But can these banks do so? The answer is: yes but only for some banks. As can be seen from the table below, nine banks have Deferred Charges as of September 30, 2014:
- Planters Development Bank (Deferred Charges of 62.50% of SE)
- United Coconut Planters Bank (Deferred Charges of 46.17% of SE)
- Bataan Development Bank (Deferred Charges of 14.33% of SE)
- City Savings Bank (Deferred Charges of 6.34% of SE)
- Bank of Commerce (Deferred Charges of 3.5% of SE)
- Card SME Bank, Inc. (Deferred Charges of 1.27% of SE)
- Wealth Development Bank Corporation (Deferred Charges of 1.22% of SE)
- Banco De Oro Unibank, Inc. (Deferred Charges of 0.05% of SE)
- Farmers Savings and Loan Bank (Deferred Charges of 0.00% of SE)
It must be noted that four of these banks were ranked as distressed (highlighted in yellow) as of June 30, 2014:
- United Coconut Planters Bank (Distressed Ratio of 301.61%)
- Planters Development Bank (Distressed Ratio of 264.76%)
- Bank of Commerce (Distressed Ratio of 186.19%)
- Bataan Development Bank (Distressed Ratio of 143.41%)
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 June 30, 2014:
- Planters Development Bank (Deferred Charges of 62.50% of SE)
- United Coconut Planters Bank (Deferred Charges of 46.17% of SE)
Retained Earnings
Only five banks have sufficient Retained Earnings (RE) to absorb their unbooked losses as of September 30, 2014:
- Card SME Bank Inc. (Deferred Charges 19.00% of RE)
- City Savings Bank (Deferred Charges 11.37% of RE)
- Wealth Development Bank Corporation (Deferred Charges 5.00% of RE)
- Banco De Oro Unibank (Deferred Charges of 0.17% of RE)
- Farmers Savings and Loan Bank, Inc. (Deferred Charges of 0.01% of RE)
- Planters Development Bank (Deferred Charges of 1313.44% of RE)
- Bataan Development Bank (Deferred Charges of 144.71% of RE)
- United Coconut Planters Bank (Deferred Charges of 139.22% 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 4.757 billion vs. Deferred Charges of Php 481.909 million.
For more information of these Deferred Charges, please consult the previous blog posts: "Overstated Capital of Philippine Banks as of June 30, 2014", "Overstated Capital of Philippine Banks as of March 31, 2014", "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 | |||||||
September 30, 2014 | |||||||
Bank | Type of Bank | Deferred Charges | Unbooked Losses | Total Deferred Charges | Stockholder's Equity | Adjusted SE | Impact on SE |
PLANTERS DEVELOPMENT BANK | Thrift | 1,515,408,409.58 | 0.00 | 1,515,408,409.58 | 2,424,611,329.33 | 909,202,919.75 | 62.50% |
UNITED COCONUT PLANTERS BANK | U/KB | 9,841,900,553.53 | 0.00 | 9,841,900,553.53 | 21,317,547,899.98 | 11,475,647,346.45 | 46.17% |
BATAAN DEVELOPMENT BANK | Thrift | 10,130,048.56 | 0.00 | 10,130,048.56 | 70,712,367.08 | 60,582,318.52 | 14.33% |
CITY SAVINGS BANK | Thrift | 341,674,720.56 | 0.00 | 341,674,720.56 | 5,391,556,126.25 | 5,049,881,405.69 | 6.34% |
BANK OF COMMERCE | U/KB | 481,909,436.16 | 0.00 | 481,909,436.16 | 13,769,767,063.00 | 13,287,857,626.84 | 3.50% |
CARD SME BANK INC A THRIFT BANK | Thrift | 4,330,651.59 | 0.00 | 4,330,651.59 | 340,293,067.27 | 335,962,415.68 | 1.27% |
WEALTH DEVELOPMENT BANK CORPORATION | Thrift | 4,623,323.40 | 0.00 | 4,623,323.40 | 378,812,404.40 | 374,189,081.00 | 1.22% |
BDO UNIBANK INC | U/KB | 86,254,914.97 | 0.00 | 86,254,914.97 | 172,404,002,715.04 | 172,317,747,800.07 | 0.05% |
FARMERS SAVINGS & LOAN BANK INC | Thrift | 3,640.67 | 0.00 | 3,640.67 | 114,330,836.72 | 114,327,196.05 | 0.00% |
Grand Total | 12,286,235,699.02 | 0.00 | 12,286,235,699.02 | 216,211,633,809.07 | 203,925,398,110.05 | 5.68% | |
Philippine Banking System | |||||||
Deferred Charges Not Yet Written Down | |||||||
Impact on Retained Earnings | |||||||
In Php | |||||||
September 30, 2014 | |||||||
Bank | Unbooked Losses | RE | Adjusted RE | Impact on RE | |||
PLANTERS DEVELOPMENT BANK | 1,515,408,409.58 | 115,377,483.78 | -1,400,030,925.80 | 1313.44% | |||
BATAAN DEVELOPMENT BANK | 10,130,048.56 | 7,000,070.48 | -3,129,978.08 | 144.71% | |||
UNITED COCONUT PLANTERS BANK | 9,841,900,553.53 | 7,069,173,592.75 | -2,772,726,960.78 | 139.22% | |||
CARD SME BANK INC A THRIFT BANK | 4,330,651.59 | 22,792,110.51 | 18,461,458.92 | 19.00% | |||
CITY SAVINGS BANK | 341,674,720.56 | 3,006,314,332.62 | 2,664,639,612.06 | 11.37% | |||
WEALTH DEVELOPMENT BANK CORPORATION | 4,623,323.40 | 92,488,259.05 | 87,864,935.65 | 5.00% | |||
BDO UNIBANK INC | 86,254,914.97 | 51,149,005,424.32 | 51,062,750,509.35 | 0.17% | |||
FARMERS SAVINGS & LOAN BANK INC | 3,640.67 | 41,778,247.35 | 41,774,606.68 | 0.01% | |||
BANK OF COMMERCE | 481,909,436.16 | -4,756,968,407.08 | -5,238,877,843.24 | -10.13% | |||
Grand Total | 12,286,235,699.02 | 56,746,961,113.78 | 44,460,725,414.76 | 21.65% |
Source: www.bsp.gov.ph
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