On the face of it, no.
At 1.48% as of March 31, 2017, NPLs as a percentage of Total Loan Portfolios are at historic lows.
The NPL Coverage Ratio is near historic highs at 138.95% as of March 31, 2017.
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 March 31, 2017, LLR/TLP stands at 2.05%, 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 | |||||
| March 31, 2017 | |||||
| Bank | Loan Loss Provisions | Gross NPLs | NPL Coverage Ratio | ||
| PHIL POSTAL SAVINGS BANK INC | 346,322,046.48 | 2,526,517,914.79 | 13.71% | ||
| CENTURY SAVINGS BANK CORPORATION | 19,702,529.95 | 117,161,921.87 | 16.82% | ||
| LUZON DEVELOPMENT BANK | 150,405,584.14 | 620,878,345.67 | 24.22% | ||
| OPTIMUM DEVELOPMENT BANK INC | 45,815,809.90 | 174,457,924.11 | 26.26% | ||
| EQUICOM SAVINGS BANK INC | 172,241,366.51 | 646,533,823.35 | 26.64% | ||
| CITYSTATE SAVINGS BANK INC | 61,375,654.71 | 221,868,254.68 | 27.66% | ||
| MARITIME SAVINGS BANK CORPORATION | 6,948,645.24 | 24,499,153.86 | 28.36% | ||
| LIFE SAVINGS BANK INC | 4,875,321.67 | 12,898,716.79 | 37.80% | ||
| WORLD PARTNERS BANK (A THRIFT BANK) | 48,785,338.30 | 112,362,449.20 | 43.42% | ||
| WEALTH DEVELOPMENT BANK CORPORATION | 133,638,050.71 | 292,932,364.95 | 45.62% | ||
| PRODUCERS SAVINGS BANK CORPORATION | 180,254,323.44 | 386,138,239.27 | 46.68% | ||
| MALAYAN BANK SAVINGS AND MORT BANK INC | 265,664,484.09 | 565,547,649.98 | 46.97% | ||
| ENTERPRISE BANK INC (A THRIFT BANK) | 121,353,813.66 | 252,043,502.46 | 48.15% | ||
| UCPB SAVINGS BANK | 615,156,050.17 | 1,254,581,397.45 | 49.03% | ||
| RCBC SAVINGS BANK INC | 2,204,453,414.48 | 4,431,477,476.10 | 49.75% | ||
| CHINA BANK SAVINGS INC | 2,236,060,135.22 | 4,410,355,252.20 | 50.70% | ||
| PAMPANGA DEVELOPMENT BANK | 28,454,816.72 | 55,028,244.04 | 51.71% | ||
| BANK ONE SAVINGS AND TRUST CORP. | 12,136,266.46 | 23,096,226.26 | 52.55% | ||
| 1ST VALLEY BANK INC A DEVELOPMENT BANK | 227,962,930.80 | 428,729,538.30 | 53.17% | ||
| METRO CEBU PUBLIC SAVINGS BANK | 13,258,248.92 | 24,372,080.98 | 54.40% | ||
| AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS | 2,935,295.65 | 5,387,619.28 | 54.48% | ||
| LEMERY SAVINGS & LOAN BANK, INC. | 4,366,221.44 | 7,700,249.95 | 56.70% | ||
| PNB SAVINGS BANK | 598,294,643.97 | 1,015,744,779.07 | 58.90% | ||
| PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC) | 103,736,921.12 | 168,397,257.81 | 61.60% | ||
| STANDARD CHARTERED BANK | 1,324,883,586.02 | 2,124,976,632.70 | 62.35% | ||
| MALASIQUI PROGRESSIVE SLB, INC | 6,951,706.48 | 11,106,429.25 | 62.59% | ||
| PHIL STAR DEVELOPMENT BANK INC | 9,276,107.75 | 13,667,597.78 | 67.87% | ||
| BUSINESS AND CONSUMERS BANK (A DB) | 9,726,977.06 | 14,191,495.90 | 68.54% | ||
| STERLING BANK OF ASIA INC (A SAVINGS BANK) | 649,798,038.92 | 942,498,137.44 | 68.94% | ||
| EAST WEST BANKING CORP | 5,773,995,719.18 | 8,291,599,642.55 | 69.64% | ||
| ANZ BANKING GROUP LTD | 281,876,153.28 | 404,087,064.26 | 69.76% | ||
| ASIA UNITED BANK CORPORATION | 2,063,130,204.94 | 2,937,364,441.27 | 70.24% | ||
| UNITED COCONUT PLANTERS BANK | 4,700,765,978.60 | 6,385,518,030.66 | 73.62% | ||
| PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS BANK) | 724,196,250.68 | 980,710,424.09 | 73.84% | ||
| CITY SAVINGS BANK INC | 1,323,757,126.31 | 1,760,688,973.83 | 75.18% | ||
| MICROFINANCE MAXIMUM SB INC | 8,832,017.79 | 11,538,108.54 | 76.55% | ||
| PHILIPPINE VETERANS BANK | 1,474,239,837.57 | 1,875,995,021.68 | 78.58% | ||
| QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK | 20,985,370.81 | 26,305,413.66 | 79.78% | ||
| BANK OF MAKATI (A SAVINGS BANK) INC | 1,837,980,147.67 | 2,272,945,790.64 | 80.86% | ||
| BANGKO KABAYAN INC (A PRIVATE DEVELOPMENT BANK) | 30,008,072.17 | 36,229,903.75 | 82.83% | ||
| HIYAS BANKING CORPORATION | 28,859,545.81 | 34,360,654.43 | 83.99% | ||
| SUN SAVINGS BANK INC | 16,054,744.01 | 18,959,809.67 | 84.68% | ||
| CORDILLERA SAVINGS BANK INC | 14,015,675.60 | 16,446,654.05 | 85.22% | ||
| BATAAN DEVELOPMENT BANK | 23,381,061.33 | 27,407,967.11 | 85.31% | ||
| LEGAZPI SAVINGS BANK INC | 385,732,943.70 | 445,995,447.33 | 86.49% | ||
| PHILIPPINE BUSINESS BANK INC A SAVINGS BANK | 1,232,951,000.48 | 1,387,192,466.80 | 88.88% | ||
| NORTHPOINT DEV'T BANK INC | 91,335,230.43 | 99,959,947.40 | 91.37% | ||
| PHIL BANK OF COMMUNICATIONS | 2,149,833,913.87 | 2,279,691,946.18 | 94.30% | ||
| BPI FAMILY SAVINGS BANK INC | 7,339,777,514.18 | 7,729,608,998.38 | 94.96% | ||
| UNIVERSITY SAVINGS BANK INC | 42,842,434.66 | 45,003,866.22 | 95.20% | ||
| PHIL SAVINGS BANK | 4,540,122,740.37 | 4,666,176,343.64 | 97.30% | ||
| BATAAN SAVINGS AND LOAN BANK | 1,595,044.62 | 1,635,781.28 | 97.51% | ||
| MAYBANK PHILIPPINES INCORPORATED | 1,622,011,258.45 | 1,661,195,995.76 | 97.64% | ||
| BPI DIRECT BANKO INC A SAVINGS BANK | 429,931,812.96 | 429,252,061.73 | 100.16% | ||
| YUANTA SAVINGS BANK PHILIPPINES INC | 114,121,567.34 | 110,104,219.27 | 103.65% | ||
| DUMAGUETE CITY DEV BANK INC | 18,933,844.50 | 17,886,472.35 | 105.86% | ||
| ROBINSONS BANK CORPORATION | 736,174,233.67 | 683,406,976.50 | 107.72% | ||
| UNION BANK OF THE PHILS | 8,785,435,158.23 | 7,993,445,459.90 | 109.91% | ||
| VILLAGE BANK INC (A THRIFT BANK) | 21,809,265.59 | 19,616,446.39 | 111.18% | ||
| FARMERS SAVINGS & LOAN BANK INC | 25,682,383.04 | 22,411,351.29 | 114.60% | ||
| BANK OF COMMERCE | 2,116,948,054.72 | 1,799,079,182.21 | 117.67% | ||
| FIRST CONSOLIDATED BANK INC (A PDB) | 630,759,385.22 | 525,049,637.72 | 120.13% | ||
| DEVELOPMENT BANK OF THE PHIL | 6,639,071,049.48 | 5,464,419,478.74 | 121.50% | ||
| LAND BANK OF THE PHILIPPINES | 10,635,057,799.38 | 8,258,481,213.76 | 128.78% | ||
| PHIL NATIONAL BANK | 11,999,516,951.58 | 9,094,274,085.32 | 131.95% | ||
| THE PALAWAN BANK (PALAWAN DB) INC | 22,327,453.43 | 16,672,400.66 | 133.92% | ||
| INTER-ASIA DEVELOPMENT BANK | 6,503,459.97 | 4,613,153.85 | 140.98% | ||
| RIZAL COMM'L BANKING CORP | 3,639,541,093.67 | 2,570,930,099.09 | 141.57% | ||
| MERCHANTS SAVINGS & LOAN ASSN INC | 24,509,991.45 | 17,112,936.55 | 143.22% | ||
| HONGKONG & SHANGHAI BANKING CORP | 1,083,159,510.67 | 746,769,210.95 | 145.05% | ||
| BDO UNIBANK INC | 25,240,998,320.79 | 16,529,874,745.48 | 152.70% | ||
| QUEZON COCONUT BANK INC (A THRIFT BANK) | 1,220,523.54 | 764,046.72 | 159.74% | ||
| CHINA BANKING CORP | 5,857,309,009.50 | 3,614,348,811.57 | 162.06% | ||
| CARD SME BANK INC A THRIFT BANK | 93,462,303.10 | 55,309,326.70 | 168.98% | ||
| BANK OF THE PHIL ISLANDS | 14,742,600,146.44 | 8,425,699,430.98 | 174.97% | ||
| BANK OF CHINA LIMITED-MANILA BRANCH | 343,934,360.82 | 188,969,213.72 | 182.01% | ||
| CTBC BANK (PHILIPPINES) CORP | 669,089,843.01 | 357,499,065.12 | 187.16% | ||
| KEB HANA BANK - MANILA BRANCH | 53,616,586.01 | 28,066,201.64 | 191.04% | ||
| SECURITY BANK CORP | 4,778,871,652.09 | 2,209,369,283.42 | 216.30% | ||
| PHIL TRUST COMPANY | 2,520,214,332.76 | 1,138,050,603.05 | 221.45% | ||
| METROPOLITAN BANK & TCO | 13,269,152,940.21 | 3,755,149,756.43 | 353.36% | ||
| CITIBANK, N.A. | 3,928,999,665.42 | 850,812,713.59 | 461.79% | ||
| BANGKOK BANK PUBLIC CO LTD | 387,061,000.00 | 37,877,890.77 | 1021.87% | ||
| ING BANK N.V. | 112,691,914.99 | 102.32 | 110136742.56% | ||
| BANK OF AMERICA N.A. | 27,700,000.00 | 0.00 | NA | ||
| BDO PRIVATE BANK, INC. | 69,049,221.94 | 0.00 | NA | ||
| CATHAY UNITED BANK CO LTD - MANILA BRANCH | 10,511,697.36 | 0.00 | NA | ||
| DEUTSCHE BANK AG | 130,690,315.37 | 0.00 | NA | ||
| FIRST COMMERCIAL BANK LTD MANILA BRANCH | 130,000.00 | 0.00 | NA | ||
| INDUSTRIAL BANK OF KOREA MANILA BRANCH | 12,303,556.90 | 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 | 434,444,800.15 | 0.00 | NA | ||
| MIZUHO BANK LTD - MANILA BRANCH | 411,975,140.91 | 0.00 | NA | ||
| SHINHAN BANK - MANILA BRANCH | 9,803,020.00 | 0.00 | NA | ||
| SUMITOMO MITSUI BANKING CORPORATION-MANILA BRANCH | 91,852,007.26 | 0.00 | NA | ||
| THE BNK OF TOKYO-MITSUBISHI UFJ LTD | 388,210,030.46 | 0.00 | NA | ||
| UNITED OVERSEAS BANK LIMITED MANILA BRANCH | 6,837,761.85 | 0.00 | NA | ||
| Grand Total | 165,878,883,177.38 | 139,247,084,946.46 | 119.13% | ||
Source: www.bsp.gov.ph
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