A Simple Stress Test of Philippine Banks as of December 31, 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 138.02 billion or 8.28% of the PhP 1,666.09 billion in Stockholders Equity (SE) as of December 31, 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 (152.83% decline in SE)
2. Enterprise Bank Inc (46.66% decline in SE)
3. Luzon Development Bank (43.65% decline in SE)
4. Equicom Savings Bank (40.76% of SE)
5. The Palawan Bank Inc (36.47% decline in SE)
6. UCPB Savings Bank (35.71% decline in SE) 
7. Maritime Savings Bank Corporation (31.30% decline in SE)
8. Legazpi Savings Bank Inc (30.69% decline in SE)
9. Philippine Veterans Bank (29.68% decline in SE)

Some of these banks are distressed. For more information regarding this, please read The Top Distressed Philippine Banks as of December 31, 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 December 31, 2017, "Classified Loans and Other Risky Assets" of the Philippine Banks amounted to PhP 353.56 billion or more than two times the size of the Philippine Banking System's NPLs of PhP 138.02 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 353.56 billion or 20.42% of the Php 1.73 trillion in Total Capital Cushion of Philippine Banks as of December 31, 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 20.42% 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 2.04% and a 50% write-off of classified loans will reduce the banking system's Total Capital Cushion by 10.21%.


Individual Banks

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

1. Bank of China Limited - Manila Branch (52.07% reduction in Total Capital Cushion)
2. Inter-Asia Development Bank (41.28% reduction in Total Capital Cushion)
3. United Coconut Planters Bank (28.35% 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 six more banks:

1. Bank of China Limited - Manila Branch (104.13% reduction in Total Capital Cushion)
2. Inter-Asia Development Bank (82.56% reduction in Total Capital Cushion)
3. United Coconut Planters Bank (56.70% reduction in Total Capital Cushion)
4. Philippine Postal Savings Bank Inc (44.89% reduction in Total Capital Cushion)
5. Yuanta Savings Bank Philippines (29.26% reduction in Total Capital Cushion)
6. Luzon Development Bank (26.44% reduction in Total Capital Cushion)
7. Philippine Resources Savings Banking Corporation (25.69% 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 eight other banks:

1. Bank of China Limited - Manila Branch (156.20% reduction in Total Capital Cushion)
2. Inter-Asia Development Bank (123.84% reduction in Total Capital Cushion)
3. United Coconut Planters Bank (85.05% reduction in Total Capital Cushion)
4. Philippine Postal Savings Bank Inc (67.34% reduction in Total Capital Cushion)
5. Yuanta Savings Bank Philippines Inc (43.90% reduction in Total Capital Cushion)
6. Luzon Development Bank (39.66% reduction in Total Capital Cushion)
7. Philippine Resources Savings Banking Corporation (38.53% reduction in Total Capital Cushion)
8. Malayan Bank Savings and Mortgage Bank (35.94% reduction in Total Capital Cushion)
9. Bataan Development Bank (30.25% reduction in Total Capital Cushion)
10. Legazpi Savings Bank (27.06% reduction in Total Capital Cushion)

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

1. Bank of China Limited - Manila Branch (208.26% reduction in Total Capital Cushion)
2. Inter-Asia Development Bank (165.12% reduction in Total Capital Cushion)
3. United Coconut Planters Bank (113.40% reduction in Total Capital Cushion)
4. Philippine Postal Savings Bank Inc (89.78% reduction in Total Capital Cushion)
5. Yuanta Savings Bank Philippines Inc (58.53% reduction in Total Capital Cushion)
6. Luzon Development Bank (52.88% reduction in Total Capital Cushion)
7. Philippine Resources Savings Banking Corporation (51.37% reduction in Total Capital Cushion
8. Malayan Bank Savings and Mortgage Bank (47.92% reduction in Total Capital Cushion)
9. Bataan Development Bank (40.34% reduction in Total Capital Cushion)
10. Legazpi Savings Bank Inc ( 36.08% reduction in Total Capital Cushion)
11. Maritime Savings Bank Corporation (31.52% reduction in Total Capital Cushion)
12. Equicom Savings Bank (31.21% reduction in Total Capital Cushion)
13. Robinsons Bank Corporation (29.20% reduction in Total Capital Cushion)
14. Philippine Savings Bank (26.34% reduction in Total Capital Cushion)

A 50% 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 fifteen more banks:

1. Bank of China Limited - Manila Branch (260.33% reduction in Total Capital Cushion)
2. Inter-Asia Development Bank (206.40% reduction in Total Capital Cushion)
3. United Coconut Planters Bank (141.75% reduction in Total Capital Cushion)
4. Philippine Postal Savings Bank Inc (112.23% reduction in Total Capital Cushion)
5. Yuanta Savings Bank Philippines Inc (73.16% reduction in Total Capital Cushion)
6. Luzon Development Bank (66.10% reduction in Total Capital Cushion)
7. Philippine Resources Savings Banking Corporation (64.22% reduction in Total Capital Cushion
8. Malayan Bank Savings and Mortgage Bank (59.90% reduction in Total Capital Cushion)
9. Bataan Development Bank (50.42% reduction in Total Capital Cushion)
10. Legazpi Savings Bank Inc (45.10% reduction in Total Capital Cushion)
11. Maritime Savings Bank Corporation (39.40% reduction in Total Capital Cushion)
12. Equicom Savings Bank (39.01% reduction in Total Capital Cushion)
13. Robinsons Bank Corporation (36.51% reduction in Total Capital Cushion)
14. Philippine Savings Bank (32.93% reduction in Total Capital Cushion)
15. UCPB Savings Bank (30.37% reduction in Total Capital Cushion)
16. China Bank Savings Inc (27.76% reduction in Total Capital Cushion)
17. Philippine Veterans Bank (27.13% reduction in Total Capital Cushion)
18. RCBC Savings Bank (26.82% reduction in Total Capital Cushion)
19. Penbank Inc (26.34% 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 December 31, 2017".  Moreover, their capital can be overstated.  See a previous blog post "Overstated Capital of Philippine Banks as of December 31, 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 December 31, 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 September 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 138.02 billion as of December 31, 2017 - approximately 1.58% of the Philippine Banking Industry's Total Loan Portfolio of Php 8.73 trillion.

 

Philippine Banking System
NPL as % of TLP
December 31, 2017
			Gross NPL/ Gross TLP
Bank	Gross NPLs	Gross TLP	(In %)
MAXIMUM SAVINGS BANK INC	9,301,471.34	12,261,436.83	75.86%
PHIL STAR DEVELOPMENT BANK INC	13,618,385.28	23,858,496.29	57.08%
PHIL POSTAL SAVINGS BANK INC	2,573,636,133.05	5,198,964,234.61	49.50%
MALASIQUI PROGRESSIVE SLB, INC	15,625,906.59	39,327,642.08	39.73%
UNIVERSITY SAVINGS BANK INC	143,068,589.00	471,577,575.89	30.34%
NORTHPOINT DEV'T BANK INC	135,617,693.05	453,969,831.51	29.87%
MARITIME SAVINGS BANK CORPORATION	23,615,730.12	116,465,682.85	20.28%
YUANTA SAVINGS BANK PHILIPPINES INC	111,281,975.24	562,447,462.39	19.79%
LEGAZPI SAVINGS BANK INC	331,930,878.48	1,757,567,652.33	18.89%
LUZON DEVELOPMENT BANK	572,886,788.42	3,555,619,201.27	16.11%
LIFE SAVINGS BANK INC	7,323,871.50	47,615,911.33	15.38%
HIYAS BANKING CORPORATION	39,024,897.61	269,795,964.37	14.46%
BATAAN DEVELOPMENT BANK	27,105,889.48	190,427,303.87	14.23%
ENTERPRISE BANK INC (A THRIFT BANK)	236,780,337.30	1,690,869,890.94	14.00%
PAMPANGA DEVELOPMENT BANK	51,370,076.92	378,461,155.83	13.57%
UCPB SAVINGS BANK	1,805,224,708.69	15,287,410,552.04	11.81%
EQUICOM SAVINGS BANK INC	581,351,331.19	5,469,854,661.55	10.63%
PHILIPPINE VETERANS BANK	1,940,400,491.73	18,991,915,993.92	10.22%
PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS	1,041,502,843.18	10,236,698,272.76	10.17%
CITYSTATE SAVINGS BANK INC	193,352,128.38	1,955,696,048.15	9.89%
1ST VALLEY BANK INC A DEVELOPMENT BANK	524,483,848.57	5,545,383,174.52	9.46%
METRO CEBU PUBLIC SAVINGS BANK	9,340,189.11	100,186,688.67	9.32%
BPI DIRECT BANKO INC A SAVINGS BANK	445,658,466.00	4,805,888,728.04	9.27%
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC)	159,948,202.14	1,762,599,044.40	9.07%
BANK OF MAKATI (A SAVINGS BANK) INC	2,112,966,067.15	23,379,505,360.36	9.04%
FARMERS SAVINGS & LOAN BANK INC	18,781,070.83	219,057,952.05	8.57%
MALAYAN BANK SAVINGS AND MORT BANK INC	382,510,294.71	4,665,373,484.66	8.20%
THE PALAWAN BANK (PALAWAN DB) INC	20,627,309.35	272,272,875.52	7.58%
STANDARD CHARTERED BANK	2,621,936,475.60	36,251,787,258.89	7.23%
CORDILLERA SAVINGS BANK INC	13,111,997.34	193,549,638.87	6.77%
DUMAGUETE CITY DEV BANK INC	37,947,396.83	566,690,105.56	6.70%
CHINA BANK SAVINGS INC	3,926,539,784.17	64,643,959,926.83	6.07%
RCBC SAVINGS BANK INC	4,434,141,000.56	84,145,572,088.92	5.27%
BUSINESS AND CONSUMERS BANK (A DB)	8,282,870.65	160,107,332.73	5.17%
WEALTH DEVELOPMENT BANK CORPORATION	355,586,153.21	6,912,634,080.70	5.14%
LEMERY SAVINGS & LOAN BANK, INC.	4,270,287.78	87,978,770.09	4.85%
CENTURY SAVINGS BANK CORPORATION	35,875,505.12	778,828,053.49	4.61%
PHIL BANK OF COMMUNICATIONS	2,188,900,338.08	49,544,603,393.20	4.42%
EAST WEST BANKING CORP	9,194,973,447.66	209,759,096,474.62	4.38%
BANK ONE SAVINGS AND TRUST CORP.	49,944,276.09	1,196,206,671.14	4.18%
CITY SAVINGS BANK INC	2,547,279,274.47	66,909,698,638.55	3.81%
STERLING BANK OF ASIA INC (A SAVINGS BANK)	1,109,957,042.55	29,634,834,745.04	3.75%
QUEZON COCONUT BANK INC (A THRIFT BANK)	2,606,502.67	69,722,420.35	3.74%
PNB SAVINGS BANK	1,668,304,338.01	45,127,568,768.07	3.70%
UNION BANK OF THE PHILS	7,919,233,625.67	220,222,446,935.23	3.60%
BPI FAMILY SAVINGS BANK INC	7,510,125,483.03	213,038,220,759.99	3.53%
ALLBANK (A THRIFT BANK) INC	63,415,045.83	1,940,436,742.07	3.27%
FIRST CONSOLIDATED BANK INC (A PDB)	386,608,203.74	11,850,245,239.88	3.26%
PHIL SAVINGS BANK	4,770,532,359.83	148,184,807,646.02	3.22%
PACIFIC ACE SAVINGS BANK INC	723,612.00	23,001,261.00	3.15%
BANK OF COMMERCE	1,905,183,563.38	68,209,378,624.91	2.79%
UNITED COCONUT PLANTERS BANK	4,260,495,688.39	157,054,762,332.17	2.71%
SUN SAVINGS BANK INC	27,575,519.66	1,039,358,886.31	2.65%
PHIL TRUST COMPANY	1,235,274,115.70	48,802,019,296.70	2.53%
MERCHANTS SAVINGS & LOAN ASSN INC	24,490,163.18	1,068,340,051.01	2.29%
PRODUCERS SAVINGS BANK CORPORATION	235,827,682.71	11,078,447,959.21	2.13%
PHILIPPINE BUSINESS BANK INC A SAVINGS BANK	1,508,538,115.21	71,820,787,305.03	2.10%
MAYBANK PHILIPPINES INCORPORATED	1,505,097,676.36	73,466,177,798.08	2.05%
PHIL NATIONAL BANK	9,026,087,102.44	448,145,282,342.91	2.01%
DEVELOPMENT BANK OF THE PHIL	5,910,318,428.03	293,472,268,297.32	2.01%
CARD SME BANK INC A THRIFT BANK	76,379,195.49	4,006,726,996.82	1.91%
HSBC SAVINGS BANK(PHILS) INC	58,497,575.68	3,079,293,607.39	1.90%
INTER-ASIA DEVELOPMENT BANK	3,697,216.26	219,186,882.38	1.69%
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK	21,531,439.74	1,658,802,869.50	1.30%
ROBINSONS BANK CORPORATION	764,981,621.23	59,450,899,441.25	1.29%
CTBC BANK (PHILIPPINES) CORP	402,002,888.64	32,101,403,440.39	1.25%
HONGKONG & SHANGHAI BANKING CORP	716,358,593.37	68,281,724,586.13	1.05%
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS	4,726,959.53	450,854,240.68	1.05%
RIZAL COMM'L BANKING CORP	2,850,646,633.56	272,104,211,932.58	1.05%
BANGKO KABAYAN INC (A PRIVATE DEVELOPMENT BANK)	17,218,615.00	1,677,028,726.17	1.03%
ASIA UNITED BANK CORPORATION	1,305,313,160.92	132,348,397,838.59	0.99%
LAND BANK OF THE PHILIPPINES	6,599,423,137.92	674,353,264,923.88	0.98%
BDO UNIBANK INC	17,044,080,200.52	1,743,923,345,525.46	0.98%
BANK OF THE PHIL ISLANDS	8,072,907,030.81	1,007,246,799,827.38	0.80%
CHINA BANKING CORP	2,923,249,111.15	407,502,702,756.47	0.72%
METROPOLITAN BANK & TCO	6,019,807,187.46	1,021,564,496,973.92	0.59%
SECURITY BANK CORP	2,126,420,967.47	372,291,931,741.06	0.57%
BANGKOK BANK PUBLIC CO LTD	32,996,077.60	5,786,996,476.44	0.57%
CITIBANK, N.A.	932,256,279.91	211,330,388,200.94	0.44%
KEB HANA BANK - MANILA BRANCH	28,043,200.72	6,721,785,797.17	0.42%
ING BANK N.V.	101.86	10,106,256,421.67	0.00%
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED	0.00	17,628,357,049.33	0.00%
BANK OF AMERICA N.A.	0.00	10,144,085,779.05	0.00%
BANK OF CHINA LIMITED-MANILA BRANCH	0.00	12,672,319,415.31	0.00%
BDO PRIVATE BANK, INC.	0.00	7,997,195,349.97	0.00%
CATHAY UNITED BANK CO LTD - MANILA BRANCH	0.00	1,302,620,247.74	0.00%
DEUTSCHE BANK AG	0.00	23,658,822,226.66	0.00%
FIRST COMMERCIAL BANK LTD MANILA BRANCH	0.00	253,191,087.00	0.00%
INDUSTRIAL BANK OF KOREA MANILA BRANCH	0.00	1,650,060,851.82	0.00%
ISLA BANK(A THRIFT BANK) INC	0.00	598,294,827.52	0.00%
JP MORGAN CHASE BANK NATIONAL ASSN.	0.00	21,005,525,749.48	0.00%
MEGA INT'L COMM'L BANK CO LTD	0.00	10,569,704,018.82	0.00%
MIZUHO BANK LTD - MANILA BRANCH	0.00	61,861,937,320.48	0.00%
SHINHAN BANK - MANILA BRANCH	0.00	1,267,315,339.15	0.00%
SUMITOMO MITSUI BANKING CORPORATION-MANILA BRANCH	0.00	14,579,174,599.81	0.00%
THE BNK OF TOKYO-MITSUBISHI UFJ LTD	0.00	31,466,693,437.28	0.00%
UNITED OVERSEAS BANK LIMITED MANILA BRANCH	0.00	1,536,003,429.00	0.00%
HUA NAN COMMERCIAL BANK LTD MANILA BRANCH	0.00	0.00	NA
Grand Total	138,018,055,845.20	8,727,257,692,058.61	1.58%

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

1. Maximum Savings Bank Inc (75.86% of TLP)
2. Philippine Star Development Bank Inc (57.08% of TLP)
3. Philippine Postal Savings Bank Inc (49.50% of TLP)
4. Malasiqui Progressive SLB Inc (39.73% of TLP)
5. University Savings Bank Inc (30.34% of TLP}
6. Northpoint Development Bank Inc (29.87% 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 8.28% of Stockholders Equity as of December 31, 2017.

Philippine Banking System
NPL as % of SE
December 31, 2017
	NPL	SE	NPL/SE
Bank	(In PHP)	(In PHP)	(In %)
PHIL POSTAL SAVINGS BANK INC	2,573,636,133.05	842,001,759.20	305.66%
ENTERPRISE BANK INC (A THRIFT BANK)	236,780,337.30	253,723,993.77	93.32%
LUZON DEVELOPMENT BANK	572,886,788.42	656,264,864.47	87.30%
EQUICOM SAVINGS BANK INC	581,351,331.19	713,200,459.81	81.51%
THE PALAWAN BANK (PALAWAN DB) INC	20,627,309.35	28,282,539.35	72.93%
UCPB SAVINGS BANK	1,805,224,708.69	2,527,615,670.22	71.42%
MARITIME SAVINGS BANK CORPORATION	23,615,730.12	37,729,273.64	62.59%
LEGAZPI SAVINGS BANK INC	331,930,878.48	540,799,646.86	61.38%
PHILIPPINE VETERANS BANK	1,940,400,491.73	3,268,708,856.38	59.36%
PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS	1,041,502,843.18	2,369,540,365.73	43.95%
CHINA BANK SAVINGS INC	3,926,539,784.17	9,101,933,064.11	43.14%
STERLING BANK OF ASIA INC (A SAVINGS BANK)	1,109,957,042.55	2,659,580,815.51	41.73%
STANDARD CHARTERED BANK	2,621,936,475.60	6,461,203,931.41	40.58%
NORTHPOINT DEV'T BANK INC	135,617,693.05	356,004,174.33	38.09%
RCBC SAVINGS BANK INC	4,434,141,000.56	11,784,171,179.05	37.63%
UNIVERSITY SAVINGS BANK INC	143,068,589.00	411,771,626.31	34.74%
PAMPANGA DEVELOPMENT BANK	51,370,076.92	149,769,025.42	34.30%
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC)	159,948,202.14	492,890,065.48	32.45%
MALAYAN BANK SAVINGS AND MORT BANK INC	382,510,294.71	1,188,581,878.15	32.18%
BATAAN DEVELOPMENT BANK	27,105,889.48	84,544,777.01	32.06%
1ST VALLEY BANK INC A DEVELOPMENT BANK	524,483,848.57	1,664,199,472.79	31.52%
MALASIQUI PROGRESSIVE SLB, INC	15,625,906.59	50,662,752.00	30.84%
BANK OF MAKATI (A SAVINGS BANK) INC	2,112,966,067.15	7,227,534,095.53	29.23%
BPI FAMILY SAVINGS BANK INC	7,510,125,483.03	26,687,511,311.24	28.14%
CITYSTATE SAVINGS BANK INC	193,352,128.38	697,461,737.09	27.72%
UNITED COCONUT PLANTERS BANK	4,260,495,688.39	17,397,558,815.10	24.49%
WEALTH DEVELOPMENT BANK CORPORATION	355,586,153.21	1,467,571,253.00	24.23%
EAST WEST BANKING CORP	9,194,973,447.66	38,620,925,589.08	23.81%
PHIL SAVINGS BANK	4,770,532,359.83	20,897,738,257.41	22.83%
HIYAS BANKING CORPORATION	39,024,897.61	171,657,550.61	22.73%
BPI DIRECT BANKO INC A SAVINGS BANK	445,658,466.00	2,047,202,631.66	21.77%
CITY SAVINGS BANK INC	2,547,279,274.47	13,744,848,979.28	18.53%
PHIL BANK OF COMMUNICATIONS	2,188,900,338.08	12,009,314,825.58	18.23%
METRO CEBU PUBLIC SAVINGS BANK	9,340,189.11	57,052,632.86	16.37%
PHILIPPINE BUSINESS BANK INC A SAVINGS BANK	1,508,538,115.21	10,187,187,378.11	14.81%
MAXIMUM SAVINGS BANK INC	9,301,471.34	64,034,475.98	14.53%
PNB SAVINGS BANK	1,668,304,338.01	11,503,184,041.59	14.50%
PHIL STAR DEVELOPMENT BANK INC	13,618,385.28	96,350,953.22	14.13%
FARMERS SAVINGS & LOAN BANK INC	18,781,070.83	132,992,180.75	14.12%
DUMAGUETE CITY DEV BANK INC	37,947,396.83	284,250,949.11	13.35%
PRODUCERS SAVINGS BANK CORPORATION	235,827,682.71	1,774,145,221.80	13.29%
DEVELOPMENT BANK OF THE PHIL	5,910,318,428.03	46,947,591,646.19	12.59%
BANK OF COMMERCE	1,905,183,563.38	15,746,839,708.73	12.10%
SUN SAVINGS BANK INC	27,575,519.66	232,213,068.73	11.88%
YUANTA SAVINGS BANK PHILIPPINES INC	111,281,975.24	942,387,007.15	11.81%
UNION BANK OF THE PHILS	7,919,233,625.67	67,773,383,482.01	11.68%
MAYBANK PHILIPPINES INCORPORATED	1,505,097,676.36	12,948,139,648.57	11.62%
LIFE SAVINGS BANK INC	7,323,871.50	70,816,478.86	10.34%
BUSINESS AND CONSUMERS BANK (A DB)	8,282,870.65	86,584,808.97	9.57%
CORDILLERA SAVINGS BANK INC	13,111,997.34	137,391,858.98	9.54%
FIRST CONSOLIDATED BANK INC (A PDB)	386,608,203.74	4,316,778,086.78	8.96%
BANK ONE SAVINGS AND TRUST CORP.	49,944,276.09	590,489,801.54	8.46%
CARD SME BANK INC A THRIFT BANK	76,379,195.49	920,636,294.74	8.30%
PHIL NATIONAL BANK	9,026,087,102.44	108,897,226,069.70	8.29%
ROBINSONS BANK CORPORATION	764,981,621.23	12,112,890,535.89	6.32%
LAND BANK OF THE PHILIPPINES	6,599,423,137.92	104,596,154,345.94	6.31%
ALLBANK (A THRIFT BANK) INC	63,415,045.83	1,020,711,669.47	6.21%
BDO UNIBANK INC	17,044,080,200.52	297,368,799,872.86	5.73%
CTBC BANK (PHILIPPINES) CORP	402,002,888.64	7,033,338,397.85	5.72%
INTER-ASIA DEVELOPMENT BANK	3,697,216.26	66,225,979.07	5.58%
PHIL TRUST COMPANY	1,235,274,115.70	23,979,055,109.03	5.15%
CITIBANK, N.A.	932,256,279.91	18,544,182,580.79	5.03%
LEMERY SAVINGS & LOAN BANK, INC.	4,270,287.78	85,354,098.57	5.00%
HONGKONG & SHANGHAI BANKING CORP	716,358,593.37	14,676,887,638.06	4.88%
ASIA UNITED BANK CORPORATION	1,305,313,160.92	26,881,201,566.71	4.86%
BANK OF THE PHIL ISLANDS	8,072,907,030.81	176,842,048,187.50	4.57%
QUEZON COCONUT BANK INC (A THRIFT BANK)	2,606,502.67	58,963,045.16	4.42%
RIZAL COMM'L BANKING CORP	2,850,646,633.56	66,891,627,479.35	4.26%
MERCHANTS SAVINGS & LOAN ASSN INC	24,490,163.18	613,220,402.50	3.99%
CHINA BANKING CORP	2,923,249,111.15	77,160,827,684.31	3.79%
CENTURY SAVINGS BANK CORPORATION	35,875,505.12	987,110,507.14	3.63%
BANGKO KABAYAN INC (A PRIVATE DEVELOPMENT BANK)	17,218,615.00	486,359,819.88	3.54%
HSBC SAVINGS BANK(PHILS) INC	58,497,575.68	1,655,388,144.52	3.53%
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK	21,531,439.74	654,541,579.78	3.29%
METROPOLITAN BANK & TCO	6,019,807,187.46	196,170,793,389.04	3.07%
SECURITY BANK CORP	2,126,420,967.47	103,433,294,420.92	2.06%
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS	4,726,959.53	243,855,237.24	1.94%
KEB HANA BANK - MANILA BRANCH	28,043,200.72	1,675,545,705.46	1.67%
BANGKOK BANK PUBLIC CO LTD	32,996,077.60	3,173,866,408.07	1.04%
PACIFIC ACE SAVINGS BANK INC	723,612.00	74,525,853.83	0.97%
ING BANK N.V.	101.86	2,614,800,005.89	0.00%
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED	0.00	4,186,671,243.23	0.00%
BANK OF AMERICA N.A.	0.00	2,096,035,697.20	0.00%
BANK OF CHINA LIMITED-MANILA BRANCH	0.00	2,599,040,906.95	0.00%
BDO PRIVATE BANK, INC.	0.00	5,348,567,459.72	0.00%
CATHAY UNITED BANK CO LTD - MANILA BRANCH	0.00	2,121,743,141.73	0.00%
DEUTSCHE BANK AG	0.00	2,455,572,028.55	0.00%
FIRST COMMERCIAL BANK LTD MANILA BRANCH	0.00	2,021,320,878.22	0.00%
HUA NAN COMMERCIAL BANK LTD MANILA BRANCH	0.00	2,069,461,976.42	0.00%
INDUSTRIAL BANK OF KOREA MANILA BRANCH	0.00	2,294,253,435.17	0.00%
ISLA BANK(A THRIFT BANK) INC	0.00	680,167,573.92	0.00%
JP MORGAN CHASE BANK NATIONAL ASSN.	0.00	1,340,894,840.65	0.00%
MEGA INT'L COMM'L BANK CO LTD	0.00	1,916,692,903.11	0.00%
MIZUHO BANK LTD - MANILA BRANCH	0.00	5,465,333,964.66	0.00%
SHINHAN BANK - MANILA BRANCH	0.00	2,210,389,217.63	0.00%
SUMITOMO MITSUI BANKING CORPORATION-MANILA BRANCH	0.00	12,852,741,885.32	0.00%
THE BNK OF TOKYO-MITSUBISHI UFJ LTD	0.00	4,665,723,811.53	0.00%
UNITED OVERSEAS BANK LIMITED MANILA BRANCH	0.00	2,340,838,059.36	0.00%
Grand Total	138,018,055,845.20	1,666,089,199,719.15	8.28%

Of the 98 banks in this list, twenty-two banks have a Gross NPL to Stockholders Equity Ratio of 30% or more as of December 31, 2017.  These banks are as follows:

1. Philippine Postal Savings Bank Inc (305.66%  of SE)
2. Enterprise Bank Inc (93.32% of SE)
3. Luzon Development Bank (87.30% of SE)
4. Equicom Savings Bank Inc (81.51% of SE)
5. The Palawan Bank Inc (79.23% of SE)
6. UCPB Savings Bank (71.42% of SE)
7. Maritime Savings Bank Corporation (62.59% of SE)
8. Legazpi Savings Bank (61.38% of SE)
9. Philippine Veterans Bank (59.36% of SE)
10. Philippine Resources Savings Banking Corporation (43.95% of SE)
11. China Bank Savings Inc (43.14% of SE)
12. Sterling Bank of Asia Inc (41.73% of SE)
13. Standard Chartered Bank (40.58% of SE)
14. Northpoint Development Bank Inc (38.09% of SE)
15. RCBC Savings Bank Inc (37.63% of SE)
16. University Savings Bank Inc (34.74% of SE)
17. Pampanga Development Bank (34.30% of SE)
18. Penbank Inc (32.45% of SE)
19. Malayan Bank Savings and Mortgage Bank Inc (32.18% of SE)
20. Bataan Development Bank (32.06% of SE)
21. 1st Valley Bank Inc (31.52% of SE)
22. Malasiqui Progressive SLB Inc (30.84% of SE)

Source: www.bsp.gov.ph

An 80% Minimum NPL Coverage Ratio will Result in a Severe Undercapitalization of Some Philippine Banks - December 31, 2017

In a previous blog post called "Are Philippine Banks Under Provisioning Loan Losses? - As of December 31, 2017", we discussed the current aggregate Loan Loss Reserves (LLR) as a percentage of Total Loan Portfolio (TLP), which stood at 1.85% as of December 31, 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 34 banks (highlighted in yellow, failed banks in red) fall into this deficiency.

 

Philippine Banking System
NPL Coverage Ratio
December 31, 2017
Bank	Loan Loss Provisions	Gross NPLs	NPL Coverage Ratio
PHIL POSTAL SAVINGS BANK INC	359,696,636.96	2,573,636,133.05	13.98%
MARITIME SAVINGS BANK CORPORATION	6,948,645.24	23,615,730.12	29.42%
UNIVERSITY SAVINGS BANK INC	43,742,434.66	143,068,589.00	30.57%
LUZON DEVELOPMENT BANK	179,930,113.15	572,886,788.42	31.41%
UCPB SAVINGS BANK	602,040,666.86	1,805,224,708.69	33.35%
PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS	367,095,651.13	1,041,502,843.18	35.25%
EQUICOM SAVINGS BANK INC	221,392,363.03	581,351,331.19	38.08%
ALLBANK (A THRIFT BANK) INC	25,226,813.08	63,415,045.83	39.78%
1ST VALLEY BANK INC A DEVELOPMENT BANK	210,213,805.41	524,483,848.57	40.08%
CITYSTATE SAVINGS BANK INC	79,217,291.59	193,352,128.38	40.97%
PNB SAVINGS BANK	698,460,623.34	1,668,304,338.01	41.87%
WEALTH DEVELOPMENT BANK CORPORATION	155,713,418.44	355,586,153.21	43.79%
CITY SAVINGS BANK INC	1,133,146,672.30	2,547,279,274.47	44.48%
MALASIQUI PROGRESSIVE SLB, INC	6,951,706.48	15,625,906.59	44.49%
DUMAGUETE CITY DEV BANK INC	19,299,237.59	37,947,396.83	50.86%
RCBC SAVINGS BANK INC	2,401,025,106.49	4,434,141,000.56	54.15%
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS	2,586,990.79	4,726,959.53	54.73%
CENTURY SAVINGS BANK CORPORATION	19,702,529.95	35,875,505.12	54.92%
CHINA BANK SAVINGS INC	2,161,442,962.97	3,926,539,784.17	55.05%
QUEZON COCONUT BANK INC (A THRIFT BANK)	1,452,319.51	2,606,502.67	55.72%
STERLING BANK OF ASIA INC (A SAVINGS BANK)	640,893,087.58	1,109,957,042.55	57.74%
PAMPANGA DEVELOPMENT BANK	30,518,706.22	51,370,076.92	59.41%
ENTERPRISE BANK INC (A THRIFT BANK)	148,926,171.26	236,780,337.30	62.90%
LEMERY SAVINGS & LOAN BANK, INC.	2,874,586.45	4,270,287.78	67.32%
SUN SAVINGS BANK INC	18,650,416.70	27,575,519.66	67.63%
PHIL STAR DEVELOPMENT BANK INC	9,276,107.75	13,618,385.28	68.11%
NORTHPOINT DEV'T BANK INC	94,058,155.26	135,617,693.05	69.36%
EAST WEST BANKING CORP	6,689,334,583.44	9,194,973,447.66	72.75%
PRODUCERS SAVINGS BANK CORPORATION	173,496,960.47	235,827,682.71	73.57%
HIYAS BANKING CORPORATION	28,859,545.81	39,024,897.61	73.95%
LIFE SAVINGS BANK INC	5,424,695.67	7,323,871.50	74.07%
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC)	119,347,708.00	159,948,202.14	74.62%
STANDARD CHARTERED BANK	1,962,488,076.95	2,621,936,475.60	74.85%
UNITED COCONUT PLANTERS BANK	3,365,124,955.37	4,260,495,688.39	78.98%
LEGAZPI SAVINGS BANK INC	267,732,567.57	331,930,878.48	80.66%
BANK OF MAKATI (A SAVINGS BANK) INC	1,717,623,068.94	2,112,966,067.15	81.29%
PHILIPPINE VETERANS BANK	1,664,354,679.22	1,940,400,491.73	85.77%
BATAAN DEVELOPMENT BANK	23,381,061.33	27,105,889.48	86.26%
MAYBANK PHILIPPINES INCORPORATED	1,326,734,966.07	1,505,097,676.36	88.15%
BANK ONE SAVINGS AND TRUST CORP.	44,384,460.48	49,944,276.09	88.87%
BPI FAMILY SAVINGS BANK INC	6,834,672,387.15	7,510,125,483.03	91.01%
PHIL SAVINGS BANK	4,482,397,136.59	4,770,532,359.83	93.96%
BPI DIRECT BANKO INC A SAVINGS BANK	435,832,557.59	445,658,466.00	97.80%
PHIL BANK OF COMMUNICATIONS	2,164,414,667.52	2,188,900,338.08	98.88%
PHILIPPINE BUSINESS BANK INC A SAVINGS BANK	1,494,847,756.55	1,508,538,115.21	99.09%
YUANTA SAVINGS BANK PHILIPPINES INC	111,659,778.72	111,281,975.24	100.34%
MAXIMUM SAVINGS BANK INC	9,369,812.16	9,301,471.34	100.73%
UNION BANK OF THE PHILS	8,682,456,359.60	7,919,233,625.67	109.64%
THE PALAWAN BANK (PALAWAN DB) INC	22,860,428.44	20,627,309.35	110.83%
MALAYAN BANK SAVINGS AND MORT BANK INC	428,096,630.02	382,510,294.71	111.92%
ROBINSONS BANK CORPORATION	870,113,574.23	764,981,621.23	113.74%
CORDILLERA SAVINGS BANK INC	15,015,675.60	13,111,997.34	114.52%
DEVELOPMENT BANK OF THE PHIL	7,014,994,004.78	5,910,318,428.03	118.69%
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK	25,709,790.77	21,531,439.74	119.41%
BANK OF COMMERCE	2,316,834,127.38	1,905,183,563.38	121.61%
PACIFIC ACE SAVINGS BANK INC	934,156.70	723,612.00	129.10%
PHIL NATIONAL BANK	11,787,259,241.98	9,026,087,102.44	130.59%
BUSINESS AND CONSUMERS BANK (A DB)	10,841,871.97	8,282,870.65	130.90%
RIZAL COMM'L BANKING CORP	3,881,667,615.24	2,850,646,633.56	136.17%
MERCHANTS SAVINGS & LOAN ASSN INC	33,386,029.89	24,490,163.18	136.32%
HONGKONG & SHANGHAI BANKING CORP	992,793,880.01	716,358,593.37	138.59%
FARMERS SAVINGS & LOAN BANK INC	26,735,177.92	18,781,070.83	142.35%
BANGKO KABAYAN INC (A PRIVATE DEVELOPMENT BANK)	25,477,556.67	17,218,615.00	147.97%
BDO UNIBANK INC	27,437,933,434.38	17,044,080,200.52	160.98%
INTER-ASIA DEVELOPMENT BANK	6,129,628.98	3,697,216.26	165.79%
HSBC SAVINGS BANK(PHILS) INC	97,081,299.13	58,497,575.68	165.96%
ASIA UNITED BANK CORPORATION	2,293,370,091.42	1,305,313,160.92	175.70%
CARD SME BANK INC A THRIFT BANK	134,937,870.63	76,379,195.49	176.67%
FIRST CONSOLIDATED BANK INC (A PDB)	696,030,195.87	386,608,203.74	180.04%
CHINA BANKING CORP	5,352,681,373.43	2,923,249,111.15	183.11%
LAND BANK OF THE PHILIPPINES	12,251,113,846.21	6,599,423,137.92	185.64%
CTBC BANK (PHILIPPINES) CORP	777,243,866.09	402,002,888.64	193.34%
METRO CEBU PUBLIC SAVINGS BANK	18,946,249.25	9,340,189.11	202.85%
BANK OF THE PHIL ISLANDS	16,422,283,140.14	8,072,907,030.81	203.42%
PHIL TRUST COMPANY	2,656,813,115.59	1,235,274,115.70	215.08%
METROPOLITAN BANK & TCO	13,765,323,944.43	6,019,807,187.46	228.67%
KEB HANA BANK - MANILA BRANCH	69,552,515.74	28,043,200.72	248.02%
SECURITY BANK CORP	5,765,769,749.50	2,126,420,967.47	271.15%
CITIBANK, N.A.	3,971,762,663.78	932,256,279.91	426.04%
BANGKOK BANK PUBLIC CO LTD	404,989,125.00	32,996,077.60	1227.39%
ING BANK N.V.	82,936,914.52	101.86	81422456.82%
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED	204,191,133.53	0.00	NA
BANK OF AMERICA N.A.	27,699,996.00	0.00	NA
BANK OF CHINA LIMITED-MANILA BRANCH	148,112,078.19	0.00	NA
BDO PRIVATE BANK, INC.	70,856,519.11	0.00	NA
CATHAY UNITED BANK CO LTD - MANILA BRANCH	11,654,922.18	0.00	NA
DEUTSCHE BANK AG	160,109,262.10	0.00	NA
FIRST COMMERCIAL BANK LTD MANILA BRANCH	2,408,000.00	0.00	NA
HUA NAN COMMERCIAL BANK LTD MANILA BRANCH	0.00	0.00	NA
INDUSTRIAL BANK OF KOREA MANILA BRANCH	16,060,933.90	0.00	NA
ISLA BANK(A THRIFT BANK) INC	4,290,580.33	0.00	NA
JP MORGAN CHASE BANK NATIONAL ASSN.	16,000,000.00	0.00	NA
MEGA INT'L COMM'L BANK CO LTD	133,623,837.77	0.00	NA
MIZUHO BANK LTD - MANILA BRANCH	539,993,128.41	0.00	NA
SHINHAN BANK - MANILA BRANCH	12,198,049.85	0.00	NA
SUMITOMO MITSUI BANKING CORPORATION-MANILA BRANCH	117,581,371.08	0.00	NA
THE BNK OF TOKYO-MITSUBISHI UFJ LTD	388,210,030.46	0.00	NA
UNITED OVERSEAS BANK LIMITED MANILA BRANCH	13,625,282.10	0.00	NA
Grand Total	172,768,654,916.09	138,018,055,845.20	125.18%

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
December 31, 2017
Bank	Gross NPLs	Minimum Loan Loss Provisions at 80% NPL Coverage Ratio	Stockholder's Equity	Impact on SE
PHIL POSTAL SAVINGS BANK INC	2,573,636,133.05	2,058,908,906.44	842,001,759.20	-201.81%
LUZON DEVELOPMENT BANK	572,886,788.42	458,309,430.74	656,264,864.47	-42.42%
EQUICOM SAVINGS BANK INC	581,351,331.19	465,081,064.95	713,200,459.81	-34.17%
UCPB SAVINGS BANK	1,805,224,708.69	1,444,179,766.95	2,527,615,670.22	-33.32%
MARITIME SAVINGS BANK CORPORATION	23,615,730.12	18,892,584.10	37,729,273.64	-31.66%
PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS	1,041,502,843.18	833,202,274.54	2,369,540,365.73	-19.67%
UNIVERSITY SAVINGS BANK INC	143,068,589.00	114,454,871.20	411,771,626.31	-17.17%
ENTERPRISE BANK INC (A THRIFT BANK)	236,780,337.30	189,424,269.84	253,723,993.77	-15.96%
1ST VALLEY BANK INC A DEVELOPMENT BANK	524,483,848.57	419,587,078.86	1,664,199,472.79	-12.58%
MALASIQUI PROGRESSIVE SLB, INC	15,625,906.59	12,500,725.27	50,662,752.00	-10.95%
CITYSTATE SAVINGS BANK INC	193,352,128.38	154,681,702.70	697,461,737.09	-10.82%
CHINA BANK SAVINGS INC	3,926,539,784.17	3,141,231,827.34	9,101,933,064.11	-10.76%
RCBC SAVINGS BANK INC	4,434,141,000.56	3,547,312,800.45	11,784,171,179.05	-9.73%
STERLING BANK OF ASIA INC (A SAVINGS BANK)	1,109,957,042.55	887,965,634.04	2,659,580,815.51	-9.29%
WEALTH DEVELOPMENT BANK CORPORATION	355,586,153.21	284,468,922.57	1,467,571,253.00	-8.77%
PAMPANGA DEVELOPMENT BANK	51,370,076.92	41,096,061.54	149,769,025.42	-7.06%
CITY SAVINGS BANK INC	2,547,279,274.47	2,037,823,419.58	13,744,848,979.28	-6.58%
PNB SAVINGS BANK	1,668,304,338.01	1,334,643,470.41	11,503,184,041.59	-5.53%
NORTHPOINT DEV'T BANK INC	135,617,693.05	108,494,154.44	356,004,174.33	-4.06%
DUMAGUETE CITY DEV BANK INC	37,947,396.83	30,357,917.46	284,250,949.11	-3.89%
ALLBANK (A THRIFT BANK) INC	63,415,045.83	50,732,036.66	1,020,711,669.47	-2.50%
STANDARD CHARTERED BANK	2,621,936,475.60	2,097,549,180.48	6,461,203,931.41	-2.09%
PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC)	159,948,202.14	127,958,561.71	492,890,065.48	-1.75%
EAST WEST BANKING CORP	9,194,973,447.66	7,355,978,758.13	38,620,925,589.08	-1.73%
PHIL STAR DEVELOPMENT BANK INC	13,618,385.28	10,894,708.22	96,350,953.22	-1.68%
SUN SAVINGS BANK INC	27,575,519.66	22,060,415.73	232,213,068.73	-1.47%
HIYAS BANKING CORPORATION	39,024,897.61	31,219,918.09	171,657,550.61	-1.38%
QUEZON COCONUT BANK INC (A THRIFT BANK)	2,606,502.67	2,085,202.14	58,963,045.16	-1.07%
CENTURY SAVINGS BANK CORPORATION	35,875,505.12	28,700,404.10	987,110,507.14	-0.91%
PRODUCERS SAVINGS BANK CORPORATION	235,827,682.71	188,662,146.17	1,774,145,221.80	-0.85%
LEMERY SAVINGS & LOAN BANK, INC.	4,270,287.78	3,416,230.22	85,354,098.57	-0.63%
LIFE SAVINGS BANK INC	7,323,871.50	5,859,097.20	70,816,478.86	-0.61%
AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS	4,726,959.53	3,781,567.62	243,855,237.24	-0.49%
UNITED COCONUT PLANTERS BANK	4,260,495,688.39	3,408,396,550.71	17,397,558,815.10	-0.25%
HUA NAN COMMERCIAL BANK LTD MANILA BRANCH	0.00	0.00	2,069,461,976.42	0.00%
FIRST COMMERCIAL BANK LTD MANILA BRANCH	0.00	0.00	2,021,320,878.22	0.12%
BANK OF MAKATI (A SAVINGS BANK) INC	2,112,966,067.15	1,690,372,853.72	7,227,534,095.53	0.38%
LEGAZPI SAVINGS BANK INC	331,930,878.48	265,544,702.78	540,799,646.86	0.40%
PACIFIC ACE SAVINGS BANK INC	723,612.00	578,889.60	74,525,853.83	0.48%
CATHAY UNITED BANK CO LTD - MANILA BRANCH	0.00	0.00	2,121,743,141.73	0.55%
SHINHAN BANK - MANILA BRANCH	0.00	0.00	2,210,389,217.63	0.55%
UNITED OVERSEAS BANK LIMITED MANILA BRANCH	0.00	0.00	2,340,838,059.36	0.58%
ISLA BANK(A THRIFT BANK) INC	0.00	0.00	680,167,573.92	0.63%
INDUSTRIAL BANK OF KOREA MANILA BRANCH	0.00	0.00	2,294,253,435.17	0.70%
BANK ONE SAVINGS AND TRUST CORP.	49,944,276.09	39,955,420.87	590,489,801.54	0.75%
SUMITOMO MITSUI BANKING CORPORATION-MANILA BRANCH	0.00	0.00	12,852,741,885.32	0.91%
MAYBANK PHILIPPINES INCORPORATED	1,505,097,676.36	1,204,078,141.09	12,948,139,648.57	0.95%
JP MORGAN CHASE BANK NATIONAL ASSN.	0.00	0.00	1,340,894,840.65	1.19%
QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK	21,531,439.74	17,225,151.79	654,541,579.78	1.30%
BANK OF AMERICA N.A.	0.00	0.00	2,096,035,697.20	1.32%
BDO PRIVATE BANK, INC.	0.00	0.00	5,348,567,459.72	1.32%
BATAAN DEVELOPMENT BANK	27,105,889.48	21,684,711.58	84,544,777.01	2.01%
ROBINSONS BANK CORPORATION	764,981,621.23	611,985,296.98	12,112,890,535.89	2.13%
MERCHANTS SAVINGS & LOAN ASSN INC	24,490,163.18	19,592,130.54	613,220,402.50	2.25%
RIZAL COMM'L BANKING CORP	2,850,646,633.56	2,280,517,306.85	66,891,627,479.35	2.39%
YUANTA SAVINGS BANK PHILIPPINES INC	111,281,975.24	89,025,580.19	942,387,007.15	2.40%
BANGKO KABAYAN INC (A PRIVATE DEVELOPMENT BANK)	17,218,615.00	13,774,892.00	486,359,819.88	2.41%
KEB HANA BANK - MANILA BRANCH	28,043,200.72	22,434,560.58	1,675,545,705.46	2.81%
PHILIPPINE BUSINESS BANK INC A SAVINGS BANK	1,508,538,115.21	1,206,830,492.17	10,187,187,378.11	2.83%
HONGKONG & SHANGHAI BANKING CORP	716,358,593.37	573,086,874.70	14,676,887,638.06	2.86%
MAXIMUM SAVINGS BANK INC	9,301,471.34	7,441,177.07	64,034,475.98	3.01%
HSBC SAVINGS BANK(PHILS) INC	58,497,575.68	46,798,060.54	1,655,388,144.52	3.04%
BPI FAMILY SAVINGS BANK INC	7,510,125,483.03	6,008,100,386.42	26,687,511,311.24	3.10%
ING BANK N.V.	101.86	81.49	2,614,800,005.89	3.17%
PHIL SAVINGS BANK	4,770,532,359.83	3,816,425,887.86	20,897,738,257.41	3.19%
CORDILLERA SAVINGS BANK INC	13,111,997.34	10,489,597.87	137,391,858.98	3.29%
PHILIPPINE VETERANS BANK	1,940,400,491.73	1,552,320,393.38	3,268,708,856.38	3.43%
PHIL BANK OF COMMUNICATIONS	2,188,900,338.08	1,751,120,270.46	12,009,314,825.58	3.44%
UNION BANK OF THE PHILS	7,919,233,625.67	6,335,386,900.54	67,773,383,482.01	3.46%
BPI DIRECT BANKO INC A SAVINGS BANK	445,658,466.00	356,526,772.80	2,047,202,631.66	3.87%
CHINA BANKING CORP	2,923,249,111.15	2,338,599,288.92	77,160,827,684.31	3.91%
SECURITY BANK CORP	2,126,420,967.47	1,701,136,773.98	103,433,294,420.92	3.93%
PHIL NATIONAL BANK	9,026,087,102.44	7,220,869,681.95	108,897,226,069.70	4.19%
METROPOLITAN BANK & TCO	6,019,807,187.46	4,815,845,749.97	196,170,793,389.04	4.56%
BDO UNIBANK INC	17,044,080,200.52	13,635,264,160.42	297,368,799,872.86	4.64%
ASIA UNITED BANK CORPORATION	1,305,313,160.92	1,044,250,528.74	26,881,201,566.71	4.65%
INTER-ASIA DEVELOPMENT BANK	3,697,216.26	2,957,773.01	66,225,979.07	4.79%
BUSINESS AND CONSUMERS BANK (A DB)	8,282,870.65	6,626,296.52	86,584,808.97	4.87%
DEVELOPMENT BANK OF THE PHIL	5,910,318,428.03	4,728,254,742.42	46,947,591,646.19	4.87%
AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED	0.00	0.00	4,186,671,243.23	4.88%
BANK OF COMMERCE	1,905,183,563.38	1,524,146,850.70	15,746,839,708.73	5.03%
BANK OF THE PHIL ISLANDS	8,072,907,030.81	6,458,325,624.65	176,842,048,187.50	5.63%
BANK OF CHINA LIMITED-MANILA BRANCH	0.00	0.00	2,599,040,906.95	5.70%
CTBC BANK (PHILIPPINES) CORP	402,002,888.64	321,602,310.91	7,033,338,397.85	6.48%
DEUTSCHE BANK AG	0.00	0.00	2,455,572,028.55	6.52%
LAND BANK OF THE PHILIPPINES	6,599,423,137.92	5,279,538,510.34	104,596,154,345.94	6.67%
PHIL TRUST COMPANY	1,235,274,115.70	988,219,292.56	23,979,055,109.03	6.96%
MEGA INT'L COMM'L BANK CO LTD	0.00	0.00	1,916,692,903.11	6.97%
CARD SME BANK INC A THRIFT BANK	76,379,195.49	61,103,356.39	920,636,294.74	8.02%
THE BNK OF TOKYO-MITSUBISHI UFJ LTD	0.00	0.00	4,665,723,811.53	8.32%
FARMERS SAVINGS & LOAN BANK INC	18,781,070.83	15,024,856.66	132,992,180.75	8.81%
FIRST CONSOLIDATED BANK INC (A PDB)	386,608,203.74	309,286,562.99	4,316,778,086.78	8.96%
MIZUHO BANK LTD - MANILA BRANCH	0.00	0.00	5,465,333,964.66	9.88%
MALAYAN BANK SAVINGS AND MORT BANK INC	382,510,294.71	306,008,235.77	1,188,581,878.15	10.27%
BANGKOK BANK PUBLIC CO LTD	32,996,077.60	26,396,862.08	3,173,866,408.07	11.93%
CITIBANK, N.A.	932,256,279.91	745,805,023.93	18,544,182,580.79	17.40%
METRO CEBU PUBLIC SAVINGS BANK	9,340,189.11	7,472,151.29	57,052,632.86	20.11%
THE PALAWAN BANK (PALAWAN DB) INC	20,627,309.35	16,501,847.48	28,282,539.35	22.48%
Grand Total	138,018,055,845.20	110,414,444,676.16	1,666,089,199,719.15	3.74%

Source: www.bsp.gov.ph

Out of the five banks highlighted in yellow, three banks have been regularly listed as one of the "The Top Distressed Philippine Banks as of December 31, 2017".

The most notable of the banks in this list is Philippine Postal Savings Bank Inc. The bank faces a shortfall of 201.81% of its stated stockholder's equity of Php 842.00 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.