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:
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.
- Development Bank of the Philippines (24.01% of TLP)
- 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:
- Development Bank of the Philippines (76.67% of SE)
- 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:
- 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 | |||
| 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:
- 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:
- United Coconut Planters Bank (NPL/SE Ratio of 24.94%)
- Bank of Commerce (NPL/SE Ratio of 21.52%)
- 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
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