On the face of it, no.
At 2.04% as of September 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 139.0% as of September 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 4.42% for the past thirty years.
As of September 2014, LLR/TLP stands at 2.84%, which is below the historical average of 4.43%, 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 | |||
| June 30, 2014 | |||
| Bank | Loan Loss Provisions | Gross NPLs | NPL Coverage Ratio |
| PROGRESS SAVINGS AND LOAN BANK INC | 292,142.84 | 1,217,809.04 | 23.99% |
| EQUICOM SAVINGS BANK INC | 83,214,340.60 | 337,344,313.69 | 24.67% |
| METRO CEBU PUBLIC SAVINGS BANK | 5,119,624.00 | 20,310,867.79 | 25.21% |
| WEALTH DEVELOPMENT BANK CORPORATION | 54,898,634.82 | 209,527,437.82 | 26.20% |
| PRODUCERS SAVINGS BANK CORPORATION | 69,149,504.72 | 262,893,457.71 | 26.30% |
| LIFE SAVINGS BANK INC | 2,649,806.08 | 9,666,525.59 | 27.41% |
| COMSAVINGS BANK | 60,017,583.39 | 191,248,204.56 | 31.38% |
| PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS | 180,969,768.02 | 561,024,042.58 | 32.26% |
| CENTURY SAVINGS BANK CORPORATION | 12,091,841.55 | 36,286,160.53 | 33.32% |
| MALASIQUI PROGRESSIVE SLB, INC | 6,470,762.05 | 19,257,920.25 | 33.60% |
| PLANTERS DEVELOPMENT BANK | 1,228,687,988.60 | 3,510,296,829.98 | 35.00% |
| MALAYAN BANK SAVINGS AND MORT BANK INC | 216,314,509.27 | 572,748,780.92 | 37.77% |
| QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK | 15,538,217.16 | 40,938,529.63 | 37.95% |
| WORLD PARTNERS BANK (A THRIFT BANK) | 60,164,380.04 | 156,140,300.23 | 38.53% |
| LUZON DEVELOPMENT BANK | 80,014,406.79 | 205,386,492.11 | 38.96% |
| MARITIME SAVINGS BANK CORPORATION | 5,943,777.88 | 14,923,853.25 | 39.83% |
| QUEZON COCONUT BANK INC (A THRIFT BANK) | 904,631.00 | 2,197,241.35 | 41.17% |
| PAMPANGA DEVELOPMENT BANK | 18,275,061.24 | 44,254,205.99 | 41.30% |
| DUNGGANON BANK (A MICROFINANCE THRIFT BANK) INC | 11,894,404.62 | 28,622,510.92 | 41.56% |
| CITYSTATE SAVINGS BANK INC | 49,634,181.95 | 117,088,935.20 | 42.39% |
| ALLIED SAVINGS BANK | 221,439,954.68 | 500,152,913.46 | 44.27% |
| BUSINESS AND CONSUMERS BANK (A DB) | 7,032,497.25 | 15,865,917.33 | 44.32% |
| DUMAGUETE CITY DEV BANK INC | 17,300,528.04 | 36,993,882.52 | 46.77% |
| LEGAZPI SAVINGS BANK INC | 164,277,885.37 | 343,109,718.52 | 47.88% |
| BANK ONE SAVINGS AND TRUST CORP. | 8,261,602.53 | 15,304,127.53 | 53.98% |
| MICROFINANCE MAXIMUM SB INC | 1,516,592.98 | 2,775,600.08 | 54.64% |
| CHINA BANK SAVINGS INC | 262,537,183.93 | 476,867,642.57 | 55.05% |
| PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC) | 51,656,190.03 | 93,194,418.99 | 55.43% |
| OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK) | 35,068,195.02 | 62,793,100.02 | 55.85% |
| FARMERS SAVINGS & LOAN BANK INC | 27,199,029.83 | 47,638,664.30 | 57.09% |
| TOWER DEVELOPMENT BANK | 7,246,943.57 | 12,448,940.29 | 58.21% |
| STANDARD CHARTERED BANK | 1,578,014,429.07 | 2,695,618,727.90 | 58.54% |
| HIYAS BANKING CORPORATION | 12,588,045.27 | 21,202,761.24 | 59.37% |
| ENTERPRISE BANK INC (A THRIFT BANK) | 50,072,039.57 | 83,558,761.35 | 59.92% |
| RCBC SAVINGS BANK INC | 1,458,628,847.92 | 2,402,636,127.37 | 60.71% |
| STERLING BANK OF ASIA INC (A SAVINGS BANK) | 542,465,689.71 | 858,715,671.59 | 63.17% |
| LEMERY SAVINGS & LOAN BANK, INC. | 5,008,824.64 | 7,724,884.86 | 64.84% |
| MAYBANK PHILIPPINES INC | 903,030,152.09 | 1,378,051,563.58 | 65.53% |
| EAST WEST BANKING CORP | 3,036,336,417.12 | 4,541,358,672.92 | 66.86% |
| PRIDE STAR DEVELOPMENT BANK INC | 6,090,315.48 | 8,744,472.07 | 69.65% |
| BPI GLOBE BANKO INC A SAVINGS BANK | 278,559,311.79 | 380,810,052.97 | 73.15% |
| NORTHPOINT DEV'T BANK INC | 28,170,841.84 | 37,886,142.07 | 74.36% |
| INTER-ASIA DEVELOPMENT BANK | 6,438,006.92 | 8,594,208.64 | 74.91% |
| UNITED COCONUT PLANTERS BANK | 4,409,121,235.63 | 5,789,807,611.16 | 76.15% |
| 1ST VALLEY BANK INC A DEVELOPMENT BANK | 182,613,193.38 | 229,969,316.89 | 79.41% |
| PHIL POSTAL SAVINGS BANK INC | 359,625,655.37 | 450,558,007.83 | 79.82% |
| SAMPAGUITA SAVINGS BANK INC | 21,561,538.64 | 26,518,966.62 | 81.31% |
| VILLAGE BANK INC (A THRIFT BANK) | 17,342,200.42 | 21,234,993.83 | 81.67% |
| TONGYANG SAVINGS BANK INC | 91,256,058.20 | 110,617,410.43 | 82.50% |
| ROBINSONS BANK CORPORATION | 439,639,956.28 | 493,361,960.72 | 89.11% |
| THE PALAWAN BANK (PALAWAN DB) INC | 12,213,999.76 | 13,679,793.00 | 89.28% |
| BPI FAMILY SAVINGS BANK INC | 4,319,304,888.17 | 4,762,753,021.27 | 90.69% |
| BATAAN DEVELOPMENT BANK | 15,863,578.64 | 17,242,964.32 | 92.00% |
| PHILIPPINE BUSINESS BANK INC A SAVINGS BANK | 709,501,501.15 | 770,221,304.39 | 92.12% |
| FIRST CONSOLIDATED BANK INC (A PDB) | 449,583,276.23 | 479,052,552.83 | 93.85% |
| CORDILLERA SAVINGS BANK INC | 16,099,637.13 | 17,061,634.00 | 94.36% |
| BANK OF COMMERCE | 2,771,868,455.15 | 2,910,449,718.05 | 95.24% |
| PHIL NATIONAL BANK | 10,242,279,723.23 | 10,658,942,086.40 | 96.09% |
| SECURITY BANK SAVINGS CORPORATION | 589,151,436.82 | 600,925,489.67 | 98.04% |
| BATAAN SAVINGS AND LOAN BANK | 2,137,583.98 | 2,160,189.36 | 98.95% |
| HONGKONG & SHANGHAI BANKING CORP | 1,277,413,319.12 | 1,284,388,818.19 | 99.46% |
| UNITED OVERSEAS BANK PHILIPPINES | 668,723,657.81 | 665,371,386.65 | 100.50% |
| PHIL BANK OF COMMUNICATIONS | 1,351,066,038.82 | 1,301,109,960.55 | 103.84% |
| SUN SAVINGS BANK INC | 8,350,409.85 | 7,929,099.28 | 105.31% |
| UNION BANK OF THE PHILS | 10,750,960,312.00 | 9,851,315,969.97 | 109.13% |
| UCPB SAVINGS BANK | 497,364,923.39 | 443,571,417.59 | 112.13% |
| CTBC BANK (PHILIPPINES) CORP | 445,038,684.27 | 383,611,264.60 | 116.01% |
| ASIA UNITED BANK CORPORATION | 1,161,526,739.01 | 1,000,233,421.51 | 116.13% |
| PHIL SAVINGS BANK | 4,191,764,263.95 | 3,594,733,281.93 | 116.61% |
| DEVELOPMENT BANK OF THE PHIL | 5,906,109,977.06 | 5,027,864,479.68 | 117.47% |
| RIZAL COMM'L BANKING CORP | 2,714,127,117.20 | 2,151,334,878.51 | 126.16% |
| PHILIPPINE VETERANS BANK | 1,079,647,375.37 | 803,725,714.93 | 134.33% |
| PACIFIC ACE SAVINGS BANK INC | 2,828,723.30 | 2,030,877.00 | 139.29% |
| CITY SAVINGS BANK INC | 433,834,718.65 | 310,401,587.69 | 139.77% |
| UNIVERSITY SAVINGS BANK INC | 41,976,227.15 | 28,825,541.35 | 145.62% |
| BANK OF THE PHIL ISLANDS | 12,247,786,106.18 | 8,291,551,975.99 | 147.71% |
| LAND BANK OF THE PHILIPPINES | 11,408,755,410.63 | 7,513,826,163.99 | 151.84% |
| BPI DIRECT SAVINGS BANK INC | 185,544,480.86 | 118,877,307.16 | 156.08% |
| MERCHANTS SAVINGS & LOAN ASSN INC | 7,735,621.66 | 4,917,002.76 | 157.32% |
| CHINA BANKING CORP | 6,747,315,145.01 | 4,241,788,759.14 | 159.07% |
| BDO UNIBANK INC | 29,105,291,458.45 | 17,868,067,253.39 | 162.89% |
| CARD SME BANK INC A THRIFT BANK | 41,990,447.15 | 25,092,689.59 | 167.34% |
| PHIL TRUST COMPANY | 2,009,126,839.36 | 1,136,024,377.76 | 176.86% |
| HSBC SAVINGS BANK(PHILS) INC | 97,186,802.32 | 45,347,213.20 | 214.32% |
| OPTIMUM DEVELOPMENT BANK INC | 44,600,074.55 | 16,717,877.39 | 266.78% |
| SECURITY BANK CORP | 3,015,132,028.68 | 1,113,417,377.10 | 270.80% |
| AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS | 3,093,560.43 | 1,092,048.97 | 283.28% |
| KOREA EXCHANGE BANK | 74,201,179.94 | 23,650,175.60 | 313.74% |
| METROPOLITAN BANK & TCO | 11,519,305,941.52 | 3,050,129,110.82 | 377.67% |
| CITIBANK, N.A. | 7,351,323,866.85 | 1,249,411,783.97 | 588.38% |
| BANK OF CHINA LIMITED-MANILA BRANCH | 85,990,281.62 | 8,660,895.91 | 992.86% |
| ANZ BANKING GROUP LTD | 277,113,243.90 | 23,339,114.85 | 1187.33% |
| JP MORGAN CHASE BANK NATIONAL ASSN. | 20,305,550.00 | 734,885.22 | 2763.09% |
| BANGKOK BANK PUBLIC CO LTD | 165,444,525.00 | 4,834,155.55 | 3422.41% |
| INTERNATIONALE NEDERLANDEN GROEP BK | 51,036,210.20 | 89.30 | 57151411.20% |
| BANK OF AMERICA N.A. | 11,450,004.00 | 4.00 | 286250100.00% |
| BDO ELITE SAVINGS BANK INC | 0.00 | 0.00 | NA |
| BDO PRIVATE BANK, INC. | 81,674,538.02 | 0.00 | NA |
| CITIBANK SAVINGS INC | 0.00 | 0.00 | NA |
| DEUTSCHE BANK AG | 137,338,089.71 | 0.00 | NA |
| ISLA BANK(A THRIFT BANK) INC | 4,310,580.33 | 0.00 | NA |
| MEGA INT'L COMM'L BANK CO LTD | 210,606,566.60 | 0.00 | NA |
| MIZUHO BANK LTD - MANILA BRANCH | 361,967,742.56 | 0.00 | NA |
| THE BNK OF TOKYO-MITSUBISHI UFJ LTD | 366,210,030.46 | 0.00 | NA |
| Grand Total | 151,682,917,822.39 | 119,321,906,373.17 | 127.12% |
Source: www.bsp.gov.ph
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