Philippine Savings Bank Ranks Number One in Past Due DOSRI Loans as % of DOSRI Loans

Editor's Note: Data is culled from  the Published Statements of Condition of individual Philippine Banks found in www.bsp.gov.ph.  Banks highlighted in yellow are classified as Distressed Banks.   The level of distress is measured by the Ratio of their Total Distressed Assets/Total Capital Cushion as of December 31, 2013.  See a previous blog post: "Philippine Banks Improve in the 4th Qtr. of 2013" or "The Top Distressed Philippine Banks as of December 31, 2013"

NPLs.  Short for Non-Performing Loans.  The NPL Ratio, or the ratio of a bank's Non-Performing Loans (NPL) to Total Loan Portfolio (TLP) is a frequently cited figure in the general media to indicate a bank's financial health, or the health of the banking system as a whole.  See: "Banks reduce exposure to bad debts, have more cash to loan out—BSP".

In the Philippine Banking Industry, Gross Non-Performing Loans stood at Php 118.116 billion as of December 31, 2013 - approximately 2.47% of the Philippine Banking Industry's Total Loan Portfolio of Php 4.779 trillion.

Philippine Banking System
NPL as % of TLP
December 31, 2013
	Gross NPLs	Gross TLP	Gross NPL/ Gross TLP
Bank	(In Php)	(In Php)	(In %)
UNITED OVERSEAS BANK PHILIPPINES	664,931,491.65	723,046,562.74	91.96%
COMSAVINGS BANK	189,798,517.04	258,338,844.50	73.47%
THE REAL BANK (A THRIFT BANK) INC	3,222,282,611.51	4,493,945,574.47	71.70%
SAMPAGUITA SAVINGS BANK INC	22,719,477.39	48,881,944.59	46.48%
DUNGGANON BANK (A MICROFINANCE THRIFT	47,508,153.45	104,442,925.74	45.49%
OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK)	129,775,492.78	304,075,337.55	42.68%
CITIBANK SAVINGS INC	2,308,133,797.81	5,525,018,098.00	41.78%
PROGRESS SAVINGS AND LOAN BANK INC	1,269,493.88	3,066,207.38	41.40%
MALASIQUI PROGRESSIVE SLB, INC	16,092,906.25	50,655,736.25	31.77%
TONG YANG SAVINGS BANK INC	148,666,358.33	533,403,848.44	27.87%
NORTHPOINT DEV'T BANK INC	37,110,605.65	164,703,767.04	22.53%
METRO CEBU PUBLIC SAVINGS BANK	19,055,765.67	86,048,583.03	22.15%
PAMPANGA DEVELOPMENT BANK	40,745,518.38	208,763,089.98	19.52%
BPI GLOBE BANKO INC A SAVINGS BANK	201,814,159.62	1,063,491,325.12	18.98%
FARMERS SAVINGS & LOAN BANK INC	48,471,260.01	257,411,854.01	18.83%
PRIDE STAR DEVELOPMENT BANK INC	6,473,437.72	36,470,704.16	17.75%
WORLD PARTNERS BANK (A THRIFT BANK)	88,682,976.78	509,720,799.55	17.40%
ALLIED SAVINGS BANK	401,441,372.70	2,479,145,754.66	16.19%
BATAAN DEVELOPMENT BANK	28,911,402.09	193,828,189.08	14.92%
LEMERY SAVINGS & LOAN BANK, INC.	9,750,997.76	67,778,615.66	14.39%
HIYAS BANKING CORPORATION	29,217,436.77	222,186,463.47	13.15%
BUSINESS AND CONSUMERS BANK (A DB)	16,884,925.63	135,882,075.31	12.43%
LIFE SAVINGS BANK INC	9,639,927.96	78,076,257.10	12.35%
MARITIME SAVINGS BANK CORPORATION	16,368,803.56	142,164,490.56	11.51%
ENTERPRISE BANK INC (A THRIFT BANK)	169,661,344.38	1,503,517,698.76	11.28%
QUEZON COCONUT BANK INC (A THRIFT BANK)	3,566,888.20	32,101,385.64	11.11%
UNIVERSITY SAVINGS BANK INC	48,120,002.84	464,700,614.89	10.36%
SECURITY BANK SAVINGS CORPORATION	838,735,420.10	8,287,967,103.92	10.12%
PLANTERS DEVELOPMENT BANK	3,267,592,729.96	34,450,275,452.28	9.48%
PHILIPPINE POSTAL SAVINGS BANK INC	392,952,272.30	4,419,324,882.07	8.89%
CENTURY SAVINGS BANK CORPORATION	40,116,374.32	463,866,613.98	8.65%
BANK OF COMMERCE	3,903,798,967.05	45,555,506,597.12	8.57%
DUMAGUETE CITY DEVELOPMENT BANK INC	41,156,519.67	482,456,929.22	8.53%
CORDILLERA SAVINGS BANK INC	14,750,218.80	174,452,800.24	8.46%
PACIFIC ACE SAVINGS BANK INC	2,030,876.69	26,610,305.90	7.63%
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC)	94,745,384.44	1,284,430,926.38	7.38%
VILLAGE BANK INC (A THRIFT BANK)	25,784,609.74	354,480,617.26	7.27%
MALAYAN BANK SAVINGS AND MORT BANK INC	315,155,109.94	4,361,019,498.14	7.23%
EQUICOM SAVINGS BANK INC	253,955,691.53	3,550,617,254.72	7.15%
LUZON DEVELOPMENT BANK	153,927,139.62	2,200,322,931.10	7.00%
PHILIPPINE RESOURCES SAVINGS BANKING	568,270,831.20	8,184,606,145.17	6.94%
BATAAN SAVINGS AND LOAN BANK	2,842,178.92	41,160,696.39	6.91%
WEALTH DEVELOPMENT BANK CORPORATION	184,239,801.85	2,674,029,621.89	6.89%
FIRST CONSOLIDATED BANK INC (A PDB)	443,718,187.84	6,771,132,384.21	6.55%
THE PALAWAN BANK (PALAWAN DB) INC	14,232,122.87	218,244,493.03	6.52%
UNION BANK OF THE PHILIPPINES	8,949,967,078.89	137,614,343,062.42	6.50%
PHIL BANK OF COMMUNICATIONS	1,240,984,212.26	19,521,972,126.23	6.36%
PHILIPPINE VETERANS BANK	960,196,997.18	15,600,625,267.85	6.15%
TOWER DEVELOPMENT BANK	11,026,032.92	191,398,134.36	5.76%
UNITED COCONUT PLANTERS BANK	4,791,102,973.68	91,829,558,325.31	5.22%
STERLING BANK OF ASIA INC (A SAVINGS BANK)	779,111,419.36	15,482,989,636.37	5.03%
EAST WEST BANKING CORP	4,648,406,663.92	94,900,777,613.11	4.90%
INTER-ASIA DEVELOPMENT BANK	4,504,816.66	102,955,417.13	4.38%
DEVELOPMENT BANK OF THE PHILIPPINES	5,639,214,503.34	129,638,563,627.94	4.35%
PHILIPPINE NATIONAL BANK	10,686,422,376.48	250,976,177,823.48	4.26%
PRODUCERS SAVINGS BANK CORPORATION	200,833,871.97	4,820,383,181.56	4.17%
RCBC SAVINGS BANK INC	1,828,298,222.91	44,130,547,426.57	4.14%
1ST VALLEY BANK INC A DEVELOPMENT BANK	191,253,994.34	5,165,020,987.59	3.70%
PHILIPPINE SAVINGS BANK	3,655,420,772.73	100,194,336,858.15	3.65%
SUN SAVINGS BANK INC	7,460,733.37	211,668,665.38	3.52%
BANK ONE SAVINGS AND TRUST CORP.	15,304,127.53	441,444,352.85	3.47%
UCPB SAVINGS BANK	284,342,672.31	8,506,784,297.90	3.34%
STANDARD CHARTERED BANK	1,086,525,758.42	34,107,769,061.36	3.19%
CHINA BANK SAVINGS INC	268,611,569.73	9,163,092,777.71	2.93%
BPI FAMILY SAVINGS BANK INC	4,370,697,474.80	150,764,833,602.85	2.90%
PHILIPPINE TRUST COMPANY	1,148,806,061.17	42,849,659,957.50	2.68%
MERCHANTS SAVINGS & LOAN ASSOCIATION INC	4,003,853.45	151,214,341.42	2.65%
PHILIPPINE BUSINESS BANK INC A SAVINGS	745,484,055.76	30,678,422,634.29	2.43%
ASIA UNITED BANK CORPORATION	1,073,013,698.39	44,518,237,565.19	2.41%
CTBC BANK (PHILIPPINES) CORPORATION	388,279,116.49	16,454,663,670.26	2.36%
LAND BANK OF THE PHILIPPINES	7,317,990,983.02	316,891,763,479.53	2.31%
CITYSTATE SAVINGS BANK INC	42,355,159.83	1,877,515,902.95	2.26%
MICROFINANCE MAXIMUM SB INC	374,895.56	16,819,783.08	2.23%
MAYBANK PHILIPPINES INC	1,036,927,723.27	47,131,591,824.26	2.20%
CARD SME BANK INC A THRIFT BANK	19,612,047.57	908,817,830.54	2.16%
OPTIMUM DEVELOPMENT BANK INC	17,197,495.99	813,920,671.95	2.11%
ROBINSONS BANK CORPORATION	421,843,064.16	20,480,106,895.16	2.06%
CHINA BANKING CORPORATION	4,117,935,690.11	214,918,989,284.16	1.92%
RIZAL COMMERCIAL BANKING CORP	3,527,950,432.52	188,945,270,427.64	1.87%
BDO UNIBANK INC	17,239,114,625.78	923,851,193,041.51	1.87%
HONGKONG & SHANGHAI BANKING CORPORATION	829,841,922.61	46,176,023,266.86	1.80%
BPI DIRECT SAVINGS BANK INC	121,202,841.76	7,441,467,057.07	1.63%
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK	14,540,829.34	928,669,661.50	1.57%
CITY SAVINGS BANK INC	391,518,685.68	25,433,487,097.33	1.54%
BANK OF THE PHILIPPINE ISLANDS	6,787,741,471.65	492,170,749,122.50	1.38%
HSBC SAVINGS BANK (PHILS) INC	52,860,163.68	6,266,865,074.75	0.84%
METROPOLITAN BANK & TRUST CO	3,124,797,642.79	550,886,387,405.56	0.57%
KOREA EXCHANGE BANK	24,799,833.58	4,512,297,785.26	0.55%
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS	1,156,048.97	219,025,051.16	0.53%
CITIBANK, N.A.	844,338,675.22	177,728,402,037.67	0.48%
SECURITY BANK CORPORATION	679,832,902.36	167,148,813,855.61	0.41%
BANK OF CHINA LIMITED-MANILA BRANCH	8,660,895.91	6,124,899,516.22	0.14%
ANZ BANKING GROUP LTD	23,339,114.85	23,431,124,037.30	0.10%
BANGKOK BANK PUBLIC CO LTD	4,954,155.55	6,771,830,916.96	0.07%
JP MORGAN CHASE BANK NATIONAL ASSOCIATION	734,885.22	15,180,284,800.46	0.00%
INTERNATIONALE NEDERLANDEN GROEP BK	89.08	31,940,097,811.71	0.00%
BANK OF AMERICA N.A.	4.00	2,890,209,181.75	0.00%
BDO PRIVATE BANK, INC.	0.00	2,330,825,427.42	0.00%
DEUTSCHE BANK AG	0.00	39,558,052,377.47	0.00%
ISLA BANK (A THRIFT BANK) INC	0.00	596,050,431.15	0.00%
MBANK PHILIPPINES	0.00	37,892,063.28	0.00%
MEGA INTERNATIONAL COMMERCIAL BANK CO LTD	0.00	8,246,864,759.09	0.00%
MIZUHO BANK LTD - MANILA BRANCH	0.00	22,335,372,609.95	0.00%
THE BANK OF TOKYO-MITSUBISHI UFJ LTD	0.00	33,384,952,619.09	0.00%
BDO ELITE SAVINGS BANK INC	0.00	0.00	NA
Grand Total	118,115,994,900.77	4,778,785,445,523.38	2.47%

Source: www.bsp.gov.ph

There are nine Philippine Banks with an Gross NPL Ratio greater than 30% of Total Loan Portfolio  (TLP).  These are as follows:

1. United Overseas Bank Philippines (91.96% of TLP)
2. Comsavings Bank (73.47% of TLP)
3. The Real Bank (71.70% of TLP)
4. Sampaguita Savings Bank Inc. (46.48% of TLP)
5. Dungganon Bank (45.49% of TLP)
6. Opportunity Kauswagan Bank Inc (42.68% of TLP)
7. Citibank Savings Inc (41.78% of TLP)
8. Progress Savings and Loan Bank Inc (41.40% of TLP)
9. Malasiqui Progressive SLB, Inc. (34.48% of TLP)

Of these banks, three banks are considered distressed:

1. Comsavings Bank (formerly GSIS Family Bank)
2. The Real Bank
3. Opportunity Kauswagan Bank Inc

The ratio of a bank's NPLs to its total Stockholders Equity (SE) maybe more important than the ratio of its NPLs to Total Loan Portfolio.  The idea behind this is that NPLs are fragile things.  As a loan deteriorates, its recoverable value will deteriorate as well.  A foreclosure will most likely result in a loan recovery that is a fraction of the loans original value.  Therefore, banks with high NPL Ratios relative to their Stockholders Equity may face a significant loss of capital if a substantial amount of their NPLs are written of as a loss.

On an overall basis, the Gross NPLs of Philippine Banks amounted to 11.80% of Stockholders Equity as of December 31, 2013.

Philippine Banking System
NPL as % of SE
December 31, 2013
	NPL	SE	NPL/SE
Bank	(In PHP)	(In PHP)	(In %)
THE REAL BANK (A THRIFT BANK) INC	3,222,282,611.51	806,215,196.88	399.68%
OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK)	129,775,492.78	61,638,110.53	210.54%
CITIBANK SAVINGS INC	2,308,133,797.81	1,588,734,573.60	145.28%
PLANTERS DEVELOPMENT BANK	3,267,592,729.96	2,709,190,353.46	120.61%
UNITED OVERSEAS BANK PHILIPPINES	664,931,491.65	700,169,994.52	94.97%
WORLD PARTNERS BANK (A THRIFT BANK)	88,682,976.78	97,350,763.11	91.10%
BPI GLOBE BANKO INC A SAVINGS BANK	201,814,159.62	222,466,942.65	90.72%
COMSAVINGS BANK	189,798,517.04	230,763,397.64	82.25%
ENTERPRISE BANK INC (A THRIFT BANK)	169,661,344.38	206,730,309.57	82.07%
SECURITY BANK SAVINGS CORPORATION	838,735,420.10	1,063,659,584.16	78.85%
PHILIPPINE POSTAL SAVINGS BANK INC	392,952,272.30	655,747,468.09	59.92%
DUNGGANON BANK (A MICROFINANCE THRIFT	47,508,153.45	84,914,347.98	55.95%
THE PALAWAN BANK (PALAWAN DB) INC	14,232,122.87	26,205,515.71	54.31%
EQUICOM SAVINGS BANK INC	253,955,691.53	498,166,589.96	50.98%
WEALTH DEVELOPMENT BANK CORPORATION	184,239,801.85	363,668,842.05	50.66%
NORTHPOINT DEV'T BANK INC	37,110,605.65	74,030,797.44	50.13%
STERLING BANK OF ASIA INC (A SAVINGS BANK)	779,111,419.36	1,617,042,495.35	48.18%
FARMERS SAVINGS & LOAN BANK INC	48,471,260.01	114,015,222.56	42.51%
BATAAN DEVELOPMENT BANK	28,911,402.09	68,240,142.11	42.37%
ALLIED SAVINGS BANK	401,441,372.70	966,841,559.87	41.52%
SAMPAGUITA SAVINGS BANK INC	22,719,477.39	56,674,898.04	40.09%
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC)	94,745,384.44	242,349,904.07	39.09%
TONG YANG SAVINGS BANK INC	148,666,358.33	390,716,494.64	38.05%
PHILIPPINE RESOURCES SAVINGS BANKING	568,270,831.20	1,600,287,621.08	35.51%
PAMPANGA DEVELOPMENT BANK	40,745,518.38	117,192,461.70	34.77%
VILLAGE BANK INC (A THRIFT BANK)	25,784,609.74	74,607,045.44	34.56%
STANDARD CHARTERED BANK	1,086,525,758.42	3,310,605,442.92	32.82%
LUZON DEVELOPMENT BANK	153,927,139.62	481,131,559.05	31.99%
METRO CEBU PUBLIC SAVINGS BANK	19,055,765.67	63,038,890.96	30.23%
MALASIQUI PROGRESSIVE SLB, INC	16,092,906.25	54,034,929.02	29.78%
MALAYAN BANK SAVINGS AND MORT BANK INC	315,155,109.94	1,097,017,961.88	28.73%
BANK OF COMMERCE	3,903,798,967.05	13,817,646,787.11	28.25%
RCBC SAVINGS BANK INC	1,828,298,222.91	6,899,395,315.46	26.50%
CHINA BANK SAVINGS INC	268,611,569.73	1,048,818,111.09	25.61%
PHIL BANK OF COMMUNICATIONS	1,240,984,212.26	4,884,526,700.64	25.41%
UNITED COCONUT PLANTERS BANK	4,791,102,973.68	18,923,327,348.00	25.32%
BPI FAMILY SAVINGS BANK INC	4,370,697,474.80	17,631,547,816.22	24.79%
EAST WEST BANKING CORP	4,648,406,663.92	19,118,256,899.86	24.31%
PHILIPPINE SAVINGS BANK	3,655,420,772.73	15,121,817,848.77	24.17%
MARITIME SAVINGS BANK CORPORATION	16,368,803.56	67,829,316.54	24.13%
UNIVERSITY SAVINGS BANK INC	48,120,002.84	213,776,498.41	22.51%
UNION BANK OF THE PHILIPPINES	8,949,967,078.89	40,738,622,254.61	21.97%
BUSINESS AND CONSUMERS BANK (A DB)	16,884,925.63	80,500,827.25	20.97%
FIRST CONSOLIDATED BANK INC (A PDB)	443,718,187.84	2,189,760,426.95	20.26%
DUMAGUETE CITY DEVELOPMENT BANK INC	41,156,519.67	216,227,266.65	19.03%
1ST VALLEY BANK INC A DEVELOPMENT BANK	191,253,994.34	1,024,055,944.77	18.68%
HIYAS BANKING CORPORATION	29,217,436.77	161,385,481.39	18.10%
PRODUCERS SAVINGS BANK CORPORATION	200,833,871.97	1,182,102,090.12	16.99%
PHILIPPINE VETERANS BANK	960,196,997.18	6,209,367,453.06	15.46%
LIFE SAVINGS BANK INC	9,639,927.96	66,553,066.52	14.48%
CORDILLERA SAVINGS BANK INC	14,750,218.80	103,395,121.60	14.27%
HONGKONG & SHANGHAI BANKING CORPORATION	829,841,922.61	5,856,722,324.95	14.17%
LEMERY SAVINGS & LOAN BANK, INC.	9,750,997.76	68,914,048.64	14.15%
PHILIPPINE NATIONAL BANK	10,686,422,376.48	75,851,044,114.67	14.09%
DEVELOPMENT BANK OF THE PHILIPPINES	5,639,214,503.34	40,750,998,289.34	13.84%
BPI DIRECT SAVINGS BANK INC	121,202,841.76	972,616,889.68	12.46%
CITY SAVINGS BANK INC	391,518,685.68	3,155,445,882.46	12.41%
CITIBANK, N.A.	844,338,675.22	7,545,425,770.57	11.19%
UCPB SAVINGS BANK	284,342,672.31	2,645,570,961.14	10.75%
BDO UNIBANK INC	17,239,114,625.78	163,633,762,916.89	10.54%
PHILIPPINE BUSINESS BANK INC A SAVINGS	745,484,055.76	7,110,533,709.94	10.48%
MAYBANK PHILIPPINES INC	1,036,927,723.27	10,219,650,372.27	10.15%
LAND BANK OF THE PHILIPPINES	7,317,990,983.02	72,317,804,694.85	10.12%
CHINA BANKING CORPORATION	4,117,935,690.11	41,787,498,261.93	9.85%
TOWER DEVELOPMENT BANK	11,026,032.92	112,560,495.06	9.80%
PRIDE STAR DEVELOPMENT BANK INC	6,473,437.72	69,890,199.26	9.26%
INTER-ASIA DEVELOPMENT BANK	4,504,816.66	52,276,134.45	8.62%
ROBINSONS BANK CORPORATION	421,843,064.16	5,172,343,787.97	8.16%
RIZAL COMMERCIAL BANKING CORP	3,527,950,432.52	45,974,823,788.29	7.67%
CARD SME BANK INC A THRIFT BANK	19,612,047.57	274,434,454.71	7.15%
SUN SAVINGS BANK INC	7,460,733.37	104,623,612.45	7.13%
BANK OF THE PHILIPPINE ISLANDS	6,787,741,471.65	99,164,800,917.73	6.84%
CTBC BANK (PHILIPPINES) CORPORATION	388,279,116.49	6,359,806,854.09	6.11%
QUEZON COCONUT BANK INC (A THRIFT BANK)	3,566,888.20	58,839,248.19	6.06%
ASIA UNITED BANK CORPORATION	1,073,013,698.39	18,014,404,268.37	5.96%
PHILIPPINE TRUST COMPANY	1,148,806,061.17	20,441,716,930.88	5.62%
CITYSTATE SAVINGS BANK INC	42,355,159.83	771,935,670.79	5.49%
CENTURY SAVINGS BANK CORPORATION	40,116,374.32	911,497,011.92	4.40%
KOREA EXCHANGE BANK	24,799,833.58	618,026,086.10	4.01%
BATAAN SAVINGS AND LOAN BANK	2,842,178.92	71,501,666.95	3.97%
BANK ONE SAVINGS AND TRUST CORP.	15,304,127.53	542,290,082.23	2.82%
PACIFIC ACE SAVINGS BANK INC	2,030,876.69	75,606,367.84	2.69%
OPTIMUM DEVELOPMENT BANK INC	17,197,495.99	713,108,078.00	2.41%
METROPOLITAN BANK & TRUST CO	3,124,797,642.79	130,413,414,436.45	2.40%
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK	14,540,829.34	656,548,271.48	2.21%
HSBC SAVINGS BANK (PHILS) INC	52,860,163.68	2,825,066,001.29	1.87%
SECURITY BANK CORPORATION	679,832,902.36	40,658,066,501.58	1.67%
PROGRESS SAVINGS AND LOAN BANK INC	1,269,493.88	83,008,094.43	1.53%
BANK OF CHINA LIMITED-MANILA BRANCH	8,660,895.91	746,794,923.86	1.16%
ANZ BANKING GROUP LTD	23,339,114.85	2,312,184,822.81	1.01%
MERCHANTS SAVINGS & LOAN ASSOCIATION INC	4,003,853.45	488,242,200.45	0.82%
MICROFINANCE MAXIMUM SB INC	374,895.56	45,791,031.87	0.82%
BANGKOK BANK PUBLIC CO LTD	4,954,155.55	1,170,854,993.88	0.42%
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS	1,156,048.97	392,277,101.62	0.29%
JP MORGAN CHASE BANK NATIONAL ASSOCIATION	734,885.22	1,556,917,580.74	0.05%
INTERNATIONALE NEDERLANDEN GROEP BK	89.08	3,132,011,905.89	0.00%
BANK OF AMERICA N.A.	4.00	596,946,705.20	0.00%
BDO ELITE SAVINGS BANK INC	0.00	1,592,542,542.62	0.00%
BDO PRIVATE BANK, INC.	0.00	6,182,595,239.49	0.00%
DEUTSCHE BANK AG	0.00	2,038,174,079.87	0.00%
ISLA BANK (A THRIFT BANK) INC	0.00	648,121,453.33	0.00%
MBANK PHILIPPINES	0.00	125,138,767.06	0.00%
MEGA INTERNATIONAL COMMERCIAL BANK CO LTD	0.00	757,011,827.28	0.00%
MIZUHO BANK LTD - MANILA BRANCH	0.00	1,319,435,712.15	0.00%
THE BANK OF TOKYO-MITSUBISHI UFJ LTD	0.00	2,284,664,024.91	0.00%
Grand Total	118,115,994,900.77	1,000,788,644,101.93	11.80%

Source: www.bsp.gov.ph

Of the 105 banks in this list, twenty-nine have a Gross NPL to Stockholders Equity Ratio of 30% or more.  These banks are as follows:

1. The Real Bank (399.68% of SE)
2. Opportunity Kauswagan Bank, Inc. (210.54% of SE)
3. Citibank Savings Inc. (145.28% of SE)
4. Planters Development Bank (120.61% of SE)
5. United Overseas Bank Philippines (94.97% of SE)
6. World Partners Bank (91.10% of SE)
7. BPI Globe Banko Inc. (90.72% of SE)
8. Comsavings Bank (82.25% of SE)
9. Enterprise Bank Inc. (82.07% of SE)
10. Security Bank Savings Corporation (78.85% of SE)
11. Philippine Postal Savings Bank (59.92% of SE)
12. Dungganon Bank (55.95% of SE)
13. The Palawan Bank (54.31% of SE)
14. Equicom Savings Bank Inc. (50.98% of SE)
15. Wealth Development Bank Corporation (50.66% of SE)
16. Northpoint Development Bank (50.13% of SE)
17. Sterling Bank of Asia, Inc. (48.18% of SE)
18. Farmers Savings & Loan Bank Inc. (42.51% of SE)
19. Bataan Development Bank (42.37% of SE)
20. Allied Savings Bank (41.52% of SE)
21. Sampaguita Savings Bank (40.09% of SE)
22. Penbank Inc (39.09% of SE)
23. Tong Yang Savings Bank Inc. (38.05% of SE)
24. Philippine Resources Savings Banking Corporation (35.51% of SE)
25. Pampanga Development Bank (34.77% of SE)
26. Village Bank Inc. (34.56% of SE)
27. Standard Chartered Bank (32.82% of SE)
28. Luzon Development Bank (31.99% of SE)
29. Metro Cebu Public Savings Bank (30.23% of SE)

Another indicator of a bank's financial health is the level of DOSRI Loans (Loans made by the bank to related parties such as Directors, Officers, Stockholders, and Related Interests) in relation to a bank's Total Loan Portfolio.  Under current banking regulations, the limit on the amount of individual loans to DOSRI, of which 70% must be secured,should not exceed a bank's parent company's regulatory capital or 15% of the bank's parent company's total loan portfolio, whichever is lower.  These limits do not apply to loans secured by assets considered as non-risk as defined in the regulations.Therefore banks with significantly high DOSRI Loan to Total Loan Portfolio ratios may be bumping up or exceeding the limits of compliance with DOSRI regulations.

On an overall basis, the DOSRI Loans of Philippine Banks amounted to only 4.48% of their Total Loan Portfolio as of December 31, 2013.  Of the 105 banks, thirty banks reported having no DOSRI Loans.  Of the seventy-five banks with DOSRI Loans, thirty-one banks had DOSRI Loans that made up less than 1% of their Total Loan Portfolios.  However, six banks had DOSRI Loans that comprised more than 15% of their Total Loan Portfolios.  They are as follows:

1. Development Bank of the Philippines (28.98% of TLP)
2. Queen City Development Bank (22.50% of TLP)
3. Land Bank of the Philippines (20.34% of TLP)
4. Citystate Savings Bank Inc. (18.06% of TLP)
5. Life Savings Bank Inc. (16.78% of TLP)
6. World Partners Bank (16.54% of TLP)

Philippine Banking System
DOSRI as % of TLP
December 31, 2013
	DOSRI	TLP	DOSRI/TLP
Bank	(In Php)	(In PHP)	(In %)
DEVELOPMENT BANK OF THE PHILIPPINES	37,574,318,755.94	129,638,563,627.94	28.98%
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK	208,965,194.14	928,669,661.50	22.50%
LAND BANK OF THE PHILIPPINES	64,464,574,548.46	316,891,763,479.53	20.34%
CITYSTATE SAVINGS BANK INC	339,050,419.89	1,877,515,902.95	18.06%
LIFE SAVINGS BANK INC	13,099,034.32	78,076,257.10	16.78%
WORLD PARTNERS BANK (A THRIFT BANK)	84,307,251.37	509,720,799.55	16.54%
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC)	185,722,166.79	1,284,430,926.38	14.46%
INTER-ASIA DEVELOPMENT BANK	12,932,485.45	102,955,417.13	12.56%
VILLAGE BANK INC (A THRIFT BANK)	40,753,662.01	354,480,617.26	11.50%
TOWER DEVELOPMENT BANK	20,499,972.81	191,398,134.36	10.71%
QUEZON COCONUT BANK INC (A THRIFT BANK)	3,267,001.46	32,101,385.64	10.18%
HIYAS BANKING CORPORATION	22,251,218.46	222,186,463.47	10.01%
OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK)	22,295,908.52	304,075,337.55	7.33%
BDO UNIBANK INC	65,547,380,374.73	923,851,193,041.51	7.10%
BANK ONE SAVINGS AND TRUST CORP.	29,980,000.00	441,444,352.85	6.79%
EAST WEST BANKING CORP	6,394,361,309.40	94,900,777,613.11	6.74%
PAMPANGA DEVELOPMENT BANK	13,807,365.80	208,763,089.98	6.61%
OPTIMUM DEVELOPMENT BANK INC	51,318,945.96	813,920,671.95	6.31%
CENTURY SAVINGS BANK CORPORATION	27,482,822.72	463,866,613.98	5.92%
STERLING BANK OF ASIA INC (A SAVINGS BANK)	835,541,319.72	15,482,989,636.37	5.40%
COMSAVINGS BANK	11,813,719.08	258,338,844.50	4.57%
DUMAGUETE CITY DEVELOPMENT BANK INC	21,091,594.46	482,456,929.22	4.37%
ROBINSONS BANK CORPORATION	855,095,968.66	20,480,106,895.16	4.18%
WEALTH DEVELOPMENT BANK CORPORATION	109,099,376.51	2,674,029,621.89	4.08%
PHILIPPINE BUSINESS BANK INC A SAVINGS	1,214,795,438.62	30,678,422,634.29	3.96%
LUZON DEVELOPMENT BANK	75,026,638.41	2,200,322,931.10	3.41%
RIZAL COMMERCIAL BANKING CORP	6,403,496,132.18	188,945,270,427.64	3.39%
CHINA BANKING CORPORATION	6,890,582,634.89	214,918,989,284.16	3.21%
PHILIPPINE POSTAL SAVINGS BANK INC	114,185,917.49	4,419,324,882.07	2.58%
BANK OF COMMERCE	1,106,238,611.24	45,555,506,597.12	2.43%
MARITIME SAVINGS BANK CORPORATION	3,411,253.64	142,164,490.56	2.40%
CORDILLERA SAVINGS BANK INC	3,962,864.00	174,452,800.24	2.27%
PRODUCERS SAVINGS BANK CORPORATION	108,679,017.99	4,820,383,181.56	2.25%
PLANTERS DEVELOPMENT BANK	747,417,240.42	34,450,275,452.28	2.17%
PHILIPPINE SAVINGS BANK	1,709,337,945.90	100,194,336,858.15	1.71%
BATAAN DEVELOPMENT BANK	3,000,000.00	193,828,189.08	1.55%
SAMPAGUITA SAVINGS BANK INC	737,071.12	48,881,944.59	1.51%
PHILIPPINE NATIONAL BANK	3,731,243,805.56	250,976,177,823.48	1.49%
MALASIQUI PROGRESSIVE SLB, INC	700,000.00	50,655,736.25	1.38%
BANK OF THE PHILIPPINE ISLANDS	6,642,782,937.98	492,170,749,122.50	1.35%
BANK OF AMERICA N.A.	38,381,425.69	2,890,209,181.75	1.33%
PHIL BANK OF COMMUNICATIONS	220,983,358.86	19,521,972,126.23	1.13%
HSBC SAVINGS BANK (PHILS) INC	65,724,577.35	6,266,865,074.75	1.05%
METROPOLITAN BANK & TRUST CO	5,535,728,765.23	550,886,387,405.56	1.00%
HONGKONG & SHANGHAI BANKING CORPORATION	437,758,104.33	46,176,023,266.86	0.95%
MALAYAN BANK SAVINGS AND MORT BANK INC	39,934,986.91	4,361,019,498.14	0.92%
THE PALAWAN BANK (PALAWAN DB) INC	1,905,518.78	218,244,493.03	0.87%
ASIA UNITED BANK CORPORATION	219,842,938.31	44,518,237,565.19	0.49%
UNION BANK OF THE PHILIPPINES	657,282,240.05	137,614,343,062.42	0.48%
JP MORGAN CHASE BANK NATIONAL ASSOCIATION	47,944,968.76	15,180,284,800.46	0.32%
PHILIPPINE VETERANS BANK	48,927,914.19	15,600,625,267.85	0.31%
SECURITY BANK CORPORATION	522,680,481.44	167,148,813,855.61	0.31%
UNITED COCONUT PLANTERS BANK	222,004,707.36	91,829,558,325.31	0.24%
SECURITY BANK SAVINGS CORPORATION	17,436,598.01	8,287,967,103.92	0.21%
ANZ BANKING GROUP LTD	35,803,803.31	23,431,124,037.30	0.15%
FIRST CONSOLIDATED BANK INC (A PDB)	8,903,923.91	6,771,132,384.21	0.13%
CTBC BANK (PHILIPPINES) CORPORATION	20,471,106.03	16,454,663,670.26	0.12%
RCBC SAVINGS BANK INC	54,657,565.90	44,130,547,426.57	0.12%
TONG YANG SAVINGS BANK INC	604,910.47	533,403,848.44	0.11%
CHINA BANK SAVINGS INC	9,116,812.76	9,163,092,777.71	0.10%
EQUICOM SAVINGS BANK INC	3,306,846.95	3,550,617,254.72	0.09%
CITY SAVINGS BANK INC	23,309,808.71	25,433,487,097.33	0.09%
FARMERS SAVINGS & LOAN BANK INC	157,318.02	257,411,854.01	0.06%
STANDARD CHARTERED BANK	15,821,850.64	34,107,769,061.36	0.05%
THE BANK OF TOKYO-MITSUBISHI UFJ LTD	14,558,686.13	33,384,952,619.09	0.04%
MAYBANK PHILIPPINES INC	19,187,980.01	47,131,591,824.26	0.04%
UCPB SAVINGS BANK	3,082,045.28	8,506,784,297.90	0.04%
ALLIED SAVINGS BANK	874,982.32	2,479,145,754.66	0.04%
CITIBANK, N.A.	42,584,789.65	177,728,402,037.67	0.02%
BPI FAMILY SAVINGS BANK INC	31,641,899.46	150,764,833,602.85	0.02%
BPI DIRECT SAVINGS BANK INC	1,191,073.19	7,441,467,057.07	0.02%
KOREA EXCHANGE BANK	386,600.00	4,512,297,785.26	0.01%
ISLA BANK (A THRIFT BANK) INC	44,962.58	596,050,431.15	0.01%
UNITED OVERSEAS BANK PHILIPPINES	39,109.09	723,046,562.74	0.01%
ENTERPRISE BANK INC (A THRIFT BANK)	25,000.00	1,503,517,698.76	0.00%
1ST VALLEY BANK INC A DEVELOPMENT BANK	0.00	5,165,020,987.59	0.00%
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS	0.00	219,025,051.16	0.00%
BANGKOK BANK PUBLIC CO LTD	0.00	6,771,830,916.96	0.00%
BANK OF CHINA LIMITED-MANILA BRANCH	0.00	6,124,899,516.22	0.00%
BATAAN SAVINGS AND LOAN BANK	0.00	41,160,696.39	0.00%
BDO PRIVATE BANK, INC.	0.00	2,330,825,427.42	0.00%
BPI GLOBE BANKO INC A SAVINGS BANK	0.00	1,063,491,325.12	0.00%
BUSINESS AND CONSUMERS BANK (A DB)	0.00	135,882,075.31	0.00%
CARD SME BANK INC A THRIFT BANK	0.00	908,817,830.54	0.00%
CITIBANK SAVINGS INC	0.00	5,525,018,098.00	0.00%
DEUTSCHE BANK AG	0.00	39,558,052,377.47	0.00%
DUNGGANON BANK (A MICROFINANCE THRIFT	0.00	104,442,925.74	0.00%
INTERNATIONALE NEDERLANDEN GROEP BK	0.00	31,940,097,811.71	0.00%
LEMERY SAVINGS & LOAN BANK, INC.	0.00	67,778,615.66	0.00%
MBANK PHILIPPINES	0.00	37,892,063.28	0.00%
MEGA INTERNATIONAL COMMERCIAL BANK CO LTD	0.00	8,246,864,759.09	0.00%
MERCHANTS SAVINGS & LOAN ASSOCIATION INC	0.00	151,214,341.42	0.00%
METRO CEBU PUBLIC SAVINGS BANK	0.00	86,048,583.03	0.00%
MICROFINANCE MAXIMUM SB INC	0.00	16,819,783.08	0.00%
MIZUHO BANK LTD - MANILA BRANCH	0.00	22,335,372,609.95	0.00%
NORTHPOINT DEV'T BANK INC	0.00	164,703,767.04	0.00%
PACIFIC ACE SAVINGS BANK INC	0.00	26,610,305.90	0.00%
PHILIPPINE RESOURCES SAVINGS BANKING	0.00	8,184,606,145.17	0.00%
PHILIPPINE TRUST COMPANY	0.00	42,849,659,957.50	0.00%
PRIDE STAR DEVELOPMENT BANK INC	0.00	36,470,704.16	0.00%
PROGRESS SAVINGS AND LOAN BANK INC	0.00	3,066,207.38	0.00%
SUN SAVINGS BANK INC	0.00	211,668,665.38	0.00%
THE REAL BANK (A THRIFT BANK) INC	0.00	4,493,945,574.47	0.00%
UNIVERSITY SAVINGS BANK INC	0.00	464,700,614.89	0.00%
BDO ELITE SAVINGS BANK INC	0.00	0.00	NA
Grand Total	214,006,915,585.78	4,778,785,445,523.38	4.48%

Source: www.bsp.gov.ph

DOSRI Rules indicate that, in the aggregate, DOSRI Loans should not exceed the total equity of the bank.  Therefore banks with a significantly high DOSRI Loans as a percentage of Stockholders Equity may be approaching DOSRI Limits.  Generally speaking, the DOSRI Loans of Philippine Banks amounted to 21.58% of Stockholders Equity as of December 31, 2013.

Three banks have DOSRI Loans that exceed 80% of their capital.  These are as follows:

1. Development Bank of the Philippines (92.20% of SE)
2. Land Bank of the Philippines (89.14% of SE)
3. World Partners Bank (86.60% of SE)

Philippine Banking System
DOSRI as % of Stockholders Equity
December 31, 2013
	DOSRI	SE	DOSRI/SE
Bank	(In Php)	(In PHP)	(In %)
DEVELOPMENT BANK OF THE PHILIPPINES	37,574,318,755.94	40,750,998,289.34	92.20%
LAND BANK OF THE PHILIPPINES	64,464,574,548.46	72,317,804,694.85	89.14%
WORLD PARTNERS BANK (A THRIFT BANK)	84,307,251.37	97,350,763.11	86.60%
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC)	185,722,166.79	242,349,904.07	76.63%
VILLAGE BANK INC (A THRIFT BANK)	40,753,662.01	74,607,045.44	54.62%
STERLING BANK OF ASIA INC (A SAVINGS BANK)	835,541,319.72	1,617,042,495.35	51.67%
CITYSTATE SAVINGS BANK INC	339,050,419.89	771,935,670.79	43.92%
BDO UNIBANK INC	65,547,380,374.73	163,633,762,916.89	40.06%
OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK)	22,295,908.52	61,638,110.53	36.17%
EAST WEST BANKING CORP	6,394,361,309.40	19,118,256,899.86	33.45%
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK	208,965,194.14	656,548,271.48	31.83%
WEALTH DEVELOPMENT BANK CORPORATION	109,099,376.51	363,668,842.05	30.00%
PLANTERS DEVELOPMENT BANK	747,417,240.42	2,709,190,353.46	27.59%
INTER-ASIA DEVELOPMENT BANK	12,932,485.45	52,276,134.45	24.74%
LIFE SAVINGS BANK INC	13,099,034.32	66,553,066.52	19.68%
TOWER DEVELOPMENT BANK	20,499,972.81	112,560,495.06	18.21%
PHILIPPINE POSTAL SAVINGS BANK INC	114,185,917.49	655,747,468.09	17.41%
PHILIPPINE BUSINESS BANK INC A SAVINGS	1,214,795,438.62	7,110,533,709.94	17.08%
ROBINSONS BANK CORPORATION	855,095,968.66	5,172,343,787.97	16.53%
CHINA BANKING CORPORATION	6,890,582,634.89	41,787,498,261.93	16.49%
LUZON DEVELOPMENT BANK	75,026,638.41	481,131,559.05	15.59%
RIZAL COMMERCIAL BANKING CORP	6,403,496,132.18	45,974,823,788.29	13.93%
HIYAS BANKING CORPORATION	22,251,218.46	161,385,481.39	13.79%
PAMPANGA DEVELOPMENT BANK	13,807,365.80	117,192,461.70	11.78%
PHILIPPINE SAVINGS BANK	1,709,337,945.90	15,121,817,848.77	11.30%
DUMAGUETE CITY DEVELOPMENT BANK INC	21,091,594.46	216,227,266.65	9.75%
PRODUCERS SAVINGS BANK CORPORATION	108,679,017.99	1,182,102,090.12	9.19%
BANK OF COMMERCE	1,106,238,611.24	13,817,646,787.11	8.01%
HONGKONG & SHANGHAI BANKING CORPORATION	437,758,104.33	5,856,722,324.95	7.47%
THE PALAWAN BANK (PALAWAN DB) INC	1,905,518.78	26,205,515.71	7.27%
OPTIMUM DEVELOPMENT BANK INC	51,318,945.96	713,108,078.00	7.20%
BANK OF THE PHILIPPINE ISLANDS	6,642,782,937.98	99,164,800,917.73	6.70%
BANK OF AMERICA N.A.	38,381,425.69	596,946,705.20	6.43%
QUEZON COCONUT BANK INC (A THRIFT BANK)	3,267,001.46	58,839,248.19	5.55%
BANK ONE SAVINGS AND TRUST CORP.	29,980,000.00	542,290,082.23	5.53%
COMSAVINGS BANK	11,813,719.08	230,763,397.64	5.12%
MARITIME SAVINGS BANK CORPORATION	3,411,253.64	67,829,316.54	5.03%
PHILIPPINE NATIONAL BANK	3,731,243,805.56	75,851,044,114.67	4.92%
PHIL BANK OF COMMUNICATIONS	220,983,358.86	4,884,526,700.64	4.52%
BATAAN DEVELOPMENT BANK	3,000,000.00	68,240,142.11	4.40%
METROPOLITAN BANK & TRUST CO	5,535,728,765.23	130,413,414,436.45	4.24%
CORDILLERA SAVINGS BANK INC	3,962,864.00	103,395,121.60	3.83%
MALAYAN BANK SAVINGS AND MORT BANK INC	39,934,986.91	1,097,017,961.88	3.64%
JP MORGAN CHASE BANK NATIONAL ASSOCIATION	47,944,968.76	1,556,917,580.74	3.08%
CENTURY SAVINGS BANK CORPORATION	27,482,822.72	911,497,011.92	3.02%
HSBC SAVINGS BANK (PHILS) INC	65,724,577.35	2,825,066,001.29	2.33%
SECURITY BANK SAVINGS CORPORATION	17,436,598.01	1,063,659,584.16	1.64%
UNION BANK OF THE PHILIPPINES	657,282,240.05	40,738,622,254.61	1.61%
ANZ BANKING GROUP LTD	35,803,803.31	2,312,184,822.81	1.55%
SAMPAGUITA SAVINGS BANK INC	737,071.12	56,674,898.04	1.30%
MALASIQUI PROGRESSIVE SLB, INC	700,000.00	54,034,929.02	1.30%
SECURITY BANK CORPORATION	522,680,481.44	40,658,066,501.58	1.29%
ASIA UNITED BANK CORPORATION	219,842,938.31	18,014,404,268.37	1.22%
UNITED COCONUT PLANTERS BANK	222,004,707.36	18,923,327,348.00	1.17%
CHINA BANK SAVINGS INC	9,116,812.76	1,048,818,111.09	0.87%
RCBC SAVINGS BANK INC	54,657,565.90	6,899,395,315.46	0.79%
PHILIPPINE VETERANS BANK	48,927,914.19	6,209,367,453.06	0.79%
CITY SAVINGS BANK INC	23,309,808.71	3,155,445,882.46	0.74%
EQUICOM SAVINGS BANK INC	3,306,846.95	498,166,589.96	0.66%
THE BANK OF TOKYO-MITSUBISHI UFJ LTD	14,558,686.13	2,284,664,024.91	0.64%
CITIBANK, N.A.	42,584,789.65	7,545,425,770.57	0.56%
STANDARD CHARTERED BANK	15,821,850.64	3,310,605,442.92	0.48%
FIRST CONSOLIDATED BANK INC (A PDB)	8,903,923.91	2,189,760,426.95	0.41%
CTBC BANK (PHILIPPINES) CORPORATION	20,471,106.03	6,359,806,854.09	0.32%
MAYBANK PHILIPPINES INC	19,187,980.01	10,219,650,372.27	0.19%
BPI FAMILY SAVINGS BANK INC	31,641,899.46	17,631,547,816.22	0.18%
TONG YANG SAVINGS BANK INC	604,910.47	390,716,494.64	0.15%
FARMERS SAVINGS & LOAN BANK INC	157,318.02	114,015,222.56	0.14%
BPI DIRECT SAVINGS BANK INC	1,191,073.19	972,616,889.68	0.12%
UCPB SAVINGS BANK	3,082,045.28	2,645,570,961.14	0.12%
ALLIED SAVINGS BANK	874,982.32	966,841,559.87	0.09%
KOREA EXCHANGE BANK	386,600.00	618,026,086.10	0.06%
ENTERPRISE BANK INC (A THRIFT BANK)	25,000.00	206,730,309.57	0.01%
ISLA BANK (A THRIFT BANK) INC	44,962.58	648,121,453.33	0.01%
UNITED OVERSEAS BANK PHILIPPINES	39,109.09	700,169,994.52	0.01%
1ST VALLEY BANK INC A DEVELOPMENT BANK	0.00	1,024,055,944.77	0.00%
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS	0.00	392,277,101.62	0.00%
BANGKOK BANK PUBLIC CO LTD	0.00	1,170,854,993.88	0.00%
BANK OF CHINA LIMITED-MANILA BRANCH	0.00	746,794,923.86	0.00%
BATAAN SAVINGS AND LOAN BANK	0.00	71,501,666.95	0.00%
BDO ELITE SAVINGS BANK INC	0.00	1,592,542,542.62	0.00%
BDO PRIVATE BANK, INC.	0.00	6,182,595,239.49	0.00%
BPI GLOBE BANKO INC A SAVINGS BANK	0.00	222,466,942.65	0.00%
BUSINESS AND CONSUMERS BANK (A DB)	0.00	80,500,827.25	0.00%
CARD SME BANK INC A THRIFT BANK	0.00	274,434,454.71	0.00%
CITIBANK SAVINGS INC	0.00	1,588,734,573.60	0.00%
DEUTSCHE BANK AG	0.00	2,038,174,079.87	0.00%
DUNGGANON BANK (A MICROFINANCE THRIFT	0.00	84,914,347.98	0.00%
INTERNATIONALE NEDERLANDEN GROEP BK	0.00	3,132,011,905.89	0.00%
LEMERY SAVINGS & LOAN BANK, INC.	0.00	68,914,048.64	0.00%
MBANK PHILIPPINES	0.00	125,138,767.06	0.00%
MEGA INTERNATIONAL COMMERCIAL BANK CO LTD	0.00	757,011,827.28	0.00%
MERCHANTS SAVINGS & LOAN ASSOCIATION INC	0.00	488,242,200.45	0.00%
METRO CEBU PUBLIC SAVINGS BANK	0.00	63,038,890.96	0.00%
MICROFINANCE MAXIMUM SB INC	0.00	45,791,031.87	0.00%
MIZUHO BANK LTD - MANILA BRANCH	0.00	1,319,435,712.15	0.00%
NORTHPOINT DEV'T BANK INC	0.00	74,030,797.44	0.00%
PACIFIC ACE SAVINGS BANK INC	0.00	75,606,367.84	0.00%
PHILIPPINE RESOURCES SAVINGS BANKING	0.00	1,600,287,621.08	0.00%
PHILIPPINE TRUST COMPANY	0.00	20,441,716,930.88	0.00%
PRIDE STAR DEVELOPMENT BANK INC	0.00	69,890,199.26	0.00%
PROGRESS SAVINGS AND LOAN BANK INC	0.00	83,008,094.43	0.00%
SUN SAVINGS BANK INC	0.00	104,623,612.45	0.00%
THE REAL BANK (A THRIFT BANK) INC	0.00	806,215,196.88	0.00%
UNIVERSITY SAVINGS BANK INC	0.00	213,776,498.41	0.00%
Grand Total	214,006,915,585.78	1,000,788,644,101.93	21.38%

Source: www.bsp.gov.ph

Banks often take pains to avoid DOSRI Loans from falling past due. Although bank policies often state that DOSRI Loans are made “substantially on the same terms as with other individuals and businesses of comparable risks.  (See Planters Development Bank Annual Report December 31, 2010). Loan underwriting standards should be tighter because a past due DOSRI loan reflects badly on the bank.    DOSRI Loans that fall past due are often:

1. Written off as soon as possible;
2. Refinanced or Restructured to become current (this requires Board of Directors Approval); or are
3. Technically reclassified as a general NPL (like if a loan to a former bank officer falls past due). 

As a result, Philippine Banks reported that Php 997.368 million, or 0.47% of its DOSRI Loans fell past due as of December 31, 2013.  Of the seventy-five banks with DOSRI Loans, sixty banks had zero past due DOSRI Loans.  No banks had past due DOSRI Loans exceeding 30% of their Total DOSRI Loan Portfolio.

Philippine Banking System
DOSRI Past Due as % of DOSRI
September 30, 2013
	DOSRI Past Due	DOSRI	DOSRI Past Due/DOSRI
Bank	(In PHP)	(In PHP)	(In %)
PHILIPPINE SAVINGS BANK	449,888,803.99	1,709,337,945.90	26.32%
DUMAGUETE CITY DEVELOPMENT BANK INC	2,600,000.00	21,091,594.46	12.33%
RIZAL COMMERCIAL BANKING CORP	526,027,298.14	6,403,496,132.18	8.21%
UNITED COCONUT PLANTERS BANK	3,301,611.26	222,004,707.36	1.49%
CITY SAVINGS BANK INC	54,277.24	23,309,808.71	0.23%
BANK OF THE PHILIPPINE ISLANDS	9,435,548.05	6,642,782,937.98	0.14%
UNITED OVERSEAS BANK PHILIPPINES	38.00	39,109.09	0.10%
EAST WEST BANKING CORP	3,906,051.48	6,394,361,309.40	0.06%
CITIBANK, N.A.	18,313.33	42,584,789.65	0.04%
PHIL BANK OF COMMUNICATIONS	33,481.24	220,983,358.86	0.02%
BDO UNIBANK INC	1,826,954.37	65,547,380,374.73	0.00%
CHINA BANKING CORPORATION	120,467.96	6,890,582,634.89	0.00%
PHILIPPINE NATIONAL BANK	30,842.68	3,731,243,805.56	0.00%
UCPB SAVINGS BANK	8.00	3,082,045.28	0.00%
LAND BANK OF THE PHILIPPINES	124,000.00	64,464,574,548.46	0.00%
ALLIED SAVINGS BANK	0.00	874,982.32	0.00%
ANZ BANKING GROUP LTD	0.00	35,803,803.31	0.00%
ASIA UNITED BANK CORPORATION	0.00	219,842,938.31	0.00%
BANK OF AMERICA N.A.	0.00	38,381,425.69	0.00%
BANK OF COMMERCE	0.00	1,106,238,611.24	0.00%
BANK ONE SAVINGS AND TRUST CORP.	0.00	29,980,000.00	0.00%
BATAAN DEVELOPMENT BANK	0.00	3,000,000.00	0.00%
BPI DIRECT SAVINGS BANK INC	0.00	1,191,073.19	0.00%
BPI FAMILY SAVINGS BANK INC	0.00	31,641,899.46	0.00%
CENTURY SAVINGS BANK CORPORATION	0.00	27,482,822.72	0.00%
CHINA BANK SAVINGS INC	0.00	9,116,812.76	0.00%
CITYSTATE SAVINGS BANK INC	0.00	339,050,419.89	0.00%
COMSAVINGS BANK	0.00	11,813,719.08	0.00%
CORDILLERA SAVINGS BANK INC	0.00	3,962,864.00	0.00%
CTBC BANK (PHILIPPINES) CORPORATION	0.00	20,471,106.03	0.00%
DEVELOPMENT BANK OF THE PHILIPPINES	0.00	37,574,318,755.94	0.00%
ENTERPRISE BANK INC (A THRIFT BANK)	0.00	25,000.00	0.00%
EQUICOM SAVINGS BANK INC	0.00	3,306,846.95	0.00%
FARMERS SAVINGS & LOAN BANK INC	0.00	157,318.02	0.00%
FIRST CONSOLIDATED BANK INC (A PDB)	0.00	8,903,923.91	0.00%
HIYAS BANKING CORPORATION	0.00	22,251,218.46	0.00%
HONGKONG & SHANGHAI BANKING CORPORATION	0.00	437,758,104.33	0.00%
HSBC SAVINGS BANK (PHILS) INC	0.00	65,724,577.35	0.00%
INTER-ASIA DEVELOPMENT BANK	0.00	12,932,485.45	0.00%
ISLA BANK (A THRIFT BANK) INC	0.00	44,962.58	0.00%
JP MORGAN CHASE BANK NATIONAL ASSOCIATION	0.00	47,944,968.76	0.00%
KOREA EXCHANGE BANK	0.00	386,600.00	0.00%
LIFE SAVINGS BANK INC	0.00	13,099,034.32	0.00%
LUZON DEVELOPMENT BANK	0.00	75,026,638.41	0.00%
MALASIQUI PROGRESSIVE SLB, INC	0.00	700,000.00	0.00%
MALAYAN BANK SAVINGS AND MORT BANK INC	0.00	39,934,986.91	0.00%
MARITIME SAVINGS BANK CORPORATION	0.00	3,411,253.64	0.00%
MAYBANK PHILIPPINES INC	0.00	19,187,980.01	0.00%
METROPOLITAN BANK & TRUST CO	0.00	5,535,728,765.23	0.00%
OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK)	0.00	22,295,908.52	0.00%
OPTIMUM DEVELOPMENT BANK INC	0.00	51,318,945.96	0.00%
PAMPANGA DEVELOPMENT BANK	0.00	13,807,365.80	0.00%
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC)	0.00	185,722,166.79	0.00%
PHILIPPINE BUSINESS BANK INC A SAVINGS	0.00	1,214,795,438.62	0.00%
PHILIPPINE POSTAL SAVINGS BANK INC	0.00	114,185,917.49	0.00%
PHILIPPINE VETERANS BANK	0.00	48,927,914.19	0.00%
PLANTERS DEVELOPMENT BANK	0.00	747,417,240.42	0.00%
PRODUCERS SAVINGS BANK CORPORATION	0.00	108,679,017.99	0.00%
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK	0.00	208,965,194.14	0.00%
QUEZON COCONUT BANK INC (A THRIFT BANK)	0.00	3,267,001.46	0.00%
RCBC SAVINGS BANK INC	0.00	54,657,565.90	0.00%
ROBINSONS BANK CORPORATION	0.00	855,095,968.66	0.00%
SAMPAGUITA SAVINGS BANK INC	0.00	737,071.12	0.00%
SECURITY BANK CORPORATION	0.00	522,680,481.44	0.00%
SECURITY BANK SAVINGS CORPORATION	0.00	17,436,598.01	0.00%
STANDARD CHARTERED BANK	0.00	15,821,850.64	0.00%
STERLING BANK OF ASIA INC (A SAVINGS BANK)	0.00	835,541,319.72	0.00%
THE BANK OF TOKYO-MITSUBISHI UFJ LTD	0.00	14,558,686.13	0.00%
THE PALAWAN BANK (PALAWAN DB) INC	0.00	1,905,518.78	0.00%
TONG YANG SAVINGS BANK INC	0.00	604,910.47	0.00%
TOWER DEVELOPMENT BANK	0.00	20,499,972.81	0.00%
UNION BANK OF THE PHILIPPINES	0.00	657,282,240.05	0.00%
VILLAGE BANK INC (A THRIFT BANK)	0.00	40,753,662.01	0.00%
WEALTH DEVELOPMENT BANK CORPORATION	0.00	109,099,376.51	0.00%
WORLD PARTNERS BANK (A THRIFT BANK)	0.00	84,307,251.37	0.00%
1ST VALLEY BANK INC A DEVELOPMENT BANK	0.00	0.00	NA
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS	0.00	0.00	NA
BANGKOK BANK PUBLIC CO LTD	0.00	0.00	NA
BANK OF CHINA LIMITED-MANILA BRANCH	0.00	0.00	NA
BATAAN SAVINGS AND LOAN BANK	0.00	0.00	NA
BDO ELITE SAVINGS BANK INC	0.00	0.00	NA
BDO PRIVATE BANK, INC.	0.00	0.00	NA
BPI GLOBE BANKO INC A SAVINGS BANK	0.00	0.00	NA
BUSINESS AND CONSUMERS BANK (A DB)	0.00	0.00	NA
CARD SME BANK INC A THRIFT BANK	0.00	0.00	NA
CITIBANK SAVINGS INC	0.00	0.00	NA
DEUTSCHE BANK AG	0.00	0.00	NA
DUNGGANON BANK (A MICROFINANCE THRIFT	0.00	0.00	NA
INTERNATIONALE NEDERLANDEN GROEP BK	0.00	0.00	NA
LEMERY SAVINGS & LOAN BANK, INC.	0.00	0.00	NA
MBANK PHILIPPINES	0.00	0.00	NA
MEGA INTERNATIONAL COMMERCIAL BANK CO LTD	0.00	0.00	NA
MERCHANTS SAVINGS & LOAN ASSOCIATION INC	0.00	0.00	NA
METRO CEBU PUBLIC SAVINGS BANK	0.00	0.00	NA
MICROFINANCE MAXIMUM SB INC	0.00	0.00	NA
MIZUHO BANK LTD - MANILA BRANCH	0.00	0.00	NA
NORTHPOINT DEV'T BANK INC	0.00	0.00	NA
PACIFIC ACE SAVINGS BANK INC	0.00	0.00	NA
PHILIPPINE RESOURCES SAVINGS BANKING	0.00	0.00	NA
PHILIPPINE TRUST COMPANY	0.00	0.00	NA
PRIDE STAR DEVELOPMENT BANK INC	0.00	0.00	NA
PROGRESS SAVINGS AND LOAN BANK INC	0.00	0.00	NA
SUN SAVINGS BANK INC	0.00	0.00	NA
THE REAL BANK (A THRIFT BANK) INC	0.00	0.00	NA
UNIVERSITY SAVINGS BANK INC	0.00	0.00	NA
Grand Total	997,367,695.74	214,006,915,585.78	0.47%

Source: www.bsp.gov.ph

RCBC's Zombie Past Due DOSRI Loans

DOSRI loans, short for loans to Directors, Officers, Stockholders, and Related Interests (DOSRI) has been the bane of the Philippine Banking System for some time now.  DOSRI abuses and violations have led to the downfall of banks such as Banco Filipino and LBC Development Bank.

Under current BSP regulations, the amount of loans to each DOSRI, 70% of which must be secured, should not exceed the amount of each DOSRI's deposit and book value of investment in the bank.  In the aggregate, loans to DOSRI, generally, should not exceed the total capital funds or 15% of the total loan portfolio of the bank and/or any of its lending and nonbanking financial subsidiaries, whichever is lower.

As of December 31, 2013, the Yuchengco family, through the Pan Malayan Management & Investment Corporation (PMMIC), owned 45.20% of RCBC.  Given that RCBC's Capital Funds amounted to Php 45.975 billion as of December 31, 2013, the book value of the Yuchengco family's investment in RCBC amounts to Php 20.781 billion as of December 31, 2013.  Together with their related party deposits of Php 4.478 billion, the theoretical upper bound for RCBC's DOSRI loans amounts to Php 25.259 billion as of December 31, 2013.

Another upper bound is the ratio of DOSRI loans to the Total Loan Portfolio.  Given that RCBC's Total Loan Portfolio stood at Php 188.945 billion, another theoretical upper bound for RCBC's DOSRI loans is Php 28.342 billion or 15% of the Total Loan Portfolio.

DOSRI regulations stipulate that the actual DOSRI loans should be the lower of each DOSRI's deposit and book value of investment in the bank or 15% of the Total Loan Portfolio.  So as of December 31, 2013, the theoretical upper bound of RCBC's DOSRI loans amounts to Php 25.259 billion.

Needless to say, RCBC's DOSRI loans amounted to Php 6.416 billion as of December 31, 2013.  This amounts to just 3.39% of RCBC's Total Loan Portfolio of Php 188.945 billion as of December 31, 2013 and 13.93% of its Capital Funds base of Php 45.975 billion for the same period. In other words, RCBC's DOSRI Loans have room to grow.

Around 8.21% of RCBC's DOSRI loans or Php 526.027 million of its DOSRI loans are past due.  Moreover, RCBC's past due DOSRI loans have been past due for some time now - since at least December 31, 2009. Prior to that (or at least since March 2005), RCBC's DOSRI Loan record was spotless: it had no past due DOSRI Loans at all.

What is curious about RCBC's DOSRI Past due is that it has remained roughly the same for the past four years, roughly Php 525 million.  It has never varied by much, fluctuating by only a few million at most each year. The constant nature of this DOSRI Past due gives credence to the idea that the past due DOSRI Loans relate to a transaction or a specific set of transactions.

RCBC describes a few of its major related party transactions in its 2013 Annual Report:

• RCBC and certain subsidiaries occupy several floors of RCBC Plaza as leaseholders of RCBC Realty Corporation (RCBC Realty). Related rental expense are included as part of Occupancy and Equipment-related account in the Statements of Profit or Loss. RCBC’s lease contract with RCBC Realty is until December 31, 2015. (Note 30.05, Notes to Financial Statements)

• In October 1, 2009, RCBC entered into a joint development agreement with RCBC Savings Bank (RSB), Malayan Insurance Company, Inc. (MICO), Grepalife Financial, Inc. (Grepalife), Bankard Inc. (Bankard) and Hexagonland, Inc. (Hexagonland), with the conformity of Goldpath Properties Development Corporation (Goldpath), the parent company of Hexagonland, to form a consortium for the pooling of their resources and establishment of an unincorporated joint venture (the “UJV”) for the construction and development of a high rise, mixed use commercial/office building, now operated by the Parent Bank as RSB Corporate Center.

In 2011, RCBC acquired the rights and interest of Grepalife in the UJV. Also in 2011, RSB was able to acquire the rights and interest of Hexagonland after the latter’s liquidation and partial return of capital to Goldpath. RSB, accordingly, contributed the land amounting to P383 million to the Project. (Notes 13 and 30.02, Notes to Financial Statements)

On October 2, 2012, the remaining co-venturers executed a memorandum of understanding agreeing in principle to cancel or revoke the UJV, subject to the approval of BSP. As of December 31, 2012, total cash contribution of RCBC, RSB and Bankard to the UJV amounted to P1.6 billion which is recorded as Construction in Progress.

On March 13, 2013, through MB Resolution No. 405 dated March 7, 2013, BSP approved RCBC’s acquisition of the land contributed to the RSB Corporate Center as well as the rights and interests of its co-venturers (Note 30.02, Notes to Financial Statements). As a result, RCBC paid its co-venturers a total consideration of P1.2 billion which is inclusive of compensation at the rate of 5.00% per annum computed from the date of the co-venturers’ payment of their respective cash contributions until the date of the actual return or payment by RCBC. In addition, by virtue of a deed of absolute sale executed between the Parent Company and RSB on April 5, 2013, the latter transferred its ownership and title to the land where the RSB Corporate Center is situated to RCBC for a selling price of P529 million. (Note 13, Notes to Financial Statements).

• On August 31, 2011, the Bank’s BOD approved the acquisition of selected assets and assumption of selected liabilities of JPL Rural Bank, through Rizal Microbank, subject to the approval of Philippine Deposit Insurance Corporation (PDIC) and BSP with the following conditions: (a) RCBC JPL shall surrender its rural bank license to BSP within 30 days from BSP approval; and (b) RCBC JPL shall likewise cease to accept deposits and change its business name so as to delete the word “bank” therein. Consequently, in 2011, the Bank infused P500 million worth of capital to Rizal Microbank to support the acquisition of assets and assumption of liabilities of RCBC JPL. The application for the acquisition of selected assets and assumption of selected liabilities was approved by PDIC and BSP on January 31, 2012 and March 2, 2012, respectively. In 2012, JPL Rural Bank changed its name to RCBC JPL. (Note 12, Notes to Financial Statements)

• On January 30, 2012, the BOD approved the acquisition of a total of 448,528,296 common stocks or around 97.79% of the outstanding capital stock in First Malayan Leasing and Finance Corporation (FMLFC) from PMMIC, House of Investments, Inc. (HI) and other investors. The sale and purchase of FMLFC stocks were made in accordance with the three share purchase agreements signed by the contracting parties on February 7, 2012 and were conditioned on among others, the receipt of approval of the transaction from the BSP, which was received by RCBC on March 12, 2012. After the acquisition, FMLFC was renamed as RCBC LFC. (Note 12, Notes to Financial Statements)

• On 31 July 2013, the RCBC Board approved the sale of the Bank’s 25% shareholdings in RCBC Realty and 49% shareholdings in RCBC Land, Inc. (RCBC Land) representing the Bank’s 34.8% economic interest in RCBC Realty to PMMIC, HI, and RCBC Land. The transaction was valued at Php 4.547 billion. The purpose of the transaction was to comply with Basel III guidelines. (See Note 12, Notes to Financial Statements)

• On 18 October 2013, the RCBC Board approved the sale of the Bank and RCBC Capital’s 89% total stake in Bankard to Philippine Business Bank Trust and Investment Center, on behalf of various clients. Bankard’s total assets, total liabilities and net assets amounted to P1.075 billion, P14 million and P1.061 billion respectively, as at the date of disposal. As a consideration for the sale of the investment, the Group received cash amounting to P225 million and a right over an escrow account amounting to P870 million established by the buyer investor in settlement of this transaction.

Gain on sale recognized related to this transaction amounting to P44 million is included as part of Gain on sale of equity investments under Miscellaneous Income in the 2013 statement of profit or loss. Moreover, the disposal of Bankard resulted in the reversal and transfer of P233 million other reserves recognized in years prior to 2011 directly to surplus. (Note 12, Notes to Financial Statements)

On 04 December 2013, RCBC Bankard was incorporated as a subsidiary of RCBC Capitalto perform card processing services for the Bank.

• The Bank’s and certain subsidiaries’ retirement funds covered under their defined post-employment benefit plan for qualified employees are administered by the Bank’s and RSB’s Trust Department in accordance with their respective trust agreements. The retirement funds have transactions directly and indirectly with the Group which consist of investment in commonshares of the Bank and investment in other securities and debt instruments wherein dividend income and trading gains are earned by the retirement funds. The retirement fund neither provides any guarantee or surety for any obligation of the Group nor its investments in its own shares of stock covered by any restriction and liens. (Note 30.03, Notes to Financial Statements)

• The Bank entered into a Memorandum of Agreement with HI, a member of the YGC, for the procurement of outsourcing services. Under the agreement, HI is the Bank’s sole representative in negotiating the terms of the contracts with selected suppliers or service providers for the procurement of certain outsourcing services, primarily IT related services. The agreement stipulated that HI would not charge fees for its service except for its share in the savings generated from suppliers and service providers. Moreover, HI is obligated to ensure that the contracts they initiate do not prejudice the Bank in any way and that the Bank does not pay more than the cost of buying the items without aggregation.

• The law firm of Angara Abello Concepcion Regala & Cruz (ACCRA) Law Office is among the firms engaged by the Bank to render legal services. Atty. Teodoro Dy-Liaco Regala, Director, is a Senior Partner of ACCRA Law Office. During the year, the Company paid ACCRA legal fees that the Company believes to be reasonable for the services provided.

These transactions give no clue as to why RCBC's Past Due DOSRI Loans have remained relatively constant for the past four years.

The bank stipulates that under its Policy on Related Party Transactions, the bank conducts its related party transactions on an "arm's length basis" with any such transaction "being on no terms no more or less favorable to the bank than terms available to nay unconnected third party under the same or similar circumstances".

"Under the Bank’s Policy on Related Party Transactions, related parties, including directors, are required to notify the Audit Committee of any potential related party transaction as soon as they become aware of it. If a transaction is determined to be a Related Party Transaction, such transaction, including all of the relevant details regarding such transaction, shall be submitted for analysis and evaluation to the Audit Committee to determine whether or not the Related Party Transaction is on terms no more or less favorable to the Bank than terms available to any unconnected third party under the same or similar circumstances. The transaction shall thereafter be presented to the Board for approval. Any member of the Board who has an interest in the transaction under discussion shall not participate in discussions and shall abstain from voting on the approval of the Related Party Transaction. Pursuant to BSP Circular No. 749 as amended and the Bank’s Corporate Governance Manual, the Bank’s stockholders confirmed by majority vote, in the last annual stockholders’ meeting, the bank’s significant transactions with its DOSRI and other related parties."

This policy, however, governs the initiation of the Related Party Transaction.  It does not seem to govern how the DOSRI Loan is treated once it has been approved by the Audit Committee and after the loan has been extended out by the bank to the related party.  According to the bank's Annual Reports for 2013 and 2012, despite the size and amount of the past due DOSRI loans remaining relatively constant and non-accruing for the past four years, the bank has not recognized any impairment of these loans for the years 2013, 2012, and 2011.

In effect, these past due DOSRI loans are zombie past due DOSRI Loans, neither living or nor dead.  Maybe it's high time that the bank rethink how these loans are treated and make the necessary adjustments to reflect their true recoverability. Are these past due DOSRI Loans worth less than their stated book value? Perhaps, or perhaps not. Only RCBC and/or its regulators will know for sure.

But the fear that the carrying values of these past due DOSRI Loans are higher than what they should be are not unfounded.  After all, RCBC was one of the major banks that maintained the accounting fiction that unbooked losses on assets it had already sold in a true sale should comprise almost 30% of its capital base for years on end. (See previous blog post, "BSP's Ampaw Accounting System.")

Maybe RCBC should provide more color as to the nature of its DOSRI transactions, such as, but not limited to the following:

1. Names of DOSRI Borrowers
2. Amount of Loan
3. Date of Loan
4. Loan Tenor and Maturity Date
5. Price of Loan (Interest Rates)
6. Purpose of Loan
7. Nature of the Collateral provided
8. Collateral Valuation and Appraisal
9. Loan Status such as Current, Past Due, Restructured

This will subject the bank to some market discipline.  Disclosure of loans that are made at less than arms length (they are subsidized by shareholders) basis might lead to a loss of shareholder value.  Similarly, disclosure of poorly performing DOSRI loans may also lead to a loss of shareholder value.  In this way, the market will decide whether these loans were granted and maintained on an above board basis.

See the previous blog post, "Sunlight is the Best Disinfectant to Purge the Rot in the Philippine Banking System".

8990 Holdings, Inc.: The Case of the Disappearing Past Due Installment Contract Receivables

In a previous blog post titled "Has the Philippine Real Estate Bubble Already Burst?", we wrote on a little known factoid buried deep within the bowels of the financial statements of 8990 Holdings, Inc. (otherwise known through its stock ticker "HOUSE"), that HOUSE's level of Installment Contract Receivables (ICRs) that are over 90 days past due jumped 500% in the nine months from December 31, 2012 to September 30, 2013.

8990 Holdings Inc.
Installment Contract Receivables, Past Due but Not Impaired
In Php
	Audited	Unaudited
	December 31, 2012	September 30, 2013	% Change
Less than 30 days	76,438,532	102,996,723	34.74%
31 - 60 days	31,128,884	30,426,033	-2.26%
61 -90 days	26,930,290	10,163,708	-62.26%
Over 90 days	39,365,086	236,008,574	499.54%
Total	173,862,792	379,595,038	118.33%

These figures were taken from HOUSE's interim financial statements as of September 30, 2013 which contained audited figures for December 31, 2012 and interim figures for the nine months since then.  The document can be found here and also on the website of the Philippine Stock Exchange.  The Annual Report can be found here and here.

Today, those figures are very much gone or reduced.  The level of past due ICRs were reduced by almost 80% for the very same figures that were audited as of December 31, 2012.

8990 Holdings Inc.
Installment Contract Receivables, Past Due but Not Impaired
In Php
	Interim Report	Annual Report
	Audited	Audited
	December 31, 2012	December 31, 2012	Variance	% Variance
Less than 30 days	76,438,532	18,426,966	-58,011,566	-75.89%
31 - 60 days	31,128,884	5,049,846	-26,079,038	-83.78%
61 -90 days	26,930,290	5,910,360	-21,019,930	-78.05%
Over 90 days	39,365,086	6,357,158	-33,007,928	-83.85%
Total	173,862,792	35,744,330	-138,118,462	-79.44%

Despite an almost 40% jump in sales, the level of past due ICRs were even lower at year end 2013 than they were at year end 2012.

8990 Holdings Inc.
Installment Contract Receivables, Past Due but Not Impaired
In Php
	Interim Report		Annual Report
	Audited	Unaudited	Audited	Audited
	December 31, 2012	September 30, 2013	December 31, 2012	December 31, 2013
Less than 30 days	76,438,532	102,996,723	18,426,966	3,824,739
31 - 60 days	31,128,884	30,426,033	5,049,846	2,403,551
61 -90 days	26,930,290	10,163,708	5,910,360	2,177,276
Over 90 days	39,365,086	236,008,574	6,357,158	15,993,266
Total	173,862,792	379,595,038	35,744,330	24,398,832

HOUSE dependence on ICRs to fuel sales has only increased since December 31, 2012.

8990 Holdings Inc.
Installment Contract Receivables/Sales
In Php
	Audited	Unaudited	Audited	Audited
	December 31, 2012	September 30, 2013	December 31, 2012	December 31, 2013
Installment Contract Receivables	4,672,109,197	8,165,199,990	4,672,109,197	9,777,920,990
Sales	2,888,596,423	4,367,429,533	3,830,644,048	5,356,098,815
Days Sales	437	505	329	493

So has the risk to its stockholders.

8990 Holdings Inc.
Installment Contract Receivables/Stockholders Equity
In Php
	Audited	Unaudited	Audited	Audited
	December 31, 2012	September 30, 2013	December 31, 2012	December 31, 2013
Installment Contract Receivables	4,672,109,197	8,165,199,990	4,672,109,197	9,777,920,990
Stockholders Equity	3,948,015,021	6,049,131,256	3,948,015,021	6,595,847,184
Installment Contract Receivables/Stockholders Equity	118.34%	134.98%	118.34%	148.24%

8990 Holdings Inc.
Real Estate/Stockholders Equity
In Php
	Audited	Unaudited	Audited	Audited
	December 31, 2012	September 30, 2013	December 31, 2012	December 31, 2013
Real Estate Inventories	2,040,532,596	2,081,143,259	2,040,532,596	2,243,559,834
Land held for Future Development	1,010,474,241	3,605,811,050	1,010,474,241	3,784,727,576
Investment Properties	142,365,067	140,860,631	142,365,067	141,928,584
Total Real Estate	3,193,371,904	5,827,814,940	3,193,371,904	6,170,215,994
Stockholders Equity	3,948,015,021	6,049,131,256	3,948,015,021	6,595,847,184
Real Estate/Stockholders Equity	80.89%	96.34%	80.89%	93.55%

8990 Holdings Inc.
ICRs & Real Estate/Stockholders Equity
In Php
	Audited	Unaudited	Audited	Audited
	December 31, 2012	September 30, 2013	December 31, 2012	December 31, 2013
Installment Contract Receivables	4,672,109,197	8,165,199,990	4,672,109,197	9,777,920,990
Real Estate	3,193,371,904	5,827,814,940	3,193,371,904	6,170,215,994
Total	7,865,481,101	13,993,014,930	7,865,481,101	15,948,136,984
10% Losss	786,548,110	1,399,301,493	786,548,110	1,594,813,698
Stockholder's Equity	3,948,015,021	6,049,131,256	3,948,015,021	6,595,847,184
Impact of 10% Loss	19.92%	23.13%	19.92%	24.18%

Impairment Losses

Based on its Annual Report, the company has now made provisions for impairment losses of Php 2,795,106 as of December 31, 2013, whereas they recognized none in the years before.  This is a step in the right direction.

Meanwhile, what happened to all those past due ICRs?

The Top Distressed Philippine Banks as of December 31, 2013

Editor's Note: The Philippine Deposit Insurance Corporation (PDIC) advised consumers to wisely choose the banks where they will deposit their money. The trouble is, most depositors don't and can't read financial statements before they open a bank account. The regulators, whose job is to safeguard the public's money, have not done a good job recently.  In the past ten years, two commercial banks, twenty-one thrift banks, and a staggering 187 rural banks have collapsed, often quite suddenly and without warning:  Regulators do have a problem bank list that they do not divulge to the public, for fear of sparking another bank run. So who can the public turn to, to advise them where to put their money? No one, except the banks themselves who will always promote their self-interests. This analysis is an attempt to fill in that knowledge gap, by screening out the weaker banks that seem ready to implode at any given moment.

Editor's Note: The ratio of Distressed Assets to Total Capital Cushion is a variant of the famous Texas Ratio, which was widely used by US financial regulators to predict bank failure during the US Savings and Loan Crisis in the 1980s and early 1990s. The basic premise is that a bank with Distressed Assets greater than its Capital Cushion is in danger of insolvency, because a significant drop in the value of  the Distressed Assets will eat into a significant amount of the bank's capital.  A bank that has a Distressed Ratio greater than 100% is flagged as borderline insolvent.  For a more detailed discussion of this ratio, please visit a previous blog post: The Texas Ratio of Select Philippine Banks

This is a list of the top distressed Universal and Commercial (U/KB) as well as Thrift Banks in the Philippines as of December 31, 2013.  It updates the seven previous blog posts: "The Top Distressed Philippine Banks as of December 31, 2013, "The Top Distressed Philippine Banks as of June 30, 2013", "The Top Distressed Philippine Banks as of March 31, 2013", "The Top Distressed Philippine Banks as of December 31, 2012",  "The Top Distressed Philippine Banks as of September 30, 2012", "The Top Distressed Philippine Banks as of June 30, 2012" and "The Top Distressed Philippine Banks as of March 31, 2012".

To see where your bank stands relative to these banks, please check the previous blog post: "Philippine Banks Improve in the 4th Qtr. of 2013".

The Top Distressed Philippine Banks
Total Distressed Assets/ Total Capital Cushion
December 31, 2013
In Php
	December 31, 2013
Bank	Total Distressed Assets (In PhP)	Total Capital Cushion (In PhP)	Distressed Assets/ Total Capital Cushion (In %)
THE REAL BANK (A THRIFT BANK) INC	7,658,858,671.42	617,617,621.91	1240.06%
BANK OF CHINA LIMITED-MANILA BRANCH	6,474,009,509.68	687,867,475.30	941.17%
COMSAVINGS BANK	1,409,515,860.14	169,764,780.11	830.28%
VILLAGE BANK INC (A THRIFT BANK)	646,328,781.06	87,430,352.92	739.25%
UNITED COCONUT PLANTERS BANK	39,058,172,119.20	10,300,012,660.82	379.21%
INTER-ASIA DEVELOPMENT BANK	152,658,208.33	61,127,067.06	249.74%
CITIBANK, N.A.	31,345,241,661.46	12,867,020,795.08	243.61%
PLANTERS DEVELOPMENT BANK	9,876,121,359.20	4,533,178,786.23	217.86%
STANDARD CHARTERED BANK	6,053,598,067.69	3,033,029,089.73	199.59%
WORLD PARTNERS BANK (A THRIFT BANK)	310,649,110.01	165,320,245.34	187.91%
UNIVERSITY SAVINGS BANK INC	423,377,038.50	239,274,961.57	176.94%
ENTERPRISE BANK INC (A THRIFT BANK)	398,644,417.05	227,625,329.81	175.13%
OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK)	163,382,416.92	103,950,857.21	157.17%
BANK OF COMMERCE	29,650,457,077.49	19,406,106,800.71	152.79%
BATAAN DEVELOPMENT BANK	117,549,048.61	77,829,490.82	151.03%
BUSINESS AND CONSUMERS BANK (A DB)	124,023,754.60	84,101,508.34	147.47%
PHILIPPINE BANK OF COMMUNICATIONS	6,870,468,436.19	4,674,290,207.54	146.98%
EQUICOM SAVINGS BANK INC	728,231,290.84	555,794,079.97	131.03%
RCBC SAVINGS BANK INC	10,144,357,461.20	8,006,173,745.56	126.71%
CHINA BANK SAVINGS INC	1,242,864,554.81	1,039,014,641.03	119.62%
MICROFINANCE MAXIMUM SB INC	55,052,820.56	54,916,771.27	100.25%
Grand Total	152,903,561,664.96	66,991,447,268.33	228.24%

Source: www.bsp.gov.ph

Disclaimer:

This list only serves as a screening guide.  It is not a definitive guide and must be taken in the context of other factors.  The figures are based on the individual banks' statement of condition as of December 31, 2013 as published in the BSP website (www.bsp.gov.ph). For this analysis, no attempt was made to go through the audited financial statements of each bank. Readers are suggested to make their own investigations and verify the figures presented. Both BSP and PDIC have their own problem bank screening systems that are much more sophisticated in scope and design, given that they have more access to information over the banks they regulate.