On the face of it, no.
At 1.60% as of December 31, 2015, NPLs as a percentage of Total Loan Portfolios are at historic lows.
While the NPL coverage ratio is near historic highs at 141.07% as of December 31, 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 4.75% 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 31, 2015, LLR/TLP stands at 2.26%, 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 | |||||
| December 31, 2015 | |||||
| Bank | Loan Loss Provisions | Gross NPLs | NPL Coverage Ratio | ||
| COMSAVINGS BANK | 19,724,008.81 | 124,154,088.77 | 15.89% | ||
| METRO CEBU PUBLIC SAVINGS BANK | 6,531,235.84 | 33,328,159.81 | 19.60% | ||
| PROGRESS SAVINGS AND LOAN BANK INC | 242,689.05 | 1,102,802.67 | 22.01% | ||
| LUZON DEVELOPMENT BANK | 105,724,528.33 | 465,963,002.07 | 22.69% | ||
| PHIL STAR DEVELOPMENT BANK INC | 6,454,022.91 | 22,292,920.67 | 28.95% | ||
| UNITED OVERSEAS BANK PHILIPPINES | 6,905,369.98 | 22,519,095.59 | 30.66% | ||
| 1ST VALLEY BANK INC A DEVELOPMENT BANK | 139,698,714.30 | 447,288,313.85 | 31.23% | ||
| TOWER DEVELOPMENT BANK | 7,244,319.21 | 22,519,095.59 | 32.17% | ||
| MARITIME SAVINGS BANK CORPORATION | 6,948,645.24 | 21,429,848.76 | 32.43% | ||
| LIFE SAVINGS BANK INC | 3,475,321.67 | 10,440,713.55 | 33.29% | ||
| ENTERPRISE BANK INC (A THRIFT BANK) | 55,353,813.66 | 162,793,960.21 | 34.00% | ||
| CITYSTATE SAVINGS BANK INC | 31,443,417.86 | 87,712,793.79 | 35.85% | ||
| CENTURY SAVINGS BANK CORPORATION | 13,586,035.87 | 37,352,904.08 | 36.37% | ||
| EQUICOM SAVINGS BANK INC | 214,542,480.36 | 581,436,111.35 | 36.90% | ||
| PLANTERS DEVELOPMENT BANK | 1,285,189,662.65 | 3,008,786,024.04 | 42.71% | ||
| BUSINESS AND CONSUMERS BANK (A DB) | 5,507,683.45 | 12,399,731.76 | 44.42% | ||
| CHINA BANK SAVINGS INC | 598,504,758.61 | 1,344,409,655.05 | 44.52% | ||
| BATAAN DEVELOPMENT BANK | 22,746,786.84 | 50,469,862.82 | 45.07% | ||
| PRODUCERS SAVINGS BANK CORPORATION | 133,647,531.72 | 285,328,808.37 | 46.84% | ||
| BANK ONE SAVINGS AND TRUST CORP. | 15,533,602.53 | 33,086,905.40 | 46.95% | ||
| DUMAGUETE CITY DEV BANK INC | 19,017,133.41 | 39,719,065.35 | 47.88% | ||
| PAMPANGA DEVELOPMENT BANK | 23,348,613.34 | 47,138,769.45 | 49.53% | ||
| SUN SAVINGS BANK INC | 11,552,765.30 | 22,519,095.59 | 51.30% | ||
| INTER-ASIA DEVELOPMENT BANK | 3,871,804.73 | 7,023,615.99 | 55.13% | ||
| BANK OF MAKATI (A SAVINGS BANK) INC | 1,326,852,324.76 | 2,400,400,159.25 | 55.28% | ||
| EAST WEST BANKING CORP | 3,963,823,039.61 | 7,131,526,803.80 | 55.58% | ||
| MAYBANK PHILIPPINES INC | 1,210,527,612.98 | 2,151,171,796.44 | 56.27% | ||
| PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC) | 83,507,577.71 | 146,949,069.01 | 56.83% | ||
| NORTHPOINT DEV'T BANK INC | 60,156,533.40 | 102,772,457.86 | 58.53% | ||
| FARMERS SAVINGS & LOAN BANK INC | 31,111,610.91 | 49,918,290.15 | 62.33% | ||
| MALAYAN BANK SAVINGS AND MORT BANK INC | 215,408,627.11 | 342,282,888.27 | 62.93% | ||
| PHIL POSTAL SAVINGS BANK INC | 300,435,936.63 | 462,011,415.77 | 65.03% | ||
| RCBC SAVINGS BANK INC | 1,757,012,545.11 | 2,534,077,126.32 | 69.34% | ||
| AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS | 3,087,453.11 | 4,396,068.42 | 70.23% | ||
| STANDARD CHARTERED BANK | 1,757,174,558.25 | 2,494,964,777.72 | 70.43% | ||
| LEMERY SAVINGS & LOAN BANK, INC. | 2,481,978.31 | 3,493,496.26 | 71.05% | ||
| MALASIQUI PROGRESSIVE SLB, INC | 7,184,596.38 | 10,068,479.25 | 71.36% | ||
| PNB SAVINGS BANK | 395,631,846.53 | 527,679,432.71 | 74.98% | ||
| THE PALAWAN BANK (PALAWAN DB) INC | 17,233,742.06 | 22,519,095.59 | 76.53% | ||
| VILLAGE BANK INC (A THRIFT BANK) | 17,342,200.42 | 22,519,095.59 | 77.01% | ||
| SAMPAGUITA SAVINGS BANK INC | 17,591,087.34 | 22,519,095.59 | 78.12% | ||
| PHILIPPINE VETERANS BANK | 1,258,964,443.10 | 1,585,158,457.78 | 79.42% | ||
| UNITED COCONUT PLANTERS BANK | 4,457,676,512.04 | 5,384,830,679.52 | 82.78% | ||
| MBANK PHILIPPINES (A THRIFT BANK) INC | 40,752,474.66 | 48,998,587.50 | 83.17% | ||
| PHILIPPINE BUSINESS BANK INC A SAVINGS BANK | 948,999,640.25 | 1,133,272,108.60 | 83.74% | ||
| DUNGGANON BANK (A MICROFINANCE THRIFT BANK) INC | 22,432,583.33 | 26,629,508.90 | 84.24% | ||
| CITY SAVINGS BANK INC | 1,056,689,456.25 | 1,235,081,286.28 | 85.56% | ||
| OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK) | 41,572,669.75 | 48,429,367.11 | 85.84% | ||
| LEGAZPI SAVINGS BANK INC | 381,155,472.26 | 442,184,092.66 | 86.20% | ||
| QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK | 19,171,204.16 | 21,961,557.01 | 87.29% | ||
| FIRST CONSOLIDATED BANK INC (A PDB) | 674,907,506.79 | 757,048,403.69 | 89.15% | ||
| DEVELOPMENT BANK OF THE PHIL | 5,915,200,068.36 | 6,610,033,570.26 | 89.49% | ||
| PHIL BANK OF COMMUNICATIONS | 1,903,538,312.55 | 2,069,016,935.20 | 92.00% | ||
| QUEZON COCONUT BANK INC (A THRIFT BANK) | 951,840.81 | 1,029,502.50 | 92.46% | ||
| CORDILLERA SAVINGS BANK INC | 13,015,675.60 | 14,010,173.80 | 92.90% | ||
| PHIL SAVINGS BANK | 4,102,552,057.27 | 4,397,573,100.68 | 93.29% | ||
| ROBINSONS BANK CORPORATION | 635,442,697.25 | 676,106,852.49 | 93.99% | ||
| BPI FAMILY SAVINGS BANK INC | 5,782,951,886.50 | 6,072,649,872.13 | 95.23% | ||
| BPI DIRECT SAVINGS BANK INC | 215,894,170.04 | 212,147,520.83 | 101.77% | ||
| UNION BANK OF THE PHILS | 8,941,934,059.34 | 8,484,078,177.00 | 105.40% | ||
| OPTIMUM DEVELOPMENT BANK INC | 42,386,660.52 | 40,145,568.50 | 105.58% | ||
| PACIFIC ACE SAVINGS BANK INC | 3,751,004.85 | 3,519,880.87 | 106.57% | ||
| ASIA UNITED BANK CORPORATION | 1,445,957,517.54 | 1,348,045,781.88 | 107.26% | ||
| BANK OF COMMERCE | 2,125,244,690.23 | 1,883,473,725.81 | 112.84% | ||
| PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS | 791,707,545.03 | 700,932,401.36 | 112.95% | ||
| HONGKONG & SHANGHAI BANKING CORP | 1,157,828,240.60 | 1,006,960,615.03 | 114.98% | ||
| BATAAN SAVINGS AND LOAN BANK | 1,595,044.62 | 1,382,910.95 | 115.34% | ||
| PHIL NATIONAL BANK | 11,274,982,388.94 | 8,979,418,689.07 | 125.56% | ||
| CTBC BANK (PHILIPPINES) CORP | 471,656,967.67 | 355,322,184.41 | 132.74% | ||
| CHINA BANKING CORP | 6,733,946,305.72 | 4,998,611,550.82 | 134.72% | ||
| BANK OF THE PHIL ISLANDS | 13,024,961,598.42 | 8,088,920,117.06 | 161.02% | ||
| RIZAL COMM'L BANKING CORP | 3,558,034,678.49 | 2,200,004,235.43 | 161.73% | ||
| MERCHANTS SAVINGS & LOAN ASSN INC | 18,398,505.29 | 11,314,946.95 | 162.60% | ||
| BANK OF CHINA LIMITED-MANILA BRANCH | 314,512,349.92 | 189,040,895.91 | 166.37% | ||
| CARD SME BANK INC A THRIFT BANK | 56,894,463.93 | 33,820,537.59 | 168.22% | ||
| HSBC SAVINGS BANK(PHILS) INC | 106,642,109.67 | 63,178,946.54 | 168.79% | ||
| LAND BANK OF THE PHILIPPINES | 11,102,181,222.34 | 6,394,449,785.12 | 173.62% | ||
| BDO UNIBANK INC | 24,352,965,239.49 | 13,695,744,420.58 | 177.81% | ||
| UNIVERSITY SAVINGS BANK INC | 41,976,227.15 | 22,519,095.59 | 186.40% | ||
| PHIL TRUST COMPANY | 2,220,822,408.94 | 1,070,276,002.16 | 207.50% | ||
| HIYAS BANKING CORPORATION | 28,641,063.26 | 13,440,327.29 | 213.10% | ||
| SECURITY BANK CORP | 3,249,611,460.81 | 1,331,116,734.82 | 244.13% | ||
| KOREA EXCHANGE BANK | 59,721,674.36 | 23,550,189.24 | 253.59% | ||
| WORLD PARTNERS BANK (A THRIFT BANK) | 74,239,747.31 | 22,519,095.59 | 329.67% | ||
| METROPOLITAN BANK & TCO | 10,383,035,507.43 | 2,532,688,458.77 | 409.96% | ||
| TONGYANG SAVINGS BANK INC | 116,005,522.51 | 22,519,095.59 | 515.14% | ||
| WEALTH DEVELOPMENT BANK CORPORATION | 138,203,824.43 | 22,519,095.59 | 613.72% | ||
| BANGKOK BANK PUBLIC CO LTD | 305,490,250.00 | 48,610,175.73 | 628.45% | ||
| CITIBANK, N.A. | 5,612,001,467.50 | 837,044,060.26 | 670.45% | ||
| ANZ BANKING GROUP LTD | 203,831,230.38 | 23,339,114.85 | 873.35% | ||
| UCPB SAVINGS BANK | 541,268,197.21 | 22,519,095.59 | 2403.60% | ||
| STERLING BANK OF ASIA INC (A SAVINGS BANK) | 570,903,937.59 | 22,519,095.59 | 2535.20% | ||
| JP MORGAN CHASE BANK NATIONAL ASSN. | 20,000,000.00 | 734,885.22 | 2721.51% | ||
| ING BANK N.V. | 57,950,204.78 | 96.12 | 60289434.85% | ||
| BANK OF AMERICA N.A. | 27,700,000.00 | 4.00 | 692500000.00% | ||
| BDO PRIVATE BANK, INC. | 181,050,261.34 | 0.00 | NA | ||
| CATHAY UNITED BANK CO LTD - MANILA BRANCH | 0.00 | 0.00 | NA | ||
| DEUTSCHE BANK AG | 342,101,385.01 | 0.00 | NA | ||
| INDUSTRIAL BANK OF KOREA MANILA BRANCH | 1,225,020.00 | 0.00 | NA | ||
| ISLA BANK(A THRIFT BANK) INC | 4,290,580.33 | 0.00 | NA | ||
| MEGA INT'L COMM'L BANK CO LTD | 225,184,675.94 | 0.00 | NA | ||
| MIZUHO BANK LTD - MANILA BRANCH | 329,990,103.14 | 0.00 | NA | ||
| SHINHAN BANK - MANILA BRANCH | 1,623,570.00 | 0.00 | NA | ||
| SUMITOMO MITSUI BANKING CORPORATION-MANILA BRANCH | 521,103.52 | 0.00 | NA | ||
| THE BNK OF TOKYO-MITSUBISHI UFJ LTD | 388,210,030.46 | 0.00 | NA | ||
| Grand Total | 152,026,406,933.27 | 120,550,926,462.40 | 126.11% | ||
Source: www.bsp.gov.ph
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