Are Philippine banks under provisioning loan losses?
On the face of it, no.
At 2.16% as of April 2014, NPLs as a percentage of Total Loan Portfolios are at or near historic lows.
At 2.16% as of April 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 139.58% as of April 2014, 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 4.84% 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 4.43% for the past thirty years.
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 | |||
| December 31, 2013 | |||
| Bank | Loan Loss Provisions | Gross NPLs | NPL Coverage Ratio |
| OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK) | 16,841,261.68 | 129,775,492.78 | 12.98% |
| METRO CEBU PUBLIC SAVINGS BANK | 2,960,442.96 | 19,055,765.67 | 15.54% |
| MARITIME SAVINGS BANK CORPORATION | 2,755,197.36 | 16,368,803.56 | 16.83% |
| THE REAL BANK (A THRIFT BANK) INC | 591,788,212.44 | 3,222,282,611.51 | 18.37% |
| DUNGGANON BANK (A MICROFINANCE THRIFT | 9,917,922.56 | 47,508,153.45 | 20.88% |
| PROGRESS SAVINGS AND LOAN BANK INC | 302,593.35 | 1,269,493.88 | 23.84% |
| LIFE SAVINGS BANK INC | 2,499,806.08 | 9,639,927.96 | 25.93% |
| ENTERPRISE BANK INC (A THRIFT BANK) | 45,072,038.57 | 169,661,344.38 | 26.57% |
| ALLIED SAVINGS BANK | 112,822,049.52 | 401,441,372.70 | 28.10% |
| NORTHPOINT DEV'T BANK INC | 10,662,692.95 | 37,110,605.65 | 28.73% |
| EQUICOM SAVINGS BANK INC | 73,536,507.76 | 253,955,691.53 | 28.96% |
| PRODUCERS SAVINGS BANK CORPORATION | 61,550,165.21 | 200,833,871.97 | 30.65% |
| CENTURY SAVINGS BANK CORPORATION | 12,646,730.90 | 40,116,374.32 | 31.53% |
| COMSAVINGS BANK | 60,506,624.39 | 189,798,517.04 | 31.88% |
| WEALTH DEVELOPMENT BANK CORPORATION | 64,853,212.07 | 184,239,801.85 | 35.20% |
| PHILIPPINE RESOURCES SAVINGS BANKING | 202,392,303.77 | 568,270,831.20 | 35.62% |
| QUEZON COCONUT BANK INC (A THRIFT BANK) | 1,315,623.91 | 3,566,888.20 | 36.88% |
| PLANTERS DEVELOPMENT BANK | 1,247,082,924.76 | 3,267,592,729.96 | 38.17% |
| MALASIQUI PROGRESSIVE SLB, INC | 6,470,762.05 | 16,092,906.25 | 40.21% |
| DUMAGUETE CITY DEVELOPMENT BANK INC | 17,300,528.04 | 41,156,519.67 | 42.04% |
| BUSINESS AND CONSUMERS BANK (A DB) | 7,172,172.37 | 16,884,925.63 | 42.48% |
| HIYAS BANKING CORPORATION | 12,588,045.27 | 29,217,436.77 | 43.08% |
| PAMPANGA DEVELOPMENT BANK | 18,644,033.89 | 40,745,518.38 | 45.76% |
| LUZON DEVELOPMENT BANK | 72,750,844.92 | 153,927,139.62 | 47.26% |
| FARMERS SAVINGS & LOAN BANK INC | 24,484,516.84 | 48,471,260.01 | 50.51% |
| PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC) | 48,608,159.37 | 94,745,384.44 | 51.30% |
| LEMERY SAVINGS & LOAN BANK, INC. | 5,008,824.64 | 9,750,997.76 | 51.37% |
| BATAAN DEVELOPMENT BANK | 15,592,398.15 | 28,911,402.09 | 53.93% |
| BANK ONE SAVINGS AND TRUST CORP. | 8,261,602.53 | 15,304,127.53 | 53.98% |
| MALAYAN BANK SAVINGS AND MORT BANK INC | 174,001,180.52 | 315,155,109.94 | 55.21% |
| STERLING BANK OF ASIA INC (A SAVINGS BANK) | 435,380,455.41 | 779,111,419.36 | 55.88% |
| CHINA BANK SAVINGS INC | 157,725,625.07 | 268,611,569.73 | 58.72% |
| TONG YANG SAVINGS BANK INC | 94,606,108.54 | 148,666,358.33 | 63.64% |
| RCBC SAVINGS BANK INC | 1,188,628,847.92 | 1,828,298,222.91 | 65.01% |
| CITYSTATE SAVINGS BANK INC | 27,682,977.13 | 42,355,159.83 | 65.36% |
| VILLAGE BANK INC (A THRIFT BANK) | 17,342,200.42 | 25,784,609.74 | 67.26% |
| EAST WEST BANKING CORP | 3,213,452,982.56 | 4,648,406,663.92 | 69.13% |
| 1ST VALLEY BANK INC A DEVELOPMENT BANK | 139,386,958.18 | 191,253,994.34 | 72.88% |
| WORLD PARTNERS BANK (A THRIFT BANK) | 64,885,845.59 | 88,682,976.78 | 73.17% |
| BATAAN SAVINGS AND LOAN BANK | 2,137,583.98 | 2,842,178.92 | 75.21% |
| MICROFINANCE MAXIMUM SB INC | 284,268.86 | 374,895.56 | 75.83% |
| TOWER DEVELOPMENT BANK | 8,420,489.57 | 11,026,032.92 | 76.37% |
| THE PALAWAN BANK (PALAWAN DB) INC | 11,073,497.04 | 14,232,122.87 | 77.81% |
| CITY SAVINGS BANK INC | 309,246,716.78 | 391,518,685.68 | 78.99% |
| MAYBANK PHILIPPINES INC | 842,481,789.38 | 1,036,927,723.27 | 81.25% |
| BPI GLOBE BANKO INC A SAVINGS BANK | 165,112,327.81 | 201,814,159.62 | 81.81% |
| UNIVERSITY SAVINGS BANK INC | 40,166,844.80 | 48,120,002.84 | 83.47% |
| SECURITY BANK SAVINGS CORPORATION | 704,101,471.09 | 838,735,420.10 | 83.95% |
| PHILIPPINE POSTAL SAVINGS BANK INC | 337,902,530.38 | 392,952,272.30 | 85.99% |
| PHILIPPINE NATIONAL BANK | 9,706,366,246.18 | 10,686,422,376.48 | 90.83% |
| PHILIPPINE BUSINESS BANK INC A SAVINGS | 688,901,501.15 | 745,484,055.76 | 92.41% |
| PRIDE STAR DEVELOPMENT BANK INC | 6,090,315.48 | 6,473,437.72 | 94.08% |
| SAMPAGUITA SAVINGS BANK INC | 21,561,538.64 | 22,719,477.39 | 94.90% |
| BPI FAMILY SAVINGS BANK INC | 4,150,003,240.95 | 4,370,697,474.80 | 94.95% |
| BANK OF COMMERCE | 3,732,183,897.55 | 3,903,798,967.05 | 95.60% |
| FIRST CONSOLIDATED BANK INC (A PDB) | 434,987,219.55 | 443,718,187.84 | 98.03% |
| CITIBANK SAVINGS INC | 2,287,438,110.91 | 2,308,133,797.81 | 99.10% |
| UNITED OVERSEAS BANK PHILIPPINES | 666,212,932.81 | 664,931,491.65 | 100.19% |
| ROBINSONS BANK CORPORATION | 423,135,641.62 | 421,843,064.16 | 100.31% |
| DEVELOPMENT BANK OF THE PHILIPPINES | 5,732,499,835.71 | 5,639,214,503.34 | 101.65% |
| SUN SAVINGS BANK INC | 7,624,041.50 | 7,460,733.37 | 102.19% |
| PHIL BANK OF COMMUNICATIONS | 1,298,386,827.43 | 1,240,984,212.26 | 104.63% |
| ASIA UNITED BANK CORPORATION | 1,144,088,009.70 | 1,073,013,698.39 | 106.62% |
| INTER-ASIA DEVELOPMENT BANK | 4,867,124.76 | 4,504,816.66 | 108.04% |
| PHILIPPINE VETERANS BANK | 1,040,706,212.22 | 960,196,997.18 | 108.38% |
| CTBC BANK (PHILIPPINES) CORPORATION | 430,854,254.74 | 388,279,116.49 | 110.97% |
| UNITED COCONUT PLANTERS BANK | 5,364,105,869.45 | 4,791,102,973.68 | 111.96% |
| RIZAL COMMERCIAL BANKING CORP | 3,953,625,097.54 | 3,527,950,432.52 | 112.07% |
| UNION BANK OF THE PHILIPPINES | 10,325,961,619.49 | 8,949,967,078.89 | 115.37% |
| PHILIPPINE SAVINGS BANK | 4,284,860,503.44 | 3,655,420,772.73 | 117.22% |
| CORDILLERA SAVINGS BANK INC | 17,598,795.59 | 14,750,218.80 | 119.31% |
| STANDARD CHARTERED BANK | 1,353,946,955.42 | 1,086,525,758.42 | 124.61% |
| UCPB SAVINGS BANK | 374,692,441.33 | 284,342,672.31 | 131.77% |
| MERCHANTS SAVINGS & LOAN ASSOCIATION INC | 5,580,681.06 | 4,003,853.45 | 139.38% |
| QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK | 20,336,371.31 | 14,540,829.34 | 139.86% |
| PACIFIC ACE SAVINGS BANK INC | 2,958,345.96 | 2,030,876.69 | 145.67% |
| HONGKONG & SHANGHAI BANKING CORPORATION | 1,223,836,685.13 | 829,841,922.61 | 147.48% |
| BPI DIRECT SAVINGS BANK INC | 186,860,512.64 | 121,202,841.76 | 154.17% |
| HSBC SAVINGS BANK (PHILS) INC | 82,454,886.81 | 52,860,163.68 | 155.99% |
| CARD SME BANK INC A THRIFT BANK | 30,825,368.13 | 19,612,047.57 | 157.18% |
| LAND BANK OF THE PHILIPPINES | 11,660,698,316.19 | 7,317,990,983.02 | 159.34% |
| BDO UNIBANK INC | 28,022,669,195.37 | 17,239,114,625.78 | 162.55% |
| CHINA BANKING CORPORATION | 6,790,729,651.70 | 4,117,935,690.11 | 164.91% |
| BANK OF THE PHILIPPINE ISLANDS | 11,214,018,218.15 | 6,787,741,471.65 | 165.21% |
| PHILIPPINE TRUST COMPANY | 1,965,620,159.61 | 1,148,806,061.17 | 171.10% |
| OPTIMUM DEVELOPMENT BANK INC | 44,661,296.13 | 17,197,495.99 | 259.70% |
| AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS | 3,334,739.21 | 1,156,048.97 | 288.46% |
| SECURITY BANK CORPORATION | 2,273,945,259.84 | 679,832,902.36 | 334.49% |
| KOREA EXCHANGE BANK | 85,124,833.55 | 24,799,833.58 | 343.25% |
| METROPOLITAN BANK & TRUST CO | 11,545,125,383.14 | 3,124,797,642.79 | 369.47% |
| CITIBANK, N.A. | 5,304,673,303.96 | 844,338,675.22 | 628.26% |
| BANK OF CHINA LIMITED-MANILA BRANCH | 69,823,282.30 | 8,660,895.91 | 806.19% |
| ANZ BANKING GROUP LTD | 260,589,391.19 | 23,339,114.85 | 1116.54% |
| JP MORGAN CHASE BANK NATIONAL ASSOCIATION | 20,443,950.00 | 734,885.22 | 2781.92% |
| BANGKOK BANK PUBLIC CO LTD | 143,125,187.50 | 4,954,155.55 | 2888.99% |
| 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% |
| BDO ELITE SAVINGS BANK INC | 0.00 | 0.00 | NA |
| BDO PRIVATE BANK, INC. | 57,350,538.02 | 0.00 | NA |
| DEUTSCHE BANK AG | 249,602,970.71 | 0.00 | NA |
| ISLA BANK (A THRIFT BANK) INC | 4,004,580.33 | 0.00 | NA |
| MBANK PHILIPPINES | 10,322,814.95 | 0.00 | NA |
| MEGA INTERNATIONAL COMMERCIAL BANK CO LTD | 209,629,759.54 | 0.00 | NA |
| MIZUHO BANK LTD - MANILA BRANCH | 354,943,963.71 | 0.00 | NA |
| THE BANK OF TOKYO-MITSUBISHI UFJ LTD | 356,910,030.46 | 0.00 | NA |
| Grand Total | 150,519,060,671.36 | 118,115,994,900.77 | 127.43% |
Source: www.bsp.gov.ph
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