On the face of it, no.
At 1.82% as of September 30, 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 139.74% as of September 30, 2015, 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 4.76% 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 September 30, 2015, LLR/TLP stands at 2.54%, 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, 2015 | |||||
| Bank | Loan Loss Provisions | Gross NPLs | NPL Coverage Ratio | ||
| COMSAVINGS BANK | 19,724,008.81 | 123,221,089.07 | 16.01% | ||
| LUZON DEVELOPMENT BANK | 103,174,932.20 | 547,582,729.01 | 18.84% | ||
| METRO CEBU PUBLIC SAVINGS BANK | 7,137,668.31 | 36,582,151.60 | 19.51% | ||
| LIFE SAVINGS BANK INC | 2,975,321.67 | 14,488,972.29 | 20.54% | ||
| PROGRESS SAVINGS AND LOAN BANK INC | 266,442.26 | 1,138,302.67 | 23.41% | ||
| PHIL STAR DEVELOPMENT BANK INC | 6,090,315.48 | 22,292,920.67 | 27.32% | ||
| MARITIME SAVINGS BANK CORPORATION | 6,948,645.24 | 23,490,621.98 | 29.58% | ||
| BATAAN DEVELOPMENT BANK | 17,744,276.66 | 59,198,855.12 | 29.97% | ||
| PRODUCERS SAVINGS BANK CORPORATION | 141,599,028.47 | 409,412,710.10 | 34.59% | ||
| CENTURY SAVINGS BANK CORPORATION | 13,586,035.87 | 38,199,697.52 | 35.57% | ||
| ENTERPRISE BANK INC (A THRIFT BANK) | 55,353,813.66 | 151,905,771.23 | 36.44% | ||
| DUMAGUETE CITY DEV BANK INC | 19,017,836.90 | 50,832,744.75 | 37.41% | ||
| WEALTH DEVELOPMENT BANK CORPORATION | 64,891,455.82 | 163,904,699.21 | 39.59% | ||
| 1ST VALLEY BANK INC A DEVELOPMENT BANK | 209,123,972.22 | 516,903,491.44 | 40.46% | ||
| BANK ONE SAVINGS AND TRUST CORP. | 10,033,602.53 | 24,537,234.83 | 40.89% | ||
| PLANTERS DEVELOPMENT BANK | 1,212,072,493.94 | 2,931,765,964.32 | 41.34% | ||
| MALAYAN BANK SAVINGS AND MORT BANK INC | 271,979,568.48 | 627,005,388.40 | 43.38% | ||
| EQUICOM SAVINGS BANK INC | 232,610,728.38 | 506,534,201.57 | 45.92% | ||
| CITYSTATE SAVINGS BANK INC | 32,502,296.85 | 70,501,723.90 | 46.10% | ||
| CHINA BANK SAVINGS INC | 535,708,305.28 | 1,154,621,429.72 | 46.40% | ||
| PHIL POSTAL SAVINGS BANK INC | 271,113,891.23 | 575,053,871.77 | 47.15% | ||
| OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK) | 20,783,004.84 | 43,374,617.22 | 47.92% | ||
| PAMPANGA DEVELOPMENT BANK | 25,799,591.55 | 52,287,742.08 | 49.34% | ||
| BANK OF MAKATI (A SAVINGS BANK) INC | 1,331,927,928.99 | 2,610,781,336.75 | 51.02% | ||
| BUSINESS AND CONSUMERS BANK (A DB) | 6,959,794.89 | 13,402,460.67 | 51.93% | ||
| QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK | 19,171,204.16 | 35,261,953.02 | 54.37% | ||
| FARMERS SAVINGS & LOAN BANK INC | 30,963,327.59 | 56,725,095.20 | 54.58% | ||
| LEGAZPI SAVINGS BANK INC | 239,844,089.48 | 435,027,850.38 | 55.13% | ||
| LEMERY SAVINGS & LOAN BANK, INC. | 2,348,978.31 | 4,085,048.65 | 57.50% | ||
| EAST WEST BANKING CORP | 3,635,966,364.87 | 6,229,695,832.19 | 58.37% | ||
| MAYBANK PHILIPPINES INC | 1,166,956,926.30 | 1,971,160,477.66 | 59.20% | ||
| PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC) | 81,533,577.71 | 130,578,749.00 | 62.44% | ||
| PNB SAVINGS BANK | 318,440,366.95 | 488,504,491.73 | 65.19% | ||
| QUEZON COCONUT BANK INC (A THRIFT BANK) | 758,020.98 | 1,148,628.17 | 65.99% | ||
| RCBC SAVINGS BANK INC | 1,936,509,048.17 | 2,908,210,627.05 | 66.59% | ||
| UNITED COCONUT PLANTERS BANK | 4,373,506,523.33 | 6,447,845,038.40 | 67.83% | ||
| STANDARD CHARTERED BANK | 1,722,730,702.99 | 2,492,811,180.57 | 69.11% | ||
| NORTHPOINT DEV'T BANK INC | 54,867,518.07 | 79,166,642.81 | 69.31% | ||
| AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS | 3,063,693.47 | 4,396,068.42 | 69.69% | ||
| STERLING BANK OF ASIA INC (A SAVINGS BANK) | 686,929,792.19 | 976,564,395.96 | 70.34% | ||
| PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS) | 460,431,791.62 | 649,050,437.74 | 70.94% | ||
| VILLAGE BANK INC (A THRIFT BANK) | 17,342,200.42 | 23,897,018.49 | 72.57% | ||
| TOWER DEVELOPMENT BANK | 7,365,458.10 | 9,948,254.32 | 74.04% | ||
| PHILIPPINE VETERANS BANK | 1,223,573,269.52 | 1,621,177,515.52 | 75.47% | ||
| CORDILLERA SAVINGS BANK INC | 11,630,893.78 | 14,750,568.06 | 78.85% | ||
| DEVELOPMENT BANK OF THE PHIL | 5,913,006,954.91 | 7,162,998,139.78 | 82.55% | ||
| PHILIPPINE BUSINESS BANK INC A SAVINGS BANK | 906,299,293.89 | 1,095,049,581.59 | 82.76% | ||
| DUNGGANON BANK (A MICROFINANCE THRIFT BANK) INC | 24,932,571.32 | 29,677,067.48 | 84.01% | ||
| SAMPAGUITA SAVINGS BANK INC | 17,591,087.34 | 20,300,554.29 | 86.65% | ||
| PHIL BANK OF COMMUNICATIONS | 1,745,123,768.54 | 1,975,747,874.57 | 88.33% | ||
| CITY SAVINGS BANK INC | 966,992,772.04 | 1,090,551,327.73 | 88.67% | ||
| FIRST CONSOLIDATED BANK INC (A PDB) | 613,940,204.18 | 678,188,791.54 | 90.53% | ||
| WORLD PARTNERS BANK (A THRIFT BANK) | 74,239,747.31 | 81,566,096.66 | 91.02% | ||
| ROBINSONS BANK CORPORATION | 606,694,285.18 | 658,926,680.81 | 92.07% | ||
| TONGYANG SAVINGS BANK INC | 99,568,567.62 | 107,006,408.12 | 93.05% | ||
| SUN SAVINGS BANK INC | 10,688,646.43 | 11,325,615.40 | 94.38% | ||
| PHIL SAVINGS BANK | 4,114,745,761.10 | 4,253,951,632.82 | 96.73% | ||
| ASIA UNITED BANK CORPORATION | 1,487,241,480.88 | 1,500,504,328.44 | 99.12% | ||
| MALASIQUI PROGRESSIVE SLB, INC | 7,184,596.38 | 7,205,779.25 | 99.71% | ||
| SECURITY BANK SAVINGS CORPORATION | 512,972,159.05 | 512,338,894.46 | 100.12% | ||
| THE PALAWAN BANK (PALAWAN DB) INC | 16,155,885.44 | 15,935,525.38 | 101.38% | ||
| HIYAS BANKING CORPORATION | 12,173,008.16 | 11,812,182.29 | 103.05% | ||
| BATAAN SAVINGS AND LOAN BANK | 1,595,044.62 | 1,534,482.05 | 103.95% | ||
| UCPB SAVINGS BANK | 565,740,984.99 | 542,390,954.01 | 104.31% | ||
| UNION BANK OF THE PHILS | 10,101,073,176.26 | 9,629,958,552.57 | 104.89% | ||
| BPI FAMILY SAVINGS BANK INC | 5,929,346,911.59 | 5,464,275,910.37 | 108.51% | ||
| HONGKONG & SHANGHAI BANKING CORP | 1,103,148,842.02 | 1,010,877,458.73 | 109.13% | ||
| INTER-ASIA DEVELOPMENT BANK | 7,257,850.85 | 6,599,419.63 | 109.98% | ||
| BPI DIRECT SAVINGS BANK INC | 217,882,728.92 | 185,981,696.75 | 117.15% | ||
| CHINA BANKING CORP | 6,755,662,357.02 | 5,686,188,810.45 | 118.81% | ||
| PHIL NATIONAL BANK | 11,274,771,881.96 | 9,306,235,006.50 | 121.15% | ||
| UNITED OVERSEAS BANK PHILIPPINES | 30,893,195.11 | 24,488,469.53 | 126.15% | ||
| CTBC BANK (PHILIPPINES) CORP | 450,802,037.31 | 352,143,947.69 | 128.02% | ||
| OPTIMUM DEVELOPMENT BANK INC | 42,386,660.52 | 32,049,573.03 | 132.25% | ||
| CARD SME BANK INC A THRIFT BANK | 56,654,266.77 | 39,802,023.40 | 142.34% | ||
| MERCHANTS SAVINGS & LOAN ASSN INC | 14,126,852.98 | 9,864,304.54 | 143.21% | ||
| BANK OF THE PHIL ISLANDS | 12,682,333,176.84 | 8,764,642,869.60 | 144.70% | ||
| BANK OF CHINA LIMITED-MANILA BRANCH | 283,991,437.17 | 189,040,895.91 | 150.23% | ||
| BANK OF COMMERCE | 2,739,127,069.89 | 1,804,743,357.72 | 151.77% | ||
| RIZAL COMM'L BANKING CORP | 3,426,842,964.30 | 2,216,947,364.34 | 154.57% | ||
| LAND BANK OF THE PHILIPPINES | 11,153,509,351.20 | 7,010,360,349.50 | 159.10% | ||
| UNIVERSITY SAVINGS BANK INC | 41,976,227.15 | 25,861,287.75 | 162.31% | ||
| BDO UNIBANK INC | 25,573,473,943.01 | 13,085,104,036.76 | 195.44% | ||
| HSBC SAVINGS BANK(PHILS) INC | 105,278,030.61 | 53,597,643.69 | 196.42% | ||
| PHIL TRUST COMPANY | 2,194,205,742.44 | 1,081,594,108.54 | 202.87% | ||
| SECURITY BANK CORP | 3,382,741,965.56 | 1,590,295,266.39 | 212.71% | ||
| KOREA EXCHANGE BANK | 61,707,874.24 | 23,550,187.96 | 262.03% | ||
| METROPOLITAN BANK & TCO | 12,233,887,366.96 | 2,590,456,257.63 | 472.27% | ||
| CITIBANK, N.A. | 5,629,587,778.64 | 804,821,801.62 | 699.48% | ||
| ANZ BANKING GROUP LTD | 306,550,637.66 | 23,339,114.85 | 1313.46% | ||
| JP MORGAN CHASE BANK NATIONAL ASSN. | 20,233,700.00 | 734,885.22 | 2753.31% | ||
| BANGKOK BANK PUBLIC CO LTD | 257,104,310.00 | 4,662,165.64 | 5514.70% | ||
| ING BANK N.V. | 99,413,228.87 | 95.48 | 104119426.97% | ||
| BANK OF AMERICA N.A. | 27,700,000.00 | 4.00 | 692500000.00% | ||
| BDO PRIVATE BANK, INC. | 180,861,211.90 | 0.00 | NA | ||
| DEUTSCHE BANK AG | 322,747,726.20 | 0.00 | NA | ||
| ISLA BANK(A THRIFT BANK) INC | 4,290,580.33 | 0.00 | NA | ||
| MEGA INT'L COMM'L BANK CO LTD | 230,593,001.26 | 0.00 | NA | ||
| MIZUHO BANK LTD - MANILA BRANCH | 329,980,661.97 | 0.00 | NA | ||
| SUMITOMO MITSUI BANKING CORPORATION-MANILA BRANCH | 2,000,000.00 | 0.00 | NA | ||
| THE BNK OF TOKYO-MITSUBISHI UFJ LTD | 388,210,030.46 | 0.00 | NA | ||
| Grand Total | 155,972,300,305.89 | 126,124,255,383.69 | 123.67% | ||
Source: www.bsp.gov.ph
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