On the face of it, no.
At 2.19% as of January 2014, NPLs as a percentage of Total Loan Portfolios are at or near historic lows.
While the NPL coverage ratio is at historic highs at 138.21% as of September 2013, indicating that most banks are adequately provisioned.
But NPLs can go much higher than current levels. Over the past thirty years, NPLs as a percentage of Total Loan Portfolios averaged 8.80% for Philippine Universal and Commercial Banks. Moreover, Loan Loss Reserves (LLR) as a percentage of Total Loan Portfolio (TLP) have averaged 4.90% for the past thirty years. As can be seen from the chart below, loan loss reserves hit a peak of 22.23% of TLP in 1986, an outlier. Without this outlier, LLR/TLP average 4.32% for the past thirty years.
As of 2013, LLR/TLP stands at 3.06%, which is below the historical average of 4.32%, indicating that Philippine banks are underprovisioning for loan losses, given historical norms. If Philippine banks were to maintain higher loan loss provisions to conform to historical averages, bank earnings will suffer but will be better provisioned for future losses.
Now, which banks have not adequately provisioned for loan losses at their current NPL levels, which are at historic lows? Those highlighted in yellow (below 80% NPL Coverage Ratio) are prime candidates.
| Philippine Banking System | |||
| NPL Coverage Ratio | |||
| September 30, 2013 | |||
| Bank | Loan Loss Provisions | Gross NPLs | NPL Coverage Ratio |
| MARITIME SAVINGS BANK CORPORATION | 2,755,197.36 | 21,081,945.79 | 13.07% |
| THE REAL BANK (A THRIFT BANK) INC | 526,788,211.44 | 3,676,265,796.17 | 14.33% |
| OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK) | 14,037,329.53 | 86,081,823.47 | 16.31% |
| QUEZON COCONUT BANK INC (A THRIFT BANK) | 1,315,623.91 | 6,021,526.16 | 21.85% |
| LIFE SAVINGS BANK INC | 2,499,806.08 | 11,066,411.65 | 22.59% |
| ALLIED SAVINGS BANK | 97,689,310.15 | 427,675,246.13 | 22.84% |
| ASIA UNITED BANK CORPORATION | 346,908,757.50 | 1,484,724,998.75 | 23.37% |
| NORTHPOINT DEV'T BANK INC | 10,416,512.17 | 41,343,785.62 | 25.19% |
| METRO CEBU PUBLIC SAVINGS BANK | 2,398,407.23 | 9,259,450.09 | 25.90% |
| PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC) | 25,421,979.33 | 90,697,987.61 | 28.03% |
| PROGRESS SAVINGS AND LOAN BANK INC | 350,304.43 | 1,239,886.20 | 28.25% |
| ILOILO CITY DEVELOPMENT BANK | 6,841,846.23 | 24,049,605.18 | 28.45% |
| EQUICOM SAVINGS BANK INC | 65,569,309.41 | 226,206,776.15 | 28.99% |
| CENTURY SAVINGS BANK CORPORATION | 12,647,178.45 | 40,262,101.54 | 31.41% |
| LUZON DEVELOPMENT BANK | 73,383,717.80 | 219,963,748.95 | 33.36% |
| COMSAVINGS BANK | 60,506,624.39 | 180,956,095.42 | 33.44% |
| BANK ONE SAVINGS AND TRUST CORP. | 6,814,595.47 | 20,076,854.81 | 33.94% |
| PLANTERS DEVELOPMENT BANK | 1,149,408,436.37 | 3,305,372,801.44 | 34.77% |
| MALASIQUI PROGRESSIVE SLB, INC | 6,470,762.05 | 17,567,906.25 | 36.83% |
| ENTERPRISE BANK INC (A THRIFT BANK) | 45,202,575.16 | 121,575,888.04 | 37.18% |
| PRODUCERS SAVINGS BANK CORPORATION | 79,316,012.39 | 202,521,421.54 | 39.16% |
| HIYAS BANKING CORPORATION | 12,588,045.27 | 31,733,803.62 | 39.67% |
| BATAAN DEVELOPMENT BANK | 14,648,342.79 | 35,501,329.21 | 41.26% |
| PAMPANGA DEVELOPMENT BANK | 17,188,806.56 | 40,236,948.19 | 42.72% |
| SILANGAN SAVINGS & LOAN BANK INC | 8,293,170.71 | 19,342,509.99 | 42.88% |
| BUSINESS AND CONSUMERS BANK (A DB) | 7,147,375.56 | 16,543,047.39 | 43.20% |
| DUNGGANON BANK (A MICROFINANCE THRIFT | 8,342,028.88 | 19,265,232.54 | 43.30% |
| WEALTH DEVELOPMENT BANK CORPORATION | 56,853,212.07 | 127,076,803.11 | 44.74% |
| STERLING BANK OF ASIA INC (A SAVINGS BANK) | 378,289,259.22 | 782,703,074.20 | 48.33% |
| PHILIPPINE RESOURCES SAVINGS BANKING | 279,030,301.24 | 530,093,760.55 | 52.64% |
| MALAYAN BANK SAVINGS AND MORT BANK INC | 167,201,180.52 | 307,337,266.81 | 54.40% |
| LEMERY SAVINGS & LOAN BANK, INC. | 5,008,824.64 | 8,615,082.76 | 58.14% |
| CITYSTATE SAVINGS BANK INC | 27,682,977.13 | 47,071,949.74 | 58.81% |
| CHINA BANK SAVINGS INC | 133,392,773.32 | 226,221,032.39 | 58.97% |
| UNIVERSITY SAVINGS BANK INC | 35,709,066.20 | 56,256,741.84 | 63.48% |
| DUMAGUETE CITY DEVELOPMENT BANK INC | 17,300,528.04 | 27,051,197.57 | 63.95% |
| MICROFINANCE MAXIMUM SB INC | 779,614.11 | 1,195,287.06 | 65.22% |
| FARMERS SAVINGS & LOAN BANK INC | 27,008,200.05 | 41,146,586.00 | 65.64% |
| VILLAGE BANK INC (A THRIFT BANK) | 17,342,200.42 | 26,309,046.44 | 65.92% |
| MAYBANK PHILIPPINES INC | 722,355,900.75 | 1,086,048,088.92 | 66.51% |
| RCBC SAVINGS BANK INC | 1,395,339,512.49 | 2,058,816,470.70 | 67.77% |
| PRIDE STAR DEVELOPMENT BANK INC | 6,090,315.48 | 8,634,935.83 | 70.53% |
| EAST WEST BANKING CORP | 3,423,561,712.01 | 4,729,518,467.90 | 72.39% |
| QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK | 24,216,873.63 | 32,495,043.40 | 74.52% |
| WORLD PARTNERS BANK (A THRIFT BANK) | 67,995,384.68 | 88,154,241.39 | 77.13% |
| BATAAN SAVINGS AND LOAN BANK | 2,137,583.98 | 2,770,214.85 | 77.16% |
| SECURITY BANK SAVINGS CORPORATION | 611,132,584.13 | 771,924,973.74 | 79.17% |
| TONG YANG SAVINGS BANK INC | 93,476,547.29 | 117,167,791.14 | 79.78% |
| BPI GLOBE BANKO INC A SAVINGS BANK | 149,827,599.44 | 184,972,059.46 | 81.00% |
| BANK OF COMMERCE | 3,263,906,977.90 | 4,016,356,222.98 | 81.27% |
| THE PALAWAN BANK (PALAWAN DB) INC | 10,510,692.74 | 12,816,840.35 | 82.01% |
| BPI FAMILY SAVINGS BANK INC | 3,898,306,266.22 | 4,587,952,154.71 | 84.97% |
| UNITED COCONUT PLANTERS BANK | 4,884,292,003.51 | 5,741,683,988.58 | 85.07% |
| TOWER DEVELOPMENT BANK | 8,420,489.57 | 9,855,607.32 | 85.44% |
| INTER-ASIA DEVELOPMENT BANK | 2,897,885.27 | 3,346,585.72 | 86.59% |
| SAMPAGUITA SAVINGS BANK INC | 21,561,538.64 | 24,566,592.56 | 87.77% |
| PHILIPPINE BUSINESS BANK INC A SAVINGS | 629,667,501.15 | 713,515,607.33 | 88.25% |
| PHILIPPINE POSTAL SAVINGS BANK INC | 331,359,287.05 | 365,776,413.52 | 90.59% |
| PHILIPPINE VETERANS BANK | 1,022,995,980.01 | 1,126,133,863.31 | 90.84% |
| PHILIPPINE NATIONAL BANK | 9,704,191,604.78 | 10,326,705,113.23 | 93.97% |
| FIRST CONSOLIDATED BANK INC (A PDB) | 435,168,128.95 | 439,534,380.11 | 99.01% |
| CITIBANK SAVINGS INC | 2,711,660,215.09 | 2,725,163,565.91 | 99.50% |
| DEVELOPMENT BANK OF THE PHILIPPINES | 5,748,150,904.06 | 5,747,728,689.61 | 100.01% |
| UNITED OVERSEAS BANK PHILIPPINES | 666,156,502.81 | 664,875,061.65 | 100.19% |
| ROBINSONS BANK CORPORATION | 448,101,571.11 | 426,874,861.97 | 104.97% |
| CITY SAVINGS BANK INC | 263,506,197.25 | 248,807,968.00 | 105.91% |
| PHIL BANK OF COMMUNICATIONS | 1,415,602,379.93 | 1,331,723,088.72 | 106.30% |
| PACIFIC ACE SAVINGS BANK INC | 5,831,514.14 | 5,392,641.51 | 108.14% |
| RIZAL COMMERCIAL BANKING CORP | 4,195,412,782.27 | 3,813,174,399.56 | 110.02% |
| SUN SAVINGS BANK INC | 6,983,097.02 | 6,245,559.79 | 111.81% |
| UNION BANK OF THE PHILIPPINES | 10,474,098,474.06 | 9,281,609,151.50 | 112.85% |
| CTBC BANK (PHILIPPINES) CORPORATION | 339,842,558.82 | 293,736,854.58 | 115.70% |
| BPI DIRECT SAVINGS BANK INC | 179,438,997.16 | 154,650,566.46 | 116.03% |
| PHILIPPINE SAVINGS BANK | 4,440,018,970.72 | 3,746,195,124.94 | 118.52% |
| STANDARD CHARTERED BANK | 1,283,549,562.49 | 1,073,584,225.34 | 119.56% |
| CORDILLERA SAVINGS BANK INC | 20,158,075.79 | 16,690,807.03 | 120.77% |
| HONGKONG & SHANGHAI BANKING CORPORATION | 924,382,521.13 | 719,591,328.75 | 128.46% |
| BANK OF THE PHILIPPINE ISLANDS | 10,222,288,689.92 | 7,459,301,933.47 | 137.04% |
| LAND BANK OF THE PHILIPPINES | 12,738,957,884.59 | 9,217,532,081.02 | 138.20% |
| BDO UNIBANK INC | 32,342,917,673.23 | 22,361,024,360.61 | 144.64% |
| UCPB SAVINGS BANK | 350,261,874.20 | 238,181,901.40 | 147.06% |
| HSBC SAVINGS BANK (PHILS) INC | 193,052,911.44 | 130,672,215.76 | 147.74% |
| CHINA BANKING CORPORATION | 7,000,428,960.83 | 4,718,030,496.01 | 148.38% |
| MERCHANTS SAVINGS & LOAN ASSOCIATION INC | 4,821,110.57 | 3,144,449.34 | 153.32% |
| CARD SME BANK INC A THRIFT BANK | 29,230,731.85 | 18,325,325.68 | 159.51% |
| PHILIPPINE TRUST COMPANY | 1,967,493,051.56 | 1,147,542,163.55 | 171.45% |
| KOREA EXCHANGE BANK | 98,698,140.37 | 41,519,190.16 | 237.72% |
| AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS | 2,998,213.08 | 1,156,048.97 | 259.35% |
| METROPOLITAN BANK & TRUST CO | 8,297,403,841.21 | 2,923,573,649.37 | 283.81% |
| SECURITY BANK CORPORATION | 2,339,846,759.96 | 740,210,526.40 | 316.11% |
| OPTIMUM DEVELOPMENT BANK INC | 44,661,296.13 | 13,837,575.70 | 322.75% |
| CITIBANK, N.A. | 5,425,724,956.57 | 790,687,359.90 | 686.20% |
| ANZ BANKING GROUP LTD | 264,857,945.34 | 23,339,114.85 | 1134.82% |
| JP MORGAN CHASE BANK NATIONAL ASSOCIATION | 15,435,400.00 | 734,885.22 | 2100.38% |
| BANGKOK BANK PUBLIC CO LTD | 127,364,870.00 | 5,034,155.55 | 2530.01% |
| INTERNATIONALE NEDERLANDEN GROEP BK | 167,503,858.26 | 89.08 | 188037559.79% |
| BANK OF AMERICA N.A. | 10,250,004.00 | 4.00 | 256250100.00% |
| BANK OF CHINA LIMITED-MANILA BRANCH | 59,231,492.72 | 0.00 | NA |
| BDO ELITE SAVINGS BANK INC | 0.00 | 0.00 | NA |
| BDO PRIVATE BANK, INC. | 48,860,938.02 | 0.00 | NA |
| DEUTSCHE BANK AG | 194,961,088.56 | 0.00 | NA |
| ISLA BANK (A THRIFT BANK) INC | 4,024,580.33 | 0.00 | NA |
| MEGA INTERNATIONAL COMMERCIAL BANK CO LTD | 206,566,716.20 | 0.00 | NA |
| MIZUHO BANK LTD - MANILA BRANCH | 294,448,818.10 | 0.00 | NA |
| THE BANK OF TOKYO-MITSUBISHI UFJ LTD | 354,910,030.46 | 0.00 | NA |
| Grand Total | 150,390,056,934.60 | 129,096,349,834.78 | 116.49% |
Source: bsp.gov.ph
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