On the face of it, no.
At 1.95% as of March 31, 2015, NPLs as a percentage of Total Loan Portfolios are at or near historic lows.
While the NPL coverage ratio is near historic highs at 138.19% as of March 31, 2015, indicating that most bank 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 March 31, 2015, LLR/TLP stands at 2.70%, 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 | |||||
| March 31, 2015 | |||||
| Bank | Loan Loss Provisions | Gross NPLs | NPL Coverage Ratio | ||
| LUZON DEVELOPMENT BANK | 96,128,336.92 | 499,420,736.49 | 19.25% | ||
| COMSAVINGS BANK | 39,187,909.81 | 191,248,204.56 | 20.49% | ||
| PROGRESS SAVINGS AND LOAN BANK INC | 261,230.16 | 1,185,998.13 | 22.03% | ||
| EQUICOM SAVINGS BANK INC | 98,024,951.22 | 428,713,287.42 | 22.86% | ||
| BATAAN DEVELOPMENT BANK | 15,216,420.99 | 64,582,515.58 | 23.56% | ||
| BANK ONE SAVINGS AND TRUST CORP. | 9,533,602.53 | 40,153,201.27 | 23.74% | ||
| PRODUCERS SAVINGS BANK CORPORATION | 66,559,860.69 | 268,795,613.94 | 24.76% | ||
| WEALTH DEVELOPMENT BANK CORPORATION | 54,898,634.82 | 201,120,841.49 | 27.30% | ||
| LIFE SAVINGS BANK INC | 3,169,806.08 | 11,010,626.31 | 28.79% | ||
| 1ST VALLEY BANK INC A DEVELOPMENT BANK | 147,938,306.65 | 509,998,431.29 | 29.01% | ||
| METRO CEBU PUBLIC SAVINGS BANK | 6,965,566.83 | 23,324,342.73 | 29.86% | ||
| MARITIME SAVINGS BANK CORPORATION | 6,948,645.24 | 21,163,052.88 | 32.83% | ||
| CITYSTATE SAVINGS BANK INC | 35,330,430.42 | 103,482,596.62 | 34.14% | ||
| NORTHPOINT DEV'T BANK INC | 42,348,546.94 | 116,923,465.35 | 36.22% | ||
| PAMPANGA DEVELOPMENT BANK | 20,207,091.55 | 55,727,765.20 | 36.26% | ||
| QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK | 15,538,217.16 | 42,769,596.12 | 36.33% | ||
| CENTURY SAVINGS BANK CORPORATION | 13,585,858.87 | 36,771,150.94 | 36.95% | ||
| OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK) | 45,094,144.34 | 121,016,620.35 | 37.26% | ||
| PLANTERS DEVELOPMENT BANK | 1,258,051,478.94 | 3,189,663,230.00 | 39.44% | ||
| HIYAS BANKING CORPORATION | 6,830,066.93 | 16,450,205.95 | 41.52% | ||
| MALAYAN BANK SAVINGS AND MORT BANK INC | 286,854,162.19 | 666,040,981.85 | 43.07% | ||
| EAST WEST BANKING CORP | 3,307,165,678.18 | 7,353,959,721.22 | 44.97% | ||
| DUMAGUETE CITY DEV BANK INC | 16,533,857.12 | 36,126,106.59 | 45.77% | ||
| PNB SAVINGS BANK | 196,876,679.90 | 427,188,228.75 | 46.09% | ||
| WORLD PARTNERS BANK (A THRIFT BANK) | 53,242,755.38 | 111,334,633.18 | 47.82% | ||
| ENTERPRISE BANK INC (A THRIFT BANK) | 55,353,813.66 | 112,532,855.86 | 49.19% | ||
| QUEZON COCONUT BANK INC (A THRIFT BANK) | 938,192.49 | 1,839,153.08 | 51.01% | ||
| BUSINESS AND CONSUMERS BANK (A DB) | 6,870,326.65 | 13,382,405.13 | 51.34% | ||
| PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC) | 68,788,127.51 | 131,506,166.73 | 52.31% | ||
| LEGAZPI SAVINGS BANK INC | 214,712,303.95 | 407,843,600.38 | 52.65% | ||
| PACIFIC ACE SAVINGS BANK INC | 2,619,354.31 | 4,961,502.34 | 52.79% | ||
| FARMERS SAVINGS & LOAN BANK INC | 30,923,816.15 | 58,212,898.88 | 53.12% | ||
| LEMERY SAVINGS & LOAN BANK, INC. | 2,348,978.31 | 4,348,037.52 | 54.02% | ||
| CHINA BANK SAVINGS INC | 407,534,369.19 | 686,951,119.90 | 59.33% | ||
| RCBC SAVINGS BANK INC | 1,556,509,048.17 | 2,585,628,228.10 | 60.20% | ||
| PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS | 465,801,900.34 | 747,125,942.99 | 62.35% | ||
| STANDARD CHARTERED BANK | 1,617,831,782.13 | 2,524,542,279.33 | 64.08% | ||
| MAYBANK PHILIPPINES INC | 1,095,192,069.63 | 1,689,317,413.77 | 64.83% | ||
| ASIA UNITED BANK CORPORATION | 1,351,789,337.84 | 2,084,924,543.46 | 64.84% | ||
| TOWER DEVELOPMENT BANK | 7,312,637.60 | 11,153,590.50 | 65.56% | ||
| STERLING BANK OF ASIA INC (A SAVINGS BANK) | 625,523,511.66 | 942,691,611.75 | 66.36% | ||
| VILLAGE BANK INC (A THRIFT BANK) | 17,342,200.42 | 24,358,134.33 | 71.20% | ||
| CORDILLERA SAVINGS BANK INC | 11,630,893.78 | 16,205,747.70 | 71.77% | ||
| DUNGGANON BANK (A MICROFINANCE THRIFT BANK) INC | 20,380,751.63 | 27,617,113.51 | 73.80% | ||
| UNITED COCONUT PLANTERS BANK | 4,330,118,488.54 | 5,746,724,166.55 | 75.35% | ||
| TONGYANG SAVINGS BANK INC | 93,205,824.46 | 114,796,354.04 | 81.19% | ||
| SAMPAGUITA SAVINGS BANK INC | 19,522,548.94 | 22,960,554.29 | 85.03% | ||
| PHIL BANK OF COMMUNICATIONS | 1,507,144,045.94 | 1,745,888,751.18 | 86.33% | ||
| MBANK PHILIPPINES (A THRIFT BANK) INC | 32,197,679.57 | 36,806,758.28 | 87.48% | ||
| SUN SAVINGS BANK INC | 9,706,479.76 | 11,050,430.93 | 87.84% | ||
| PHIL POSTAL SAVINGS BANK INC | 411,076,857.01 | 466,132,640.60 | 88.19% | ||
| PHILIPPINE BUSINESS BANK INC A SAVINGS BANK | 833,201,501.15 | 939,826,283.92 | 88.65% | ||
| THE PALAWAN BANK (PALAWAN DB) INC | 13,685,112.33 | 15,194,656.19 | 90.07% | ||
| MALASIQUI PROGRESSIVE SLB, INC | 7,184,596.38 | 7,772,843.25 | 92.43% | ||
| FIRST CONSOLIDATED BANK INC (A PDB) | 523,360,422.84 | 560,207,876.49 | 93.42% | ||
| CTBC BANK (PHILIPPINES) CORP | 430,657,742.86 | 440,792,982.95 | 97.70% | ||
| PHIL SAVINGS BANK | 4,280,569,141.59 | 4,336,921,235.15 | 98.70% | ||
| DEVELOPMENT BANK OF THE PHIL | 5,787,920,346.92 | 5,863,437,846.65 | 98.71% | ||
| BPI GLOBE BANKO INC A SAVINGS BANK | 276,987,191.07 | 280,542,197.86 | 98.73% | ||
| SECURITY BANK SAVINGS CORPORATION | 512,972,159.05 | 512,338,894.46 | 100.12% | ||
| UNITED OVERSEAS BANK PHILIPPINES | 671,690,921.81 | 665,440,686.65 | 100.94% | ||
| INTER-ASIA DEVELOPMENT BANK | 8,731,279.16 | 8,609,444.71 | 101.42% | ||
| HONGKONG & SHANGHAI BANKING CORP | 1,065,010,700.80 | 1,049,304,788.02 | 101.50% | ||
| MICROFINANCE MAXIMUM SB INC | 2,483,957.42 | 2,425,068.76 | 102.43% | ||
| BPI FAMILY SAVINGS BANK INC | 5,097,836,003.60 | 4,921,476,831.19 | 103.58% | ||
| ROBINSONS BANK CORPORATION | 583,071,793.52 | 558,006,486.11 | 104.49% | ||
| CITY SAVINGS BANK INC | 623,531,908.38 | 594,760,597.21 | 104.84% | ||
| UNION BANK OF THE PHILS | 10,414,211,375.73 | 9,877,599,202.32 | 105.43% | ||
| UCPB SAVINGS BANK | 542,687,987.48 | 512,493,634.01 | 105.89% | ||
| BANK OF COMMERCE | 2,622,410,023.17 | 2,449,297,065.34 | 107.07% | ||
| PHIL NATIONAL BANK | 10,081,695,965.90 | 9,301,061,945.00 | 108.39% | ||
| BATAAN SAVINGS AND LOAN BANK | 1,595,044.62 | 1,419,538.00 | 112.36% | ||
| HSBC SAVINGS BANK(PHILS) INC | 99,106,362.61 | 81,930,694.58 | 120.96% | ||
| PHIL STAR DEVELOPMENT BANK INC | 6,090,315.48 | 4,656,148.72 | 130.80% | ||
| BPI DIRECT SAVINGS BANK INC | 206,231,489.42 | 153,634,930.52 | 134.23% | ||
| CHINA BANKING CORP | 6,468,273,899.30 | 4,648,856,616.84 | 139.14% | ||
| MERCHANTS SAVINGS & LOAN ASSN INC | 13,211,253.95 | 9,252,307.06 | 142.79% | ||
| BANK OF THE PHIL ISLANDS | 11,929,525,719.35 | 8,352,468,626.16 | 142.83% | ||
| BANK OF CHINA LIMITED-MANILA BRANCH | 278,940,895.82 | 189,040,895.91 | 147.56% | ||
| UNIVERSITY SAVINGS BANK INC | 41,976,227.15 | 26,222,110.35 | 160.08% | ||
| LAND BANK OF THE PHILIPPINES | 11,184,250,299.25 | 6,945,870,220.09 | 161.02% | ||
| RIZAL COMM'L BANKING CORP | 3,412,568,672.70 | 2,069,285,395.36 | 164.92% | ||
| CARD SME BANK INC A THRIFT BANK | 54,301,220.37 | 32,736,348.30 | 165.87% | ||
| BDO UNIBANK INC | 28,822,161,170.22 | 15,797,233,825.99 | 182.45% | ||
| OPTIMUM DEVELOPMENT BANK INC | 44,568,839.06 | 22,988,260.92 | 193.88% | ||
| PHIL TRUST COMPANY | 2,146,337,478.15 | 1,106,060,633.65 | 194.05% | ||
| PHILIPPINE VETERANS BANK | 1,193,984,870.49 | 600,639,100.41 | 198.79% | ||
| SECURITY BANK CORP | 3,307,188,779.95 | 1,408,759,419.03 | 234.76% | ||
| CITIBANK, N.A. | 7,261,826,949.77 | 2,889,108,388.18 | 251.35% | ||
| AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS | 2,829,852.78 | 1,092,048.97 | 259.13% | ||
| MEGA INT'L COMM'L BANK CO LTD | 218,976,963.90 | 67,450,000.00 | 324.65% | ||
| KOREA EXCHANGE BANK | 84,097,972.17 | 23,550,178.80 | 357.10% | ||
| METROPOLITAN BANK & TCO | 12,388,787,365.15 | 2,551,456,717.49 | 485.56% | ||
| ANZ BANKING GROUP LTD | 297,936,037.23 | 23,339,114.85 | 1276.55% | ||
| JP MORGAN CHASE BANK NATIONAL ASSN. | 20,244,062.00 | 734,885.22 | 2754.72% | ||
| BANGKOK BANK PUBLIC CO LTD | 219,529,150.00 | 4,714,155.55 | 4656.81% | ||
| INTERNATIONALE NEDERLANDEN GROEP BK | 122,846,326.92 | 91.40 | 134405171.68% | ||
| BANK OF AMERICA N.A. | 20,400,004.00 | 4.00 | 510000100.00% | ||
| BDO ELITE SAVINGS BANK INC | 0.00 | 0.00 | NA | ||
| BDO PRIVATE BANK, INC. | 89,323,538.02 | 0.00 | NA | ||
| DEUTSCHE BANK AG | 165,610,803.32 | 0.00 | NA | ||
| ISLA BANK(A THRIFT BANK) INC | 4,290,580.33 | 0.00 | NA | ||
| MIZUHO BANK LTD - MANILA BRANCH | 329,984,154.78 | 0.00 | NA | ||
| THE BNK OF TOKYO-MITSUBISHI UFJ LTD | 383,710,030.46 | 0.00 | NA | ||
| Grand Total | 155,005,474,039.38 | 124,667,684,377.93 | 124.33% | ||
Source: www.bsp.gov.ph
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