On the face of it, no.
At 1.24% as of December 31, 2017, NPLs as a percentage of Total Loan Portfolios are at historic lows.
The NPL Coverage Ratio is near historic highs at 149.53% as of December 31, 2017.
However, NPLs can go much higher than current levels. Over the past thirty-five years, NPLs as a percentage of Total Loan Portfolios averaged 8.15% for Philippine Universal and Commercial Banks. Moreover, Loan Loss Reserves (LLR) as a percentage of Total Loan Portfolio (TLP) have averaged 4.59% for the past thirty-five 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 4.07% for the past thirty-five years.
As of December 31, 2017, LLR/TLP stands at 1.85%, which is below the historical average of 4.59%, 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, 2017 | |||||
| Bank | Loan Loss Provisions | Gross NPLs | NPL Coverage Ratio | ||
| PHIL POSTAL SAVINGS BANK INC | 359,696,636.96 | 2,573,636,133.05 | 13.98% | ||
| MARITIME SAVINGS BANK CORPORATION | 6,948,645.24 | 23,615,730.12 | 29.42% | ||
| UNIVERSITY SAVINGS BANK INC | 43,742,434.66 | 143,068,589.00 | 30.57% | ||
| LUZON DEVELOPMENT BANK | 179,930,113.15 | 572,886,788.42 | 31.41% | ||
| UCPB SAVINGS BANK | 602,040,666.86 | 1,805,224,708.69 | 33.35% | ||
| PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS | 367,095,651.13 | 1,041,502,843.18 | 35.25% | ||
| EQUICOM SAVINGS BANK INC | 221,392,363.03 | 581,351,331.19 | 38.08% | ||
| ALLBANK (A THRIFT BANK) INC | 25,226,813.08 | 63,415,045.83 | 39.78% | ||
| 1ST VALLEY BANK INC A DEVELOPMENT BANK | 210,213,805.41 | 524,483,848.57 | 40.08% | ||
| CITYSTATE SAVINGS BANK INC | 79,217,291.59 | 193,352,128.38 | 40.97% | ||
| PNB SAVINGS BANK | 698,460,623.34 | 1,668,304,338.01 | 41.87% | ||
| WEALTH DEVELOPMENT BANK CORPORATION | 155,713,418.44 | 355,586,153.21 | 43.79% | ||
| CITY SAVINGS BANK INC | 1,133,146,672.30 | 2,547,279,274.47 | 44.48% | ||
| MALASIQUI PROGRESSIVE SLB, INC | 6,951,706.48 | 15,625,906.59 | 44.49% | ||
| DUMAGUETE CITY DEV BANK INC | 19,299,237.59 | 37,947,396.83 | 50.86% | ||
| RCBC SAVINGS BANK INC | 2,401,025,106.49 | 4,434,141,000.56 | 54.15% | ||
| AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS | 2,586,990.79 | 4,726,959.53 | 54.73% | ||
| CENTURY SAVINGS BANK CORPORATION | 19,702,529.95 | 35,875,505.12 | 54.92% | ||
| CHINA BANK SAVINGS INC | 2,161,442,962.97 | 3,926,539,784.17 | 55.05% | ||
| QUEZON COCONUT BANK INC (A THRIFT BANK) | 1,452,319.51 | 2,606,502.67 | 55.72% | ||
| STERLING BANK OF ASIA INC (A SAVINGS BANK) | 640,893,087.58 | 1,109,957,042.55 | 57.74% | ||
| PAMPANGA DEVELOPMENT BANK | 30,518,706.22 | 51,370,076.92 | 59.41% | ||
| ENTERPRISE BANK INC (A THRIFT BANK) | 148,926,171.26 | 236,780,337.30 | 62.90% | ||
| LEMERY SAVINGS & LOAN BANK, INC. | 2,874,586.45 | 4,270,287.78 | 67.32% | ||
| SUN SAVINGS BANK INC | 18,650,416.70 | 27,575,519.66 | 67.63% | ||
| PHIL STAR DEVELOPMENT BANK INC | 9,276,107.75 | 13,618,385.28 | 68.11% | ||
| NORTHPOINT DEV'T BANK INC | 94,058,155.26 | 135,617,693.05 | 69.36% | ||
| EAST WEST BANKING CORP | 6,689,334,583.44 | 9,194,973,447.66 | 72.75% | ||
| PRODUCERS SAVINGS BANK CORPORATION | 173,496,960.47 | 235,827,682.71 | 73.57% | ||
| HIYAS BANKING CORPORATION | 28,859,545.81 | 39,024,897.61 | 73.95% | ||
| LIFE SAVINGS BANK INC | 5,424,695.67 | 7,323,871.50 | 74.07% | ||
| PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC) | 119,347,708.00 | 159,948,202.14 | 74.62% | ||
| STANDARD CHARTERED BANK | 1,962,488,076.95 | 2,621,936,475.60 | 74.85% | ||
| UNITED COCONUT PLANTERS BANK | 3,365,124,955.37 | 4,260,495,688.39 | 78.98% | ||
| LEGAZPI SAVINGS BANK INC | 267,732,567.57 | 331,930,878.48 | 80.66% | ||
| BANK OF MAKATI (A SAVINGS BANK) INC | 1,717,623,068.94 | 2,112,966,067.15 | 81.29% | ||
| PHILIPPINE VETERANS BANK | 1,664,354,679.22 | 1,940,400,491.73 | 85.77% | ||
| BATAAN DEVELOPMENT BANK | 23,381,061.33 | 27,105,889.48 | 86.26% | ||
| MAYBANK PHILIPPINES INCORPORATED | 1,326,734,966.07 | 1,505,097,676.36 | 88.15% | ||
| BANK ONE SAVINGS AND TRUST CORP. | 44,384,460.48 | 49,944,276.09 | 88.87% | ||
| BPI FAMILY SAVINGS BANK INC | 6,834,672,387.15 | 7,510,125,483.03 | 91.01% | ||
| PHIL SAVINGS BANK | 4,482,397,136.59 | 4,770,532,359.83 | 93.96% | ||
| BPI DIRECT BANKO INC A SAVINGS BANK | 435,832,557.59 | 445,658,466.00 | 97.80% | ||
| PHIL BANK OF COMMUNICATIONS | 2,164,414,667.52 | 2,188,900,338.08 | 98.88% | ||
| PHILIPPINE BUSINESS BANK INC A SAVINGS BANK | 1,494,847,756.55 | 1,508,538,115.21 | 99.09% | ||
| YUANTA SAVINGS BANK PHILIPPINES INC | 111,659,778.72 | 111,281,975.24 | 100.34% | ||
| MAXIMUM SAVINGS BANK INC | 9,369,812.16 | 9,301,471.34 | 100.73% | ||
| UNION BANK OF THE PHILS | 8,682,456,359.60 | 7,919,233,625.67 | 109.64% | ||
| THE PALAWAN BANK (PALAWAN DB) INC | 22,860,428.44 | 20,627,309.35 | 110.83% | ||
| MALAYAN BANK SAVINGS AND MORT BANK INC | 428,096,630.02 | 382,510,294.71 | 111.92% | ||
| ROBINSONS BANK CORPORATION | 870,113,574.23 | 764,981,621.23 | 113.74% | ||
| CORDILLERA SAVINGS BANK INC | 15,015,675.60 | 13,111,997.34 | 114.52% | ||
| DEVELOPMENT BANK OF THE PHIL | 7,014,994,004.78 | 5,910,318,428.03 | 118.69% | ||
| QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK | 25,709,790.77 | 21,531,439.74 | 119.41% | ||
| BANK OF COMMERCE | 2,316,834,127.38 | 1,905,183,563.38 | 121.61% | ||
| PACIFIC ACE SAVINGS BANK INC | 934,156.70 | 723,612.00 | 129.10% | ||
| PHIL NATIONAL BANK | 11,787,259,241.98 | 9,026,087,102.44 | 130.59% | ||
| BUSINESS AND CONSUMERS BANK (A DB) | 10,841,871.97 | 8,282,870.65 | 130.90% | ||
| RIZAL COMM'L BANKING CORP | 3,881,667,615.24 | 2,850,646,633.56 | 136.17% | ||
| MERCHANTS SAVINGS & LOAN ASSN INC | 33,386,029.89 | 24,490,163.18 | 136.32% | ||
| HONGKONG & SHANGHAI BANKING CORP | 992,793,880.01 | 716,358,593.37 | 138.59% | ||
| FARMERS SAVINGS & LOAN BANK INC | 26,735,177.92 | 18,781,070.83 | 142.35% | ||
| BANGKO KABAYAN INC (A PRIVATE DEVELOPMENT BANK) | 25,477,556.67 | 17,218,615.00 | 147.97% | ||
| BDO UNIBANK INC | 27,437,933,434.38 | 17,044,080,200.52 | 160.98% | ||
| INTER-ASIA DEVELOPMENT BANK | 6,129,628.98 | 3,697,216.26 | 165.79% | ||
| HSBC SAVINGS BANK(PHILS) INC | 97,081,299.13 | 58,497,575.68 | 165.96% | ||
| ASIA UNITED BANK CORPORATION | 2,293,370,091.42 | 1,305,313,160.92 | 175.70% | ||
| CARD SME BANK INC A THRIFT BANK | 134,937,870.63 | 76,379,195.49 | 176.67% | ||
| FIRST CONSOLIDATED BANK INC (A PDB) | 696,030,195.87 | 386,608,203.74 | 180.04% | ||
| CHINA BANKING CORP | 5,352,681,373.43 | 2,923,249,111.15 | 183.11% | ||
| LAND BANK OF THE PHILIPPINES | 12,251,113,846.21 | 6,599,423,137.92 | 185.64% | ||
| CTBC BANK (PHILIPPINES) CORP | 777,243,866.09 | 402,002,888.64 | 193.34% | ||
| METRO CEBU PUBLIC SAVINGS BANK | 18,946,249.25 | 9,340,189.11 | 202.85% | ||
| BANK OF THE PHIL ISLANDS | 16,422,283,140.14 | 8,072,907,030.81 | 203.42% | ||
| PHIL TRUST COMPANY | 2,656,813,115.59 | 1,235,274,115.70 | 215.08% | ||
| METROPOLITAN BANK & TCO | 13,765,323,944.43 | 6,019,807,187.46 | 228.67% | ||
| KEB HANA BANK - MANILA BRANCH | 69,552,515.74 | 28,043,200.72 | 248.02% | ||
| SECURITY BANK CORP | 5,765,769,749.50 | 2,126,420,967.47 | 271.15% | ||
| CITIBANK, N.A. | 3,971,762,663.78 | 932,256,279.91 | 426.04% | ||
| BANGKOK BANK PUBLIC CO LTD | 404,989,125.00 | 32,996,077.60 | 1227.39% | ||
| ING BANK N.V. | 82,936,914.52 | 101.86 | 81422456.82% | ||
| AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED | 204,191,133.53 | 0.00 | NA | ||
| BANK OF AMERICA N.A. | 27,699,996.00 | 0.00 | NA | ||
| BANK OF CHINA LIMITED-MANILA BRANCH | 148,112,078.19 | 0.00 | NA | ||
| BDO PRIVATE BANK, INC. | 70,856,519.11 | 0.00 | NA | ||
| CATHAY UNITED BANK CO LTD - MANILA BRANCH | 11,654,922.18 | 0.00 | NA | ||
| DEUTSCHE BANK AG | 160,109,262.10 | 0.00 | NA | ||
| FIRST COMMERCIAL BANK LTD MANILA BRANCH | 2,408,000.00 | 0.00 | NA | ||
| HUA NAN COMMERCIAL BANK LTD MANILA BRANCH | 0.00 | 0.00 | NA | ||
| INDUSTRIAL BANK OF KOREA MANILA BRANCH | 16,060,933.90 | 0.00 | NA | ||
| ISLA BANK(A THRIFT BANK) INC | 4,290,580.33 | 0.00 | NA | ||
| JP MORGAN CHASE BANK NATIONAL ASSN. | 16,000,000.00 | 0.00 | NA | ||
| MEGA INT'L COMM'L BANK CO LTD | 133,623,837.77 | 0.00 | NA | ||
| MIZUHO BANK LTD - MANILA BRANCH | 539,993,128.41 | 0.00 | NA | ||
| SHINHAN BANK - MANILA BRANCH | 12,198,049.85 | 0.00 | NA | ||
| SUMITOMO MITSUI BANKING CORPORATION-MANILA BRANCH | 117,581,371.08 | 0.00 | NA | ||
| THE BNK OF TOKYO-MITSUBISHI UFJ LTD | 388,210,030.46 | 0.00 | NA | ||
| UNITED OVERSEAS BANK LIMITED MANILA BRANCH | 13,625,282.10 | 0.00 | NA | ||
| Grand Total | 172,768,654,916.09 | 138,018,055,845.20 | 125.18% | ||
Source: www.bsp.gov.ph
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