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Monday, February 27, 2017

An 80% Minimum NPL Coverage Ratio will Result in a Severe Undercapitalization of Some Philippine Banks - September 30, 2016

In a previous blog post called "Are Philippine Banks Under Provisioning Loan Losses? - As of September 30, 2016", we discussed the current aggregate Loan Loss Reserves (LLR) as a percentage of Total Loan Portfolio (TLP), which stood at 2.17% as of September 30, 2016, is below the historic average of 4.14% for the last thirty-four years.  Despite NPLs being at or near historic lows, some banks still have not adequately provisioned for loan losses.  Their NPL Coverage Ratios are below the ideal ratio of 100% and even below the suggested minimum of 80% NPL Coverage Ratio.

As the table below suggests, it seems that around 41 banks (highlighted in yellow, failed banks in red) fall into this deficiency.

Philippine Banking System
NPL Coverage Ratio
September 30, 2016








Bank Loan Loss Provisions Gross NPLs NPL Coverage Ratio
METRO CEBU PUBLIC SAVINGS BANK 4,953,358.32 25,320,036.75 19.56%
PHIL POSTAL SAVINGS BANK INC 328,380,655.72 1,640,187,915.83 20.02%
CITYSTATE SAVINGS BANK INC 28,480,676.03 140,511,602.44 20.27%
MARITIME SAVINGS BANK CORPORATION 6,948,645.24 27,430,460.04 25.33%
LUZON DEVELOPMENT BANK 133,271,068.67 517,066,469.62 25.77%
ENTERPRISE BANK INC (A THRIFT BANK) 55,353,813.66 198,058,282.51 27.95%
EQUICOM SAVINGS BANK INC 190,837,584.24 636,811,214.24 29.97%
LIFE SAVINGS BANK INC 4,675,321.67 13,535,320.94 34.54%
OPTIMUM DEVELOPMENT BANK INC 44,215,809.90 109,784,239.74 40.28%
PRODUCERS SAVINGS BANK CORPORATION 177,261,734.04 426,272,143.49 41.58%
PHIL STAR DEVELOPMENT BANK INC 8,487,331.25 20,032,181.12 42.37%
UNIVERSITY SAVINGS BANK INC 42,876,227.15 89,865,132.18 47.71%
ANZ BANKING GROUP LTD 196,768,661.88 405,519,723.90 48.52%
CHINA BANK SAVINGS INC 2,186,394,027.84 4,502,299,081.60 48.56%
WEALTH DEVELOPMENT BANK CORPORATION 125,451,510.11 252,365,406.44 49.71%
MICROFINANCE MAXIMUM SB INC 2,956,657.50 5,801,774.13 50.96%
PAMPANGA DEVELOPMENT BANK 27,878,613.34 54,092,503.50 51.54%
BANK ONE SAVINGS AND TRUST CORP. 12,136,266.46 23,103,734.39 52.53%
WORLD PARTNERS BANK (A THRIFT BANK) 74,239,747.31 137,429,309.44 54.02%
UCPB SAVINGS BANK 541,991,838.02 985,724,574.61 54.98%
MALAYAN BANK SAVINGS AND MORT BANK INC 186,090,171.22 335,052,548.11 55.54%
BATAAN DEVELOPMENT BANK 22,746,786.84 40,443,319.15 56.24%
PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS 841,716,517.70 1,472,388,536.66 57.17%
DUMAGUETE CITY DEV BANK INC 18,933,844.50 32,589,350.10 58.10%
1ST VALLEY BANK INC A DEVELOPMENT BANK 260,762,192.35 447,820,468.00 58.23%
CENTURY SAVINGS BANK CORPORATION 21,061,844.89 35,947,320.47 58.59%
EAST WEST BANKING CORP 5,087,326,013.70 8,502,163,356.59 59.84%
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC) 93,434,088.93 151,518,194.30 61.67%
RCBC SAVINGS BANK INC 2,252,012,545.11 3,563,204,986.32 63.20%
STERLING BANK OF ASIA INC (A SAVINGS BANK) 623,648,572.57 972,054,930.79 64.16%
PNB SAVINGS BANK 503,142,862.89 768,619,166.47 65.46%
STANDARD CHARTERED BANK 1,581,601,894.93 2,277,960,050.89 69.43%
UNITED COCONUT PLANTERS BANK 4,386,715,924.52 6,312,050,076.31 69.50%
OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK) 70,536,847.02 100,478,233.20 70.20%
INTER-ASIA DEVELOPMENT BANK 6,108,593.42 8,568,049.77 71.30%
BANK OF MAKATI (A SAVINGS BANK) INC 1,279,993,349.29 1,715,453,783.07 74.62%
PHILIPPINE VETERANS BANK 1,442,288,794.21 1,920,148,532.73 75.11%
PHILIPPINE BUSINESS BANK INC A SAVINGS BANK 1,102,951,000.48 1,467,430,873.86 75.16%
BUSINESS AND CONSUMERS BANK (A DB) 12,228,943.90 15,921,373.30 76.81%
NORTHPOINT DEV'T BANK INC 77,237,597.04 100,382,035.16 76.94%
LEMERY SAVINGS & LOAN BANK, INC. 2,694,843.51 3,502,078.88 76.95%
MALASIQUI PROGRESSIVE SLB, INC 6,951,706.48 8,390,479.25 82.85%
BPI FAMILY SAVINGS BANK INC 6,824,385,724.35 8,123,032,981.64 84.01%
FARMERS SAVINGS & LOAN BANK INC 31,764,661.83 37,783,485.46 84.07%
BATAAN SAVINGS AND LOAN BANK 1,595,044.62 1,889,208.47 84.43%
VILLAGE BANK INC (A THRIFT BANK) 21,809,265.59 25,552,620.63 85.35%
CITY SAVINGS BANK INC 1,241,782,018.05 1,404,431,487.61 88.42%
LEGAZPI SAVINGS BANK INC 401,890,347.92 450,487,116.92 89.21%
MAYBANK PHILIPPINES INC 2,166,385,398.32 2,404,370,029.81 90.10%
BANGKO KABAYAN INC 30,885,652.55 34,185,431.96 90.35%
DEVELOPMENT BANK OF THE PHIL 6,194,181,739.95 6,851,069,030.92 90.41%
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK 19,590,734.06 21,604,255.85 90.68%
PHIL BANK OF COMMUNICATIONS 2,109,948,584.26 2,283,081,027.49 92.42%
PACIFIC ACE SAVINGS BANK INC 3,012,326.51 3,201,492.69 94.09%
ROBINSONS BANK CORPORATION 676,652,992.13 713,818,768.00 94.79%
BPI GLOBE BANKO INC A SAVINGS BANK 327,963,029.70 344,373,998.27 95.23%
SUN SAVINGS BANK INC 14,676,397.29 15,302,238.90 95.91%
DUNGGANON BANK (A MICROFINANCE THRIFT BANK) INC 23,001,810.53 23,839,161.85 96.49%
THE PALAWAN BANK (PALAWAN DB) INC 19,519,468.15 20,180,212.89 96.73%
PHIL SAVINGS BANK 4,356,216,926.02 4,475,439,320.31 97.34%
TOWER DEVELOPMENT BANK 7,347,915.50 7,396,175.06 99.35%
CORDILLERA SAVINGS BANK INC 13,515,675.60 13,254,102.64 101.97%
YUANTA SAVINGS BANK PHILIPPINES INC 109,302,436.49 103,695,194.06 105.41%
UNION BANK OF THE PHILS 8,560,545,350.24 7,951,594,741.54 107.66%
ASIA UNITED BANK CORPORATION 2,035,324,952.52 1,875,670,487.58 108.51%
BPI DIRECT SAVINGS BANK INC 219,134,074.98 191,837,077.75 114.23%
HONGKONG & SHANGHAI BANKING CORP 957,725,660.08 806,160,007.79 118.80%
BANK OF COMMERCE 2,256,358,205.52 1,855,644,519.55 121.59%
CTBC BANK (PHILIPPINES) CORP 615,769,619.71 485,595,806.28 126.81%
LAND BANK OF THE PHILIPPINES 10,915,939,152.48 8,084,444,246.85 135.02%
PHIL NATIONAL BANK 11,742,548,354.20 8,518,905,151.86 137.84%
CHINA BANKING CORP 6,406,694,336.24 4,609,661,975.35 138.98%
FIRST CONSOLIDATED BANK INC (A PDB) 682,198,923.56 448,961,979.40 151.95%
BDO UNIBANK INC 24,165,959,516.61 15,455,700,305.05 156.36%
HSBC SAVINGS BANK(PHILS) INC 95,786,577.54 61,066,188.09 156.86%
BANK OF THE PHIL ISLANDS 13,589,521,070.41 7,996,789,257.69 169.94%
RIZAL COMM'L BANKING CORP 3,318,514,885.24 1,939,990,833.94 171.06%
CARD SME BANK INC A THRIFT BANK 80,342,981.79 45,647,812.97 176.01%
BANK OF CHINA LIMITED-MANILA BRANCH 346,774,298.12 189,040,895.91 183.44%
SECURITY BANK CORP 4,099,868,175.52 2,232,110,933.80 183.68%
PHIL TRUST COMPANY 2,237,032,428.42 1,179,597,115.48 189.64%
HIYAS BANKING CORPORATION 28,859,545.81 13,845,821.64 208.44%
QUEZON COCONUT BANK INC (A THRIFT BANK) 1,350,781.52 604,828.80 223.33%
KOREA EXCHANGE BANK 52,187,086.00 23,050,195.00 226.41%
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS 3,977,150.93 1,092,048.97 364.19%
METROPOLITAN BANK & TCO 10,853,284,173.86 2,689,483,124.87 403.55%
CITIBANK, N.A. 5,594,258,940.93 788,325,974.03 709.64%
BANGKOK BANK PUBLIC CO LTD 343,398,250.00 45,436,941.43 755.77%
ING BANK N.V. 67,469,911.66 99.00 68151425.92%
BANK OF AMERICA N.A. 27,700,000.00 0.00 NA
BDO PRIVATE BANK, INC. 181,900,983.84 0.00 NA
CATHAY UNITED BANK CO LTD - MANILA BRANCH 7,913,842.84 0.00 NA
DEUTSCHE BANK AG 94,656,413.25 0.00 NA
INDUSTRIAL BANK OF KOREA MANILA BRANCH 8,817,034.68 0.00 NA
ISLA BANK(A THRIFT BANK) INC 4,290,580.33 0.00 NA
JP MORGAN CHASE BANK NATIONAL ASSN. 19,265,114.78 0.00 NA
MEGA INT'L COMM'L BANK CO LTD 284,736,230.00 0.00 NA
MERCHANTS SAVINGS & LOAN ASSN INC 0.00 NA NA
MIZUHO BANK LTD - MANILA BRANCH 371,984,357.75 0.00 NA
SAMPAGUITA SAVINGS BANK INC 0.00 NA NA
SHINHAN BANK - MANILA BRANCH 4,319,050.00 0.00 NA
SUMITOMO MITSUI BANKING CORPORATION-MANILA BRANCH 63,308,100.00 0.00 NA
THE BNK OF TOKYO-MITSUBISHI UFJ LTD 388,210,030.46 0.00 NA
TONGYANG SAVINGS BANK INC 0.00 NA NA
UNITED OVERSEAS BANK LIMITED MANILA BRANCH 6,778,051.65 0.00 NA
Grand Total 159,403,876,826.74 135,311,544,562.34 117.81%



Raising the NPL Coverage Ratio to a minimum of 80% will entail additional loan loss provisions for some banks that could eat into a substantial chunk (20% or more) of their Stockholder's Equity.  Based on the table below, seven banks will be severely affected:


Philippine Banking System
Impact on SE of Minimum Loan Loss Provisions
September 30, 2016










Bank Gross NPLs Minimum Loan Loss Provisions at 80% NPL Coverage Ratio Stockholder's Equity Impact on SE
PHIL POSTAL SAVINGS BANK INC 1,640,187,915.83 1,312,150,332.66 1,058,216,633.31 -92.96%
LUZON DEVELOPMENT BANK 517,066,469.62 413,653,175.70 404,058,012.13 -69.39%
EQUICOM SAVINGS BANK INC 636,811,214.24 509,448,971.39 626,758,730.90 -50.83%
MARITIME SAVINGS BANK CORPORATION 27,430,460.04 21,944,368.03 39,925,577.13 -37.56%
ENTERPRISE BANK INC (A THRIFT BANK) 198,058,282.51 158,446,626.01 292,355,245.38 -35.26%
WORLD PARTNERS BANK (A THRIFT BANK) 137,429,309.44 109,943,447.55 115,938,824.05 -30.80%
METRO CEBU PUBLIC SAVINGS BANK 25,320,036.75 20,256,029.40 58,630,483.01 -26.10%
PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS 1,472,388,536.66 1,177,910,829.33 1,850,946,782.29 -18.16%
CHINA BANK SAVINGS INC 4,502,299,081.60 3,601,839,265.28 7,821,210,951.53 -18.10%
WEALTH DEVELOPMENT BANK CORPORATION 252,365,406.44 201,892,325.15 508,836,382.27 -15.02%
CITYSTATE SAVINGS BANK INC 140,511,602.44 112,409,281.95 582,910,405.56 -14.40%
OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK) 100,478,233.20 80,382,586.56 74,224,506.93 -13.26%
BATAAN DEVELOPMENT BANK 40,443,319.15 32,354,655.32 75,400,409.55 -12.74%
PAMPANGA DEVELOPMENT BANK 54,092,503.50 43,274,002.80 131,058,660.90 -11.75%
MICROFINANCE MAXIMUM SB INC 5,801,774.13 4,641,419.30 15,535,135.56 -10.84%
PRODUCERS SAVINGS BANK CORPORATION 426,272,143.49 341,017,714.79 1,523,530,979.32 -10.75%
LIFE SAVINGS BANK INC 13,535,320.94 10,828,256.75 64,374,895.34 -9.56%
UCPB SAVINGS BANK 985,724,574.61 788,579,659.69 2,621,729,090.68 -9.41%
PHIL STAR DEVELOPMENT BANK INC 20,032,181.12 16,025,744.90 84,143,922.59 -8.96%
MALAYAN BANK SAVINGS AND MORT BANK INC 335,052,548.11 268,042,038.49 1,004,429,782.08 -8.16%
1ST VALLEY BANK INC A DEVELOPMENT BANK 447,820,468.00 358,256,374.40 1,364,367,929.78 -7.15%
UNIVERSITY SAVINGS BANK INC 89,865,132.18 71,892,105.74 409,195,561.92 -7.09%
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC) 151,518,194.30 121,214,555.44 417,720,105.11 -6.65%
STERLING BANK OF ASIA INC (A SAVINGS BANK) 972,054,930.79 777,643,944.63 2,587,484,013.68 -5.95%
RCBC SAVINGS BANK INC 3,563,204,986.32 2,850,563,989.06 10,158,403,672.58 -5.89%
EAST WEST BANKING CORP 8,502,163,356.59 6,801,730,685.27 31,685,632,764.13 -5.41%
OPTIMUM DEVELOPMENT BANK INC 109,784,239.74 87,827,391.79 843,689,148.13 -5.17%
STANDARD CHARTERED BANK 2,277,960,050.89 1,822,368,040.71 7,017,719,822.55 -3.43%
UNITED COCONUT PLANTERS BANK 6,312,050,076.31 5,049,640,061.05 21,411,774,394.94 -3.10%
ANZ BANKING GROUP LTD 405,519,723.90 324,415,779.12 4,541,699,215.58 -2.81%
DUMAGUETE CITY DEV BANK INC 32,589,350.10 26,071,480.08 266,977,938.85 -2.67%
PHILIPPINE VETERANS BANK 1,920,148,532.73 1,536,118,826.18 4,478,437,038.24 -2.10%
BANK OF MAKATI (A SAVINGS BANK) INC 1,715,453,783.07 1,372,363,026.46 6,355,580,191.55 -1.45%
INTER-ASIA DEVELOPMENT BANK 8,568,049.77 6,854,439.82 60,800,589.82 -1.23%
BANK ONE SAVINGS AND TRUST CORP. 23,103,734.39 18,482,987.51 570,575,638.03 -1.11%
PNB SAVINGS BANK 768,619,166.47 614,895,333.18 11,413,970,024.36 -0.98%
NORTHPOINT DEV'T BANK INC 100,382,035.16 80,305,628.13 347,512,047.45 -0.88%
CENTURY SAVINGS BANK CORPORATION 35,947,320.47 28,757,856.38 977,205,775.87 -0.79%
PHILIPPINE BUSINESS BANK INC A SAVINGS BANK 1,467,430,873.86 1,173,944,699.09 9,783,294,718.66 -0.73%
BUSINESS AND CONSUMERS BANK (A DB) 15,921,373.30 12,737,098.64 80,166,313.16 -0.63%
LEMERY SAVINGS & LOAN BANK, INC. 3,502,078.88 2,801,663.10 78,768,063.24 -0.14%
BATAAN SAVINGS AND LOAN BANK 1,889,208.47 1,511,366.78 58,264,413.67 0.14%
SHINHAN BANK - MANILA BRANCH 0.00 0.00 2,181,650,622.30 0.20%
UNITED OVERSEAS BANK LIMITED MANILA BRANCH 0.00 0.00 2,410,100,420.13 0.28%
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK 21,604,255.85 17,283,404.68 655,995,854.61 0.35%
CATHAY UNITED BANK CO LTD - MANILA BRANCH 0.00 0.00 2,124,713,929.75 0.37%
INDUSTRIAL BANK OF KOREA MANILA BRANCH 0.00 0.00 2,179,547,384.17 0.40%
MALASIQUI PROGRESSIVE SLB, INC 8,390,479.25 6,712,383.40 52,893,282.63 0.45%
SUMITOMO MITSUI BANKING CORPORATION-MANILA BRANCH 0.00 0.00 12,894,505,582.44 0.49%
ISLA BANK(A THRIFT BANK) INC 0.00 0.00 663,130,458.76 0.65%
PACIFIC ACE SAVINGS BANK INC 3,201,492.69 2,561,194.15 67,968,259.21 0.66%
BANGKO KABAYAN INC 34,185,431.96 27,348,345.57 455,487,809.33 0.78%
ROBINSONS BANK CORPORATION 713,818,768.00 571,055,014.40 12,573,381,884.01 0.84%
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS 1,092,048.97 873,639.18 313,260,984.02 0.99%
TOWER DEVELOPMENT BANK 7,396,175.06 5,916,940.05 123,987,587.27 1.15%
CITY SAVINGS BANK INC 1,404,431,487.61 1,123,545,190.09 9,627,879,435.92 1.23%
FARMERS SAVINGS & LOAN BANK INC 37,783,485.46 30,226,788.37 117,906,642.16 1.30%
BPI FAMILY SAVINGS BANK INC 8,123,032,981.64 6,498,426,385.31 24,630,504,141.58 1.32%
BANK OF AMERICA N.A. 0.00 0.00 2,091,322,952.20 1.32%
JP MORGAN CHASE BANK NATIONAL ASSN. 0.00 0.00 1,312,606,965.00 1.47%
QUEZON COCONUT BANK INC (A THRIFT BANK) 604,828.80 483,863.04 58,577,305.35 1.48%
DEVELOPMENT BANK OF THE PHIL 6,851,069,030.92 5,480,855,224.74 46,153,823,955.40 1.55%
SUN SAVINGS BANK INC 15,302,238.90 12,241,791.12 147,120,131.74 1.65%
VILLAGE BANK INC (A THRIFT BANK) 25,552,620.63 20,442,096.50 81,097,139.42 1.69%
KOREA EXCHANGE BANK 23,050,195.00 18,440,156.00 1,618,173,459.43 2.09%
MAYBANK PHILIPPINES INC 2,404,370,029.81 1,923,496,023.85 11,459,762,757.56 2.12%
HONGKONG & SHANGHAI BANKING CORP 806,160,007.79 644,928,006.23 14,469,407,938.09 2.16%
CORDILLERA SAVINGS BANK INC 13,254,102.64 10,603,282.11 132,182,802.36 2.20%
ASIA UNITED BANK CORPORATION 1,875,670,487.58 1,500,536,390.06 22,694,519,662.37 2.36%
SECURITY BANK CORP 2,232,110,933.80 1,785,688,747.04 95,445,926,178.92 2.42%
HSBC SAVINGS BANK(PHILS) INC 61,066,188.09 48,852,950.47 1,895,120,326.94 2.48%
YUANTA SAVINGS BANK PHILIPPINES INC 103,695,194.06 82,956,155.25 997,565,754.30 2.64%
ING BANK N.V. 99.00 79.20 2,472,002,251.34 2.73%
PHIL BANK OF COMMUNICATIONS 2,283,081,027.49 1,826,464,821.99 10,035,381,618.31 2.82%
RIZAL COMM'L BANKING CORP 1,939,990,833.94 1,551,992,667.15 60,497,738,050.16 2.92%
DEUTSCHE BANK AG 0.00 0.00 3,057,324,212.59 3.10%
CTBC BANK (PHILIPPINES) CORP 485,595,806.28 388,476,645.02 7,038,190,699.89 3.23%
BDO PRIVATE BANK, INC. 0.00 0.00 5,530,263,921.85 3.29%
UNION BANK OF THE PHILS 7,951,594,741.54 6,361,275,793.23 60,864,429,577.76 3.61%
BPI DIRECT SAVINGS BANK INC 191,837,077.75 153,469,662.20 1,771,503,589.44 3.71%
DUNGGANON BANK (A MICROFINANCE THRIFT BANK) INC 23,839,161.85 19,071,329.48 105,260,339.26 3.73%
PHIL SAVINGS BANK 4,475,439,320.31 3,580,351,456.25 19,348,131,817.30 4.01%
BANK OF THE PHIL ISLANDS 7,996,789,257.69 6,397,431,406.15 160,250,998,256.40 4.49%
METROPOLITAN BANK & TCO 2,689,483,124.87 2,151,586,499.90 192,439,269,508.81 4.52%
CHINA BANKING CORP 4,609,661,975.35 3,687,729,580.28 57,928,346,393.89 4.69%
PHIL TRUST COMPANY 1,179,597,115.48 943,677,692.38 27,533,789,981.24 4.70%
PHIL NATIONAL BANK 8,518,905,151.86 6,815,124,121.49 101,895,482,350.76 4.84%
BANK OF COMMERCE 1,855,644,519.55 1,484,515,615.64 15,874,738,964.29 4.86%
LAND BANK OF THE PHILIPPINES 8,084,444,246.85 6,467,555,397.48 91,117,891,955.27 4.88%
BDO UNIBANK INC 15,455,700,305.05 12,364,560,244.04 214,669,254,074.54 5.50%
CARD SME BANK INC A THRIFT BANK 45,647,812.97 36,518,250.38 658,722,626.30 6.65%
THE PALAWAN BANK (PALAWAN DB) INC 20,180,212.89 16,144,170.31 45,345,870.51 7.44%
BANK OF CHINA LIMITED-MANILA BRANCH 189,040,895.91 151,232,716.73 2,540,023,753.67 7.70%
LEGAZPI SAVINGS BANK INC 450,487,116.92 360,389,693.54 497,452,769.19 8.34%
THE BNK OF TOKYO-MITSUBISHI UFJ LTD 0.00 0.00 4,616,507,682.90 8.41%
FIRST CONSOLIDATED BANK INC (A PDB) 448,961,979.40 359,169,583.52 3,718,689,279.76 8.69%
BANGKOK BANK PUBLIC CO LTD 45,436,941.43 36,349,553.14 3,152,975,067.89 9.74%
HIYAS BANKING CORPORATION 13,845,821.64 11,076,657.31 151,955,107.40 11.70%
MIZUHO BANK LTD - MANILA BRANCH 0.00 0.00 2,752,197,686.87 13.52%
MEGA INT'L COMM'L BANK CO LTD 0.00 0.00 1,881,123,285.21 15.14%
CITIBANK, N.A. 788,325,974.03 630,660,779.22 13,062,838,862.23 38.00%
BPI GLOBE BANKO INC A SAVINGS BANK 344,373,998.27 275,499,198.62 7,992,434.34 656.42%
MERCHANTS SAVINGS & LOAN ASSN INC NA NA NA NA
SAMPAGUITA SAVINGS BANK INC NA NA NA NA
TONGYANG SAVINGS BANK INC NA NA NA NA
Grand Total 135,311,544,562.34 108,249,235,649.87 1,469,009,398,388.55 3.48%


Source: www.bsp.gov.ph


Out of the seven banks highlighted in yellow, 6 banks have been regularly listed as one of the "The Top Distressed Philippine Banks as of September 30, 2016".

Philippine Postal Savings Bank Inc faces a shortfall of 92.96% of its stated stockholder's equity of Php 1,058.22 million if it were to increase its loan loss provisions to meet a minimum NPL Coverage Ratio of 80%.


Monday, February 20, 2017

Are Philippine Banks Under Provisioning Loan Losses? - As of September 30, 2016

Are Philippine banks under provisioning loan losses?

On the face of it, no.

At 1.60% as of September 30, 2016, NPLs as a percentage of Total Loan Portfolios are at historic lows.




While the NPL coverage ratio is near historic highs at 135.64% as of September 30, 2016, indicating that most banks are adequately provisioned, the ratio is starting to trend downwards and has been doing so for the past three years.



However, NPLs can go much higher than current levels.  Over the past thirty-four 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 4.68% 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 is 4.14% for the past thirty-four years.




As of September 30, 2016, LLR/TLP stands at 2.17%, which is below the historical average of 4.14%, 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, 2016








Bank Loan Loss Provisions Gross NPLs NPL Coverage Ratio
METRO CEBU PUBLIC SAVINGS BANK 4,953,358.32 25,320,036.75 19.56%
PHIL POSTAL SAVINGS BANK INC 328,380,655.72 1,640,187,915.83 20.02%
CITYSTATE SAVINGS BANK INC 28,480,676.03 140,511,602.44 20.27%
MARITIME SAVINGS BANK CORPORATION 6,948,645.24 27,430,460.04 25.33%
LUZON DEVELOPMENT BANK 133,271,068.67 517,066,469.62 25.77%
ENTERPRISE BANK INC (A THRIFT BANK) 55,353,813.66 198,058,282.51 27.95%
EQUICOM SAVINGS BANK INC 190,837,584.24 636,811,214.24 29.97%
LIFE SAVINGS BANK INC 4,675,321.67 13,535,320.94 34.54%
OPTIMUM DEVELOPMENT BANK INC 44,215,809.90 109,784,239.74 40.28%
PRODUCERS SAVINGS BANK CORPORATION 177,261,734.04 426,272,143.49 41.58%
PHIL STAR DEVELOPMENT BANK INC 8,487,331.25 20,032,181.12 42.37%
UNIVERSITY SAVINGS BANK INC 42,876,227.15 89,865,132.18 47.71%
ANZ BANKING GROUP LTD 196,768,661.88 405,519,723.90 48.52%
CHINA BANK SAVINGS INC 2,186,394,027.84 4,502,299,081.60 48.56%
WEALTH DEVELOPMENT BANK CORPORATION 125,451,510.11 252,365,406.44 49.71%
MICROFINANCE MAXIMUM SB INC 2,956,657.50 5,801,774.13 50.96%
PAMPANGA DEVELOPMENT BANK 27,878,613.34 54,092,503.50 51.54%
BANK ONE SAVINGS AND TRUST CORP. 12,136,266.46 23,103,734.39 52.53%
WORLD PARTNERS BANK (A THRIFT BANK) 74,239,747.31 137,429,309.44 54.02%
UCPB SAVINGS BANK 541,991,838.02 985,724,574.61 54.98%
MALAYAN BANK SAVINGS AND MORT BANK INC 186,090,171.22 335,052,548.11 55.54%
BATAAN DEVELOPMENT BANK 22,746,786.84 40,443,319.15 56.24%
PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS 841,716,517.70 1,472,388,536.66 57.17%
DUMAGUETE CITY DEV BANK INC 18,933,844.50 32,589,350.10 58.10%
1ST VALLEY BANK INC A DEVELOPMENT BANK 260,762,192.35 447,820,468.00 58.23%
CENTURY SAVINGS BANK CORPORATION 21,061,844.89 35,947,320.47 58.59%
EAST WEST BANKING CORP 5,087,326,013.70 8,502,163,356.59 59.84%
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC) 93,434,088.93 151,518,194.30 61.67%
RCBC SAVINGS BANK INC 2,252,012,545.11 3,563,204,986.32 63.20%
STERLING BANK OF ASIA INC (A SAVINGS BANK) 623,648,572.57 972,054,930.79 64.16%
PNB SAVINGS BANK 503,142,862.89 768,619,166.47 65.46%
STANDARD CHARTERED BANK 1,581,601,894.93 2,277,960,050.89 69.43%
UNITED COCONUT PLANTERS BANK 4,386,715,924.52 6,312,050,076.31 69.50%
OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK) 70,536,847.02 100,478,233.20 70.20%
INTER-ASIA DEVELOPMENT BANK 6,108,593.42 8,568,049.77 71.30%
BANK OF MAKATI (A SAVINGS BANK) INC 1,279,993,349.29 1,715,453,783.07 74.62%
PHILIPPINE VETERANS BANK 1,442,288,794.21 1,920,148,532.73 75.11%
PHILIPPINE BUSINESS BANK INC A SAVINGS BANK 1,102,951,000.48 1,467,430,873.86 75.16%
BUSINESS AND CONSUMERS BANK (A DB) 12,228,943.90 15,921,373.30 76.81%
NORTHPOINT DEV'T BANK INC 77,237,597.04 100,382,035.16 76.94%
LEMERY SAVINGS & LOAN BANK, INC. 2,694,843.51 3,502,078.88 76.95%
MALASIQUI PROGRESSIVE SLB, INC 6,951,706.48 8,390,479.25 82.85%
BPI FAMILY SAVINGS BANK INC 6,824,385,724.35 8,123,032,981.64 84.01%
FARMERS SAVINGS & LOAN BANK INC 31,764,661.83 37,783,485.46 84.07%
BATAAN SAVINGS AND LOAN BANK 1,595,044.62 1,889,208.47 84.43%
VILLAGE BANK INC (A THRIFT BANK) 21,809,265.59 25,552,620.63 85.35%
CITY SAVINGS BANK INC 1,241,782,018.05 1,404,431,487.61 88.42%
LEGAZPI SAVINGS BANK INC 401,890,347.92 450,487,116.92 89.21%
MAYBANK PHILIPPINES INC 2,166,385,398.32 2,404,370,029.81 90.10%
BANGKO KABAYAN INC 30,885,652.55 34,185,431.96 90.35%
DEVELOPMENT BANK OF THE PHIL 6,194,181,739.95 6,851,069,030.92 90.41%
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK 19,590,734.06 21,604,255.85 90.68%
PHIL BANK OF COMMUNICATIONS 2,109,948,584.26 2,283,081,027.49 92.42%
PACIFIC ACE SAVINGS BANK INC 3,012,326.51 3,201,492.69 94.09%
ROBINSONS BANK CORPORATION 676,652,992.13 713,818,768.00 94.79%
BPI GLOBE BANKO INC A SAVINGS BANK 327,963,029.70 344,373,998.27 95.23%
SUN SAVINGS BANK INC 14,676,397.29 15,302,238.90 95.91%
DUNGGANON BANK (A MICROFINANCE THRIFT BANK) INC 23,001,810.53 23,839,161.85 96.49%
THE PALAWAN BANK (PALAWAN DB) INC 19,519,468.15 20,180,212.89 96.73%
PHIL SAVINGS BANK 4,356,216,926.02 4,475,439,320.31 97.34%
TOWER DEVELOPMENT BANK 7,347,915.50 7,396,175.06 99.35%
CORDILLERA SAVINGS BANK INC 13,515,675.60 13,254,102.64 101.97%
YUANTA SAVINGS BANK PHILIPPINES INC 109,302,436.49 103,695,194.06 105.41%
UNION BANK OF THE PHILS 8,560,545,350.24 7,951,594,741.54 107.66%
ASIA UNITED BANK CORPORATION 2,035,324,952.52 1,875,670,487.58 108.51%
BPI DIRECT SAVINGS BANK INC 219,134,074.98 191,837,077.75 114.23%
HONGKONG & SHANGHAI BANKING CORP 957,725,660.08 806,160,007.79 118.80%
BANK OF COMMERCE 2,256,358,205.52 1,855,644,519.55 121.59%
CTBC BANK (PHILIPPINES) CORP 615,769,619.71 485,595,806.28 126.81%
LAND BANK OF THE PHILIPPINES 10,915,939,152.48 8,084,444,246.85 135.02%
PHIL NATIONAL BANK 11,742,548,354.20 8,518,905,151.86 137.84%
CHINA BANKING CORP 6,406,694,336.24 4,609,661,975.35 138.98%
FIRST CONSOLIDATED BANK INC (A PDB) 682,198,923.56 448,961,979.40 151.95%
BDO UNIBANK INC 24,165,959,516.61 15,455,700,305.05 156.36%
HSBC SAVINGS BANK(PHILS) INC 95,786,577.54 61,066,188.09 156.86%
BANK OF THE PHIL ISLANDS 13,589,521,070.41 7,996,789,257.69 169.94%
RIZAL COMM'L BANKING CORP 3,318,514,885.24 1,939,990,833.94 171.06%
CARD SME BANK INC A THRIFT BANK 80,342,981.79 45,647,812.97 176.01%
BANK OF CHINA LIMITED-MANILA BRANCH 346,774,298.12 189,040,895.91 183.44%
SECURITY BANK CORP 4,099,868,175.52 2,232,110,933.80 183.68%
PHIL TRUST COMPANY 2,237,032,428.42 1,179,597,115.48 189.64%
HIYAS BANKING CORPORATION 28,859,545.81 13,845,821.64 208.44%
QUEZON COCONUT BANK INC (A THRIFT BANK) 1,350,781.52 604,828.80 223.33%
KOREA EXCHANGE BANK 52,187,086.00 23,050,195.00 226.41%
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS 3,977,150.93 1,092,048.97 364.19%
METROPOLITAN BANK & TCO 10,853,284,173.86 2,689,483,124.87 403.55%
CITIBANK, N.A. 5,594,258,940.93 788,325,974.03 709.64%
BANGKOK BANK PUBLIC CO LTD 343,398,250.00 45,436,941.43 755.77%
ING BANK N.V. 67,469,911.66 99.00 68151425.92%
BANK OF AMERICA N.A. 27,700,000.00 0.00 NA
BDO PRIVATE BANK, INC. 181,900,983.84 0.00 NA
CATHAY UNITED BANK CO LTD - MANILA BRANCH 7,913,842.84 0.00 NA
DEUTSCHE BANK AG 94,656,413.25 0.00 NA
INDUSTRIAL BANK OF KOREA MANILA BRANCH 8,817,034.68 0.00 NA
ISLA BANK(A THRIFT BANK) INC 4,290,580.33 0.00 NA
JP MORGAN CHASE BANK NATIONAL ASSN. 19,265,114.78 0.00 NA
MEGA INT'L COMM'L BANK CO LTD 284,736,230.00 0.00 NA
MERCHANTS SAVINGS & LOAN ASSN INC 0.00 NA NA
MIZUHO BANK LTD - MANILA BRANCH 371,984,357.75 0.00 NA
SAMPAGUITA SAVINGS BANK INC 0.00 NA NA
SHINHAN BANK - MANILA BRANCH 4,319,050.00 0.00 NA
SUMITOMO MITSUI BANKING CORPORATION-MANILA BRANCH 63,308,100.00 0.00 NA
THE BNK OF TOKYO-MITSUBISHI UFJ LTD 388,210,030.46 0.00 NA
TONGYANG SAVINGS BANK INC 0.00 NA NA
UNITED OVERSEAS BANK LIMITED MANILA BRANCH 6,778,051.65 0.00 NA
Grand Total 159,403,876,826.74 135,311,544,562.34 117.81%


Source: www.bsp.gov.ph