On the face of it, no.
At 1.31% as of March 31, 2018, NPLs as a percentage of Total Loan Portfolios are at historic lows.
The NPL Coverage Ratio is near historic highs at 152.87% as of March 31, 2018.
However, NPLs can go much higher than current levels. Over the past thirty-five years, NPLs as a percentage of Total Loan Portfolios averaged 7.97% for Philippine Universal and Commercial Banks. Moreover, Loan Loss Reserves (LLR) as a percentage of Total Loan Portfolio (TLP) have averaged 4.52% 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 March 31, 2018, LLR/TLP stands at 2.00%, which is below the historical average of 4.52%, 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, 2018 | |||||
| Bank | Loan Loss Provisions | Gross NPLs | NPL Coverage Ratio | ||
| OVERSEAS FILIPINO BANK INC A SAVINGS BANK OF LANDBANK | 351,740,331.70 | 2,372,036,167.05 | 14.83% | ||
| CITY SAVINGS BANK INC | 468,632,904.47 | 2,301,306,789.86 | 20.36% | ||
| ALLBANK (A THRIFT BANK) INC | 32,979,738.86 | 134,213,404.65 | 24.57% | ||
| PNB SAVINGS BANK | 737,210,888.12 | 2,124,019,395.12 | 34.71% | ||
| UCPB SAVINGS BANK | 620,627,702.81 | 1,745,232,594.64 | 35.56% | ||
| PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS | 400,401,281.25 | 1,062,566,562.48 | 37.68% | ||
| WEALTH DEVELOPMENT BANK CORPORATION | 155,750,397.86 | 412,713,639.62 | 37.74% | ||
| MALASIQUI PROGRESSIVE SLB, INC | 6,951,706.48 | 18,193,736.59 | 38.21% | ||
| 1ST VALLEY BANK INC A DEVELOPMENT BANK | 225,928,271.41 | 588,001,638.40 | 38.42% | ||
| EQUICOM SAVINGS BANK INC | 234,892,363.03 | 611,032,784.07 | 38.44% | ||
| STERLING BANK OF ASIA INC (A SAVINGS BANK) | 676,763,352.26 | 1,699,159,473.33 | 39.83% | ||
| ENTERPRISE BANK INC (A THRIFT BANK) | 148,926,171.26 | 372,014,404.47 | 40.03% | ||
| CITYSTATE SAVINGS BANK INC | 78,417,232.11 | 185,543,258.69 | 42.26% | ||
| PAMPANGA DEVELOPMENT BANK | 32,319,534.28 | 69,353,372.83 | 46.60% | ||
| UNIVERSITY SAVINGS BANK INC | 43,842,434.66 | 92,295,812.86 | 47.50% | ||
| PRODUCERS SAVINGS BANK CORPORATION | 171,868,036.32 | 353,037,002.05 | 48.68% | ||
| LUZON DEVELOPMENT BANK | 207,825,009.13 | 416,440,693.84 | 49.91% | ||
| PACIFIC ACE SAVINGS BANK INC | 1,499,713.76 | 2,984,850.00 | 50.24% | ||
| RCBC SAVINGS BANK INC | 2,166,957,468.17 | 4,109,016,585.20 | 52.74% | ||
| QUEZON COCONUT BANK INC (A THRIFT BANK) | 1,433,319.51 | 2,606,066.55 | 55.00% | ||
| CHINA BANK SAVINGS INC | 2,173,374,030.82 | 3,790,269,728.70 | 57.34% | ||
| EAST WEST BANKING CORP | 6,028,528,902.09 | 8,930,351,011.28 | 67.51% | ||
| UNITED COCONUT PLANTERS BANK | 3,490,576,572.71 | 5,128,033,818.99 | 68.07% | ||
| PHIL STAR DEVELOPMENT BANK INC | 9,276,107.75 | 13,483,385.28 | 68.80% | ||
| BPI FAMILY SAVINGS BANK INC | 7,140,640,820.52 | 9,790,467,131.53 | 72.93% | ||
| AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS | 3,337,624.39 | 4,347,508.72 | 76.77% | ||
| HIYAS BANKING CORPORATION | 28,859,545.81 | 37,495,017.41 | 76.97% | ||
| BPI DIRECT BANKO INC A SAVINGS BANK | 743,711,267.25 | 954,911,331.10 | 77.88% | ||
| PHILIPPINE VETERANS BANK | 1,704,851,375.58 | 2,181,098,696.83 | 78.16% | ||
| STANDARD CHARTERED BANK | 2,076,857,495.38 | 2,628,789,265.43 | 79.00% | ||
| PHIL SAVINGS BANK | 4,229,577,772.28 | 5,252,790,829.40 | 80.52% | ||
| LEGAZPI SAVINGS BANK INC | 267,915,422.76 | 329,579,647.69 | 81.29% | ||
| BANK OF MAKATI (A SAVINGS BANK) INC | 1,782,032,082.32 | 2,121,239,215.17 | 84.01% | ||
| ASIA UNITED BANK CORPORATION | 2,557,307,069.63 | 3,026,033,955.52 | 84.51% | ||
| FIRST CONSOLIDATED BANK INC (A PDB) | 598,493,763.36 | 705,237,796.65 | 84.86% | ||
| PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC) | 127,898,091.74 | 145,138,725.50 | 88.12% | ||
| BANK ONE SAVINGS CORPORATION | 44,384,460.48 | 49,944,276.09 | 88.87% | ||
| BATAAN DEVELOPMENT BANK | 22,116,112.30 | 24,676,967.70 | 89.62% | ||
| PHILIPPINE BUSINESS BANK INC A SAVINGS BANK | 1,529,847,756.55 | 1,686,555,957.00 | 90.71% | ||
| YUANTA SAVINGS BANK PHILIPPINES INC | 103,959,106.39 | 113,530,881.58 | 91.57% | ||
| BANGKO KABAYAN INC (A PRIVATE DEVELOPMENT BANK) | 27,484,231.38 | 29,307,273.85 | 93.78% | ||
| PHIL BANK OF COMMUNICATIONS | 2,232,079,425.83 | 2,360,805,236.87 | 94.55% | ||
| RIZAL COMM'L BANKING CORP | 3,469,857,170.18 | 3,569,025,053.26 | 97.22% | ||
| LIFE SAVINGS BANK INC | 5,424,695.67 | 5,501,639.71 | 98.60% | ||
| MALAYAN BANK SAVINGS AND MORT BANK INC | 414,769,389.74 | 406,014,848.11 | 102.16% | ||
| MAXIMUM SAVINGS BANK INC | 10,709,623.18 | 10,342,264.54 | 103.55% | ||
| MAXIMUM SAVINGS BANK INC | 10,709,623.18 | 10,342,264.54 | 103.55% | ||
| BUSINESS AND CONSUMERS BANK (A DB) | 10,242,248.42 | 9,756,926.51 | 104.97% | ||
| NORTHPOINT DEV'T BANK INC | 124,190,688.07 | 117,143,695.58 | 106.02% | ||
| INTER-ASIA DEVELOPMENT BANK | 6,628,197.52 | 6,176,468.45 | 107.31% | ||
| DUMAGUETE CITY DEV BANK INC | 19,299,237.59 | 17,922,228.25 | 107.68% | ||
| ROBINSONS BANK CORPORATION | 874,576,172.78 | 791,070,048.46 | 110.56% | ||
| SUN SAVINGS BANK INC | 19,612,159.35 | 17,732,744.36 | 110.60% | ||
| CORDILLERA SAVINGS BANK INC | 15,115,675.60 | 13,442,527.92 | 112.45% | ||
| DEVELOPMENT BANK OF THE PHIL | 7,232,794,354.83 | 6,314,041,316.18 | 114.55% | ||
| MERCHANTS SAVINGS & LOAN ASSN INC | 79,906,370.97 | 67,454,694.49 | 118.46% | ||
| MERCHANTS SAVINGS & LOAN ASSN INC | 79,906,370.97 | 67,454,694.49 | 118.46% | ||
| UNION BANK OF THE PHILS | 8,869,250,015.55 | 7,464,200,947.49 | 118.82% | ||
| MAYBANK PHILIPPINES INCORPORATED | 1,967,154,226.15 | 1,654,606,707.98 | 118.89% | ||
| CENTURY SAVINGS BANK CORPORATION | 19,702,529.95 | 16,544,659.57 | 119.09% | ||
| LEMERY SAVINGS & LOAN BANK, INC. | 2,374,586.45 | 1,981,724.21 | 119.82% | ||
| THE PALAWAN BANK (PALAWAN DB) INC | 23,117,928.44 | 19,228,837.97 | 120.23% | ||
| BANK OF COMMERCE | 2,252,201,482.03 | 1,714,905,631.27 | 131.33% | ||
| PHIL NATIONAL BANK | 11,403,926,454.40 | 8,679,744,711.60 | 131.39% | ||
| FARMERS SAVINGS & LOAN BANK INC | 27,019,800.14 | 18,191,139.09 | 148.53% | ||
| CTBC BANK (PHILIPPINES) CORP | 753,239,497.59 | 496,282,907.62 | 151.78% | ||
| CARD SME BANK INC A THRIFT BANK | 145,936,911.85 | 88,020,494.62 | 165.80% | ||
| LAND BANK OF THE PHILIPPINES | 13,398,345,758.80 | 7,976,576,276.23 | 167.97% | ||
| BANK OF THE PHIL ISLANDS | 16,789,943,088.53 | 9,962,513,455.51 | 168.53% | ||
| BDO UNIBANK INC | 31,634,486,676.97 | 17,688,078,804.39 | 178.85% | ||
| METRO CEBU PUBLIC SAVINGS BANK | 18,946,249.25 | 9,340,189.11 | 202.85% | ||
| PHIL TRUST COMPANY | 2,693,239,225.85 | 1,277,448,244.94 | 210.83% | ||
| HSBC SAVINGS BANK(PHILS) INC | 103,782,524.11 | 47,493,373.87 | 218.52% | ||
| METROPOLITAN BANK & TCO | 17,600,268,142.31 | 6,457,035,907.54 | 272.58% | ||
| HONGKONG & SHANGHAI BANKING CORP | 1,680,479,111.28 | 576,180,886.39 | 291.66% | ||
| KEB HANA BANK - MANILA BRANCH | 82,992,871.97 | 28,266,209.64 | 293.61% | ||
| SECURITY BANK CORP | 6,090,025,018.16 | 1,962,296,925.07 | 310.35% | ||
| CHINA BANKING CORP | 8,363,288,057.83 | 2,569,254,055.11 | 325.51% | ||
| CITIBANK, N.A. | 3,928,907,029.10 | 928,476,627.31 | 423.16% | ||
| QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK | 31,745,501.19 | 2,578,975.82 | 1230.93% | ||
| BANGKOK BANK PUBLIC CO LTD | 411,008,000.00 | 30,625,504.25 | 1342.04% | ||
| ING BANK N.V. | 89,069,918.98 | 106.32 | 83775318.83% | ||
| AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED | 142,565,127.97 | 0.00 | NA | ||
| BANK OF AMERICA N.A. | 34,093,660.58 | 0.00 | NA | ||
| BANK OF CHINA LIMITED-MANILA BRANCH | 243,551,988.51 | 0.00 | NA | ||
| BDO PRIVATE BANK, INC. | 9,599,102.90 | 0.00 | NA | ||
| CATHAY UNITED BANK CO LTD - MANILA BRANCH | 30,062,417.98 | 0.00 | NA | ||
| DEUTSCHE BANK AG | 179,433,093.04 | 0.00 | NA | ||
| FIRST COMMERCIAL BANK LTD MANILA BRANCH | 5,391,000.00 | 0.00 | NA | ||
| HUA NAN COMMERCIAL BANK LTD MANILA BRANCH | 138,745.60 | 0.00 | NA | ||
| INDUSTRIAL BANK OF KOREA MANILA BRANCH | 23,346,757.13 | 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 | 126,332,409.24 | 0.00 | NA | ||
| MIZUHO BANK LTD - MANILA BRANCH | 489,988,770.84 | 0.00 | NA | ||
| MUFG BANK, LTD. | 388,210,030.46 | 0.00 | NA | ||
| SHINHAN BANK - MANILA BRANCH | 18,617,312.96 | 0.00 | NA | ||
| SUMITOMO MITSUI BANKING CORPORATION-MANILA BRANCH | 196,596,318.46 | 0.00 | NA | ||
| THE BNK OF TOKYO-MITSUBISHI UFJ LTD | 388,210,030.46 | 0.00 | NA | ||
| UNITED OVERSEAS BANK LIMITED MANILA BRANCH | 14,166,903.20 | 0.00 | NA | ||
| Grand Total | 186,752,863,729.36 | 149,069,150,608.36 | 125.28% | ||
Source: www.bsp.gov.ph
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