom Savings Bank, Inc.	0.00	459,838,990.18	459,838,990.18	0.00%
First Consolidated Bank, Inc.	0.00	1,939,239,317.62	1,939,239,317.62	0.00%
Hiyas Banking Corporation	0.00	157,773,949.33	157,773,949.33	0.00%
HongKong & Shanghai Banking Corporation	0.00	4,781,045,440.48	4,781,045,440.48	0.00%
HSBC Savings Bank (Phils), Inc.	0.00	2,748,084,259.69	2,748,084,259.69	0.00%
Iloilo City Development Bank	0.00	70,911,147.62	70,911,147.62	0.00%
Internationale Nederlanden Groep BK	0.00	2,795,170,643.11	2,795,170,643.11	0.00%
Isla Bank	0.00	637,164,919.99	637,164,919.99	0.00%
JP Morgan Chase National Bank Association	0.00	2,421,333,323.53	2,421,333,323.53	0.00%
Korea Exchange Bank	0.00	543,771,939.45	543,771,939.45	0.00%
Land Bank of the Philippines	0.00	91,259,545,903.56	91,259,545,903.56	0.00%
Lemery Savings and Loan Bank, Inc.	0.00	66,176,078.88	66,176,078.88	0.00%
Life Savings Bank, Inc.	0.00	64,608,956.87	64,608,956.87	0.00%
Luzon Development Bank	0.00	434,085,634.37	434,085,634.37	0.00%
Malasiqui Progressive Savings and Loan Bank	0.00	52,663,015.28	52,663,015.28	0.00%
Malayan Bank Savings & Mortgage Bank	0.00	1,056,259,592.22	1,056,259,592.22	0.00%
Maritime Savings Bank Corporation	0.00	65,560,548.63	65,560,548.63	0.00%
Maybank Philippines Inc.	0.00	10,182,436,458.59	10,182,436,458.59	0.00%
Mega International Commercial Bank Company Limited	0.00	649,152,544.54	649,152,544.54	0.00%
Merchants Savings and Loan Association, Inc.	0.00	535,527,047.95	535,527,047.95	0.00%
Metro Cebu Public Savings Bank	0.00	70,198,484.65	70,198,484.65	0.00%
Metropolitan Bank & Trust Company	0.00	122,188,510,670.78	122,188,510,670.78	0.00%
Microfinance Maximum Savings Bank	0.00	66,733,990.88	66,733,990.88	0.00%
Mizuho Corporate Bank Ltd. - Manila Branch	0.00	1,272,915,083.49	1,272,915,083.49	0.00%
Northpoint Development Bank	0.00	72,537,441.93	72,537,441.93	0.00%
Opportunity Kauswagan Bank	0.00	61,323,344.55	61,323,344.55	0.00%
Optimum Development Bank, Inc.	0.00	728,125,103.12	728,125,103.12	0.00%
Pacific Ace Savings Bank, Inc.	0.00	74,386,714.64	74,386,714.64	0.00%
Pampanga Development Bank	0.00	112,503,628.25	112,503,628.25	0.00%
Penbank, Inc.	0.00	271,010,894.61	271,010,894.61	0.00%
Philippine Bank of Communications	0.00	7,109,040,036.29	7,109,040,036.29	0.00%
Philippine Business Bank	0.00	7,978,879,476.66	7,978,879,476.66	0.00%
Philippine National Bank	0.00	80,105,100,648.55	80,105,100,648.55	0.00%
Philippine Postal Savings Bank, Inc.	0.00	759,927,280.94	759,927,280.94	0.00%
Philippine Resources Savings Banking Corporation	0.00	1,370,795,921.72	1,370,795,921.72	0.00%
Philippine Savings Bank	0.00	17,631,397,452.60	17,631,397,452.60	0.00%
Philippine Trust Company	0.00	22,248,019,776.86	22,248,019,776.86	0.00%
Philippine Veterans Bank	0.00	9,096,313,444.16	9,096,313,444.16	0.00%
Pride Star Development Bank, Inc.	0.00	69,963,653.77	69,963,653.77	0.00%
Producers Savings Bank Corporation	0.00	1,087,630,484.52	1,087,630,484.52	0.00%
Progress Savings and Loan Bank, Inc.	0.00	83,299,483.73	83,299,483.73	0.00%
Queen City Development Bank	0.00	667,259,864.54	667,259,864.54	0.00%
Quezon Coconut Producers Savings and Loan Bank	0.00	58,040,408.94	58,040,408.94	0.00%
RCBC Savings Bank, Inc.	0.00	7,815,557,867.68	7,815,557,867.68	0.00%
Rizal Commercial Banking Corporation	0.00	47,643,616,278.44	47,643,616,278.44	0.00%
Robinsons Bank Corporation	0.00	6,151,937,855.15	6,151,937,855.15	0.00%
Sampaguita Savings Bank, Inc.	0.00	53,013,204.79	53,013,204.79	0.00%
Security Bank Corporation	0.00	38,065,480,632.77	38,065,480,632.77	0.00%
Silangan Savings and Loan Bank, Inc.	0.00	10,391,308.19	10,391,308.19	0.00%
Standard Chartered Bank	0.00	2,050,871,175.77	2,050,871,175.77	0.00%
Sterling Bank of Asia, Inc.	0.00	2,308,153,826.27	2,308,153,826.27	0.00%
Sun Savings Bank, Inc.	0.00	115,048,743.38	115,048,743.38	0.00%
The Bank of Tokyo - Mitsubishi UFJ Ltd	0.00	1,925,492,931.38	1,925,492,931.38	0.00%
The Palawan Bank	0.00	16,444,109.52	16,444,109.52	0.00%
Tong Yang Savings Bank, Inc.	0.00	392,789,225.10	392,789,225.10	0.00%
Tower Development Bank	0.00	114,617,272.75	114,617,272.75	0.00%
UCPB Savings Bank	0.00	2,412,138,206.81	2,412,138,206.81	0.00%
Union Bank of the Philippines	0.00	48,228,662,513.03	48,228,662,513.03	0.00%
United Overseas Bank Philippines	0.00	702,252,001.37	702,252,001.37	0.00%
University Savings Bank, Inc.	0.00	206,998,198.47	206,998,198.47	0.00%
Village Bank, Inc.	0.00	72,569,009.96	72,569,009.96	0.00%
Grand Total	12,964,121,955.67	1,046,807,472,973.25	1,033,843,351,017.58	1.24%

Philippine Banking System
Deferred Charges Not Yet Written Down
Impact on Retained Earnings
In Php
March 31, 2013
Bank	Unbooked Losses	RE	Adjusted RE	Impact on RE
Bataan Development Bank	17,487,365.73	5,225,140.21	-12,262,225.52	334.68%
United Coconut Planters Bank	9,841,900,553.53	5,819,224,869.67	-4,022,675,683.86	169.13%
Planters Development Bank	1,898,568,467.82	2,267,249,230.37	368,680,762.55	83.74%
Wealth Development Bank Corporation	6,117,443.37	61,870,345.42	55,752,902.05	9.89%
City Savings Bank, Inc.	40,477,588.53	2,106,371,414.79	2,065,893,826.26	1.92%
Banco De Oro Unibank	197,154,091.09	42,048,863,454.89	41,851,709,363.80	0.47%
Farmers Savings and Loan Bank, Inc.	31,349.51	34,240,853.13	34,209,503.62	0.09%
Security Bank Savings Corporation	1,355,985.76	-914,299,921.67	-915,655,907.43	-0.15%
Bank of Commerce	902,587,565.94	-4,043,397,510.06	-4,945,985,076.00	-22.32%
Card SME Bank, Inc.	5,110,330.07	-18,724,977.88	-23,835,307.95	-27.29%
World Partners Bank	53,331,214.32	-22,309,832.94	-75,641,047.26	-239.05%
Grand Total	12,964,121,955.67	47,344,313,065.93	34,380,191,110.26	311.10%