On the face of it, no.
At 1.82% as of year-end 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 142.43% as of year-end 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 8.78% for Philippine Universal and Commercial Banks. Moreover, Loan Loss Reserves (LLR) as a percentage of Total Loan Portfolio (TLP) have averaged 4.83% 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 4.27% for the past thirty years.
As of December 2014, LLR/TLP stands at 2.59%, which is below the historical average of 4.27%, indicating that Philippine banks are under-provisioning 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, 2014 | |||||
| Bank | Loan Loss Provisions | Gross NPLs | NPL Coverage Ratio | ||
| BATAAN DEVELOPMENT BANK | 16,310,231.15 | 71,137,540.16 | 22.93% | ||
| PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS | 207,334,096.92 | 902,011,403.70 | 22.99% | ||
| PROGRESS SAVINGS AND LOAN BANK INC | 278,991.99 | 1,207,809.04 | 23.10% | ||
| EQUICOM SAVINGS BANK INC | 85,799,601.16 | 356,698,473.09 | 24.05% | ||
| METRO CEBU PUBLIC SAVINGS BANK | 5,182,294.74 | 20,739,588.38 | 24.99% | ||
| NORTHPOINT DEV'T BANK INC | 32,626,356.50 | 121,594,798.43 | 26.83% | ||
| WEALTH DEVELOPMENT BANK CORPORATION | 54,898,634.82 | 194,938,216.83 | 28.16% | ||
| PRODUCERS SAVINGS BANK CORPORATION | 85,141,536.43 | 288,404,619.03 | 29.52% | ||
| QUEZON COCONUT BANK INC (A THRIFT BANK) | 1,009,814.41 | 3,330,448.37 | 30.32% | ||
| LIFE SAVINGS BANK INC | 2,869,806.08 | 9,403,531.57 | 30.52% | ||
| LUZON DEVELOPMENT BANK | 85,246,042.73 | 278,070,478.36 | 30.66% | ||
| WORLD PARTNERS BANK (A THRIFT BANK) | 58,315,135.85 | 186,102,844.57 | 31.33% | ||
| COMSAVINGS BANK | 60,017,583.39 | 191,248,204.56 | 31.38% | ||
| CENTURY SAVINGS BANK CORPORATION | 12,091,841.55 | 36,165,716.65 | 33.43% | ||
| QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK | 15,538,217.16 | 45,545,701.47 | 34.12% | ||
| ALLIED SAVINGS BANK | 151,182,757.90 | 414,606,169.75 | 36.46% | ||
| CITYSTATE SAVINGS BANK INC | 37,497,328.95 | 102,664,700.25 | 36.52% | ||
| PLANTERS DEVELOPMENT BANK | 1,209,268,505.48 | 3,224,949,677.84 | 37.50% | ||
| 1ST VALLEY BANK INC A DEVELOPMENT BANK | 224,337,385.92 | 577,450,943.39 | 38.85% | ||
| CHINA BANK SAVINGS INC | 318,186,776.72 | 791,976,981.61 | 40.18% | ||
| MARITIME SAVINGS BANK CORPORATION | 5,852,557.72 | 13,475,889.24 | 43.43% | ||
| PAMPANGA DEVELOPMENT BANK | 19,175,061.24 | 44,112,193.34 | 43.47% | ||
| DUMAGUETE CITY DEV BANK INC | 17,300,528.04 | 38,450,305.29 | 44.99% | ||
| HIYAS BANKING CORPORATION | 6,830,066.93 | 14,943,655.86 | 45.71% | ||
| BUSINESS AND CONSUMERS BANK (A DB) | 6,807,895.86 | 14,741,449.33 | 46.18% | ||
| OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK) | 39,662,025.14 | 84,129,787.26 | 47.14% | ||
| MALAYAN BANK SAVINGS AND MORT BANK INC | 286,463,527.92 | 602,727,144.09 | 47.53% | ||
| LEGAZPI SAVINGS BANK INC | 175,696,750.59 | 358,997,214.80 | 48.94% | ||
| DUNGGANON BANK (A MICROFINANCE THRIFT BANK) INC | 13,103,723.55 | 26,522,198.74 | 49.41% | ||
| TOWER DEVELOPMENT BANK | 7,246,943.57 | 14,128,146.31 | 51.29% | ||
| FARMERS SAVINGS & LOAN BANK INC | 28,748,344.32 | 55,076,146.41 | 52.20% | ||
| PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC) | 59,473,510.85 | 106,392,180.30 | 55.90% | ||
| MALASIQUI PROGRESSIVE SLB, INC | 8,160,596.38 | 14,293,443.25 | 57.09% | ||
| MAYBANK PHILIPPINES INC | 903,030,152.09 | 1,576,610,671.13 | 57.28% | ||
| STANDARD CHARTERED BANK | 1,563,147,723.04 | 2,709,206,512.13 | 57.70% | ||
| EAST WEST BANKING CORP | 2,933,109,010.02 | 4,836,469,856.36 | 60.65% | ||
| BANK ONE SAVINGS AND TRUST CORP. | 9,533,602.53 | 15,304,127.53 | 62.29% | ||
| STERLING BANK OF ASIA INC (A SAVINGS BANK) | 564,406,890.92 | 871,517,086.54 | 64.76% | ||
| RCBC SAVINGS BANK INC | 1,593,628,847.92 | 2,448,630,329.66 | 65.08% | ||
| ENTERPRISE BANK INC (A THRIFT BANK) | 50,072,039.57 | 76,451,890.54 | 65.49% | ||
| PRIDE STAR DEVELOPMENT BANK INC | 6,090,315.48 | 8,300,262.62 | 73.37% | ||
| SAMPAGUITA SAVINGS BANK INC | 20,096,752.57 | 26,785,290.77 | 75.03% | ||
| PHIL POSTAL SAVINGS BANK INC | 374,122,256.94 | 492,362,764.41 | 75.99% | ||
| UNITED COCONUT PLANTERS BANK | 4,406,329,154.24 | 5,636,880,749.10 | 78.17% | ||
| TONGYANG SAVINGS BANK INC | 88,615,664.32 | 112,567,867.52 | 78.72% | ||
| CORDILLERA SAVINGS BANK INC | 14,763,133.27 | 18,647,760.26 | 79.17% | ||
| INTER-ASIA DEVELOPMENT BANK | 6,835,032.93 | 8,554,783.72 | 79.90% | ||
| CITY SAVINGS BANK INC | 567,785,781.81 | 709,780,523.40 | 79.99% | ||
| VILLAGE BANK INC (A THRIFT BANK) | 17,342,200.42 | 20,965,006.83 | 82.72% | ||
| BATAAN SAVINGS AND LOAN BANK | 2,137,583.98 | 2,502,930.36 | 85.40% | ||
| LEMERY SAVINGS & LOAN BANK, INC. | 5,008,824.64 | 5,728,960.87 | 87.43% | ||
| ROBINSONS BANK CORPORATION | 456,711,205.14 | 507,835,084.60 | 89.93% | ||
| PHIL BANK OF COMMUNICATIONS | 1,377,017,428.35 | 1,520,459,210.68 | 90.57% | ||
| THE PALAWAN BANK (PALAWAN DB) INC | 12,921,093.83 | 14,045,823.30 | 91.99% | ||
| BPI FAMILY SAVINGS BANK INC | 4,718,401,272.11 | 5,108,776,708.58 | 92.36% | ||
| SECURITY BANK SAVINGS CORPORATION | 600,748,863.61 | 649,418,868.91 | 92.51% | ||
| SUN SAVINGS BANK INC | 9,074,163.32 | 9,541,892.70 | 95.10% | ||
| PHIL NATIONAL BANK | 10,164,425,526.17 | 10,527,433,340.17 | 96.55% | ||
| BANK OF COMMERCE | 2,844,108,907.43 | 2,820,205,869.67 | 100.85% | ||
| UNITED OVERSEAS BANK PHILIPPINES | 671,508,766.56 | 665,452,236.65 | 100.91% | ||
| DEVELOPMENT BANK OF THE PHIL | 5,861,632,053.27 | 5,808,528,843.60 | 100.91% | ||
| FIRST CONSOLIDATED BANK INC (A PDB) | 474,856,715.22 | 469,987,187.56 | 101.04% | ||
| HONGKONG & SHANGHAI BANKING CORP | 1,237,310,523.61 | 1,219,293,790.10 | 101.48% | ||
| UNION BANK OF THE PHILS | 10,770,009,648.23 | 10,076,556,506.11 | 106.88% | ||
| UCPB SAVINGS BANK | 526,450,598.25 | 475,471,372.29 | 110.72% | ||
| CTBC BANK (PHILIPPINES) CORP | 489,535,143.69 | 439,807,782.14 | 111.31% | ||
| PHILIPPINE BUSINESS BANK INC A SAVINGS BANK | 724,501,501.15 | 616,983,187.60 | 117.43% | ||
| PHIL SAVINGS BANK | 4,283,406,877.75 | 3,601,618,439.11 | 118.93% | ||
| RIZAL COMM'L BANKING CORP | 2,751,732,463.02 | 2,143,581,902.58 | 128.37% | ||
| PACIFIC ACE SAVINGS BANK INC | 2,747,624.10 | 2,030,877.00 | 135.29% | ||
| ASIA UNITED BANK CORPORATION | 1,269,388,984.28 | 937,915,220.59 | 135.34% | ||
| UNIVERSITY SAVINGS BANK INC | 41,976,227.15 | 28,498,734.87 | 147.29% | ||
| LAND BANK OF THE PHILIPPINES | 11,144,958,925.41 | 7,477,389,676.01 | 149.05% | ||
| BANK OF THE PHIL ISLANDS | 11,812,909,980.62 | 7,842,038,110.95 | 150.64% | ||
| CHINA BANKING CORP | 6,745,223,114.96 | 4,415,291,462.72 | 152.77% | ||
| PHILIPPINE VETERANS BANK | 1,107,131,906.80 | 703,338,366.80 | 157.41% | ||
| CARD SME BANK INC A THRIFT BANK | 49,352,115.32 | 30,567,692.70 | 161.45% | ||
| MERCHANTS SAVINGS & LOAN ASSN INC | 10,392,306.35 | 6,371,298.43 | 163.11% | ||
| BPI DIRECT SAVINGS BANK INC | 192,581,841.99 | 116,040,563.44 | 165.96% | ||
| BDO UNIBANK INC | 29,140,904,568.08 | 16,992,547,843.11 | 171.49% | ||
| PHIL TRUST COMPANY | 2,035,551,839.11 | 1,104,441,940.64 | 184.31% | ||
| BANGKOK BANK PUBLIC CO LTD | 179,561,062.50 | 87,029,546.70 | 206.32% | ||
| HSBC SAVINGS BANK(PHILS) INC | 100,031,775.99 | 44,015,977.19 | 227.26% | ||
| CITIBANK, N.A. | 7,460,468,783.47 | 2,887,177,872.02 | 258.40% | ||
| SECURITY BANK CORP | 3,124,108,147.73 | 1,106,216,853.17 | 282.41% | ||
| OPTIMUM DEVELOPMENT BANK INC | 44,568,839.06 | 15,721,868.56 | 283.48% | ||
| AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS | 3,308,123.65 | 1,092,048.97 | 302.93% | ||
| KOREA EXCHANGE BANK | 76,320,936.39 | 23,550,180.50 | 324.08% | ||
| METROPOLITAN BANK & TCO | 11,990,057,174.57 | 2,746,871,596.00 | 436.50% | ||
| BANK OF CHINA LIMITED-MANILA BRANCH | 111,155,603.35 | 8,660,895.91 | 1283.42% | ||
| ANZ BANKING GROUP LTD | 323,694,551.65 | 23,339,114.85 | 1386.92% | ||
| JP MORGAN CHASE BANK NATIONAL ASSN. | 20,134,625.00 | 734,885.22 | 2739.83% | ||
| INTERNATIONALE NEDERLANDEN GROEP BK | 91,276,110.65 | 91.75 | 99483499.35% | ||
| BANK OF AMERICA N.A. | 18,300,004.00 | 4.00 | 457500100.00% | ||
| BDO ELITE SAVINGS BANK INC | 0.00 | 0.00 | NA | ||
| BDO PRIVATE BANK, INC. | 88,546,538.02 | 0.00 | NA | ||
| DEUTSCHE BANK AG | 253,968,682.99 | 0.00 | NA | ||
| ISLA BANK(A THRIFT BANK) INC | 4,290,580.33 | 0.00 | NA | ||
| MEGA INT'L COMM'L BANK CO LTD | 225,119,938.38 | 0.00 | NA | ||
| MIZUHO BANK LTD - MANILA BRANCH | 361,954,599.06 | 0.00 | NA | ||
| THE BNK OF TOKYO-MITSUBISHI UFJ LTD | 366,210,030.46 | 0.00 | NA | ||
| Grand Total | 152,834,257,730.78 | 122,059,385,743.47 | 125.21% | ||
Source: www.bsp.gov.ph
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