The Capital Adequacy Ratios of Philippine Banks - June 30, 2015

A bank's Capital Adequacy Ratio is a measure of a bank's capital and financial strength.  It is expressed as a percentage of a bank's risk weighted credit exposures.  It is also known as the "Capital to Risk Weighted Assets Ratio (CRAR).

The general formula is as follows:

CAR = (Tier 1 Capital + Tier 2 Capital)/Risk Weighted Assets

Tier 1 Capital

Tier 1 CAR is the ratio of a bank's core or equity capital to its total risk-weighted assets.  It measures financial strength from a regulator's point of view. Tier 1 Capital measures the bank's ability to absorb losses without a bank being required to cease trading.

The formula for Tier 1 Capital is as follows:

Tier 1 Capital = (Paid-up Capital + Statutory Reserves + Disclosed Free Reserves) - (Equity Investments in Subsidiary + Intangible Assets + Current & B/F losses)

Tier 1 CAR = Tier 1 Capital/Risk Weighted Assets

Tier 2 Capital

Tier 2 Capital is supplementary capital.  It measures the ability of a bank to absorb losses in the event of a winding up and so it provides a lesser degree of protection to depositors.

The formula for Tier 2 Capital is as follows:

 Tier 2 Capital = Undisclosed Reserves + General Loss Reserves + Hybrid Debt Capital Instruments and Subordinated Debts.

Common Equity Tier 1 Ratio

Investopedia defines the Common Equity Tier 1 Ratio as a capital adequacy ratio that: 

"...excludes any preferred shares or non-controlling interests when determining the calculation. This differs from the Tier 1 capital ratio which is based on the sum of its equity capital and disclosed reserves, and sometimes non-redeemable, non-cumulative preferred stock."

"...Regulators use the Tier 1 common capital ratio to grade a firm's capital adequacy as one of the following rankings: Well-Capitalized, Adequately Capitalized, Undercapitalized, Significantly Undercapitalized, and Critically Undercapitalized."

Well Capitalized: Common Equity Tier 1 Ratio of 6% or more and does not pay any dividends that would affect its capital base.

Adequately Capitalized: Common Equity Tier 1 Ratio of 4% or more.

Undercapitalized: Common Equity Tier 1 Ratio below 4%.

Significantly Undercapitalized: Common Equity Tier 1 Ratio below 3%.

Critically Undercapitalized: Common Equity Tier 1 Ratio below 2%.

Banks "ranked as Undercapitalized or below are prohibited from paying any dividends or management fees.  In addition, they are required to file a capital restoration plan."

For more information regarding this, please read the BIS Basel III definition of capital.


Risk Weighted Assets

Risk Weighted Assets are a bank's on balance sheet assets and off-balance sheet exposures, weighted according to risk.  Different classes of assets have different risk weightings.  For instance, cash on hand or a government bond has zero risk weighting and are subtracted from the total risk assets.  A loan would have a 100% risk weighthing - it would be counted towards the total risk assets of the bank.

More information about this can be found here.

Minimum Capital Requirements

International Guidelines

Basel III is the global requlatory standard on bank capital adequacy, stress testing, and market liquidity risk agreed upon by the members of the Basel Committee on Banking Supervision.

Under Basel III, the minimum Common Equity Tier 1 Capital Ratio is 4.5%, Tier 1 Capital Ratio is 6.0%, conservation buffer is 2.5%, and the minimum Total CAR is 8.0%.

For more information on Basel III, read this.

BSP Guidelines

The BSP issued new BASEL III Implementing Guidelines that will take effect on January 1, 2014. Under the new guidelines:

"Banks must now meet specific minimum thresholds for so-called Common Equity Tier 1 (CET1) capital and Tier 1 (T1) capital in addition to the Capital Adequacy Ratio (CAR). These regulatory thresholds effectively move banks worldwide to rely more on core capital instruments like CET1 and T1 issues. This is in lieu of hybrid instruments which did not fare well in the latest global crisis as far as absorbing losses. The ability to absorb losses is central to Basel III.

The BSP maintained the minimum Capital Adequacy Ratio (CAR) at 10.0 percent. In addition to CAR, the new framework sets a CET1 ratio of at least 6.0 percent and the Tier I capital ratio is at a minimum of 7.5 percent. 

The new guidelines also introduce a capital conservation buffer of 2.5 percent which shall be made up of CET1 capital. In addition, banks which issued capital instruments from 2011 will be allowed to count these instruments as Basel III-eligible until end-2015

Moreover, banks that are considered by the BSP as "too big to fail" (domestically systemically important banks) will have minimum common equity Tier 1 (CET1) Ratios that are higher by 1.5% to 3.5% higher than the existing minimum of 6.00% and the capital conservation buffer of 2.5%.

Under these guidelines, several Philippine Banks currently do not meet these guidelines as of June 30, 2015.  The banks that fail to meet BSP's minimum capital requirements are as follows:

TOTAL CAR

1. Bataan Savings and Loan Bank (Total CAR of 0.00)
2. Northpoint Development Bank Inc (Total CAR of 0.00)
3. Comsavings Bank (Total CAR of 1.88)
4. Microfinance Maximum SB Inc (Total CAR of 5.36)
5. Planters Development Bank (Total CAR of 7.19)
6. The Palawan Bank (Total CAR of 7.72)

Tier One CAR

1. 1st Valley Bank (Tier One CAR of 0.00)
2. Bataan Savings and Loan Bank (Tier One CAR of 0.00)
3. Business & Consumers Bank (Tier One CAR of 0.00)
4. Enterprise Bank Inc. (Tier One CAR of 0.00)
5. Equicom Savings Bank, Inc. (Tier One CAR of 0.00)
6. Inter-Asia Development Bank (Tier One CAR of 0.00)
7. Maritime Savings Bank Corporation (Tier One CAR of 0.00)
8. Optimum Development Bank (Tier One CAR of 0.00)
9. Comsavings Bank (Tier One CAR of 1.43)
10. CARD SME Bank (Tier One CAR of 4.01)
11. Planters Development Bank (Tier One CAR of 5.72)
12. The Palawan Bank (Tier One CAR of 7.76)
13. Sterling Bank of Asia Inc. (Tier One CAR of 8.05)
14. Land Bank of the Philippines (Tier One CAR of 9.69)
15. Microfinance Maximum SB Inc (Tier One CAR of 9.86)

Common Equity Tier One CAR

As stated above, the BSP's reporting guidelines on the Common Equity Tier One CAR (CET1) only took effect as of January 1, 2014.  Banks only started reporting this ratio in their Published Statements of Condition for June 30, 2014.  Fifty-eight banks reported their CET1 Ratio as 0.00 for June 30, 2015.

However, those banks that did report a CET1 Ratio other than 0.00, three banks reported CET1 Ratios below BSP's recommended ratio.  They are as follows:

1. Planters Development Bank (CET1 Ratio of 5.72)
2. Robinsons Bank Corporation (CET1 Ratio of 7.88)
3. Land Bank of the Philippines (CET1 Ratio of 9.69)

The Total CAR, Tier 1 CAR, and Common Equity Tier 1 CAR of Philippine Banks as of June 30, 2015 is as follows:(Banks that do not meet BSP's minimum capital requirements are highlighted in yellow):

Philippine Banking System
TOTAL CAR
June 30, 2015
Bank	Type of Bank	Total CAR
BATAAN SAVINGS AND LOAN BANK	Thrift Bank	0.00
NORTHPOINT DEV'T BANK INC	Thrift Bank	0.00
COMSAVINGS BANK	Thrift Bank	1.88
MICROFINANCE MAXIMUM SB INC	Thrift Bank	5.36
PLANTERS DEVELOPMENT BANK	Thrift Bank	7.19
THE PALAWAN BANK (PALAWAN DB) INC	Thrift Bank	7.72
OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK)	Thrift Bank	10.45
UNITED COCONUT PLANTERS BANK	U/KB	10.51
EQUICOM SAVINGS BANK INC	Thrift Bank	10.53
WEALTH DEVELOPMENT BANK CORPORATION	Thrift Bank	10.82
MIZUHO BANK LTD - MANILA BRANCH	U/KB	11.42
LUZON DEVELOPMENT BANK	Thrift Bank	11.47
THE BNK OF TOKYO-MITSUBISHI UFJ LTD	U/KB	11.75
STERLING BANK OF ASIA INC (A SAVINGS BANK)	Thrift Bank	12.10
STANDARD CHARTERED BANK	U/KB	12.17
ENTERPRISE BANK INC (A THRIFT BANK)	Thrift Bank	12.18
BDO UNIBANK INC	U/KB	12.24
ASIA UNITED BANK CORPORATION	U/KB	12.78
CHINA BANK SAVINGS INC	Thrift Bank	12.81
LAND BANK OF THE PHILIPPINES	U/KB	12.84
PHIL POSTAL SAVINGS BANK INC	Thrift Bank	13.08
CITY SAVINGS BANK INC	Thrift Bank	13.38
BANK OF CHINA LIMITED-MANILA BRANCH	U/KB	13.54
BANK OF THE PHIL ISLANDS	U/KB	13.85
PHIL BANK OF COMMUNICATIONS	U/KB	13.91
ANZ BANKING GROUP LTD	U/KB	14.06
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC)	Thrift Bank	14.07
RCBC SAVINGS BANK INC	Thrift Bank	14.35
PHIL NATIONAL BANK	U/KB	14.42
HONGKONG & SHANGHAI BANKING CORP	U/KB	14.89
VILLAGE BANK INC (A THRIFT BANK)	Thrift Bank	14.89
SECURITY BANK CORP	U/KB	15.46
LEGAZPI SAVINGS BANK INC	Thrift Bank	15.50
BPI FAMILY SAVINGS BANK INC	Thrift Bank	15.60
MAYBANK PHILIPPINES INC	U/KB	15.70
CITIBANK, N.A.	U/KB	15.89
FARMERS SAVINGS & LOAN BANK INC	Thrift Bank	15.92
CHINA BANKING CORP	U/KB	16.16
UCPB SAVINGS BANK	Thrift Bank	16.52
MALAYAN BANK SAVINGS AND MORT BANK INC	Thrift Bank	16.58
UNION BANK OF THE PHILS	U/KB	16.63
RIZAL COMM'L BANKING CORP	U/KB	16.68
PRODUCERS SAVINGS BANK CORPORATION	Thrift Bank	17.09
HSBC SAVINGS BANK(PHILS) INC	Thrift Bank	17.65
DEVELOPMENT BANK OF THE PHIL	U/KB	17.88
EAST WEST BANKING CORP	U/KB	18.48
BATAAN DEVELOPMENT BANK	Thrift Bank	18.52
1ST VALLEY BANK INC A DEVELOPMENT BANK	Thrift Bank	18.57
BANK OF MAKATI	Thrift Bank	18.81
PHIL SAVINGS BANK	Thrift Bank	19.05
METROPOLITAN BANK & TCO	U/KB	19.22
WORLD PARTNERS BANK (A THRIFT BANK)	Thrift Bank	19.94
HIYAS BANKING CORPORATION	Thrift Bank	20.02
PHILIPPINE BUSINESS BANK INC A SAVINGS BANK	Thrift Bank	20.16
PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS	Thrift Bank	20.57
PHILIPPINE VETERANS BANK	U/KB	20.89
MEGA INT'L COMM'L BANK CO LTD	U/KB	21.15
BANK OF COMMERCE	U/KB	21.60
BPI GLOBE BANKO INC A SAVINGS BANK	Thrift Bank	22.55
BPI DIRECT SAVINGS BANK INC	Thrift Bank	23.27
KOREA EXCHANGE BANK	U/KB	23.43
CTBC BANK (PHILIPPINES) CORP	U/KB	24.21
METRO CEBU PUBLIC SAVINGS BANK	Thrift Bank	24.21
FIRST CONSOLIDATED BANK INC (A PDB)	Thrift Bank	24.37
DUMAGUETE CITY DEV BANK INC	Thrift Bank	25.64
CARD SME BANK INC A THRIFT BANK	Thrift Bank	25.66
LIFE SAVINGS BANK INC	Thrift Bank	25.68
JP MORGAN CHASE BANK NATIONAL ASSN.	U/KB	26.04
BDO PRIVATE BANK, INC.	U/KB	26.30
INTER-ASIA DEVELOPMENT BANK	Thrift Bank	26.44
CITYSTATE SAVINGS BANK INC	Thrift Bank	26.95
ROBINSONS BANK CORPORATION	U/KB	28.59
DEUTSCHE BANK AG	U/KB	28.70
BUSINESS AND CONSUMERS BANK (A DB)	Thrift Bank	28.81
TOWER DEVELOPMENT BANK	Thrift Bank	31.10
LEMERY SAVINGS & LOAN BANK, INC.	Thrift Bank	32.17
MARITIME SAVINGS BANK CORPORATION	Thrift Bank	32.90
PAMPANGA DEVELOPMENT BANK	Thrift Bank	33.06
CORDILLERA SAVINGS BANK INC	Thrift Bank	34.05
SUN SAVINGS BANK INC	Thrift Bank	35.36
BANK OF AMERICA N.A.	U/KB	36.86
MBANK PHILIPPINES (A THRIFT BANK) INC	Thrift Bank	37.35
TONGYANG SAVINGS BANK INC	Thrift Bank	37.55
UNIVERSITY SAVINGS BANK INC	Thrift Bank	37.64
DUNGGANON BANK (A MICROFINANCE THRIFT BANK) INC	Thrift Bank	39.10
BANGKOK BANK PUBLIC CO LTD	U/KB	40.29
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK	Thrift Bank	40.80
PHIL TRUST COMPANY	U/KB	40.88
MALASIQUI PROGRESSIVE SLB, INC	Thrift Bank	43.90
PHIL STAR DEVELOPMENT BANK INC	Thrift Bank	50.18
INTERNATIONALE NEDERLANDEN GROEP BK	U/KB	51.93
OPTIMUM DEVELOPMENT BANK INC	Thrift Bank	57.55
QUEZON COCONUT BANK INC (A THRIFT BANK)	Thrift Bank	58.76
SAMPAGUITA SAVINGS BANK INC	Thrift Bank	61.94
BANK ONE SAVINGS AND TRUST CORP.	Thrift Bank	62.84
MERCHANTS SAVINGS & LOAN ASSN INC	Thrift Bank	64.13
PROGRESS SAVINGS AND LOAN BANK INC	Thrift Bank	83.88
PACIFIC ACE SAVINGS BANK INC	Thrift Bank	84.87
CENTURY SAVINGS BANK CORPORATION	Thrift Bank	85.37
PNB SAVINGS BANK	Thrift Bank	90.61
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS	U/KB	109.82
UNITED OVERSEAS BANK PHILIPPINES	Thrift Bank	112.89
ISLA BANK(A THRIFT BANK) INC	Thrift Bank	190.23
BDO ELITE SAVINGS BANK INC	Thrift Bank	454.50
SECURITY BANK SAVINGS CORPORATION	Thrift Bank	NA

Philippine Banking System
Tier One CAR
June 30, 2015
Bank	Type of Bank	Tier One CAR
1ST VALLEY BANK INC A DEVELOPMENT BANK	Thrift Bank	0.00
BATAAN SAVINGS AND LOAN BANK	Thrift Bank	0.00
BUSINESS AND CONSUMERS BANK (A DB)	Thrift Bank	0.00
ENTERPRISE BANK INC (A THRIFT BANK)	Thrift Bank	0.00
EQUICOM SAVINGS BANK INC	Thrift Bank	0.00
INTER-ASIA DEVELOPMENT BANK	Thrift Bank	0.00
MARITIME SAVINGS BANK CORPORATION	Thrift Bank	0.00
OPTIMUM DEVELOPMENT BANK INC	Thrift Bank	0.00
COMSAVINGS BANK	Thrift Bank	1.43
CARD SME BANK INC A THRIFT BANK	Thrift Bank	4.01
PLANTERS DEVELOPMENT BANK	Thrift Bank	5.72
THE PALAWAN BANK (PALAWAN DB) INC	Thrift Bank	7.76
STERLING BANK OF ASIA INC (A SAVINGS BANK)	Thrift Bank	8.05
LAND BANK OF THE PHILIPPINES	U/KB	9.69
MICROFINANCE MAXIMUM SB INC	Thrift Bank	9.86
WEALTH DEVELOPMENT BANK CORPORATION	Thrift Bank	10.17
PHIL BANK OF COMMUNICATIONS	U/KB	10.29
DEVELOPMENT BANK OF THE PHIL	U/KB	10.46
BDO UNIBANK INC	U/KB	10.48
MIZUHO BANK LTD - MANILA BRANCH	U/KB	10.48
UNITED COCONUT PLANTERS BANK	U/KB	10.51
LUZON DEVELOPMENT BANK	Thrift Bank	10.62
CHINA BANK SAVINGS INC	Thrift Bank	11.00
THE BNK OF TOKYO-MITSUBISHI UFJ LTD	U/KB	11.00
PHIL NATIONAL BANK	U/KB	11.24
STANDARD CHARTERED BANK	U/KB	11.59
SECURITY BANK CORP	U/KB	12.00
ASIA UNITED BANK CORPORATION	U/KB	12.21
PHIL POSTAL SAVINGS BANK INC	Thrift Bank	12.22
CITY SAVINGS BANK INC	Thrift Bank	12.53
RIZAL COMM'L BANKING CORP	U/KB	12.72
UNION BANK OF THE PHILS	U/KB	12.81
BANK OF THE PHIL ISLANDS	U/KB	12.98
PHIL SAVINGS BANK	Thrift Bank	13.02
BANK OF CHINA LIMITED-MANILA BRANCH	U/KB	13.05
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC)	Thrift Bank	13.42
ANZ BANKING GROUP LTD	U/KB	13.51
RCBC SAVINGS BANK INC	Thrift Bank	13.63
PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS	Thrift Bank	14.09
HONGKONG & SHANGHAI BANKING CORP	U/KB	14.39
EAST WEST BANKING CORP	U/KB	14.53
VILLAGE BANK INC (A THRIFT BANK)	Thrift Bank	14.56
MAYBANK PHILIPPINES INC	U/KB	14.64
BPI FAMILY SAVINGS BANK INC	Thrift Bank	14.72
LEGAZPI SAVINGS BANK INC	Thrift Bank	14.77
CITIBANK, N.A.	U/KB	15.17
FARMERS SAVINGS & LOAN BANK INC	Thrift Bank	15.18
CHINA BANKING CORP	U/KB	15.24
METROPOLITAN BANK & TCO	U/KB	15.29
UCPB SAVINGS BANK	Thrift Bank	15.86
MALAYAN BANK SAVINGS AND MORT BANK INC	Thrift Bank	15.88
HSBC SAVINGS BANK(PHILS) INC	Thrift Bank	16.95
PRODUCERS SAVINGS BANK CORPORATION	Thrift Bank	17.20
BANK OF MAKATI	Thrift Bank	18.27
UNIVERSITY SAVINGS BANK INC	Thrift Bank	18.82
PHILIPPINE BUSINESS BANK INC A SAVINGS BANK	Thrift Bank	19.36
WORLD PARTNERS BANK (A THRIFT BANK)	Thrift Bank	19.39
HIYAS BANKING CORPORATION	Thrift Bank	19.72
MEGA INT'L COMM'L BANK CO LTD	U/KB	20.20
BATAAN DEVELOPMENT BANK	Thrift Bank	20.46
PHILIPPINE VETERANS BANK	U/KB	20.52
BANK OF COMMERCE	U/KB	21.09
BPI GLOBE BANKO INC A SAVINGS BANK	Thrift Bank	22.35
BPI DIRECT SAVINGS BANK INC	Thrift Bank	22.44
KOREA EXCHANGE BANK	U/KB	23.02
CTBC BANK (PHILIPPINES) CORP	U/KB	23.44
FIRST CONSOLIDATED BANK INC (A PDB)	Thrift Bank	23.49
METRO CEBU PUBLIC SAVINGS BANK	Thrift Bank	23.78
DUMAGUETE CITY DEV BANK INC	Thrift Bank	25.24
LIFE SAVINGS BANK INC	Thrift Bank	25.46
JP MORGAN CHASE BANK NATIONAL ASSN.	U/KB	25.89
BDO PRIVATE BANK, INC.	U/KB	26.04
CITYSTATE SAVINGS BANK INC	Thrift Bank	26.56
ROBINSONS BANK CORPORATION	U/KB	27.86
DEUTSCHE BANK AG	U/KB	28.35
LEMERY SAVINGS & LOAN BANK, INC.	Thrift Bank	31.92
NORTHPOINT DEV'T BANK INC	Thrift Bank	33.15
CORDILLERA SAVINGS BANK INC	Thrift Bank	33.52
SUN SAVINGS BANK INC	Thrift Bank	34.46
BANK OF AMERICA N.A.	U/KB	36.42
MBANK PHILIPPINES (A THRIFT BANK) INC	Thrift Bank	37.35
TONGYANG SAVINGS BANK INC	Thrift Bank	37.55
DUNGGANON BANK (A MICROFINANCE THRIFT BANK) INC	Thrift Bank	38.68
BANGKOK BANK PUBLIC CO LTD	U/KB	39.32
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK	Thrift Bank	40.38
PHIL TRUST COMPANY	U/KB	40.53
MALASIQUI PROGRESSIVE SLB, INC	Thrift Bank	43.71
PHIL STAR DEVELOPMENT BANK INC	Thrift Bank	49.87
OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK)	Thrift Bank	50.71
INTERNATIONALE NEDERLANDEN GROEP BK	U/KB	51.47
QUEZON COCONUT BANK INC (A THRIFT BANK)	Thrift Bank	56.96
SAMPAGUITA SAVINGS BANK INC	Thrift Bank	61.91
BANK ONE SAVINGS AND TRUST CORP.	Thrift Bank	62.45
MERCHANTS SAVINGS & LOAN ASSN INC	Thrift Bank	63.61
CENTURY SAVINGS BANK CORPORATION	Thrift Bank	83.82
PROGRESS SAVINGS AND LOAN BANK INC	Thrift Bank	83.88
PACIFIC ACE SAVINGS BANK INC	Thrift Bank	84.74
PNB SAVINGS BANK	Thrift Bank	89.70
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS	U/KB	109.28
UNITED OVERSEAS BANK PHILIPPINES	Thrift Bank	112.27
TOWER DEVELOPMENT BANK	Thrift Bank	115.06
PAMPANGA DEVELOPMENT BANK	Thrift Bank	124.73
ISLA BANK(A THRIFT BANK) INC	Thrift Bank	189.92
BDO ELITE SAVINGS BANK INC	Thrift Bank	454.50
SECURITY BANK SAVINGS CORPORATION	Thrift Bank	NA

Philippine Banking System
Common Tier 1 Ratio
June 30, 2015
Bank	Type of Bank	Common Tier 1 Ratio
1ST VALLEY BANK INC A DEVELOPMENT BANK	Thrift Bank	0.00
BANK OF AMERICA N.A.	U/KB	0.00
BANK OF CHINA LIMITED-MANILA BRANCH	U/KB	0.00
BANK OF MAKATI	Thrift Bank	0.00
BANK ONE SAVINGS AND TRUST CORP.	Thrift Bank	0.00
BATAAN DEVELOPMENT BANK	Thrift Bank	0.00
BATAAN SAVINGS AND LOAN BANK	Thrift Bank	0.00
BUSINESS AND CONSUMERS BANK (A DB)	Thrift Bank	0.00
CARD SME BANK INC A THRIFT BANK	Thrift Bank	0.00
CENTURY SAVINGS BANK CORPORATION	Thrift Bank	0.00
CITYSTATE SAVINGS BANK INC	Thrift Bank	0.00
COMSAVINGS BANK	Thrift Bank	0.00
CORDILLERA SAVINGS BANK INC	Thrift Bank	0.00
DUMAGUETE CITY DEV BANK INC	Thrift Bank	0.00
DUNGGANON BANK (A MICROFINANCE THRIFT BANK) INC	Thrift Bank	0.00
ENTERPRISE BANK INC (A THRIFT BANK)	Thrift Bank	0.00
EQUICOM SAVINGS BANK INC	Thrift Bank	0.00
FARMERS SAVINGS & LOAN BANK INC	Thrift Bank	0.00
FIRST CONSOLIDATED BANK INC (A PDB)	Thrift Bank	0.00
HIYAS BANKING CORPORATION	Thrift Bank	0.00
INTER-ASIA DEVELOPMENT BANK	Thrift Bank	0.00
ISLA BANK(A THRIFT BANK) INC	Thrift Bank	0.00
LEGAZPI SAVINGS BANK INC	Thrift Bank	0.00
LEMERY SAVINGS & LOAN BANK, INC.	Thrift Bank	0.00
LIFE SAVINGS BANK INC	Thrift Bank	0.00
LUZON DEVELOPMENT BANK	Thrift Bank	0.00
MALASIQUI PROGRESSIVE SLB, INC	Thrift Bank	0.00
MALAYAN BANK SAVINGS AND MORT BANK INC	Thrift Bank	0.00
MARITIME SAVINGS BANK CORPORATION	Thrift Bank	0.00
MBANK PHILIPPINES (A THRIFT BANK) INC	Thrift Bank	0.00
METRO CEBU PUBLIC SAVINGS BANK	Thrift Bank	0.00
MICROFINANCE MAXIMUM SB INC	Thrift Bank	0.00
NORTHPOINT DEV'T BANK INC	Thrift Bank	0.00
OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK)	Thrift Bank	0.00
OPTIMUM DEVELOPMENT BANK INC	Thrift Bank	0.00
PACIFIC ACE SAVINGS BANK INC	Thrift Bank	0.00
PAMPANGA DEVELOPMENT BANK	Thrift Bank	0.00
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC)	Thrift Bank	0.00
PHIL POSTAL SAVINGS BANK INC	Thrift Bank	0.00
PHILIPPINE BUSINESS BANK INC A SAVINGS BANK	Thrift Bank	0.00
PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS	Thrift Bank	0.00
PRODUCERS SAVINGS BANK CORPORATION	Thrift Bank	0.00
PROGRESS SAVINGS AND LOAN BANK INC	Thrift Bank	0.00
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK	Thrift Bank	0.00
QUEZON COCONUT BANK INC (A THRIFT BANK)	Thrift Bank	0.00
SAMPAGUITA SAVINGS BANK INC	Thrift Bank	0.00
STERLING BANK OF ASIA INC (A SAVINGS BANK)	Thrift Bank	0.00
SUN SAVINGS BANK INC	Thrift Bank	0.00
THE PALAWAN BANK (PALAWAN DB) INC	Thrift Bank	0.00
TONGYANG SAVINGS BANK INC	Thrift Bank	0.00
TOWER DEVELOPMENT BANK	Thrift Bank	0.00
UCPB SAVINGS BANK	Thrift Bank	0.00
UNITED COCONUT PLANTERS BANK	U/KB	0.00
UNITED OVERSEAS BANK PHILIPPINES	Thrift Bank	0.00
UNIVERSITY SAVINGS BANK INC	Thrift Bank	0.00
VILLAGE BANK INC (A THRIFT BANK)	Thrift Bank	0.00
WEALTH DEVELOPMENT BANK CORPORATION	Thrift Bank	0.00
WORLD PARTNERS BANK (A THRIFT BANK)	Thrift Bank	0.00
PLANTERS DEVELOPMENT BANK	Thrift Bank	5.72
ROBINSONS BANK CORPORATION	U/KB	7.88
LAND BANK OF THE PHILIPPINES	U/KB	9.69
BDO UNIBANK INC	U/KB	10.08
PHIL BANK OF COMMUNICATIONS	U/KB	10.29
DEVELOPMENT BANK OF THE PHIL	U/KB	10.46
MIZUHO BANK LTD - MANILA BRANCH	U/KB	10.48
CHINA BANK SAVINGS INC	Thrift Bank	10.99
THE BNK OF TOKYO-MITSUBISHI UFJ LTD	U/KB	11.00
PHIL NATIONAL BANK	U/KB	11.24
STANDARD CHARTERED BANK	U/KB	11.59
SECURITY BANK CORP	U/KB	12.00
ASIA UNITED BANK CORPORATION	U/KB	12.21
CITY SAVINGS BANK INC	Thrift Bank	12.53
RIZAL COMM'L BANKING CORP	U/KB	12.72
UNION BANK OF THE PHILS	U/KB	12.81
BANK OF THE PHIL ISLANDS	U/KB	12.98
PHIL SAVINGS BANK	Thrift Bank	13.02
ANZ BANKING GROUP LTD	U/KB	13.51
RCBC SAVINGS BANK INC	Thrift Bank	13.63
HONGKONG & SHANGHAI BANKING CORP	U/KB	14.39
EAST WEST BANKING CORP	U/KB	14.53
MAYBANK PHILIPPINES INC	U/KB	14.64
BPI FAMILY SAVINGS BANK INC	Thrift Bank	14.72
CITIBANK, N.A.	U/KB	15.17
CHINA BANKING CORP	U/KB	15.24
METROPOLITAN BANK & TCO	U/KB	15.29
HSBC SAVINGS BANK(PHILS) INC	Thrift Bank	16.95
PHILIPPINE VETERANS BANK	U/KB	18.76
MEGA INT'L COMM'L BANK CO LTD	U/KB	20.20
BDO PRIVATE BANK, INC.	U/KB	20.55
BANK OF COMMERCE	U/KB	21.09
BPI GLOBE BANKO INC A SAVINGS BANK	Thrift Bank	22.35
BPI DIRECT SAVINGS BANK INC	Thrift Bank	22.44
KOREA EXCHANGE BANK	U/KB	23.02
CTBC BANK (PHILIPPINES) CORP	U/KB	23.44
JP MORGAN CHASE BANK NATIONAL ASSN.	U/KB	25.89
DEUTSCHE BANK AG	U/KB	28.35
BANGKOK BANK PUBLIC CO LTD	U/KB	39.32
PHIL TRUST COMPANY	U/KB	40.53
INTERNATIONALE NEDERLANDEN GROEP BK	U/KB	51.47
PHIL STAR DEVELOPMENT BANK INC	Thrift Bank	52.14
MERCHANTS SAVINGS & LOAN ASSN INC	Thrift Bank	63.61
PNB SAVINGS BANK	Thrift Bank	89.68
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS	U/KB	109.28
BDO ELITE SAVINGS BANK INC	Thrift Bank	454.50
SECURITY BANK SAVINGS CORPORATION	Thrift Bank	NA

Source: www.bsp.gov.ph

A Simple Stress Test of Philippine Banks as of March 31, 2015

Editor's Note: This is an updated version of an earlier blog post "A Simple Stress Test of Philippine Banks as of December 31, 2014"

Editor's Note: For the purposes of this article, Philippine Banks or the Philippine Banking System refers to the Philippine Commercial and Universal Banking System and the Philippine Thrift Banking System.  We are ignoring the Philippine Rural and Cooperative Banking Sytem whose asset base is tiny in comparison to the whole banking system (Php 218.298 billion or 1.98% of the Php 11,034.461 billion in assets held in the Philippine Banking System as of March 31, 2015).


In an April 9, 2012 article entitled "Stress Test Proves Strength of PH Banks", "Philippine banks are seen to survive a disaster in which the various lenders are forced to write off loans as large as PhP 36 billion without asking shareholders, the central bank, or the national government for bailout money."  This assertion stems from a recent stress test conducted by the Bangko Sentral ng Pilipinas (BSP) on all 55 regular and commercial and expanded license banks.

For Philippine Banks, these NPLs currently comprise PhP 124.668 billion or 10.37% of the PhP 1,202.021 billion in Stockholders Equity (SE) as of March 31, 2015.  So, writing off 50% of the Philippine Banks NPLs would reduce their aggregate stockholders equity by a little more than 5%.

Naturally, some banks would be more affected than others.  (Weak banks are highlighted in yellow.  Failed banks are highlighted in red.  For more information regarding this, please read "The Top Distressed Philippine Banks as of March 31, 2015").

The stockholder's equity of one bank, Comsavings Bank would be completely wiped out.  Nine other banks would be severely affected.  These banks are: Opportunity Kauswagan Bank Inc (94.87% decline in SE),Legazpi Savings Bank (69.58% decline in SE),  World Partners Bank (67.58% decline in SE), Luzon Development Bank (46.84% decline in SE), BPI Globe Banko Inc (46.13% decline in SE), Bataan Development Bank (45.11% decline in SE), Planters Development Bank (42.76% decline in SE),  , Malayan Bank Savings and Mortgage Bank (33.94% decline in SE), Equicom Savings Bank Inc (31.66% decline in SE).

Philippine Banking System
NPL as % of SE
March 31, 2015
	NPL	SE	NPL/SE
Bank	(In PHP)	(In PHP)	(In %)
COMSAVINGS BANK	191,248,204.56	38,533,481.47	496.32%
OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK)	121,016,620.35	63,778,558.90	189.74%
LEGAZPI SAVINGS BANK INC	407,843,600.38	293,055,776.54	139.17%
WORLD PARTNERS BANK (A THRIFT BANK)	111,334,633.18	82,368,161.87	135.17%
LUZON DEVELOPMENT BANK	499,420,736.49	533,108,615.37	93.68%
BPI GLOBE BANKO INC A SAVINGS BANK	280,542,197.86	304,094,825.33	92.25%
BATAAN DEVELOPMENT BANK	64,582,515.58	71,577,676.61	90.23%
PLANTERS DEVELOPMENT BANK	3,189,663,230.00	3,729,311,188.88	85.53%
MALAYAN BANK SAVINGS AND MORT BANK INC	666,040,981.85	981,257,387.22	67.88%
EQUICOM SAVINGS BANK INC	428,713,287.42	677,023,616.17	63.32%
NORTHPOINT DEV'T BANK INC	116,923,465.35	199,063,075.93	58.74%
FARMERS SAVINGS & LOAN BANK INC	58,212,898.88	109,971,561.50	52.93%
UNITED OVERSEAS BANK PHILIPPINES	665,440,686.65	1,273,737,551.61	52.24%
MBANK PHILIPPINES (A THRIFT BANK) INC	36,806,758.28	74,305,893.14	49.53%
WEALTH DEVELOPMENT BANK CORPORATION	201,120,841.49	419,331,125.73	47.96%
ENTERPRISE BANK INC (A THRIFT BANK)	112,532,855.86	240,299,900.37	46.83%
PHIL POSTAL SAVINGS BANK INC	466,132,640.60	1,001,228,941.63	46.56%
THE PALAWAN BANK (PALAWAN DB) INC	15,194,656.19	32,902,950.23	46.18%
SECURITY BANK SAVINGS CORPORATION	512,338,894.46	1,143,033,718.34	44.82%
PAMPANGA DEVELOPMENT BANK	55,727,765.20	125,866,612.25	44.28%
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC)	131,506,166.73	299,770,523.32	43.87%
SAMPAGUITA SAVINGS BANK INC	22,960,554.29	55,554,461.00	41.33%
STERLING BANK OF ASIA INC (A SAVINGS BANK)	942,691,611.75	2,289,196,608.47	41.18%
PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS	747,125,942.99	1,825,335,912.56	40.93%
STANDARD CHARTERED BANK	2,524,542,279.33	6,210,664,540.23	40.65%
1ST VALLEY BANK INC A DEVELOPMENT BANK	509,998,431.29	1,275,621,264.65	39.98%
METRO CEBU PUBLIC SAVINGS BANK	23,324,342.73	59,130,187.54	39.45%
EAST WEST BANKING CORP	7,353,959,721.22	21,215,170,074.44	34.66%
VILLAGE BANK INC (A THRIFT BANK)	24,358,134.33	73,972,492.58	32.93%
MARITIME SAVINGS BANK CORPORATION	21,163,052.88	65,172,179.44	32.47%
RCBC SAVINGS BANK INC	2,585,628,228.10	8,363,165,332.13	30.92%
TONGYANG SAVINGS BANK INC	114,796,354.04	379,798,977.17	30.23%
UNITED COCONUT PLANTERS BANK	5,746,724,166.55	19,493,624,037.54	29.48%
DUNGGANON BANK (A MICROFINANCE THRIFT BANK) INC	27,617,113.51	93,838,745.83	29.43%
CHINA BANK SAVINGS INC	686,951,119.90	2,622,224,892.31	26.20%
PHIL SAVINGS BANK	4,336,921,235.15	16,832,958,884.31	25.76%
UCPB SAVINGS BANK	512,493,634.01	2,100,397,897.70	24.40%
CITIBANK, N.A.	2,889,108,388.18	12,991,673,871.97	22.24%
PHIL BANK OF COMMUNICATIONS	1,745,888,751.18	8,014,764,595.11	21.78%
BPI FAMILY SAVINGS BANK INC	4,921,476,831.19	22,825,999,302.20	21.56%
PRODUCERS SAVINGS BANK CORPORATION	268,795,613.94	1,343,324,173.35	20.01%
UNION BANK OF THE PHILS	9,877,599,202.32	52,694,139,745.70	18.75%
FIRST CONSOLIDATED BANK INC (A PDB)	560,207,876.49	2,990,242,435.53	18.73%
LIFE SAVINGS BANK INC	11,010,626.31	61,786,467.30	17.82%
INTER-ASIA DEVELOPMENT BANK	8,609,444.71	53,743,654.92	16.02%
MAYBANK PHILIPPINES INC	1,689,317,413.77	10,571,046,072.06	15.98%
BUSINESS AND CONSUMERS BANK (A DB)	13,382,405.13	85,687,284.77	15.62%
BANK OF COMMERCE	2,449,297,065.34	15,776,044,047.26	15.53%
CITYSTATE SAVINGS BANK INC	103,482,596.62	669,710,469.16	15.45%
DUMAGUETE CITY DEV BANK INC	36,126,106.59	237,118,540.08	15.24%
MALASIQUI PROGRESSIVE SLB, INC	7,772,843.25	54,222,334.73	14.34%
CORDILLERA SAVINGS BANK INC	16,205,747.70	114,530,107.35	14.15%
DEVELOPMENT BANK OF THE PHIL	5,863,437,846.65	41,661,819,296.39	14.07%
BPI DIRECT SAVINGS BANK INC	153,634,930.52	1,333,313,254.19	11.52%
PHILIPPINE BUSINESS BANK INC A SAVINGS BANK	939,826,283.92	8,330,054,784.91	11.28%
PHILIPPINE VETERANS BANK	600,639,100.41	5,639,587,670.72	10.65%
SUN SAVINGS BANK INC	11,050,430.93	106,877,548.80	10.34%
ASIA UNITED BANK CORPORATION	2,084,924,543.46	20,392,480,454.52	10.22%
PHIL NATIONAL BANK	9,301,061,945.00	92,681,211,252.95	10.04%
HIYAS BANKING CORPORATION	16,450,205.95	165,015,624.56	9.97%
LAND BANK OF THE PHILIPPINES	6,945,870,220.09	72,468,514,725.69	9.58%
TOWER DEVELOPMENT BANK	11,153,590.50	118,197,886.79	9.44%
ROBINSONS BANK CORPORATION	558,006,486.11	6,148,932,630.66	9.07%
CITY SAVINGS BANK INC	594,760,597.21	6,554,464,780.82	9.07%
BDO UNIBANK INC	15,797,233,825.99	180,124,872,745.52	8.77%
CHINA BANKING CORP	4,648,856,616.84	53,356,950,652.26	8.71%
HONGKONG & SHANGHAI BANKING CORP	1,049,304,788.02	13,226,608,858.88	7.93%
BANK OF CHINA LIMITED-MANILA BRANCH	189,040,895.91	2,459,070,205.22	7.69%
BANK ONE SAVINGS AND TRUST CORP.	40,153,201.27	560,902,553.27	7.16%
CARD SME BANK INC A THRIFT BANK	32,736,348.30	464,160,148.68	7.05%
CTBC BANK (PHILIPPINES) CORP	440,792,982.95	6,597,930,236.45	6.68%
UNIVERSITY SAVINGS BANK INC	26,222,110.35	403,231,462.48	6.50%
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK	42,769,596.12	663,135,618.59	6.45%
PACIFIC ACE SAVINGS BANK INC	4,961,502.34	80,393,394.02	6.17%
PHIL STAR DEVELOPMENT BANK INC	4,656,148.72	76,909,453.54	6.05%
BANK OF THE PHIL ISLANDS	8,352,468,626.16	139,896,235,877.90	5.97%
LEMERY SAVINGS & LOAN BANK, INC.	4,348,037.52	74,143,290.88	5.86%
MICROFINANCE MAXIMUM SB INC	2,425,068.76	42,775,838.74	5.67%
PHIL TRUST COMPANY	1,106,060,633.65	24,845,721,383.49	4.45%
CENTURY SAVINGS BANK CORPORATION	36,771,150.94	938,321,162.21	3.92%
PNB SAVINGS BANK	427,188,228.75	11,123,280,436.26	3.84%
RIZAL COMM'L BANKING CORP	2,069,285,395.36	54,528,200,155.40	3.79%
HSBC SAVINGS BANK(PHILS) INC	81,930,694.58	2,176,142,509.96	3.76%
MEGA INT'L COMM'L BANK CO LTD	67,450,000.00	1,868,072,477.39	3.61%
QUEZON COCONUT BANK INC (A THRIFT BANK)	1,839,153.08	58,583,359.29	3.14%
OPTIMUM DEVELOPMENT BANK INC	22,988,260.92	751,388,533.95	3.06%
SECURITY BANK CORP	1,408,759,419.03	50,108,379,684.07	2.81%
BATAAN SAVINGS AND LOAN BANK	1,419,538.00	63,352,894.61	2.24%
MERCHANTS SAVINGS & LOAN ASSN INC	9,252,307.06	413,241,948.67	2.24%
KOREA EXCHANGE BANK	23,550,178.80	1,220,725,219.87	1.93%
METROPOLITAN BANK & TCO	2,551,456,717.49	145,841,362,014.27	1.75%
PROGRESS SAVINGS AND LOAN BANK INC	1,185,998.13	82,916,253.57	1.43%
ANZ BANKING GROUP LTD	23,339,114.85	4,515,688,133.41	0.52%
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS	1,092,048.97	363,703,278.76	0.30%
BANGKOK BANK PUBLIC CO LTD	4,714,155.55	3,095,660,443.74	0.15%
JP MORGAN CHASE BANK NATIONAL ASSN.	734,885.22	1,378,790,422.84	0.05%
INTERNATIONALE NEDERLANDEN GROEP BK	91.40	2,496,181,851.31	0.00%
BANK OF AMERICA N.A.	4.00	2,096,061,205.20	0.00%
BDO ELITE SAVINGS BANK INC	0.00	806,678,920.20	0.00%
BDO PRIVATE BANK, INC.	0.00	5,875,974,686.81	0.00%
DEUTSCHE BANK AG	0.00	2,500,772,096.92	0.00%
ISLA BANK(A THRIFT BANK) INC	0.00	658,250,282.30	0.00%
MIZUHO BANK LTD - MANILA BRANCH	0.00	2,873,176,295.13	0.00%
THE BNK OF TOKYO-MITSUBISHI UFJ LTD	0.00	4,579,210,136.29	0.00%
Grand Total	124,667,684,377.93	1,202,021,106,765.15	10.37%

Are NPLs the Right Numbers to Look At?

In a financial crisis, a loan that is current can very well become past due, and a past due loan can become a non-performing loan, and a non-performing loan can become a loan write-off.  The real number to look at are the loans that the banks and BSP already consider doubtful: Classified Loans.

Investopedia.com defines "Classified Loans" as:

"Any bank loan that is in danger of default. Classified loans have unpaid interest and principal outstanding, and it is unclear whether the bank will be able to recoup the loan proceeds from the borrower. Banks usually categorize such loans as adversely classified assets on their books."

The US Federal Deposit Insurance Corporation (FDIC), similar to our very own Philippine Deposit Insurance Corporation (PDIC), defines Classified Loans as:

"Loans classified Loss are considered uncollectible and of such little value that their continuance as bankable assets is not warranted. This classification does not mean that the loan has absolutely no recovery or salvage value but rather it is not practical or desirable to defer writing off this basically worthless asset even though partial recovery may be effected in the future."

In Circular #0247 dated May 19, 2000, BSP defines Classified Loans as loans which possess the following characteristics:

1. Loans especially mentioned because they have potential weaknesses that deserve Management's close attention;
2. Substandard Loans are loans which appear to involve a substantial and unreasonable degree of risk to the institution because of unfavorable record or unsatisfactory characteristics;
3. Doubtful Loans are Substandard Loans with the added characteristics that existing facts, conditions, and values make collection or liquidation in full highly improbable and in which substantial loss is probable;
4. Loss are loans that are considered uncollectible or worthless and are of such little value that their continuance as bankable assets is not warranted although the loans may have some recovery or salvage value.

The circular mandates that an allowance for probable losses should be set up in accordance with the following schedule:

1. Loans Especially Mentioned: 5%
2. Substandard - Secured: 6% - 25%
3. Substandard - Unsecured: 25%
4. Doubtful: 50%
5. Loss: 100%

As of March 31, 2015, "Classified Loans and Other Risky Assets" of the Philippine Banks amounted to PhP 403.700 billion or more than 3 times the size of the Philippine Banking System's NPLs of PhP 124.668 billion for the same period.  Consequently, any write-offs of Classified Loans will have three times the impact of an NPL write-off.

Philippine Banking System
Classified Loans vs. NPLs
March 31, 2015
	Classified Loans	NPL	Classified Loans/NPL
Bank	(In PHP)	(In PHP)	(In %)
BANK OF AMERICA N.A.	5,614,000.00	4.00	140350000.00%
INTERNATIONALE NEDERLANDEN GROEP BK	65,000,000.00	91.40	71115973.74%
BANK OF CHINA LIMITED-MANILA BRANCH	8,798,081,232.32	189,040,895.91	4654.06%
VILLAGE BANK INC (A THRIFT BANK)	612,819,397.29	24,358,134.33	2515.87%
KOREA EXCHANGE BANK	496,342,871.07	23,550,178.80	2107.60%
BUSINESS AND CONSUMERS BANK (A DB)	244,923,898.35	13,382,405.13	1830.19%
INTER-ASIA DEVELOPMENT BANK	154,181,672.81	8,609,444.71	1790.84%
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS	13,972,461.61	1,092,048.97	1279.47%
BANK OF COMMERCE	28,940,752,164.13	2,449,297,065.34	1181.59%
MEGA INT'L COMM'L BANK CO LTD	752,996,067.20	67,450,000.00	1116.38%
PHIL STAR DEVELOPMENT BANK INC	45,948,036.48	4,656,148.72	986.82%
METROPOLITAN BANK & TCO	23,643,176,349.46	2,551,456,717.49	926.65%
QUEZON COCONUT BANK INC (A THRIFT BANK)	16,860,367.27	1,839,153.08	916.75%
CITIBANK, N.A.	26,152,414,000.00	2,889,108,388.18	905.21%
SECURITY BANK CORP	10,099,000,000.00	1,408,759,419.03	716.87%
COMSAVINGS BANK	1,275,879,789.57	191,248,204.56	667.13%
PHILIPPINE VETERANS BANK	3,759,760,117.83	600,639,100.41	625.96%
RIZAL COMM'L BANKING CORP	12,071,454,182.64	2,069,285,395.36	583.36%
TOWER DEVELOPMENT BANK	63,813,749.03	11,153,590.50	572.14%
BANK ONE SAVINGS AND TRUST CORP.	222,333,663.29	40,153,201.27	553.71%
DUMAGUETE CITY DEV BANK INC	186,850,000.00	36,126,106.59	517.22%
OPTIMUM DEVELOPMENT BANK INC	118,237,414.61	22,988,260.92	514.34%
PHIL TRUST COMPANY	5,057,058,000.00	1,106,060,633.65	457.21%
PHIL NATIONAL BANK	40,360,427,887.88	9,301,061,945.00	433.93%
UCPB SAVINGS BANK	2,130,534,589.13	512,493,634.01	415.72%
CORDILLERA SAVINGS BANK INC	64,774,904.85	16,205,747.70	399.70%
UNIVERSITY SAVINGS BANK INC	102,606,770.77	26,222,110.35	391.30%
RCBC SAVINGS BANK INC	9,760,813,000.00	2,585,628,228.10	377.50%
BDO UNIBANK INC	58,212,737,471.63	15,797,233,825.99	368.50%
UNITED COCONUT PLANTERS BANK	20,225,000,000.00	5,746,724,166.55	351.94%
PHIL SAVINGS BANK	14,223,657,267.45	4,336,921,235.15	327.97%
CENTURY SAVINGS BANK CORPORATION	113,281,678.30	36,771,150.94	308.07%
UNION BANK OF THE PHILS	27,860,875,880.23	9,877,599,202.32	282.06%
ROBINSONS BANK CORPORATION	1,526,179,000.00	558,006,486.11	273.51%
LAND BANK OF THE PHILIPPINES	18,080,477,391.84	6,945,870,220.09	260.31%
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK	108,947,815.93	42,769,596.12	254.73%
HSBC SAVINGS BANK(PHILS) INC	202,277,279.15	81,930,694.58	246.89%
CHINA BANKING CORP	11,469,061,592.88	4,648,856,616.84	246.71%
LIFE SAVINGS BANK INC	25,275,027.40	11,010,626.31	229.55%
PRODUCERS SAVINGS BANK CORPORATION	595,396,826.60	268,795,613.94	221.51%
METRO CEBU PUBLIC SAVINGS BANK	51,276,007.91	23,324,342.73	219.84%
ASIA UNITED BANK CORPORATION	4,561,086,107.31	2,084,924,543.46	218.77%
STERLING BANK OF ASIA INC (A SAVINGS BANK)	2,046,671,000.00	942,691,611.75	217.11%
TONGYANG SAVINGS BANK INC	244,334,293.64	114,796,354.04	212.84%
BANK OF THE PHIL ISLANDS	17,656,476,765.61	8,352,468,626.16	211.39%
LEGAZPI SAVINGS BANK INC	852,505,000.00	407,843,600.38	209.03%
MALAYAN BANK SAVINGS AND MORT BANK INC	1,375,273,712.12	666,040,981.85	206.48%
FARMERS SAVINGS & LOAN BANK INC	117,847,578.42	58,212,898.88	202.44%
PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS	1,444,161,897.52	747,125,942.99	193.30%
BPI FAMILY SAVINGS BANK INC	9,184,790,080.93	4,921,476,831.19	186.63%
CHINA BANK SAVINGS INC	1,250,520,366.42	686,951,119.90	182.04%
BATAAN DEVELOPMENT BANK	102,400,000.00	64,582,515.58	158.56%
MARITIME SAVINGS BANK CORPORATION	33,435,676.93	21,163,052.88	157.99%
PLANTERS DEVELOPMENT BANK	4,971,179,292.24	3,189,663,230.00	155.85%
PHILIPPINE BUSINESS BANK INC A SAVINGS BANK	1,455,126,000.00	939,826,283.92	154.83%
PHIL POSTAL SAVINGS BANK INC	671,766,952.51	466,132,640.60	144.11%
FIRST CONSOLIDATED BANK INC (A PDB)	769,901,672.97	560,207,876.49	137.43%
DEVELOPMENT BANK OF THE PHIL	8,044,354,493.36	5,863,437,846.65	137.20%
EQUICOM SAVINGS BANK INC	576,440,514.35	428,713,287.42	134.46%
PNB SAVINGS BANK	558,290,160.54	427,188,228.75	130.69%
LEMERY SAVINGS & LOAN BANK, INC.	5,650,057.09	4,348,037.52	129.94%
ANZ BANKING GROUP LTD	29,593,661.02	23,339,114.85	126.80%
1ST VALLEY BANK INC A DEVELOPMENT BANK	642,031,207.19	509,998,431.29	125.89%
CITY SAVINGS BANK INC	747,703,695.60	594,760,597.21	125.72%
SECURITY BANK SAVINGS CORPORATION	641,563,634.22	512,338,894.46	125.22%
CTBC BANK (PHILIPPINES) CORP	538,724,227.33	440,792,982.95	122.22%
BPI DIRECT SAVINGS BANK INC	185,550,281.49	153,634,930.52	120.77%
WORLD PARTNERS BANK (A THRIFT BANK)	133,857,505.43	111,334,633.18	120.23%
DUNGGANON BANK (A MICROFINANCE THRIFT BANK) INC	33,195,886.30	27,617,113.51	120.20%
MAYBANK PHILIPPINES INC	1,998,643,368.58	1,689,317,413.77	118.31%
UNITED OVERSEAS BANK PHILIPPINES	768,339,948.28	665,440,686.65	115.46%
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC)	150,105,993.24	131,506,166.73	114.14%
BPI GLOBE BANKO INC A SAVINGS BANK	301,879,149.82	280,542,197.86	107.61%
STANDARD CHARTERED BANK	2,712,571,038.84	2,524,542,279.33	107.45%
PROGRESS SAVINGS AND LOAN BANK INC	1,258,979.13	1,185,998.13	106.15%
SAMPAGUITA SAVINGS BANK INC	23,876,821.97	22,960,554.29	103.99%
BANGKOK BANK PUBLIC CO LTD	4,714,155.55	4,714,155.55	100.00%
BATAAN SAVINGS AND LOAN BANK	1,419,538.00	1,419,538.00	100.00%
HIYAS BANKING CORPORATION	16,450,205.95	16,450,205.95	100.00%
JP MORGAN CHASE BANK NATIONAL ASSN.	734,885.22	734,885.22	100.00%
MALASIQUI PROGRESSIVE SLB, INC	7,772,843.25	7,772,843.25	100.00%
OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK)	121,016,620.35	121,016,620.35	100.00%
EAST WEST BANKING CORP	7,352,208,071.00	7,353,959,721.22	99.98%
SUN SAVINGS BANK INC	10,746,159.69	11,050,430.93	97.25%
PAMPANGA DEVELOPMENT BANK	47,394,335.63	55,727,765.20	85.05%
HONGKONG & SHANGHAI BANKING CORP	744,434,370.37	1,049,304,788.02	70.95%
LUZON DEVELOPMENT BANK	342,223,917.09	499,420,736.49	68.52%
WEALTH DEVELOPMENT BANK CORPORATION	77,899,031.54	201,120,841.49	38.73%
PHIL BANK OF COMMUNICATIONS	31,102,717.11	1,745,888,751.18	1.78%
CARD SME BANK INC A THRIFT BANK	0.00	32,736,348.30	0.00%
CITYSTATE SAVINGS BANK INC	0.00	103,482,596.62	0.00%
ENTERPRISE BANK INC (A THRIFT BANK)	0.00	112,532,855.86	0.00%
MBANK PHILIPPINES (A THRIFT BANK) INC	0.00	36,806,758.28	0.00%
MERCHANTS SAVINGS & LOAN ASSN INC	0.00	9,252,307.06	0.00%
MICROFINANCE MAXIMUM SB INC	0.00	2,425,068.76	0.00%
NORTHPOINT DEV'T BANK INC	0.00	116,923,465.35	0.00%
PACIFIC ACE SAVINGS BANK INC	0.00	4,961,502.34	0.00%
THE PALAWAN BANK (PALAWAN DB) INC	0.00	15,194,656.19	0.00%
BDO ELITE SAVINGS BANK INC	0.00	0.00	NA
BDO PRIVATE BANK, INC.	709,747,747.91	0.00	NA
DEUTSCHE BANK AG	1,068,823,098.34	0.00	NA
ISLA BANK(A THRIFT BANK) INC	0.00	0.00	NA
MIZUHO BANK LTD - MANILA BRANCH	421,990,399.91	0.00	NA
THE BNK OF TOKYO-MITSUBISHI UFJ LTD	0.00	0.00	NA
Grand Total	403,700,854,944.22	124,667,684,377.93	323.82%

This level of classified loans should be measured against the bank's "capital cushion" or its ability to absorb losses.  Capital Cushion is normally defined as a bank's "Tangible Common Equity" plus its Loan Loss Reserves.  Tangible Common Equity (TCE) refers to the subset of shareholders' equity that is not preferred equity and not intangible assets.  So it excludes such items as Hybrid equity (like preferred shares) and goodwill.

By this measure, the level of "Classified Loans and other Risky Assets" amounts to 31.42% of the Php 1.284.657 trillion in Total Capital Cushion of Philippine Banks as of March 31, 2015.

Philippine Banking System
Classified Loans as % of Total Capital Cushion
December 31, 2014
	Classified Loans	Total Capital Cushion	Classified Loans/Total Capital Cushion
Bank	(In Php)	(In Php)	(In %)
COMSAVINGS BANK	1,275,879,789.57	2,040,620.46	62524.11%
LEGAZPI SAVINGS BANK INC	852,505,000.00	71,668,890.19	1189.50%
VILLAGE BANK INC (A THRIFT BANK)	612,819,397.29	91,330,174.05	670.99%
BANK OF CHINA LIMITED-MANILA BRANCH	8,798,081,232.32	2,621,331,502.11	335.63%
BUSINESS AND CONSUMERS BANK (A DB)	244,923,898.35	91,656,352.27	267.22%
INTER-ASIA DEVELOPMENT BANK	154,181,672.81	60,943,659.80	252.99%
UNITED COCONUT PLANTERS BANK	20,225,000,000.00	12,029,067,773.11	168.13%
PLANTERS DEVELOPMENT BANK	4,971,179,292.24	3,105,561,377.23	160.07%
BANK OF COMMERCE	28,940,752,164.13	18,295,365,969.21	158.19%
CITIBANK, N.A.	26,152,414,000.00	20,692,983,956.61	126.38%
BATAAN DEVELOPMENT BANK	102,400,000.00	84,304,826.74	121.46%
MALAYAN BANK SAVINGS AND MORT BANK INC	1,375,273,712.12	1,279,482,144.80	107.49%
WORLD PARTNERS BANK (A THRIFT BANK)	133,857,505.43	132,927,437.25	100.70%
RCBC SAVINGS BANK INC	9,760,813,000.00	9,825,342,006.76	99.34%
OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK)	121,016,620.35	121,973,635.48	99.22%
BPI GLOBE BANKO INC A SAVINGS BANK	301,879,149.82	317,502,753.38	95.08%
FARMERS SAVINGS & LOAN BANK INC	117,847,578.42	134,827,515.80	87.41%
UCPB SAVINGS BANK	2,130,534,589.13	2,538,952,565.15	83.91%
DUMAGUETE CITY DEV BANK INC	186,850,000.00	239,322,684.57	78.07%
EQUICOM SAVINGS BANK INC	576,440,514.35	768,259,083.16	75.03%
METRO CEBU PUBLIC SAVINGS BANK	51,276,007.91	69,920,459.96	73.33%
STERLING BANK OF ASIA INC (A SAVINGS BANK)	2,046,671,000.00	2,876,685,571.45	71.15%
PHIL SAVINGS BANK	14,223,657,267.45	20,931,580,838.52	67.95%
PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS	1,444,161,897.52	2,198,216,834.13	65.70%
PHIL STAR DEVELOPMENT BANK INC	45,948,036.48	81,973,833.05	56.05%
LUZON DEVELOPMENT BANK	342,223,917.09	620,410,762.14	55.16%
TOWER DEVELOPMENT BANK	63,813,749.03	120,204,213.56	53.09%
CORDILLERA SAVINGS BANK INC	64,774,904.85	123,366,087.49	52.51%
TONGYANG SAVINGS BANK INC	244,334,293.64	474,040,690.72	51.54%
PHILIPPINE VETERANS BANK	3,759,760,117.83	7,305,012,418.21	51.47%
PHIL POSTAL SAVINGS BANK INC	671,766,952.51	1,351,665,525.19	49.70%
DEUTSCHE BANK AG	1,068,823,098.34	2,215,707,540.15	48.24%
MARITIME SAVINGS BANK CORPORATION	33,435,676.93	70,668,699.12	47.31%
1ST VALLEY BANK INC A DEVELOPMENT BANK	642,031,207.19	1,368,109,523.21	46.93%
UNION BANK OF THE PHILS	27,860,875,880.23	62,677,961,656.73	44.45%
CHINA BANK SAVINGS INC	1,250,520,366.42	2,843,349,806.94	43.98%
PRODUCERS SAVINGS BANK CORPORATION	595,396,826.60	1,381,963,385.45	43.08%
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC)	150,105,993.24	357,335,617.45	42.01%
UNITED OVERSEAS BANK PHILIPPINES	768,339,948.28	1,843,819,010.39	41.67%
SECURITY BANK SAVINGS CORPORATION	641,563,634.22	1,588,413,414.97	40.39%
LIFE SAVINGS BANK INC	25,275,027.40	63,924,870.67	39.54%
BANK ONE SAVINGS AND TRUST CORP.	222,333,663.29	566,887,909.10	39.22%
PHIL NATIONAL BANK	40,360,427,887.88	104,068,094,437.47	38.78%
KOREA EXCHANGE BANK	496,342,871.07	1,284,097,972.17	38.65%
UNIVERSITY SAVINGS BANK INC	102,606,770.77	272,320,975.70	37.68%
MEGA INT'L COMM'L BANK CO LTD	752,996,067.20	2,040,085,431.57	36.91%
STANDARD CHARTERED BANK	2,712,571,038.84	8,024,888,405.68	33.80%
BPI FAMILY SAVINGS BANK INC	9,184,790,080.93	27,240,230,883.49	33.72%
PAMPANGA DEVELOPMENT BANK	47,394,335.63	144,154,031.58	32.88%
SAMPAGUITA SAVINGS BANK INC	23,876,821.97	75,446,427.87	31.65%
EAST WEST BANKING CORP	7,352,208,071.00	24,078,038,495.54	30.53%
DUNGGANON BANK (A MICROFINANCE THRIFT BANK) INC	33,195,886.30	112,885,626.05	29.41%
QUEZON COCONUT BANK INC (A THRIFT BANK)	16,860,367.27	57,413,595.52	29.37%
BDO UNIBANK INC	58,212,737,471.63	202,744,632,642.70	28.71%
LAND BANK OF THE PHILIPPINES	18,080,477,391.84	66,913,719,817.48	27.02%
PHIL TRUST COMPANY	5,057,058,000.00	20,953,818,006.85	24.13%
RIZAL COMM'L BANKING CORP	12,071,454,182.64	51,389,247,292.97	23.49%
FIRST CONSOLIDATED BANK INC (A PDB)	769,901,672.97	3,416,484,504.09	22.53%
ROBINSONS BANK CORPORATION	1,526,179,000.00	7,079,978,934.78	21.56%
SECURITY BANK CORP	10,099,000,000.00	49,978,057,265.47	20.21%
ASIA UNITED BANK CORPORATION	4,561,086,107.31	22,657,108,060.23	20.13%
DEVELOPMENT BANK OF THE PHIL	8,044,354,493.36	40,570,661,092.37	19.83%
CHINA BANKING CORP	11,469,061,592.88	58,267,596,506.47	19.68%
MAYBANK PHILIPPINES INC	1,998,643,368.58	11,690,151,577.28	17.10%
WEALTH DEVELOPMENT BANK CORPORATION	77,899,031.54	480,371,548.58	16.22%
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK	108,947,815.93	681,272,956.48	15.99%
METROPOLITAN BANK & TCO	23,643,176,349.46	150,010,488,374.17	15.76%
PHILIPPINE BUSINESS BANK INC A SAVINGS BANK	1,455,126,000.00	9,511,588,637.10	15.30%
OPTIMUM DEVELOPMENT BANK INC	118,237,414.61	792,442,288.34	14.92%
MIZUHO BANK LTD - MANILA BRANCH	421,990,399.91	3,029,984,154.78	13.93%
MALASIQUI PROGRESSIVE SLB, INC	7,772,843.25	60,982,462.80	12.75%
BDO PRIVATE BANK, INC.	709,747,747.91	5,591,591,534.13	12.69%
BPI DIRECT SAVINGS BANK INC	185,550,281.49	1,466,739,963.04	12.65%
CENTURY SAVINGS BANK CORPORATION	113,281,678.30	924,062,339.47	12.26%
BANK OF THE PHIL ISLANDS	17,656,476,765.61	151,829,400,490.84	11.63%
CITY SAVINGS BANK INC	747,703,695.60	6,668,601,929.63	11.21%
HIYAS BANKING CORPORATION	16,450,205.95	170,639,794.32	9.64%
SUN SAVINGS BANK INC	10,746,159.69	114,082,540.17	9.42%
HSBC SAVINGS BANK(PHILS) INC	202,277,279.15	2,219,306,698.17	9.11%
CTBC BANK (PHILIPPINES) CORP	538,724,227.33	6,959,986,711.28	7.74%
LEMERY SAVINGS & LOAN BANK, INC.	5,650,057.09	74,923,548.33	7.54%
HONGKONG & SHANGHAI BANKING CORP	744,434,370.37	14,022,338,639.35	5.31%
PNB SAVINGS BANK	558,290,160.54	11,257,557,062.46	4.96%
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS	13,972,461.61	376,601,564.39	3.71%
INTERNATIONALE NEDERLANDEN GROEP BK	65,000,000.00	2,622,846,326.92	2.48%
BATAAN SAVINGS AND LOAN BANK	1,419,538.00	64,296,764.51	2.21%
PROGRESS SAVINGS AND LOAN BANK INC	1,258,979.13	83,794,739.22	1.50%
ANZ BANKING GROUP LTD	29,593,661.02	4,523,125,543.65	0.65%
PHIL BANK OF COMMUNICATIONS	31,102,717.11	7,910,385,394.08	0.39%
BANK OF AMERICA N.A.	5,614,000.00	2,116,461,209.20	0.27%
BANGKOK BANK PUBLIC CO LTD	4,714,155.55	3,314,810,827.00	0.14%
JP MORGAN CHASE BANK NATIONAL ASSN.	734,885.22	1,407,968,061.99	0.05%
BDO ELITE SAVINGS BANK INC	0.00	1,583,649,281.18	0.00%
CARD SME BANK INC A THRIFT BANK	0.00	469,126,734.21	0.00%
CITYSTATE SAVINGS BANK INC	0.00	724,795,838.45	0.00%
ENTERPRISE BANK INC (A THRIFT BANK)	0.00	296,449,412.77	0.00%
ISLA BANK(A THRIFT BANK) INC	0.00	661,796,405.99	0.00%
MBANK PHILIPPINES (A THRIFT BANK) INC	0.00	123,726,994.24	0.00%
MERCHANTS SAVINGS & LOAN ASSN INC	0.00	427,197,144.35	0.00%
MICROFINANCE MAXIMUM SB INC	0.00	54,462,098.70	0.00%
NORTHPOINT DEV'T BANK INC	0.00	243,988,192.87	0.00%
PACIFIC ACE SAVINGS BANK INC	0.00	82,900,536.82	0.00%
THE BNK OF TOKYO-MITSUBISHI UFJ LTD	0.00	4,962,920,166.75	0.00%
THE PALAWAN BANK (PALAWAN DB) INC	0.00	44,159,244.35	0.00%
Grand Total	403,700,854,944.22	1,284,656,999,735.14	31.42%

Stress Test Scenarios

Aggregate

So how will a 10%, 20%, 30%, 40%, and even 50% write-off of Classified Loans affect the Total Capital Cushion of the Philippine Banking System?

In the aggregate, if Classified Loans amount to 31.42% of the banking system's Total Capital Cushion, then it follows that a 10% write-off of Classified Loans will reduce the total capital by 3.14% and a 50% write-off of classified loans will reduce the banking system's Total Capital Cushion by 15.71%.

Individual Banks

A 10% write-off of Classified Loans would wipe out the capital of two banks (highlighted in red) and severely impact (by 30% or more) the Total Capital Cushion of two other banks (severely affected banks highlighted in yellow).

1. Comsavings Bank (6252.41% reduction in Total Capital Cushion)
2. Legazpi Savings Bank (118.95% reduction in Total Capital Cushion)
3. Village Bank Inc. (67.10% reduction in Total Capital Cushion)
4. Bank of China Limited - Manila Branch (33.56% reduction in Total Capital Cushion)

A 20% write-off of Classified Loans will totally wipe out the Total Capital Cushion of three banks and severely impact the Total Capital Cushion of six more banks:

1. Comsavings Bank (12504.82% reduction in Total Capital Cushion)
2. Legazpi Savings Bank (237.90% reduction in Total Capital Cushion)
3. Village Bank Inc. (134.20% reduction in Total Capital Cushion)
4. Bank of China Limited - Manila Branch (67.13% reduction in Total Capital Cushion)
5. Business and Consumers Bank (53.44% reduction in Total Capital Cushion)
6. Inter-Asia Development Bank (50.60% reduction in Total Capital Cushion)
7. United Coconut Planters Bank (33.63% reduction in Total Capital Cushion)
8. Planters Development Bank (32.01% reduction in Total Capital Cushion)
9. Bank of Commerce (31.64% reduction in Total Capital Cushion)

A 30% write-off of Classified Loans will totally wipe out the Total Capital Cushion of four banks and severely affect (reduce by 30% or more) the Total Capital Cushion of nine other banks:

1. Comsavings Bank (18757.23% reduction in Total Capital Cushion)
2. Legazpi Savings Bank (356.85% reduction in Total Capital Cushion)
3. Village Bank Inc. (201.30% reduction in Total Capital Cushion)
4. Bank of China Limited - Manila Branch (100.69% reduction in Total Capital Cushion)
5. Business and Consumers Bank (80.17% reduction in Total Capital Cushion)
6. Inter-Asia Development Bank (75.90% reduction in Total Capital Cushion)
7. United Coconut Planters Bank (50.44% reduction in Total Capital Cushion)
8. Planters Development Bank (48.02% reduction in Total Capital Cushion)
9. Bank of Commerce (47.46% reduction in Total Capital Cushion)
10. Citibank, N.A. (37.91% reduction in Total Capital Cushion)
11. Bataan Development Bank (36.44% reduction in Total Capital Cushion)
12. Malayan Bank Savings and Mortgage Bank Inc (32.25% reduction in Total Capital Cushion)
13. World Partners Bank (30.21% reduction in Total Capital Cushion)

A 40% write-off of Classified Loans will totally wipe out the Total Capital Cushion of six banks and severely affect (reduce by 30% or more) the Total Capital Cushion of fourteen more banks:

1. Comsavings Bank (25009% reduction in Total Capital Cushion)
2. Legazpi Savings Bank (475.80% reduction in Total Capital Cushion)
3. Village Bank Inc. (268.40% reduction in Total Capital Cushion)
4. Bank of China Limited - Manila Branch (134.25% reduction in Total Capital Cushion)
5. Business and Consumers Bank (106.89% reduction in Total Capital Cushion)
6. Inter-Asia Development Bank (101.20% reduction in Total Capital Cushion)
7. United Coconut Planters Bank (67.25% reduction in Total Capital Cushion)
8. Planters Development Bank (64.03% reduction in Total Capital Cushion)
9. Bank of Commerce (63.27% reduction in Total Capital Cushion)
10. Citibank, N.A. (50.55% reduction in Total Capital Cushion)
11. Bataan Development Bank (48.59% reduction in Total Capital Cushion)
12. Malayan Bank Savings and Mortgage Bank Inc (42.99% reduction in Total Capital Cushion)
13. World Partners Bank (40.28% reduction in Total Capital Cushion)
14. RCBC Savings Bank (39.74% reduction in Total Capital Cushion)
15. Opportunity Kauswagan Bank Inc (39.69% reduction in Total Capital Cushion)
16. BPI Globe Banko Inc (38.03% reduction in Total Capital Cushion)
17. Farmers Savings & Loan Bank (34.96% reduction in Total Capital Cushion)
18. UCPB Savings Bank (33.57% reduction in Total Capital Cushion)
19. Dumaguete City Development Bank Inc. (31.23% reduction in Total Capital Cushion)
20. Equicom Savings Bank (30.01% reduction in Total Capital Cushion)

A 50% write-off of Classified Loans will totally wipe out the Total Capital Cushion of six banks and severely affect (reduce by 30% or more) the Total Capital Cushion of eighteen more banks:

1. Comsavings Bank (31,262.06% reduction in Total Capital Cushion)
2. Legazpi Savings Bank (594.75% reduction in Total Capital Cushion)
3. Village Bank Inc. (335.50% reduction in Total Capital Cushion)
4. Bank of China Limited - Manila Branch (167.82% reduction in Total Capital Cushion)
5. Business and Consumers Bank (133.61% reduction in Total Capital Cushion)
6. Inter-Asia Development Bank (126.50% reduction in Total Capital Cushion)
7. United Coconut Planters Bank (84.07% reduction in Total Capital Cushion)
8. Planters Development Bank (80.04% reduction in Total Capital Cushion)
9. Bank of Commerce (79.09% reduction in Total Capital Cushion)
10. Citibank, N.A. (63.19% reduction in Total Capital Cushion)
11. Bataan Development Bank (60.73% reduction in Total Capital Cushion)
12. Malayan Bank Savings and Mortgage Bank Inc (53.74% reduction in Total Capital Cushion)
13. World Partners Bank (50.35% reduction in Total Capital Cushion)
14. RCBC Savings Bank (49.67% reduction in Total Capital Cushion)
15. Opportunity Kauswagan Bank Inc (49.61% reduction in Total Capital Cushion)
16. BPI Globe Banko Inc (47.54% reduction in Total Capital Cushion)
17. Farmers Savings & Loan Bank (43.70% reduction in Total Capital Cushion)
18. UCPB Savings Bank (41.96% reduction in Total Capital Cushion)
19. Dumaguete City Development Bank Inc. (39.04% reduction in Total Capital Cushion)
20. Equicom Savings Bank (37.52% reduction in Total Capital Cushion)
21. Metro Cebu Public Savings Bank (36.67% reduction in Total Capital Cushion)
22. Sterling Bank of Asia Inc (35.57% reduction in Total Capital Cushion)
23. Philippine Savings Bank (33.98% reduction in Total Capital Cushion)
24. Philippine Resources Savings Banking Corporation (32.85% reduction in Total Capital Cushion)

Please bear in mind that a number of these banks are already very weak and are in distress.  Please see a previous blog post: "The Top Distressed Philippine Banks as of March 31, 2015".  Moreover, their capital can be overstated.  See a previous blog post "Overstated Capital of Philippine Banks as of March 31, 2015".  As such, any reduction in their capital cushion could knock down an already weak bank.

Philippine Banking System
Impact Analysis of Classified Loan Loss Severities on Total Capital Cushion
March 31, 2015
	Classified Loans	Total Capital Cushion	Classified Loans/Total Capital Cushion	Impact of 10% Classified Loan Loss Severity on Total Capital Cushion	Impact of 20% Classified Loan Loss Severity on Total Capital Cushion	Impact of 30% Classified Loan Loss Severity on Total Capital Cushion	Impact of 40% Classified Loan Loss Severity on Total Capital Cushion	Impact of 50% Classified Loan Loss Severity on Total Capital Cushion
Bank	(In Php)	(In Php)	(In %)	(In %)	(In %)	(In %)	(In %)	(In %)
COMSAVINGS BANK	1,275,879,789.57	2,040,620.46	62524.11%	6252.41%	12504.82%	18757.23%	25009.64%	31262.06%
LEGAZPI SAVINGS BANK INC	852,505,000.00	71,668,890.19	1189.50%	118.95%	237.90%	356.85%	475.80%	594.75%
VILLAGE BANK INC (A THRIFT BANK)	612,819,397.29	91,330,174.05	670.99%	67.10%	134.20%	201.30%	268.40%	335.50%
BANK OF CHINA LIMITED-MANILA BRANCH	8,798,081,232.32	2,621,331,502.11	335.63%	33.56%	67.13%	100.69%	134.25%	167.82%
BUSINESS AND CONSUMERS BANK (A DB)	244,923,898.35	91,656,352.27	267.22%	26.72%	53.44%	80.17%	106.89%	133.61%
INTER-ASIA DEVELOPMENT BANK	154,181,672.81	60,943,659.80	252.99%	25.30%	50.60%	75.90%	101.20%	126.50%
UNITED COCONUT PLANTERS BANK	20,225,000,000.00	12,029,067,773.11	168.13%	16.81%	33.63%	50.44%	67.25%	84.07%
PLANTERS DEVELOPMENT BANK	4,971,179,292.24	3,105,561,377.23	160.07%	16.01%	32.01%	48.02%	64.03%	80.04%
BANK OF COMMERCE	28,940,752,164.13	18,295,365,969.21	158.19%	15.82%	31.64%	47.46%	63.27%	79.09%
CITIBANK, N.A.	26,152,414,000.00	20,692,983,956.61	126.38%	12.64%	25.28%	37.91%	50.55%	63.19%
BATAAN DEVELOPMENT BANK	102,400,000.00	84,304,826.74	121.46%	12.15%	24.29%	36.44%	48.59%	60.73%
MALAYAN BANK SAVINGS AND MORT BANK INC	1,375,273,712.12	1,279,482,144.80	107.49%	10.75%	21.50%	32.25%	42.99%	53.74%
WORLD PARTNERS BANK (A THRIFT BANK)	133,857,505.43	132,927,437.25	100.70%	10.07%	20.14%	30.21%	40.28%	50.35%
RCBC SAVINGS BANK INC	9,760,813,000.00	9,825,342,006.76	99.34%	9.93%	19.87%	29.80%	39.74%	49.67%
OPPORTUNITY KAUSWAGAN BANK INC (A MICROFINANCE THRIFT BANK)	121,016,620.35	121,973,635.48	99.22%	9.92%	19.84%	29.76%	39.69%	49.61%
BPI GLOBE BANKO INC A SAVINGS BANK	301,879,149.82	317,502,753.38	95.08%	9.51%	19.02%	28.52%	38.03%	47.54%
FARMERS SAVINGS & LOAN BANK INC	117,847,578.42	134,827,515.80	87.41%	8.74%	17.48%	26.22%	34.96%	43.70%
UCPB SAVINGS BANK	2,130,534,589.13	2,538,952,565.15	83.91%	8.39%	16.78%	25.17%	33.57%	41.96%
DUMAGUETE CITY DEV BANK INC	186,850,000.00	239,322,684.57	78.07%	7.81%	15.61%	23.42%	31.23%	39.04%
EQUICOM SAVINGS BANK INC	576,440,514.35	768,259,083.16	75.03%	7.50%	15.01%	22.51%	30.01%	37.52%
METRO CEBU PUBLIC SAVINGS BANK	51,276,007.91	69,920,459.96	73.33%	7.33%	14.67%	22.00%	29.33%	36.67%
STERLING BANK OF ASIA INC (A SAVINGS BANK)	2,046,671,000.00	2,876,685,571.45	71.15%	7.11%	14.23%	21.34%	28.46%	35.57%
PHIL SAVINGS BANK	14,223,657,267.45	20,931,580,838.52	67.95%	6.80%	13.59%	20.39%	27.18%	33.98%
PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS	1,444,161,897.52	2,198,216,834.13	65.70%	6.57%	13.14%	19.71%	26.28%	32.85%
PHIL STAR DEVELOPMENT BANK INC	45,948,036.48	81,973,833.05	56.05%	5.61%	11.21%	16.82%	22.42%	28.03%
LUZON DEVELOPMENT BANK	342,223,917.09	620,410,762.14	55.16%	5.52%	11.03%	16.55%	22.06%	27.58%
TOWER DEVELOPMENT BANK	63,813,749.03	120,204,213.56	53.09%	5.31%	10.62%	15.93%	21.24%	26.54%
CORDILLERA SAVINGS BANK INC	64,774,904.85	123,366,087.49	52.51%	5.25%	10.50%	15.75%	21.00%	26.25%
TONGYANG SAVINGS BANK INC	244,334,293.64	474,040,690.72	51.54%	5.15%	10.31%	15.46%	20.62%	25.77%
PHILIPPINE VETERANS BANK	3,759,760,117.83	7,305,012,418.21	51.47%	5.15%	10.29%	15.44%	20.59%	25.73%
PHIL POSTAL SAVINGS BANK INC	671,766,952.51	1,351,665,525.19	49.70%	4.97%	9.94%	14.91%	19.88%	24.85%
DEUTSCHE BANK AG	1,068,823,098.34	2,215,707,540.15	48.24%	4.82%	9.65%	14.47%	19.30%	24.12%
MARITIME SAVINGS BANK CORPORATION	33,435,676.93	70,668,699.12	47.31%	4.73%	9.46%	14.19%	18.93%	23.66%
1ST VALLEY BANK INC A DEVELOPMENT BANK	642,031,207.19	1,368,109,523.21	46.93%	4.69%	9.39%	14.08%	18.77%	23.46%
UNION BANK OF THE PHILS	27,860,875,880.23	62,677,961,656.73	44.45%	4.45%	8.89%	13.34%	17.78%	22.23%
CHINA BANK SAVINGS INC	1,250,520,366.42	2,843,349,806.94	43.98%	4.40%	8.80%	13.19%	17.59%	21.99%
PRODUCERS SAVINGS BANK CORPORATION	595,396,826.60	1,381,963,385.45	43.08%	4.31%	8.62%	12.93%	17.23%	21.54%
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC)	150,105,993.24	357,335,617.45	42.01%	4.20%	8.40%	12.60%	16.80%	21.00%
UNITED OVERSEAS BANK PHILIPPINES	768,339,948.28	1,843,819,010.39	41.67%	4.17%	8.33%	12.50%	16.67%	20.84%
SECURITY BANK SAVINGS CORPORATION	641,563,634.22	1,588,413,414.97	40.39%	4.04%	8.08%	12.12%	16.16%	20.20%
LIFE SAVINGS BANK INC	25,275,027.40	63,924,870.67	39.54%	3.95%	7.91%	11.86%	15.82%	19.77%
BANK ONE SAVINGS AND TRUST CORP.	222,333,663.29	566,887,909.10	39.22%	3.92%	7.84%	11.77%	15.69%	19.61%
PHIL NATIONAL BANK	40,360,427,887.88	104,068,094,437.47	38.78%	3.88%	7.76%	11.63%	15.51%	19.39%
KOREA EXCHANGE BANK	496,342,871.07	1,284,097,972.17	38.65%	3.87%	7.73%	11.60%	15.46%	19.33%
UNIVERSITY SAVINGS BANK INC	102,606,770.77	272,320,975.70	37.68%	3.77%	7.54%	11.30%	15.07%	18.84%
MEGA INT'L COMM'L BANK CO LTD	752,996,067.20	2,040,085,431.57	36.91%	3.69%	7.38%	11.07%	14.76%	18.46%
STANDARD CHARTERED BANK	2,712,571,038.84	8,024,888,405.68	33.80%	3.38%	6.76%	10.14%	13.52%	16.90%
BPI FAMILY SAVINGS BANK INC	9,184,790,080.93	27,240,230,883.49	33.72%	3.37%	6.74%	10.12%	13.49%	16.86%
PAMPANGA DEVELOPMENT BANK	47,394,335.63	144,154,031.58	32.88%	3.29%	6.58%	9.86%	13.15%	16.44%
SAMPAGUITA SAVINGS BANK INC	23,876,821.97	75,446,427.87	31.65%	3.16%	6.33%	9.49%	12.66%	15.82%
EAST WEST BANKING CORP	7,352,208,071.00	24,078,038,495.54	30.53%	3.05%	6.11%	9.16%	12.21%	15.27%
DUNGGANON BANK (A MICROFINANCE THRIFT BANK) INC	33,195,886.30	112,885,626.05	29.41%	2.94%	5.88%	8.82%	11.76%	14.70%
QUEZON COCONUT BANK INC (A THRIFT BANK)	16,860,367.27	57,413,595.52	29.37%	2.94%	5.87%	8.81%	11.75%	14.68%
BDO UNIBANK INC	58,212,737,471.63	202,744,632,642.70	28.71%	2.87%	5.74%	8.61%	11.48%	14.36%
LAND BANK OF THE PHILIPPINES	18,080,477,391.84	66,913,719,817.48	27.02%	2.70%	5.40%	8.11%	10.81%	13.51%
PHIL TRUST COMPANY	5,057,058,000.00	20,953,818,006.85	24.13%	2.41%	4.83%	7.24%	9.65%	12.07%
RIZAL COMM'L BANKING CORP	12,071,454,182.64	51,389,247,292.97	23.49%	2.35%	4.70%	7.05%	9.40%	11.75%
FIRST CONSOLIDATED BANK INC (A PDB)	769,901,672.97	3,416,484,504.09	22.53%	2.25%	4.51%	6.76%	9.01%	11.27%
ROBINSONS BANK CORPORATION	1,526,179,000.00	7,079,978,934.78	21.56%	2.16%	4.31%	6.47%	8.62%	10.78%
SECURITY BANK CORP	10,099,000,000.00	49,978,057,265.47	20.21%	2.02%	4.04%	6.06%	8.08%	10.10%
ASIA UNITED BANK CORPORATION	4,561,086,107.31	22,657,108,060.23	20.13%	2.01%	4.03%	6.04%	8.05%	10.07%
DEVELOPMENT BANK OF THE PHIL	8,044,354,493.36	40,570,661,092.37	19.83%	1.98%	3.97%	5.95%	7.93%	9.91%
CHINA BANKING CORP	11,469,061,592.88	58,267,596,506.47	19.68%	1.97%	3.94%	5.91%	7.87%	9.84%
MAYBANK PHILIPPINES INC	1,998,643,368.58	11,690,151,577.28	17.10%	1.71%	3.42%	5.13%	6.84%	8.55%
WEALTH DEVELOPMENT BANK CORPORATION	77,899,031.54	480,371,548.58	16.22%	1.62%	3.24%	4.86%	6.49%	8.11%
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK	108,947,815.93	681,272,956.48	15.99%	1.60%	3.20%	4.80%	6.40%	8.00%
METROPOLITAN BANK & TCO	23,643,176,349.46	150,010,488,374.17	15.76%	1.58%	3.15%	4.73%	6.30%	7.88%
PHILIPPINE BUSINESS BANK INC A SAVINGS BANK	1,455,126,000.00	9,511,588,637.10	15.30%	1.53%	3.06%	4.59%	6.12%	7.65%
OPTIMUM DEVELOPMENT BANK INC	118,237,414.61	792,442,288.34	14.92%	1.49%	2.98%	4.48%	5.97%	7.46%
MIZUHO BANK LTD - MANILA BRANCH	421,990,399.91	3,029,984,154.78	13.93%	1.39%	2.79%	4.18%	5.57%	6.96%
MALASIQUI PROGRESSIVE SLB, INC	7,772,843.25	60,982,462.80	12.75%	1.27%	2.55%	3.82%	5.10%	6.37%
BDO PRIVATE BANK, INC.	709,747,747.91	5,591,591,534.13	12.69%	1.27%	2.54%	3.81%	5.08%	6.35%
BPI DIRECT SAVINGS BANK INC	185,550,281.49	1,466,739,963.04	12.65%	1.27%	2.53%	3.80%	5.06%	6.33%
CENTURY SAVINGS BANK CORPORATION	113,281,678.30	924,062,339.47	12.26%	1.23%	2.45%	3.68%	4.90%	6.13%
BANK OF THE PHIL ISLANDS	17,656,476,765.61	151,829,400,490.84	11.63%	1.16%	2.33%	3.49%	4.65%	5.81%
CITY SAVINGS BANK INC	747,703,695.60	6,668,601,929.63	11.21%	1.12%	2.24%	3.36%	4.48%	5.61%
HIYAS BANKING CORPORATION	16,450,205.95	170,639,794.32	9.64%	0.96%	1.93%	2.89%	3.86%	4.82%
SUN SAVINGS BANK INC	10,746,159.69	114,082,540.17	9.42%	0.94%	1.88%	2.83%	3.77%	4.71%
HSBC SAVINGS BANK(PHILS) INC	202,277,279.15	2,219,306,698.17	9.11%	0.91%	1.82%	2.73%	3.65%	4.56%
CTBC BANK (PHILIPPINES) CORP	538,724,227.33	6,959,986,711.28	7.74%	0.77%	1.55%	2.32%	3.10%	3.87%
LEMERY SAVINGS & LOAN BANK, INC.	5,650,057.09	74,923,548.33	7.54%	0.75%	1.51%	2.26%	3.02%	3.77%
HONGKONG & SHANGHAI BANKING CORP	744,434,370.37	14,022,338,639.35	5.31%	0.53%	1.06%	1.59%	2.12%	2.65%
PNB SAVINGS BANK	558,290,160.54	11,257,557,062.46	4.96%	0.50%	0.99%	1.49%	1.98%	2.48%
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS	13,972,461.61	376,601,564.39	3.71%	0.37%	0.74%	1.11%	1.48%	1.86%
INTERNATIONALE NEDERLANDEN GROEP BK	65,000,000.00	2,622,846,326.92	2.48%	0.25%	0.50%	0.74%	0.99%	1.24%
BATAAN SAVINGS AND LOAN BANK	1,419,538.00	64,296,764.51	2.21%	0.22%	0.44%	0.66%	0.88%	1.10%
PROGRESS SAVINGS AND LOAN BANK INC	1,258,979.13	83,794,739.22	1.50%	0.15%	0.30%	0.45%	0.60%	0.75%
ANZ BANKING GROUP LTD	29,593,661.02	4,523,125,543.65	0.65%	0.07%	0.13%	0.20%	0.26%	0.33%
PHIL BANK OF COMMUNICATIONS	31,102,717.11	7,910,385,394.08	0.39%	0.04%	0.08%	0.12%	0.16%	0.20%
BANK OF AMERICA N.A.	5,614,000.00	2,116,461,209.20	0.27%	0.03%	0.05%	0.08%	0.11%	0.13%
BANGKOK BANK PUBLIC CO LTD	4,714,155.55	3,314,810,827.00	0.14%	0.01%	0.03%	0.04%	0.06%	0.07%
JP MORGAN CHASE BANK NATIONAL ASSN.	734,885.22	1,407,968,061.99	0.05%	0.01%	0.01%	0.02%	0.02%	0.03%
BDO ELITE SAVINGS BANK INC	0.00	1,583,649,281.18	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
CARD SME BANK INC A THRIFT BANK	0.00	469,126,734.21	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
CITYSTATE SAVINGS BANK INC	0.00	724,795,838.45	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
ENTERPRISE BANK INC (A THRIFT BANK)	0.00	296,449,412.77	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
ISLA BANK(A THRIFT BANK) INC	0.00	661,796,405.99	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
MBANK PHILIPPINES (A THRIFT BANK) INC	0.00	123,726,994.24	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
MERCHANTS SAVINGS & LOAN ASSN INC	0.00	427,197,144.35	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
MICROFINANCE MAXIMUM SB INC	0.00	54,462,098.70	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
NORTHPOINT DEV'T BANK INC	0.00	243,988,192.87	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
PACIFIC ACE SAVINGS BANK INC	0.00	82,900,536.82	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
THE BNK OF TOKYO-MITSUBISHI UFJ LTD	0.00	4,962,920,166.75	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
THE PALAWAN BANK (PALAWAN DB) INC	0.00	44,159,244.35	0.00%	0.00%	0.00%	0.00%	0.00%	0.00%
Grand Total	403,700,854,944.22	1,284,656,999,735.14	31.42%	3.14%	6.28%	9.43%	12.57%	15.71%

Source: www.bsp.gov.ph