On the face of it, no.
At 1.40% as of December 31, 2016, NPLs as a percentage of Total Loan Portfolios are at historic lows.
The NPL Coverage Ratio is at historic highs at 144.67% as of December 31, 2016.
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 December 31, 2016, LLR/TLP stands at 2.02%, 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 | |||||
| December 31, 2016 | |||||
| Bank | Loan Loss Provisions | Gross NPLs | NPL Coverage Ratio | ||
| PHIL POSTAL SAVINGS BANK INC | 333,047,322.48 | 2,105,663,775.71 | 15.82% | ||
| CITYSTATE SAVINGS BANK INC | 28,194,883.83 | 119,756,629.16 | 23.54% | ||
| EQUICOM SAVINGS BANK INC | 146,840,980.06 | 601,715,967.86 | 24.40% | ||
| LUZON DEVELOPMENT BANK | 140,505,149.80 | 544,175,490.99 | 25.82% | ||
| MARITIME SAVINGS BANK CORPORATION | 6,948,645.24 | 24,652,054.39 | 28.19% | ||
| LIFE SAVINGS BANK INC | 4,875,321.67 | 14,205,894.15 | 34.32% | ||
| WORLD PARTNERS BANK (A THRIFT BANK) | 43,933,367.98 | 107,415,667.13 | 40.90% | ||
| PHIL STAR DEVELOPMENT BANK INC | 8,584,607.75 | 19,238,385.28 | 44.62% | ||
| OPTIMUM DEVELOPMENT BANK INC | 44,215,809.90 | 90,959,273.89 | 48.61% | ||
| CHINA BANK SAVINGS INC | 2,173,488,033.39 | 4,293,974,170.33 | 50.62% | ||
| MALAYAN BANK SAVINGS AND MORT BANK INC | 294,054,415.63 | 574,727,293.20 | 51.16% | ||
| ENTERPRISE BANK INC (A THRIFT BANK) | 121,353,813.66 | 232,694,561.97 | 52.15% | ||
| BANK ONE SAVINGS AND TRUST CORP. | 12,136,266.46 | 23,101,952.55 | 52.53% | ||
| PAMPANGA DEVELOPMENT BANK | 26,936,446.48 | 49,744,868.65 | 54.15% | ||
| MALASIQUI PROGRESSIVE SLB, INC | 6,951,706.48 | 12,713,229.25 | 54.68% | ||
| 1ST VALLEY BANK INC A DEVELOPMENT BANK | 191,949,568.34 | 346,548,011.68 | 55.39% | ||
| WEALTH DEVELOPMENT BANK CORPORATION | 133,572,223.76 | 240,199,722.90 | 55.61% | ||
| RCBC SAVINGS BANK INC | 2,069,453,414.48 | 3,715,336,441.78 | 55.70% | ||
| METRO CEBU PUBLIC SAVINGS BANK | 12,188,817.06 | 21,100,005.39 | 57.77% | ||
| PRODUCERS SAVINGS BANK CORPORATION | 180,254,314.44 | 311,505,684.33 | 57.87% | ||
| UNIVERSITY SAVINGS BANK INC | 42,642,434.66 | 72,145,206.72 | 59.11% | ||
| CENTURY SAVINGS BANK CORPORATION | 21,061,844.89 | 34,734,041.96 | 60.64% | ||
| STANDARD CHARTERED BANK | 1,296,634,374.95 | 2,123,003,347.70 | 61.08% | ||
| AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS | 4,030,509.10 | 6,509,512.97 | 61.92% | ||
| PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC) | 93,435,088.93 | 146,519,151.74 | 63.77% | ||
| UCPB SAVINGS BANK | 622,663,549.91 | 975,156,384.32 | 63.85% | ||
| PNB SAVINGS BANK | 549,213,325.97 | 829,192,484.27 | 66.23% | ||
| STERLING BANK OF ASIA INC (A SAVINGS BANK) | 636,882,137.36 | 936,700,031.78 | 67.99% | ||
| ANZ BANKING GROUP LTD | 277,452,243.24 | 404,087,064.26 | 68.66% | ||
| EAST WEST BANKING CORP | 5,654,352,021.70 | 8,227,387,109.25 | 68.73% | ||
| NORTHPOINT DEV'T BANK INC | 85,299,972.67 | 122,915,455.83 | 69.40% | ||
| BUSINESS AND CONSUMERS BANK (A DB) | 10,375,153.50 | 13,970,890.80 | 74.26% | ||
| BATAAN DEVELOPMENT BANK | 23,381,061.33 | 31,340,481.42 | 74.60% | ||
| BANK OF MAKATI (A SAVINGS BANK) INC | 1,690,714,265.05 | 2,243,073,464.02 | 75.37% | ||
| PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS | 724,420,435.39 | 955,755,336.48 | 75.80% | ||
| BANGKO KABAYAN INC (A PRIVATE DEVELOPMENT BANK) | 30,270,872.06 | 39,444,210.03 | 76.74% | ||
| PHILIPPINE VETERANS BANK | 1,462,735,170.55 | 1,898,738,872.12 | 77.04% | ||
| UNITED COCONUT PLANTERS BANK | 4,694,474,678.64 | 5,989,286,726.79 | 78.38% | ||
| DUNGGANON BANK (A MICROFINANCE THRIFT BANK) INC | 22,353,345.69 | 28,178,352.90 | 79.33% | ||
| INTER-ASIA DEVELOPMENT BANK | 6,196,487.82 | 7,566,983.61 | 81.89% | ||
| HIYAS BANKING CORPORATION | 28,859,545.81 | 34,826,424.16 | 82.87% | ||
| MAYBANK PHILIPPINES INCORPORATED | 1,700,075,880.09 | 2,036,189,716.30 | 83.49% | ||
| CITY SAVINGS BANK INC | 1,341,372,690.55 | 1,530,120,230.40 | 87.66% | ||
| BATAAN SAVINGS AND LOAN BANK | 1,595,044.62 | 1,808,578.20 | 88.19% | ||
| PHILIPPINE BUSINESS BANK INC A SAVINGS BANK | 1,182,951,000.48 | 1,322,295,019.15 | 89.46% | ||
| LEGAZPI SAVINGS BANK INC | 401,890,347.92 | 447,417,498.87 | 89.82% | ||
| DUMAGUETE CITY DEV BANK INC | 18,933,844.50 | 20,850,370.14 | 90.81% | ||
| LEMERY SAVINGS & LOAN BANK, INC. | 2,738,284.63 | 2,987,856.52 | 91.65% | ||
| BPI FAMILY SAVINGS BANK INC | 6,971,409,756.08 | 7,497,941,572.20 | 92.98% | ||
| QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK | 20,622,537.49 | 22,071,051.75 | 93.44% | ||
| HONGKONG & SHANGHAI BANKING CORP | 748,260,867.39 | 797,673,955.04 | 93.81% | ||
| PHIL BANK OF COMMUNICATIONS | 2,159,595,324.29 | 2,259,014,990.06 | 95.60% | ||
| CORDILLERA SAVINGS BANK INC | 14,015,675.60 | 14,588,524.39 | 96.07% | ||
| PHIL SAVINGS BANK | 4,468,782,709.06 | 4,531,110,557.04 | 98.62% | ||
| BPI DIRECT BANKO INC A SAVINGS BANK | 540,016,696.62 | 547,319,743.95 | 98.67% | ||
| YUANTA SAVINGS BANK PHILIPPINES INC | 111,191,258.04 | 112,039,320.83 | 99.24% | ||
| SUN SAVINGS BANK INC | 15,438,316.50 | 15,103,167.59 | 102.22% | ||
| ROBINSONS BANK CORPORATION | 708,610,993.75 | 691,088,663.30 | 102.54% | ||
| FIRST CONSOLIDATED BANK INC (A PDB) | 630,486,394.06 | 590,763,111.01 | 106.72% | ||
| VILLAGE BANK INC (A THRIFT BANK) | 21,809,265.59 | 20,037,722.29 | 108.84% | ||
| FARMERS SAVINGS & LOAN BANK INC | 25,477,401.82 | 22,696,612.39 | 112.25% | ||
| UNION BANK OF THE PHILS | 8,777,174,140.57 | 7,778,178,634.93 | 112.84% | ||
| BANK OF COMMERCE | 2,083,915,313.03 | 1,777,798,286.62 | 117.22% | ||
| ASIA UNITED BANK CORPORATION | 1,916,602,888.31 | 1,475,266,303.18 | 129.92% | ||
| PHIL NATIONAL BANK | 11,645,626,722.87 | 8,771,559,273.58 | 132.77% | ||
| DEVELOPMENT BANK OF THE PHIL | 6,615,553,742.00 | 4,802,651,348.83 | 137.75% | ||
| MERCHANTS SAVINGS & LOAN ASSN INC | 21,430,018.40 | 15,291,332.84 | 140.14% | ||
| THE PALAWAN BANK (PALAWAN DB) INC | 21,908,732.90 | 14,849,692.88 | 147.54% | ||
| LAND BANK OF THE PHILIPPINES | 10,634,578,515.79 | 7,173,190,275.55 | 148.25% | ||
| BDO UNIBANK INC | 24,450,320,470.09 | 15,854,555,894.59 | 154.22% | ||
| CHINA BANKING CORP | 5,823,531,628.37 | 3,728,985,069.67 | 156.17% | ||
| HSBC SAVINGS BANK(PHILS) INC | 100,965,502.80 | 63,448,045.28 | 159.13% | ||
| CTBC BANK (PHILIPPINES) CORP | 745,517,901.51 | 460,786,467.63 | 161.79% | ||
| BANK OF CHINA LIMITED-MANILA BRANCH | 329,957,085.86 | 189,040,895.91 | 174.54% | ||
| CARD SME BANK INC A THRIFT BANK | 85,236,684.08 | 48,473,003.59 | 175.84% | ||
| BANK OF THE PHIL ISLANDS | 14,289,383,788.97 | 7,688,633,689.58 | 185.85% | ||
| KEB HANA BANK - MANILA BRANCH | 52,723,292.43 | 28,022,199.88 | 188.15% | ||
| RIZAL COMM'L BANKING CORP | 3,619,363,187.41 | 1,913,419,749.01 | 189.16% | ||
| PHIL TRUST COMPANY | 2,264,032,428.42 | 1,172,897,983.43 | 193.03% | ||
| SECURITY BANK CORP | 4,464,914,745.62 | 1,956,583,647.77 | 228.20% | ||
| QUEZON COCONUT BANK INC (A THRIFT BANK) | 1,225,133.86 | 440,570.84 | 278.08% | ||
| METROPOLITAN BANK & TCO | 13,049,114,638.69 | 3,683,099,014.74 | 354.30% | ||
| CITIBANK, N.A. | 3,828,457,128.45 | 869,608,224.33 | 440.25% | ||
| BANGKOK BANK PUBLIC CO LTD | 369,607,500.00 | 43,936,941.43 | 841.22% | ||
| ING BANK N.V. | 106,771,914.09 | 101.44 | 105256224.46% | ||
| BANK OF AMERICA N.A. | 27,700,000.00 | 0.00 | NA | ||
| BDO PRIVATE BANK, INC. | 182,621,734.84 | 0.00 | NA | ||
| CATHAY UNITED BANK CO LTD - MANILA BRANCH | 10,880,436.94 | 0.00 | NA | ||
| DEUTSCHE BANK AG | 77,821,547.23 | 0.00 | NA | ||
| FIRST COMMERCIAL BANK LTD MANILA BRANCH | 0.00 | 0.00 | NA | ||
| INDUSTRIAL BANK OF KOREA MANILA BRANCH | 10,271,834.32 | 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 | 410,834,943.20 | 0.00 | NA | ||
| MIZUHO BANK LTD - MANILA BRANCH | 349,964,606.89 | 0.00 | NA | ||
| SHINHAN BANK - MANILA BRANCH | 5,330,996.00 | 0.00 | NA | ||
| SUMITOMO MITSUI BANKING CORPORATION-MANILA BRANCH | 82,338,553.67 | 0.00 | NA | ||
| THE BNK OF TOKYO-MITSUBISHI UFJ LTD | 388,210,030.46 | 0.00 | NA | ||
| Grand Total | 161,909,651,400.37 | 130,563,795,522.67 | 124.01% | ||
Source: www.bsp.gov.ph
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