But can these banks do so? The answer is: yes but only for some banks. As can be seen from the table below, eight banks have Deferred Charges as of March 31, 2014:
- Planters Development Bank (Deferred Charges of 56.20% of SE)
- United Coconut Planters Bank (Deferred Charges of 49.51% of SE)
- Bataan Development Bank (Deferred Charges of 15.49% of SE)
- Bank of Commerce (Deferred Charges of 4.72% of SE)
- Card SME Bank, Inc. (Deferred Charges of 1.60% of SE)
- Wealth Development Bank Corporation (Deferred Charges of 0.74% of SE)
- Banco De Oro Unibank, Inc. (Deferred Charges of 0.07% of SE)
- Farmers Savings and Loan Bank (Deferred Charges of 0.01% of SE)
It must be noted that four of these banks were ranked as distressed (highlighted in yellow) as of December 31, 2013:
- United Coconut Planters Bank (Distressed Ratio of 379.21%)
- Planters Development Bank (Distressed Ratio of 217.86%)
- Bank of Commerce (Distressed Ratio of 152.79%)
- Bataan Development Bank (Distressed Ratio of 151.03%)
For two of the banks, the immediate booking their Deferred Charges will only serve to impair 25% or more of their Stockholders Equity as of March 31, 2014:
- Planters Development Bank (Deferred Charges of 56.20% of SE)
- United Coconut Planters Bank (Deferred Charges of 49.51% of SE)
Retained Earnings
Only four banks have sufficient Retained Earnings (RE) to absorb their unbooked losses as of March 31, 2014:
- Card SME Bank Inc. (Deferred Charges 17.26% of RE)
- Wealth Development Bank Corporation (Deferred Charges 3.10% of RE)
- Banco De Oro Unibank (Deferred Charges of 0.23% of RE)
- Farmers Savings and Loan Bank, Inc. (Deferred Charges of 0.02% of RE)
- Planters Development Bank (Deferred Charges of 14532.13% of RE)
- United Coconut Planters Bank (Deferred Charges of 139.77% of RE)
- Bataan Development Bank (Deferred Charges of 128.67% of RE)
One of the banks with Deferred Charges has negative Retained Earnings. As such, it does not have the capacity to absorb additional losses.
- Bank of Commerce (Retained Earnings of - PhP 4.842 billion vs. Deferred Charges of Php 622.135 million)
For more information of these Deferred Charges, please consult the previous blog posts: "Overstated Capital of Philippine Banks as of December 31, 2013", "Overstated Capital of Philippine Banks as of September 30, 2013", "Can Philippine Banks Charge Their Unbooked Losses Against Retained Earnings? - June 30, 2013, "Can Philippine Banks Charge their Unbooked Losses Against Retained Earnings? - March 31, 2013", "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, 2014 | |||||||
Bank | Type of Bank | Deferred Charges | Unbooked Losses | Total Deferred Charges | Stockholder's Equity | Adjusted SE | Impact on SE |
PLANTERS DEVELOPMENT BANK | Thrift | 1,682,681,921.96 | 0.00 | 1,682,681,921.96 | 2,962,516,124.60 | 1,279,834,202.64 | 56.80% |
UNITED COCONUT PLANTERS BANK | U/KB | 9,841,900,553.53 | 0.00 | 9,841,900,553.53 | 19,877,073,858.92 | 10,035,173,305.39 | 49.51% |
BATAAN DEVELOPMENT BANK | Thrift | 10,536,851.62 | 0.00 | 10,536,851.62 | 68,019,741.89 | 57,482,890.27 | 15.49% |
BANK OF COMMERCE | U/KB | 622,135,479.42 | 0.00 | 622,135,479.42 | 13,184,273,245.48 | 12,562,137,766.06 | 4.72% |
CARD SME BANK INC A THRIFT BANK | Thrift | 4,666,173.39 | 0.00 | 4,666,173.39 | 291,104,890.74 | 286,438,717.35 | 1.60% |
WEALTH DEVELOPMENT BANK CORPORATION | Thrift | 2,746,672.40 | 0.00 | 2,746,672.40 | 373,531,565.95 | 370,784,893.55 | 0.74% |
BDO UNIBANK INC | U/KB | 123,221,307.01 | 0.00 | 123,221,307.01 | 165,466,057,134.09 | 165,342,835,827.08 | 0.07% |
FARMERS SAVINGS & LOAN BANK INC | Thrift | 7,430.59 | 0.00 | 7,430.59 | 116,414,913.18 | 116,407,482.59 | 0.01% |
Grand Total | 12,287,896,389.92 | 0.00 | 12,287,896,389.92 | 202,338,991,474.85 | 190,051,095,084.93 | 6.07% |
Philippine Banking System | ||||
Deferred Charges Not Yet Written Down | ||||
Impact on Retained Earnings | ||||
In Php | ||||
March 31, 2014 | ||||
Bank | Unbooked Losses | RE | Adjusted RE | Impact on RE |
PLANTERS DEVELOPMENT BANK | 1,682,681,921.96 | 11,579,042.56 | 1,694,260,964.52 | 14532.13% |
UNITED COCONUT PLANTERS BANK | 9,841,900,553.53 | 7,041,369,659.28 | 16,883,270,212.81 | 139.77% |
BATAAN DEVELOPMENT BANK | 10,536,851.62 | 8,188,915.96 | 18,725,767.58 | 128.67% |
CARD SME BANK INC A THRIFT BANK | 4,666,173.39 | 27,027,212.37 | 31,693,385.76 | 17.26% |
WEALTH DEVELOPMENT BANK CORPORATION | 2,746,672.40 | 88,558,472.41 | 91,305,144.81 | 3.10% |
BDO UNIBANK INC | 123,221,307.01 | 54,289,009,663.93 | 54,412,230,970.94 | 0.23% |
FARMERS SAVINGS & LOAN BANK INC | 7,430.59 | 47,941,036.04 | 47,948,466.63 | 0.02% |
BANK OF COMMERCE | 622,135,479.42 | -4,842,056,442.96 | -4,219,920,963.54 | -12.85% |
Grand Total | 12,287,896,389.92 | 56,671,617,559.59 | 68,959,513,949.51 | 21.68% |
Source: www.bsp.gov.ph
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