A Simple Stress Test of Philippine Banks as of September 30, 2017

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 145.94 billion or 8.85% of the PhP 1,648.70 billion in Stockholders Equity (SE) as of September 30, 2017.  So, writing off 50% of the Philippine Banks NPLs would reduce their aggregate stockholder's equity by a little less than 5%.

Naturally, some banks would be more affected than others.

The stockholder's equity of eight banks would be severely affected.  These banks are:

1. Philippine Postal Savings Bank Inc (137.50% decline in SE)
2. World Partners Bank (127.26% decline in SE)
3. Equicom Savings Bank (47.52% of SE)
4. Luzon Development Bank (44.78% decline in SE)
5. Enterprise Bank Inc (38.49% decline in SE)
6. Maritime Savings Bank Corporation (31.52% decline in SE)
7.  Legazpi Savings Bank Inc (29.79% decline in SE)
8. Philippine Veterans Bank (26.92% decline in SE)

Some of these banks are distressed. For more information regarding this, please read The Top Distressed Philippine Banks as of September 30, 2017).

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 loans 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 September 30, 2017, "Classified Loans and Other Risky Assets" of the Philippine Banks amounted to PhP 360.09 billion or more than two times the size of the Philippine Banking System's NPLs of PhP 145.94 billion for the same period.  Consequently, any write-offs of Classified Loans will have more than twice the impact of an NPL write-off.

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 Php 360.09 billion or 21.14% of the Php 1.70 trillion in Total Capital Cushion of Philippine Banks as of September 30, 2017.

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 21.14% 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 2.11% and a 50% write-off of classified loans will reduce the banking system's Total Capital Cushion by 10.57%.


Individual Banks

A 10% write-off of Classified Loans would severely impact (by 25% or more) the Total Capital Cushion of four banks (severely affected banks highlighted in yellow).

1. Bank of China Limited - Manila Branch (51.18% reduction in Total Capital Cushion)
2. Inter-Asia Development Bank (38.26% reduction in Total Capital Cushion)
3. Village Bank (26.84% reduction in Total Capital Cushion)
4. United Coconut Planters Bank (25.87% reduction in Total Capital Cushion)

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

1. Bank of China Limited - Manila Branch (102.36% reduction in Total Capital Cushion)
2. Inter-Asia Development Bank (76.51% reduction in Total Capital Cushion)
3. Village Bank Inc (53.68% reduction in Total Capital Cushion)
4. United Coconut Planters Bank (51.74% reduction in Total Capital Cushion)
5. Philippine Postal Savings Bank Inc (45.21% reduction in Total Capital Cushion)
6. Philippine Resources Savings Banking Corporation (27.36% reduction in Total Capital Cushion)
   
7. Yuanta Savings Bank Philippines (26.30% reduction in Total Capital Cushion)
8. Malayan Bank Savings and Mortgage Bank (25.80% reduction in Total Capital Cushion)

A 30% write-off of Classified Loans will totally wipe out the Total Capital Cushion of two banks and severely affect (reduce by 25% or more) the Total Capital Cushion of eleven other banks:

1. Bank of China Limited - Manila Branch (153.54% reduction in Total Capital Cushion)
2. Inter-Asia Development Bank (114.77% reduction in Total Capital Cushion)
3. Village Bank Inc (80.52% reduction in Total Capital Cushion)
4. United Coconut Planters Bank (77.61% reduction in Total Capital Cushion)
5. Philippine Postal Savings Bank Inc (67.81% reduction in Total Capital Cushion)
6. Philippine Resources Savings Banking Corporation (41.05% reduction in Total Capital Cushion)
7. Yuanta Savings Bank Philippines Inc (39.45% reduction in Total Capital Cushion)
8. Malayan Bank Savings and Mortgage Bank (38.69% reduction in Total Capital Cushion)
9. World Partners Bank (34.32% reduction in Total Capital Cushion)
10. Luzon Development Bank (30.41% reduction in Total Capital Cushion)
11. Bataan Development Bank (30.12% reduction in Total Capital Cushion)
12. Legazpi Savings Bank (27.11% reduction in Total Capital Cushion)
13. Maritime Savings Bank Corporation (25.00% reduction in Total Capital Cushion)

A 40% write-off of Classified Loans will totally wipe out the Total Capital Cushion of two banks and severely affect (reduce by 25% or more) the Total Capital Cushion of thirteen more banks:

1. Bank of China Limited - Manila Branch (204.72% reduction in Total Capital Cushion)
2. Inter-Asia Development Bank (153.02% reduction in Total Capital Cushion)
3. Village Bank Inc (107.35% reduction in Total Capital Cushion)
4. United Coconut Planters Bank (103.48% reduction in Total Capital Cushion)
5. Philippine Postal Savings Bank Inc (90.42% reduction in Total Capital Cushion)
6. Philippine Resources Savings Banking Corporation (54.73% reduction in Total Capital Cushion
7. Yuanta Savings Bank Philippines Inc (52.59% reduction in Total Capital Cushion
8. Malayan Bank Savings and Mortgage Bank (51.59% reduction in Total Capital Cushion)
9. World Partners Bank (45.76% reduction in Total Capital Cushion)
10. Luzon Development Bank (40.55% reduction in Total Capital Cushion)
11. Bataan Development Bank (40.16% reduction in Total Capital Cushion)
12. Legazpi Savings Bank Inc ( 36.15% reduction in Total Capital Cushion)
13. Maritime Savings Bank Corporation (33.33% reduction in Total Capital Cushion)
14. Equicom Savings Bank (31.02% reduction in Total Capital Cushion)
15. Robinsons Bank Corporation (29.41% reduction in Total Capital Cushion)
16. China Bank Savings (29.25% reduction in Total Capital Cushion)
17. Philippine Savings Bank (25.60% reduction in Total Capital Cushion)

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

1. Bank of China Limited - Manila Branch (255.90% reduction in Total Capital Cushion)
2. Inter-Asia Development Bank (191.28% reduction in Total Capital Cushion)
3. Village Bank Inc (134.19% reduction in Total Capital Cushion)
4. United Coconut Planters Bank (103.48% reduction in Total Capital Cushion)
5. Philippine Postal Savings Bank Inc (113.02% reduction in Total Capital Cushion)
6. Philippine Resources Savings Banking Corporation (68.41% reduction in Total Capital Cushion
7. Yuanta Savings Bank Philippines Inc (65.74% reduction in Total Capital Cushion
8. Malayan Bank Savings and Mortgage Bank (64.49% reduction in Total Capital Cushion)
9. World Partners Bank (57.20% reduction in Total Capital Cushion)
10. Luzon Development Bank (50.68% reduction in Total Capital Cushion)
11. Bataan Development Bank (50.20% reduction in Total Capital Cushion)
12. Legazpi Savings Bank Inc ( 45.18% reduction in Total Capital Cushion)
13. Maritime Savings Bank Corporation (41.66% reduction in Total Capital Cushion)
14. Equicom Savings Bank (38.78% reduction in Total Capital Cushion)
15. Robinsons Bank Corporation (36.76% reduction in Total Capital Cushion)
16. China Bank Savings (36.56% reduction in Total Capital Cushion)
17. Philippine Savings Bank (32.00% reduction in Total Capital Cushion)
18. UCPB Savings Bank (29.11% reduction in Total Capital Cushion)
19. Philippine Veterans Bank (28.77% reduction in Total Capital Cushion)
20. Penbank (26.77% reduction in Total Capital Cushion)
21. RCBC Savings Bank (26.76% reduction in Total Capital Cushion)
22. Dumaguete City Development Bank (25.04% 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 September 30, 2017".  Moreover, their capital can be overstated.  See a previous blog post "Overstated Capital of Philippine Banks as of September 30, 2017".  As such, any reduction in their capital cushion could knock down an already weak bank.

 

 Source: www.bsp.gov.ph

Philippine Postal Savings Bank Ranks 1st in Non-Performing Loans as % of Stockholder's Equity as of September 30, 2017

Editor's Note: Data is culled from  the Published Statements of Condition of individual Philippine Banks found in www.bsp.gov.ph.  

This blog post updates previous blog posts such as Philippine Postal Savings Bank Ranks 1st in Non-Performing Loans as % of Stockholder's Equity as of June 30, 2017 .


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 145.94 billion as of September 30, 2017 - approximately 1.77% of the Philippine Banking Industry's Total Loan Portfolio of Php 8.26 trillion.

Philippine Banking System
NPL as % of TLP
September 30, 2017
			Gross NPL/ Gross TLP
Bank	Gross NPLs	Gross TLP	(In %)
PHIL STAR DEVELOPMENT BANK INC	13,618,385.28	24,500,782.27	55.58%
PHIL POSTAL SAVINGS BANK INC	2,508,468,000.93	5,744,862,007.68	43.66%
MALASIQUI PROGRESSIVE SLB, INC	16,462,941.25	40,099,749.13	41.05%
WORLD PARTNERS BANK (A THRIFT BANK)	133,433,965.51	369,686,690.87	36.09%
NORTHPOINT DEV'T BANK INC	167,453,354.61	488,457,053.42	34.28%
LEGAZPI SAVINGS BANK INC	320,173,069.38	1,314,412,780.16	24.36%
UNIVERSITY SAVINGS BANK INC	116,956,047.27	496,844,416.03	23.54%
BATAAN SAVINGS AND LOAN BANK	2,089,556.31	8,883,494.35	23.52%
YUANTA SAVINGS BANK PHILIPPINES INC	112,954,004.98	488,100,511.78	23.14%
LIFE SAVINGS BANK INC	11,416,781.69	51,328,132.95	22.24%
MARITIME SAVINGS BANK CORPORATION	23,382,029.78	113,479,698.19	20.60%
PACIFIC ACE SAVINGS BANK INC	3,359,285.69	18,307,602.69	18.35%
LUZON DEVELOPMENT BANK	545,046,546.55	3,126,117,639.91	17.44%
LEMERY SAVINGS & LOAN BANK, INC.	13,423,090.28	93,153,053.58	14.41%
PAMPANGA DEVELOPMENT BANK	51,971,314.94	372,928,966.84	13.94%
HIYAS BANKING CORPORATION	34,353,876.46	247,198,160.81	13.90%
ENTERPRISE BANK INC (A THRIFT BANK)	215,713,578.66	1,680,240,185.10	12.84%
BATAAN DEVELOPMENT BANK	23,282,834.47	181,731,851.49	12.81%
FARMERS SAVINGS & LOAN BANK INC	23,926,681.31	202,216,693.64	11.83%
EQUICOM SAVINGS BANK INC	667,607,093.01	5,767,977,570.78	11.57%
PHILIPPINE VETERANS BANK	1,883,037,451.22	16,351,335,745.82	11.52%
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC)	188,311,423.89	1,729,726,141.75	10.89%
PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS BANK)	1,044,815,027.27	9,669,052,791.85	10.81%
BANK OF MAKATI (A SAVINGS BANK) INC	2,326,624,061.12	22,331,893,690.78	10.42%
MALAYAN BANK SAVINGS AND MORT BANK INC	435,420,208.60	4,349,622,153.99	10.01%
CITYSTATE SAVINGS BANK INC	188,959,446.02	1,940,667,782.19	9.74%
UCPB SAVINGS BANK	1,441,208,137.49	15,172,610,993.13	9.50%
1ST VALLEY BANK INC A DEVELOPMENT BANK	526,595,673.05	5,553,153,750.02	9.48%
METRO CEBU PUBLIC SAVINGS BANK	8,869,721.90	96,998,130.45	9.14%
CORDILLERA SAVINGS BANK INC	15,910,979.40	184,583,522.18	8.62%
BPI DIRECT BANKO INC A SAVINGS BANK	402,048,116.22	4,946,873,915.86	8.13%
THE PALAWAN BANK (PALAWAN DB) INC	18,005,142.63	258,528,705.91	6.96%
CHINA BANK SAVINGS INC	4,130,404,304.73	64,155,254,685.32	6.44%
STANDARD CHARTERED BANK	2,625,905,469.28	41,269,883,080.69	6.36%
VILLAGE BANK INC (A THRIFT BANK)	29,349,566.91	464,113,203.81	6.32%
RCBC SAVINGS BANK INC	4,880,055,779.99	79,284,699,874.34	6.16%
WEALTH DEVELOPMENT BANK CORPORATION	380,390,453.79	6,679,108,966.06	5.70%
DUMAGUETE CITY DEV BANK INC	29,599,686.48	572,564,507.05	5.17%
PRODUCERS SAVINGS BANK CORPORATION	422,122,515.34	8,223,544,581.17	5.13%
CENTURY SAVINGS BANK CORPORATION	35,040,627.61	692,756,493.72	5.06%
PHIL BANK OF COMMUNICATIONS	2,216,599,337.40	47,905,082,372.72	4.63%
EAST WEST BANKING CORP	8,571,691,526.36	197,214,306,063.31	4.35%
BANK ONE SAVINGS AND TRUST CORP.	49,944,276.09	1,243,571,621.70	4.02%
BUSINESS AND CONSUMERS BANK (A DB)	6,090,313.34	157,907,975.33	3.86%
UNION BANK OF THE PHILS	8,069,495,405.68	210,226,172,546.88	3.84%
STERLING BANK OF ASIA INC (A SAVINGS BANK)	999,798,578.55	26,188,733,185.53	3.82%
BPI FAMILY SAVINGS BANK INC	7,581,005,954.14	210,551,533,396.39	3.60%
FIRST CONSOLIDATED BANK INC (A PDB)	407,424,268.73	11,549,381,132.98	3.53%
PNB SAVINGS BANK	1,435,899,069.48	41,192,455,388.91	3.49%
CITY SAVINGS BANK INC	2,171,636,478.59	63,151,639,525.61	3.44%
SUN SAVINGS BANK INC	31,865,252.35	940,788,490.50	3.39%
BANK OF COMMERCE	1,933,309,750.94	57,815,067,658.17	3.34%
ALLBANK (A THRIFT BANK) INC	53,131,404.08	1,641,596,923.25	3.24%
PHIL SAVINGS BANK	4,610,213,814.22	142,798,635,298.07	3.23%
INTER-ASIA DEVELOPMENT BANK	6,364,956.89	203,913,077.52	3.12%
UNITED COCONUT PLANTERS BANK	4,006,807,441.49	140,724,110,261.36	2.85%
PHIL TRUST COMPANY	1,121,366,905.75	41,927,002,375.42	2.67%
PHILIPPINE BUSINESS BANK INC A SAVINGS BANK	1,527,303,682.15	66,250,033,277.91	2.31%
ASIA UNITED BANK CORPORATION	2,729,346,887.64	118,692,336,295.69	2.30%
MAYBANK PHILIPPINES INCORPORATED	1,538,320,568.40	68,507,304,429.46	2.25%
CARD SME BANK INC A THRIFT BANK	69,511,576.66	3,296,832,851.74	2.11%
DEVELOPMENT BANK OF THE PHIL	5,788,443,476.53	276,462,828,566.56	2.09%
MERCHANTS SAVINGS & LOAN ASSN INC	21,944,310.69	1,048,859,851.85	2.09%
PHIL NATIONAL BANK	8,771,640,884.50	427,566,996,674.77	2.05%
HSBC SAVINGS BANK(PHILS) INC	51,109,354.88	3,205,893,669.56	1.59%
LAND BANK OF THE PHILIPPINES	9,545,698,986.46	610,832,570,250.45	1.56%
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK	24,547,464.17	1,620,598,229.89	1.51%
ROBINSONS BANK CORPORATION	771,694,104.69	53,243,335,521.48	1.45%
BANK OF CHINA LIMITED-MANILA BRANCH	188,969,213.72	13,434,051,214.41	1.41%
CTBC BANK (PHILIPPINES) CORP	427,998,126.17	30,930,205,257.47	1.38%
ANZ BANKING GROUP LTD	404,087,064.26	31,534,582,210.88	1.28%
BANGKO KABAYAN INC (A PRIVATE DEVELOPMENT BANK)	19,285,872.47	1,543,314,982.44	1.25%
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS	5,222,336.47	465,856,262.81	1.12%
HONGKONG & SHANGHAI BANKING CORP	745,759,554.02	68,168,764,444.33	1.09%
CHINA BANKING CORP	4,034,201,792.60	372,073,819,046.05	1.08%
BDO UNIBANK INC	18,340,530,156.37	1,699,590,325,341.91	1.08%
RIZAL COMM'L BANKING CORP	2,738,199,180.71	257,003,478,605.63	1.07%
BANK OF THE PHIL ISLANDS	9,657,461,045.03	936,521,746,266.58	1.03%
QUEZON COCONUT BANK INC (A THRIFT BANK)	519,588.36	62,239,900.61	0.83%
METROPOLITAN BANK & TCO	6,115,557,253.03	928,840,152,178.94	0.66%
SECURITY BANK CORP	2,178,978,925.78	371,061,421,976.43	0.59%
CITIBANK, N.A.	886,570,461.17	196,401,565,772.92	0.45%
KEB HANA BANK - MANILA BRANCH	28,131,704.26	6,305,489,528.96	0.45%
BANGKOK BANK PUBLIC CO LTD	35,377,890.77	8,575,099,025.79	0.41%
ING BANK N.V.	103.63	12,171,649,368.29	0.00%
BANK OF AMERICA N.A.	0.00	5,213,822,526.77	0.00%
BDO PRIVATE BANK, INC.	0.00	8,097,900,367.14	0.00%
CATHAY UNITED BANK CO LTD - MANILA BRANCH	0.00	1,278,700,340.90	0.00%
DEUTSCHE BANK AG	0.00	41,077,991,671.55	0.00%
FIRST COMMERCIAL BANK LTD MANILA BRANCH	0.00	242,000,000.00	0.00%
HUA NAN COMMERCIAL BANK LTD MANILA BRANCH	0.00	0.00	NA
INDUSTRIAL BANK OF KOREA MANILA BRANCH	0.00	1,606,228,766.34	0.00%
ISLA BANK(A THRIFT BANK) INC	0.00	657,239,778.42	0.00%
JP MORGAN CHASE BANK NATIONAL ASSN.	0.00	23,559,467,795.11	0.00%
MEGA INT'L COMM'L BANK CO LTD	0.00	11,869,126,550.93	0.00%
MIZUHO BANK LTD - MANILA BRANCH	0.00	49,503,206,030.80	0.00%
SHINHAN BANK - MANILA BRANCH	0.00	1,219,285,528.25	0.00%
SUMITOMO MITSUI BANKING CORPORATION-MANILA BRANCH	0.00	15,910,933,550.00	0.00%
THE BNK OF TOKYO-MITSUBISHI UFJ LTD	0.00	32,526,188,169.16	0.00%
UNITED OVERSEAS BANK LIMITED MANILA BRANCH	0.00	1,598,061,555.00	0.00%
Grand Total	145,936,822,530.97	8,259,960,900,685.59	1.77%

There are five Philippine Banks with a Gross NPL Ratio greater than 25.00% of Total Loan Portfolio (TLP).  These are as follows:

1.     Philippine Star Development Bank, Inc. (55.58% of TLP)
2.     Philippine Postal Savings Bank Inc. (43.66% of TLP)
3.     Malasiqui Progressive SLB, Inc. (41.05% of TLP)
4.     World Partners Bank (36.09% of TLP)
5.     Northpoint Development Bank, Inc. (34.28% of TLP)

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 mere fraction of the loan's 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 off as a loss.

On an overall basis, the Gross NPLs of Philippine Banks amounted to 8.85% of Stockholders Equity as of September 30, 2017.

 

Philippine Banking System
NPL as % of SE
September 30, 2017
	NPL	SE	NPL/SE
Bank	(In PHP)	(In PHP)	(In %)
PHIL POSTAL SAVINGS BANK INC	2,508,468,000.93	912,190,817.96	274.99%
WORLD PARTNERS BANK (A THRIFT BANK)	133,433,965.51	52,424,149.24	254.53%
EQUICOM SAVINGS BANK INC	667,607,093.01	702,493,775.37	95.03%
LUZON DEVELOPMENT BANK	545,046,546.55	608,587,401.07	89.56%
ENTERPRISE BANK INC (A THRIFT BANK)	215,713,578.66	280,195,073.92	76.99%
MARITIME SAVINGS BANK CORPORATION	23,382,029.78	37,087,935.24	63.04%
LEGAZPI SAVINGS BANK INC	320,173,069.38	537,350,772.59	59.58%
PHILIPPINE VETERANS BANK	1,883,037,451.22	3,497,229,644.77	53.84%
UCPB SAVINGS BANK	1,441,208,137.49	2,941,708,331.13	48.99%
NORTHPOINT DEV'T BANK INC	167,453,354.61	349,870,036.19	47.86%
THE PALAWAN BANK (PALAWAN DB) INC	18,005,142.63	38,796,966.79	46.41%
CHINA BANK SAVINGS INC	4,130,404,304.73	9,020,020,772.21	45.79%
PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS BANK)	1,044,815,027.27	2,330,423,041.47	44.83%
RCBC SAVINGS BANK INC	4,880,055,779.99	11,406,749,774.02	42.78%
VILLAGE BANK INC (A THRIFT BANK)	29,349,566.91	70,575,666.57	41.59%
STANDARD CHARTERED BANK	2,625,905,469.28	6,607,584,228.73	39.74%
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC)	188,311,423.89	486,928,896.76	38.67%
STERLING BANK OF ASIA INC (A SAVINGS BANK)	999,798,578.55	2,614,441,434.70	38.24%
MALAYAN BANK SAVINGS AND MORT BANK INC	435,420,208.60	1,176,335,297.85	37.01%
PAMPANGA DEVELOPMENT BANK	51,971,314.94	148,200,486.72	35.07%
1ST VALLEY BANK INC A DEVELOPMENT BANK	526,595,673.05	1,594,183,681.39	33.03%
BANK OF MAKATI (A SAVINGS BANK) INC	2,326,624,061.12	7,177,253,101.88	32.42%
MALASIQUI PROGRESSIVE SLB, INC	16,462,941.25	52,202,636.18	31.54%
UNIVERSITY SAVINGS BANK INC	116,956,047.27	417,685,916.66	28.00%
BATAAN DEVELOPMENT BANK	23,282,834.47	83,685,275.51	27.82%
BPI FAMILY SAVINGS BANK INC	7,581,005,954.14	27,332,288,317.29	27.74%
WEALTH DEVELOPMENT BANK CORPORATION	380,390,453.79	1,474,494,842.00	25.80%
PRODUCERS SAVINGS BANK CORPORATION	422,122,515.34	1,673,043,542.61	25.23%
CITYSTATE SAVINGS BANK INC	188,959,446.02	750,760,752.25	25.17%
EAST WEST BANKING CORP	8,571,691,526.36	37,335,941,987.02	22.96%
PHIL SAVINGS BANK	4,610,213,814.22	20,553,887,937.32	22.43%
UNITED COCONUT PLANTERS BANK	4,006,807,441.49	17,915,131,482.85	22.37%
HIYAS BANKING CORPORATION	34,353,876.46	172,583,685.53	19.91%
BPI DIRECT BANKO INC A SAVINGS BANK	402,048,116.22	2,026,159,831.01	19.84%
PHIL BANK OF COMMUNICATIONS	2,216,599,337.40	11,928,226,773.54	18.58%
FARMERS SAVINGS & LOAN BANK INC	23,926,681.31	132,550,717.23	18.05%
CITY SAVINGS BANK INC	2,171,636,478.59	12,706,877,725.77	17.09%
LIFE SAVINGS BANK INC	11,416,781.69	67,270,003.62	16.97%
METRO CEBU PUBLIC SAVINGS BANK	8,869,721.90	52,804,532.18	16.80%
SUN SAVINGS BANK INC	31,865,252.35	190,859,259.93	16.70%
LEMERY SAVINGS & LOAN BANK, INC.	13,423,090.28	81,595,968.41	16.45%
PHILIPPINE BUSINESS BANK INC A SAVINGS BANK	1,527,303,682.15	10,074,646,988.78	15.16%
PHIL STAR DEVELOPMENT BANK INC	13,618,385.28	95,512,977.18	14.26%
DEVELOPMENT BANK OF THE PHIL	5,788,443,476.53	46,550,980,106.56	12.43%
BANK OF COMMERCE	1,933,309,750.94	15,611,461,237.37	12.38%
PNB SAVINGS BANK	1,435,899,069.48	11,722,055,280.02	12.25%
MAYBANK PHILIPPINES INCORPORATED	1,538,320,568.40	12,564,639,453.88	12.24%
UNION BANK OF THE PHILS	8,069,495,405.68	65,938,706,351.21	12.24%
YUANTA SAVINGS BANK PHILIPPINES INC	112,954,004.98	973,401,700.92	11.60%
CORDILLERA SAVINGS BANK INC	15,910,979.40	144,410,140.75	11.02%
DUMAGUETE CITY DEV BANK INC	29,599,686.48	282,851,266.90	10.46%
ASIA UNITED BANK CORPORATION	2,729,346,887.64	26,504,553,463.24	10.30%
FIRST CONSOLIDATED BANK INC (A PDB)	407,424,268.73	4,243,049,159.99	9.60%
ANZ BANKING GROUP LTD	404,087,064.26	4,242,436,078.21	9.52%
INTER-ASIA DEVELOPMENT BANK	6,364,956.89	67,233,113.70	9.47%
LAND BANK OF THE PHILIPPINES	9,545,698,986.46	101,943,418,116.82	9.36%
BANK ONE SAVINGS AND TRUST CORP.	49,944,276.09	584,102,778.37	8.55%
PHIL NATIONAL BANK	8,771,640,884.50	106,035,778,273.85	8.27%
CARD SME BANK INC A THRIFT BANK	69,511,576.66	877,516,443.55	7.92%
BANK OF CHINA LIMITED-MANILA BRANCH	188,969,213.72	2,580,749,046.71	7.32%
BUSINESS AND CONSUMERS BANK (A DB)	6,090,313.34	87,068,500.59	6.99%
BDO UNIBANK INC	18,340,530,156.37	293,986,619,750.52	6.24%
ROBINSONS BANK CORPORATION	771,694,104.69	12,401,830,668.75	6.22%
CTBC BANK (PHILIPPINES) CORP	427,998,126.17	7,097,828,768.53	6.03%
ALLBANK (A THRIFT BANK) INC	53,131,404.08	903,007,636.97	5.88%
BANK OF THE PHIL ISLANDS	9,657,461,045.03	174,856,293,663.35	5.52%
HONGKONG & SHANGHAI BANKING CORP	745,759,554.02	13,895,030,853.83	5.37%
CHINA BANKING CORP	4,034,201,792.60	75,949,384,511.58	5.31%
CITIBANK, N.A.	886,570,461.17	17,519,765,588.91	5.06%
PACIFIC ACE SAVINGS BANK INC	3,359,285.69	74,249,704.16	4.52%
PHIL TRUST COMPANY	1,121,366,905.75	25,015,724,609.18	4.48%
RIZAL COMM'L BANKING CORP	2,738,199,180.71	64,861,968,770.74	4.22%
BANGKO KABAYAN INC (A PRIVATE DEVELOPMENT BANK)	19,285,872.47	477,480,991.72	4.04%
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK	24,547,464.17	652,183,207.72	3.76%
BATAAN SAVINGS AND LOAN BANK	2,089,556.31	57,340,856.43	3.64%
CENTURY SAVINGS BANK CORPORATION	35,040,627.61	986,255,355.88	3.55%
MERCHANTS SAVINGS & LOAN ASSN INC	21,944,310.69	619,980,068.95	3.54%
METROPOLITAN BANK & TCO	6,115,557,253.03	199,943,990,930.40	3.06%
HSBC SAVINGS BANK(PHILS) INC	51,109,354.88	1,894,764,577.93	2.70%
SECURITY BANK CORP	2,178,978,925.78	101,502,917,257.72	2.15%
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS	5,222,336.47	260,731,005.77	2.00%
KEB HANA BANK - MANILA BRANCH	28,131,704.26	1,636,435,622.34	1.72%
BANGKOK BANK PUBLIC CO LTD	35,377,890.77	3,145,339,339.96	1.12%
QUEZON COCONUT BANK INC (A THRIFT BANK)	519,588.36	58,492,054.63	0.89%
ING BANK N.V.	103.63	2,457,969,000.41	0.00%
BANK OF AMERICA N.A.	0.00	2,091,322,952.20	0.00%
BDO PRIVATE BANK, INC.	0.00	5,251,554,616.09	0.00%
CATHAY UNITED BANK CO LTD - MANILA BRANCH	0.00	2,131,959,607.41	0.00%
DEUTSCHE BANK AG	0.00	2,531,311,509.69	0.00%
FIRST COMMERCIAL BANK LTD MANILA BRANCH	0.00	2,024,021,798.12	0.00%
HUA NAN COMMERCIAL BANK LTD MANILA BRANCH	0.00	2,081,351,164.93	0.00%
INDUSTRIAL BANK OF KOREA MANILA BRANCH	0.00	2,271,224,385.43	0.00%
ISLA BANK(A THRIFT BANK) INC	0.00	675,385,523.04	0.00%
JP MORGAN CHASE BANK NATIONAL ASSN.	0.00	1,304,593,848.06	0.00%
MEGA INT'L COMM'L BANK CO LTD	0.00	1,856,041,660.71	0.00%
MIZUHO BANK LTD - MANILA BRANCH	0.00	5,512,796,843.22	0.00%
SHINHAN BANK - MANILA BRANCH	0.00	2,208,080,775.75	0.00%
SUMITOMO MITSUI BANKING CORPORATION-MANILA BRANCH	0.00	12,836,854,089.47	0.00%
THE BNK OF TOKYO-MITSUBISHI UFJ LTD	0.00	4,653,117,496.08	0.00%
UNITED OVERSEAS BANK LIMITED MANILA BRANCH	0.00	2,346,970,697.12	0.00%
Grand Total	145,936,822,530.97	1,648,695,424,715.78	8.85%

Of the 100 banks in this list, twenty-three banks have a Gross NPL to Stockholders Equity Ratio of 30% or more as of September 30, 2017.  These banks are as follows:

1. Philippine Postal Savings Bank (274.99% of SE)
2. World Partners Bank (254.53% of SE)
3. Equicom Savings Bank (95.03% of SE)
4. Luzon Development Bank (89.56% of SE)
5. Enterprise Bank (76.99% of SE)
6. Maritime Savings Bank Corporation (63.04% of SE)
7. Legazpi Savings Bank (59.58% of SE)
8. Philippine Veterans Bank (53.84% of SE)
9. UCPB Savings Bank (48.99% of SE)
10. Northpoint Development Bank (47.86% of SE)
11. The Palawan Bank (46.41% of SE)
12. China Bank Savings (45.79% of SE)
13. Philippine Resources Savings Banking Corporation (44.83% of SE)
14. RCBC Savings Bank (42.78% of SE)
15. Village Bank Inc (41.59% of SE)
16. Standard Chartered Bank (39.74% of SE)
17. Penbank Inc (38.67% of SE)
18. Sterling Bank of Asia (38.24% of SE)
19. Malayan Bank Savings and Mortgage Bank (37.01% of SE)
20. Pampanga Development Bank (35.07% of SE)
21. 1st Valley Bank Inc (33.03% of SE)
22. Bank of Makati (32.42% of SE)
23. Malasiqui Progressive SLB, Inc. (31.54% of SE)

Source: www.bsp.gov.ph 

An 80% Minimum NPL Coverage Ratio will Result in a Severe Undercapitalization of Some Philippine Banks - September 30, 2017

In a previous blog post called "Are Philippine Banks Under Provisioning Loan Losses? - As of September 30, 2017", we discussed the current aggregate Loan Loss Reserves (LLR) as a percentage of Total Loan Portfolio (TLP), which stood at 1.93% as of September 30, 2017, is below the historic average of 4.08% for the last thirty-four years.
 
Despite NPLs being at or near historic lows, some banks still have not adequately provisioned for loan losses. Their NPL Coverage Ratios are below the ideal ratio of 100% and even below the suggested minimum of 80% NPL Coverage Ratio.

As the table below suggests, it seems that around 38 banks (highlighted in yellow, failed banks in red) fall into this deficiency.

Philippine Banking System
NPL Coverage Ratio
September 30, 2017
Bank	Loan Loss Provisions	Gross NPLs	NPL Coverage Ratio
PHIL POSTAL SAVINGS BANK INC	357,874,671.93	2,508,468,000.93	14.27%
MARITIME SAVINGS BANK CORPORATION	6,948,645.24	23,382,029.78	29.72%
CITYSTATE SAVINGS BANK INC	57,985,000.97	188,959,446.02	30.69%
LUZON DEVELOPMENT BANK	168,938,771.90	545,046,546.55	31.00%
PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS BANK)	351,480,550.35	1,044,815,027.27	33.64%
LEMERY SAVINGS & LOAN BANK, INC.	4,774,277.32	13,423,090.28	35.57%
UNIVERSITY SAVINGS BANK INC	43,442,434.66	116,956,047.27	37.14%
WEALTH DEVELOPMENT BANK CORPORATION	143,660,259.48	380,390,453.79	37.77%
UCPB SAVINGS BANK	572,211,629.75	1,441,208,137.49	39.70%
MALASIQUI PROGRESSIVE SLB, INC	6,951,706.48	16,462,941.25	42.23%
LIFE SAVINGS BANK INC	4,824,695.67	11,416,781.69	42.26%
MALAYAN BANK SAVINGS AND MORT BANK INC	185,282,008.54	435,420,208.60	42.55%
ALLBANK (A THRIFT BANK) INC	23,226,813.08	53,131,404.08	43.72%
PRODUCERS SAVINGS BANK CORPORATION	186,386,253.06	422,122,515.34	44.15%
EQUICOM SAVINGS BANK INC	316,625,637.43	667,607,093.01	47.43%
1ST VALLEY BANK INC A DEVELOPMENT BANK	256,966,756.18	526,595,673.05	48.80%
RCBC SAVINGS BANK INC	2,431,453,414.48	4,880,055,779.99	49.82%
CHINA BANK SAVINGS INC	2,212,793,269.62	4,130,404,304.73	53.57%
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS	2,812,854.03	5,222,336.47	53.86%
PNB SAVINGS BANK	773,674,598.91	1,435,899,069.48	53.88%
WORLD PARTNERS BANK (A THRIFT BANK)	74,823,694.59	133,433,965.51	56.08%
CENTURY SAVINGS BANK CORPORATION	19,702,529.95	35,040,627.61	56.23%
ENTERPRISE BANK INC (A THRIFT BANK)	121,353,813.66	215,713,578.66	56.26%
SUN SAVINGS BANK INC	18,318,429.65	31,865,252.35	57.49%
CITY SAVINGS BANK INC	1,254,175,930.66	2,171,636,478.59	57.75%
PAMPANGA DEVELOPMENT BANK	31,606,995.59	51,971,314.94	60.82%
DUMAGUETE CITY DEV BANK INC	19,299,237.59	29,599,686.48	65.20%
STANDARD CHARTERED BANK	1,712,514,476.20	2,625,905,469.28	65.22%
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC)	123,223,858.03	188,311,423.89	65.44%
STERLING BANK OF ASIA INC (A SAVINGS BANK)	664,337,067.00	999,798,578.55	66.45%
ANZ BANKING GROUP LTD	269,626,393.67	404,087,064.26	66.72%
PHIL STAR DEVELOPMENT BANK INC	9,276,107.75	13,618,385.28	68.11%
EAST WEST BANKING CORP	6,007,211,039.23	8,571,691,526.36	70.08%
NORTHPOINT DEV'T BANK INC	119,391,217.75	167,453,354.61	71.30%
UNITED COCONUT PLANTERS BANK	2,879,657,626.33	4,006,807,441.49	71.87%
BATAAN SAVINGS AND LOAN BANK	1,595,044.62	2,089,556.31	76.33%
PHILIPPINE VETERANS BANK	1,545,833,818.57	1,883,037,451.22	82.09%
LEGAZPI SAVINGS BANK INC	266,204,467.71	320,173,069.38	83.14%
HIYAS BANKING CORPORATION	28,859,545.81	34,353,876.46	84.01%
ASIA UNITED BANK CORPORATION	2,398,708,327.73	2,729,346,887.64	87.89%
CORDILLERA SAVINGS BANK INC	14,015,675.60	15,910,979.40	88.09%
BANK ONE SAVINGS AND TRUST CORP.	44,384,460.48	49,944,276.09	88.87%
PHILIPPINE BUSINESS BANK INC A SAVINGS BANK	1,377,129,761.34	1,527,303,682.15	90.17%
PACIFIC ACE SAVINGS BANK INC	3,128,611.95	3,359,285.69	93.13%
PHIL SAVINGS BANK	4,437,039,977.44	4,610,213,814.22	96.24%
MAYBANK PHILIPPINES INCORPORATED	1,488,402,247.81	1,538,320,568.40	96.76%
PHIL BANK OF COMMUNICATIONS	2,160,147,833.79	2,216,599,337.40	97.45%
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK	24,402,817.45	24,547,464.17	99.41%
BANK OF MAKATI (A SAVINGS BANK) INC	2,313,298,934.55	2,326,624,061.12	99.43%
BPI FAMILY SAVINGS BANK INC	7,566,095,774.51	7,581,005,954.14	99.80%
YUANTA SAVINGS BANK PHILIPPINES INC	113,008,096.86	112,954,004.98	100.05%
BATAAN DEVELOPMENT BANK	23,381,061.33	23,282,834.47	100.42%
ROBINSONS BANK CORPORATION	804,961,431.05	771,694,104.69	104.31%
VILLAGE BANK INC (A THRIFT BANK)	30,987,101.94	29,349,566.91	105.58%
BPI DIRECT BANKO INC A SAVINGS BANK	431,833,619.78	402,048,116.22	107.41%
BANK OF COMMERCE	2,104,388,186.18	1,933,309,750.94	108.85%
FARMERS SAVINGS & LOAN BANK INC	26,449,814.62	23,926,681.31	110.55%
UNION BANK OF THE PHILS	9,045,851,109.76	8,069,495,405.68	112.10%
DEVELOPMENT BANK OF THE PHIL	6,829,373,585.30	5,788,443,476.53	117.98%
LAND BANK OF THE PHILIPPINES	11,704,299,689.59	9,545,698,986.46	122.61%
INTER-ASIA DEVELOPMENT BANK	7,953,225.52	6,364,956.89	124.95%
THE PALAWAN BANK (PALAWAN DB) INC	22,860,428.44	18,005,142.63	126.97%
HONGKONG & SHANGHAI BANKING CORP	971,318,939.15	745,759,554.02	130.25%
RIZAL COMM'L BANKING CORP	3,729,435,227.92	2,738,199,180.71	136.20%
PHIL NATIONAL BANK	12,022,124,234.33	8,771,640,884.50	137.06%
MERCHANTS SAVINGS & LOAN ASSN INC	30,510,360.82	21,944,310.69	139.04%
CHINA BANKING CORP	5,827,772,846.39	4,034,201,792.60	144.46%
BDO UNIBANK INC	27,110,966,691.04	18,340,530,156.37	147.82%
FIRST CONSOLIDATED BANK INC (A PDB)	643,528,677.51	407,424,268.73	157.95%
BANGKO KABAYAN INC (A PRIVATE DEVELOPMENT BANK)	30,841,940.08	19,285,872.47	159.92%
CARD SME BANK INC A THRIFT BANK	115,324,117.25	69,511,576.66	165.91%
CTBC BANK (PHILIPPINES) CORP	727,902,882.54	427,998,126.17	170.07%
BUSINESS AND CONSUMERS BANK (A DB)	10,387,109.24	6,090,313.34	170.55%
BANK OF THE PHIL ISLANDS	16,628,800,617.12	9,657,461,045.03	172.19%
BANK OF CHINA LIMITED-MANILA BRANCH	342,070,922.20	188,969,213.72	181.02%
HSBC SAVINGS BANK(PHILS) INC	97,284,599.77	51,109,354.88	190.35%
METRO CEBU PUBLIC SAVINGS BANK	18,559,329.09	8,869,721.90	209.24%
METROPOLITAN BANK & TCO	13,544,464,439.10	6,115,557,253.03	221.48%
PHIL TRUST COMPANY	2,598,668,029.34	1,121,366,905.75	231.74%
SECURITY BANK CORP	5,322,581,576.81	2,178,978,925.78	244.27%
KEB HANA BANK - MANILA BRANCH	70,156,824.72	28,131,704.26	249.39%
QUEZON COCONUT BANK INC (A THRIFT BANK)	1,532,986.81	519,588.36	295.04%
CITIBANK, N.A.	3,669,000,356.27	886,570,461.17	413.84%
BANGKOK BANK PUBLIC CO LTD	407,389,687.50	35,377,890.77	1151.54%
ING BANK N.V.	88,430,916.29	103.63	85333316.89%
BANK OF AMERICA N.A.	27,699,996.00	0.00	NA
BDO PRIVATE BANK, INC.	70,426,644.78	0.00	NA
CATHAY UNITED BANK CO LTD - MANILA BRANCH	11,387,003.41	0.00	NA
DEUTSCHE BANK AG	145,910,504.41	0.00	NA
FIRST COMMERCIAL BANK LTD MANILA BRANCH	2,310,000.00	0.00	NA
HUA NAN COMMERCIAL BANK LTD MANILA BRANCH	0.00	0.00	NA
INDUSTRIAL BANK OF KOREA MANILA BRANCH	15,532,197.22	0.00	NA
ISLA BANK(A THRIFT BANK) INC	4,290,580.33	0.00	NA
JP MORGAN CHASE BANK NATIONAL ASSN.	19,265,114.78	0.00	NA
MEGA INT'L COMM'L BANK CO LTD	145,409,223.49	0.00	NA
MIZUHO BANK LTD - MANILA BRANCH	477,998,367.14	0.00	NA
SHINHAN BANK - MANILA BRANCH	11,742,855.50	0.00	NA
SUMITOMO MITSUI BANKING CORPORATION-MANILA BRANCH	140,809,335.50	0.00	NA
THE BNK OF TOKYO-MITSUBISHI UFJ LTD	388,210,030.46	0.00	NA
UNITED OVERSEAS BANK LIMITED MANILA BRANCH	13,991,322.20	0.00	NA
Grand Total	171,731,463,802.97	145,936,822,530.97	117.68%

Raising the NPL Coverage Ratio to a minimum of 80% will entail additional loan loss provisions for some banks that could eat into a substantial chunk (20% or more) of their Stockholder's Equity.  Based on the table below, five banks will be severely affected:

Philippine Banking System
Impact on SE of Minimum Loan Loss Provisions
September 30, 2017
Bank	Gross NPLs	Minimum Loan Loss Provisions at 80% NPL Coverage Ratio	Stockholder's Equity	Impact on SE
PHIL POSTAL SAVINGS BANK INC	2,508,468,000.93	2,006,774,400.74	912,190,817.96	-180.76%
WORLD PARTNERS BANK (A THRIFT BANK)	133,433,965.51	106,747,172.41	52,424,149.24	-60.89%
LUZON DEVELOPMENT BANK	545,046,546.55	436,037,237.24	608,587,401.07	-43.89%
MARITIME SAVINGS BANK CORPORATION	23,382,029.78	18,705,623.82	37,087,935.24	-31.70%
EQUICOM SAVINGS BANK INC	667,607,093.01	534,085,674.41	702,493,775.37	-30.96%
PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS BANK)	1,044,815,027.27	835,852,021.82	2,330,423,041.47	-20.78%
UCPB SAVINGS BANK	1,441,208,137.49	1,152,966,509.99	2,941,708,331.13	-19.74%
ENTERPRISE BANK INC (A THRIFT BANK)	215,713,578.66	172,570,862.93	280,195,073.92	-18.28%
MALAYAN BANK SAVINGS AND MORT BANK INC	435,420,208.60	348,336,166.88	1,176,335,297.85	-13.86%
RCBC SAVINGS BANK INC	4,880,055,779.99	3,904,044,623.99	11,406,749,774.02	-12.91%
CITYSTATE SAVINGS BANK INC	188,959,446.02	151,167,556.82	750,760,752.25	-12.41%
CHINA BANK SAVINGS INC	4,130,404,304.73	3,304,323,443.78	9,020,020,772.21	-12.10%
UNIVERSITY SAVINGS BANK INC	116,956,047.27	93,564,837.82	417,685,916.66	-12.00%
MALASIQUI PROGRESSIVE SLB, INC	16,462,941.25	13,170,353.00	52,202,636.18	-11.91%
WEALTH DEVELOPMENT BANK CORPORATION	380,390,453.79	304,312,363.03	1,474,494,842.00	-10.90%
1ST VALLEY BANK INC A DEVELOPMENT BANK	526,595,673.05	421,276,538.44	1,594,183,681.39	-10.31%
PRODUCERS SAVINGS BANK CORPORATION	422,122,515.34	337,698,012.27	1,673,043,542.61	-9.04%
LEMERY SAVINGS & LOAN BANK, INC.	13,423,090.28	10,738,472.22	81,595,968.41	-7.31%
PAMPANGA DEVELOPMENT BANK	51,971,314.94	41,577,051.95	148,200,486.72	-6.73%
LIFE SAVINGS BANK INC	11,416,781.69	9,133,425.35	67,270,003.62	-6.41%
STANDARD CHARTERED BANK	2,625,905,469.28	2,100,724,375.42	6,607,584,228.73	-5.88%
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC)	188,311,423.89	150,649,139.11	486,928,896.76	-5.63%
STERLING BANK OF ASIA INC (A SAVINGS BANK)	999,798,578.55	799,838,862.84	2,614,441,434.70	-5.18%
NORTHPOINT DEV'T BANK INC	167,453,354.61	133,962,683.69	349,870,036.19	-4.16%
CITY SAVINGS BANK INC	2,171,636,478.59	1,737,309,182.87	12,706,877,725.77	-3.80%
SUN SAVINGS BANK INC	31,865,252.35	25,492,201.88	190,859,259.93	-3.76%
PNB SAVINGS BANK	1,435,899,069.48	1,148,719,255.58	11,722,055,280.02	-3.20%
EAST WEST BANKING CORP	8,571,691,526.36	6,857,353,221.09	37,335,941,987.02	-2.28%
ALLBANK (A THRIFT BANK) INC	53,131,404.08	42,505,123.26	903,007,636.97	-2.13%
UNITED COCONUT PLANTERS BANK	4,006,807,441.49	3,205,445,953.19	17,915,131,482.85	-1.82%
PHIL STAR DEVELOPMENT BANK INC	13,618,385.28	10,894,708.22	95,512,977.18	-1.69%
DUMAGUETE CITY DEV BANK INC	29,599,686.48	23,679,749.18	282,851,266.90	-1.55%
ANZ BANKING GROUP LTD	404,087,064.26	323,269,651.41	4,242,436,078.21	-1.26%
CENTURY SAVINGS BANK CORPORATION	35,040,627.61	28,032,502.09	986,255,355.88	-0.84%
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS	5,222,336.47	4,177,869.18	260,731,005.77	-0.52%
BATAAN SAVINGS AND LOAN BANK	2,089,556.31	1,671,645.05	57,340,856.43	-0.13%
HUA NAN COMMERCIAL BANK LTD MANILA BRANCH	0.00	0.00	2,081,351,164.93	0.00%
FIRST COMMERCIAL BANK LTD MANILA BRANCH	0.00	0.00	2,024,021,798.12	0.11%
SHINHAN BANK - MANILA BRANCH	0.00	0.00	2,208,080,775.75	0.53%
CATHAY UNITED BANK CO LTD - MANILA BRANCH	0.00	0.00	2,131,959,607.41	0.53%
PACIFIC ACE SAVINGS BANK INC	3,359,285.69	2,687,428.55	74,249,704.16	0.59%
UNITED OVERSEAS BANK LIMITED MANILA BRANCH	0.00	0.00	2,346,970,697.12	0.60%
ISLA BANK(A THRIFT BANK) INC	0.00	0.00	675,385,523.04	0.64%
INDUSTRIAL BANK OF KOREA MANILA BRANCH	0.00	0.00	2,271,224,385.43	0.68%
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK	24,547,464.17	19,637,971.34	652,183,207.72	0.73%
BANK ONE SAVINGS AND TRUST CORP.	49,944,276.09	39,955,420.87	584,102,778.37	0.76%
HIYAS BANKING CORPORATION	34,353,876.46	27,483,101.17	172,583,685.53	0.80%
ASIA UNITED BANK CORPORATION	2,729,346,887.64	2,183,477,510.11	26,504,553,463.24	0.81%
CORDILLERA SAVINGS BANK INC	15,910,979.40	12,728,783.52	144,410,140.75	0.89%
SUMITOMO MITSUI BANKING CORPORATION-MANILA BRANCH	0.00	0.00	12,836,854,089.47	1.10%
PHILIPPINE VETERANS BANK	1,883,037,451.22	1,506,429,960.98	3,497,229,644.77	1.13%
BANK OF AMERICA N.A.	0.00	0.00	2,091,322,952.20	1.32%
BDO PRIVATE BANK, INC.	0.00	0.00	5,251,554,616.09	1.34%
JP MORGAN CHASE BANK NATIONAL ASSN.	0.00	0.00	1,304,593,848.06	1.48%
ROBINSONS BANK CORPORATION	771,694,104.69	617,355,283.75	12,401,830,668.75	1.51%
PHILIPPINE BUSINESS BANK INC A SAVINGS BANK	1,527,303,682.15	1,221,842,945.72	10,074,646,988.78	1.54%
LEGAZPI SAVINGS BANK INC	320,173,069.38	256,138,455.50	537,350,772.59	1.87%
QUEZON COCONUT BANK INC (A THRIFT BANK)	519,588.36	415,670.69	58,492,054.63	1.91%
MAYBANK PHILIPPINES INCORPORATED	1,538,320,568.40	1,230,656,454.72	12,564,639,453.88	2.05%
MERCHANTS SAVINGS & LOAN ASSN INC	21,944,310.69	17,555,448.55	619,980,068.95	2.09%
YUANTA SAVINGS BANK PHILIPPINES INC	112,954,004.98	90,363,203.98	973,401,700.92	2.33%
RIZAL COMM'L BANKING CORP	2,738,199,180.71	2,190,559,344.57	64,861,968,770.74	2.37%
HONGKONG & SHANGHAI BANKING CORP	745,759,554.02	596,607,643.22	13,895,030,853.83	2.70%
KEB HANA BANK - MANILA BRANCH	28,131,704.26	22,505,363.41	1,636,435,622.34	2.91%
HSBC SAVINGS BANK(PHILS) INC	51,109,354.88	40,887,483.90	1,894,764,577.93	2.98%
BANGKO KABAYAN INC (A PRIVATE DEVELOPMENT BANK)	19,285,872.47	15,428,697.98	477,480,991.72	3.23%
PHIL BANK OF COMMUNICATIONS	2,216,599,337.40	1,773,279,469.92	11,928,226,773.54	3.24%
CHINA BANKING CORP	4,034,201,792.60	3,227,361,434.08	75,949,384,511.58	3.42%
SECURITY BANK CORP	2,178,978,925.78	1,743,183,140.62	101,502,917,257.72	3.53%
BANK OF COMMERCE	1,933,309,750.94	1,546,647,800.75	15,611,461,237.37	3.57%
ING BANK N.V.	103.63	82.90	2,457,969,000.41	3.60%
PHIL SAVINGS BANK	4,610,213,814.22	3,688,171,051.38	20,553,887,937.32	3.64%
UNION BANK OF THE PHILS	8,069,495,405.68	6,455,596,324.54	65,938,706,351.21	3.93%
LAND BANK OF THE PHILIPPINES	9,545,698,986.46	7,636,559,189.17	101,943,418,116.82	3.99%
BDO UNIBANK INC	18,340,530,156.37	14,672,424,125.10	293,986,619,750.52	4.23%
INTER-ASIA DEVELOPMENT BANK	6,364,956.89	5,091,965.51	67,233,113.70	4.26%
METROPOLITAN BANK & TCO	6,115,557,253.03	4,892,445,802.42	199,943,990,930.40	4.33%
PHIL NATIONAL BANK	8,771,640,884.50	7,017,312,707.60	106,035,778,273.85	4.72%
DEVELOPMENT BANK OF THE PHIL	5,788,443,476.53	4,630,754,781.22	46,550,980,106.56	4.72%
BANK OF THE PHIL ISLANDS	9,657,461,045.03	7,725,968,836.02	174,856,293,663.35	5.09%
CTBC BANK (PHILIPPINES) CORP	427,998,126.17	342,398,500.94	7,097,828,768.53	5.43%
BPI DIRECT BANKO INC A SAVINGS BANK	402,048,116.22	321,638,492.98	2,026,159,831.01	5.44%
BPI FAMILY SAVINGS BANK INC	7,581,005,954.14	6,064,804,763.31	27,332,288,317.29	5.49%
FARMERS SAVINGS & LOAN BANK INC	23,926,681.31	19,141,345.05	132,550,717.23	5.51%
BATAAN DEVELOPMENT BANK	23,282,834.47	18,626,267.58	83,685,275.51	5.68%
DEUTSCHE BANK AG	0.00	0.00	2,531,311,509.69	5.76%
BANK OF MAKATI (A SAVINGS BANK) INC	2,326,624,061.12	1,861,299,248.90	7,177,253,101.88	6.30%
BUSINESS AND CONSUMERS BANK (A DB)	6,090,313.34	4,872,250.67	87,068,500.59	6.33%
PHIL TRUST COMPANY	1,121,366,905.75	897,093,524.60	25,015,724,609.18	6.80%
CARD SME BANK INC A THRIFT BANK	69,511,576.66	55,609,261.33	877,516,443.55	6.80%
BANK OF CHINA LIMITED-MANILA BRANCH	188,969,213.72	151,175,370.98	2,580,749,046.71	7.40%
FIRST CONSOLIDATED BANK INC (A PDB)	407,424,268.73	325,939,414.98	4,243,049,159.99	7.48%
MEGA INT'L COMM'L BANK CO LTD	0.00	0.00	1,856,041,660.71	7.83%
THE BNK OF TOKYO-MITSUBISHI UFJ LTD	0.00	0.00	4,653,117,496.08	8.34%
MIZUHO BANK LTD - MANILA BRANCH	0.00	0.00	5,512,796,843.22	8.67%
VILLAGE BANK INC (A THRIFT BANK)	29,349,566.91	23,479,653.53	70,575,666.57	10.64%
BANGKOK BANK PUBLIC CO LTD	35,377,890.77	28,302,312.62	3,145,339,339.96	12.05%
CITIBANK, N.A.	886,570,461.17	709,256,368.94	17,519,765,588.91	16.89%
METRO CEBU PUBLIC SAVINGS BANK	8,869,721.90	7,095,777.52	52,804,532.18	21.71%
THE PALAWAN BANK (PALAWAN DB) INC	18,005,142.63	14,404,114.10	38,796,966.79	21.80%
Grand Total	145,936,822,530.97	116,749,458,024.78	1,648,695,424,715.78	3.33%

Source: www.bsp.gov.ph

Out of the five banks highlighted in yellow, four banks have been regularly listed as one of the "The Top Distressed Philippine Banks as of September 30, 2017".

The most notable of the banks in this list is Philippine Postal Savings Bank Inc. The bank faces a shortfall of 180.76% of its stated stockholder's equity of Php 912.19 million if it were to increase its loan loss provisions to meet a minimum NPL Coverage Ratio of 80%. In short, it's equity would be completely wiped out and then some if the bank were to properly account for its losses.