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 March 31, 2015:
- United Coconut Planters Bank (Deferred Charges of 42.50% of SE)
- Planters Development Bank (Deferred Charges of 35.97% of SE)
- Bataan Development Bank (Deferred Charges of 14.31% of SE)
- City Savings Bank (Deferred Charges of 5.45% of SE)
- Bank of Commerce (Deferred Charges of 2.17% of SE)
- Card SME Bank, Inc. (Deferred Charges of 0.62% of SE)
- Wealth Development Bank Corporation (Deferred Charges of 0.46% of SE)
- Banco De Oro Unibank, Inc. (Deferred Charges of 0.03% 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, 2014:
- United Coconut Planters Bank (Distressed Ratio of 441.42%)
- Planters Development Bank (Distressed Ratio of 191.46%)
- Bank of Commerce (Distressed Ratio of 184.58%)
- Bataan Development Bank (Distressed Ratio of 144.69%)
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, 2015:
- United Coconut Planters Bank (Deferred Charges of 42.50% of SE)
- Planters Development Bank (Deferred Charges of 35.97% of SE)
Retained Earnings
Only five banks have sufficient Retained Earnings (RE) to absorb their unbooked losses as of March 31, 2015:
- City Savings Bank (Deferred Charges 7.37% of RE)
- Card SME Bank Inc (Deferred Charges 3.04% of RE)
- Wealth Development Bank Corporation (Deferred Charges 1.88% of RE)
- BDO Unibank (Deferred Charges of 0.07% of RE)
- Farmers Savings and Loan Bank, Inc. (Deferred Charges of 0.01% of RE)
- United Coconut Planters Bank (Deferred Charges of 133.32% of RE)
Two of the banks with Deferred Charges have negative Retained Earnings. As such, they do not have the capacity to absorb additional losses.
- Bank of Commerce (Retained Earnings of - Php 4.300 billion vs. Deferred Charges of Php 341.683 million.
- Planters Development Bank (Retained Earnings of - PhP 778.862 million vs. Deferred Charges of Php 1.341 billion
For more information of these Deferred Charges, please consult the previous blog posts: "Overstated Capital of Philippine Banks as of December 31, 2014", "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 | |||||||
March 31, 2015 | |||||||
Bank | Type of Bank | Deferred Charges | Unbooked Losses | Total Deferred Charges | Stockholder's Equity | Adjusted SE | Impact on SE |
UNITED COCONUT PLANTERS BANK | U/KB | 8,284,746,199.58 | 0.00 | 8,284,746,199.58 | 19,493,624,037.54 | 11,208,877,837.96 | 42.50% |
PLANTERS DEVELOPMENT BANK | Thrift | 1,341,386,981.98 | 0.00 | 1,341,386,981.98 | 3,729,311,188.88 | 2,387,924,206.90 | 35.97% |
BATAAN DEVELOPMENT BANK | Thrift | 10,240,410.34 | 0.00 | 10,240,410.34 | 71,577,676.61 | 61,337,266.27 | 14.31% |
CITY SAVINGS BANK | Thrift | 357,255,092.15 | 0.00 | 357,255,092.15 | 6,554,464,780.82 | 6,197,209,688.67 | 5.45% |
BANK OF COMMERCE | U/KB | 341,683,392.90 | 0.00 | 341,683,392.90 | 15,776,044,047.26 | 15,434,360,654.36 | 2.17% |
CARD SME BANK INC A THRIFT BANK | Thrift | 2,879,678.96 | 0.00 | 2,879,678.96 | 464,160,148.68 | 461,280,469.72 | 0.62% |
WEALTH DEVELOPMENT BANK CORPORATION | Thrift | 1,929,202.52 | 0.00 | 1,929,202.52 | 419,331,125.73 | 417,401,923.21 | 0.46% |
BDO UNIBANK INC | U/KB | 49,288,522.93 | 0.00 | 49,288,522.93 | 180,124,872,745.52 | 180,075,584,222.59 | 0.03% |
FARMERS SAVINGS & LOAN BANK INC | Thrift | 5,724.13 | 0.00 | 5,724.13 | 109,971,561.50 | 109,965,837.37 | 0.01% |
Grand Total | 10,389,415,205.49 | 0.00 | 10,389,415,205.49 | 226,743,357,312.54 | 216,353,942,107.05 | 4.58% |
Philippine Banking System | ||||
Deferred Charges Not Yet Written Down | ||||
Impact on Retained Earnings | ||||
In Php | ||||
March 31, 2015 | ||||
Bank | Total Deferred Charges | RE | Adjusted RE | Impact on RE |
UNITED COCONUT PLANTERS BANK | 8,284,746,199.58 | 6,214,106,212.76 | -2,070,639,986.82 | 133.32% |
BATAAN DEVELOPMENT BANK | 10,240,410.34 | 11,010,707.53 | 770,297.19 | 93.00% |
CITY SAVINGS BANK | 357,255,092.15 | 4,849,480,670.85 | 4,492,225,578.70 | 7.37% |
CARD SME BANK INC A THRIFT BANK | 2,879,678.96 | 94,831,513.84 | 91,951,834.88 | 3.04% |
WEALTH DEVELOPMENT BANK CORPORATION | 1,929,202.52 | 102,753,465.78 | 100,824,263.26 | 1.88% |
BDO UNIBANK INC | 49,288,522.93 | 69,075,712,138.22 | 69,026,423,615.29 | 0.07% |
FARMERS SAVINGS & LOAN BANK INC | 5,724.13 | 43,662,699.65 | 43,656,975.52 | 0.01% |
BANK OF COMMERCE | 341,683,392.90 | -4,299,684,940.48 | -4,641,368,333.38 | -7.95% |
PLANTERS DEVELOPMENT BANK | 1,341,386,981.98 | -778,861,623.78 | -2,120,248,605.76 | -172.22% |
Grand Total | 10,389,415,205.49 | 75,313,010,844.37 | 64,923,595,638.88 | 13.79% |
Source: www.bsp.gov.ph
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