On the face of it, no.
At 1.33% as of June 30, 2018, NPLs as a percentage of Total Loan Portfolios are at historic lows.
The NPL Coverage Ratio is near historic highs at 143.61% as of June 30, 2018.
However, NPLs can go much higher than current levels. Over the past thirty-five years, NPLs as a percentage of Total Loan Portfolios averaged 7.97% for Philippine Universal and Commercial Banks. Moreover, Loan Loss Reserves (LLR) as a percentage of Total Loan Portfolio (TLP) have averaged 4.52% for the past thirty-five years. As can be seen from the chart below, loan loss reserves hit a peak of 22.23% of TLP in 1986, an outlier. Without this outlier, LLR/TLP average is 4.07% for the past thirty-five years.
As of June 30, 2018, LLR/TLP stands at 1.91%, which is below the historical average of 4.52%, indicating that Philippine banks are under-provisioning for loan losses, given historical norms. If Philippine banks were to maintain higher loan loss provisions to conform to historical averages, bank earnings will suffer but will be better provisioned for future losses.
Now, which banks have not adequately provisioned for loan losses at their current NPL levels, which are at historic lows? Those highlighted in yellow (below 80% NPL Coverage Ratio) are prime candidates.
| Philippine Banking System | |||||
| NPL Coverage Ratio | |||||
| June 30, 2018 | |||||
| Bank | Loan Loss Provisions | Gross NPLs | NPL Coverage Ratio | ||
| ALLBANK (A THRIFT BANK) INC | 33,943,161.99 | 134,216,215.54 | 25.29% | ||
| UCPB SAVINGS BANK | 536,011,384.46 | 1,881,456,594.41 | 28.49% | ||
| MARITIME SAVINGS BANK CORPORATION | 6,948,645.24 | 21,895,317.81 | 31.74% | ||
| PHILIPPINE RESOURCES SAVINGS BANKING | 384,104,649.18 | 1,179,751,558.32 | 32.56% | ||
| PNB SAVINGS BANK | 757,713,070.25 | 2,300,104,540.68 | 32.94% | ||
| ENTERPRISE BANK INC (A THRIFT BANK) | 148,926,171.26 | 397,531,630.21 | 37.46% | ||
| WEALTH DEVELOPMENT BANK CORPORATION | 155,823,456.99 | 405,053,553.43 | 38.47% | ||
| EQUICOM SAVINGS BANK INC | 248,392,363.03 | 639,559,441.16 | 38.84% | ||
| MALASIQUI PROGRESSIVE SLB, INC | 6,951,706.48 | 17,776,401.59 | 39.11% | ||
| PACIFIC ACE SAVINGS BANK INC | 1,949,435.10 | 4,706,728.00 | 41.42% | ||
| 1ST VALLEY BANK INC A DEVELOPMENT BANK | 283,317,794.20 | 672,608,541.12 | 42.12% | ||
| STERLING BANK OF ASIA INC (A SAVINGS | 713,245,697.54 | 1,567,148,692.24 | 45.51% | ||
| CHINA BANK SAVINGS INC | 1,905,541,832.88 | 3,781,873,875.79 | 50.39% | ||
| UNIVERSITY SAVINGS BANK INC | 44,555,430.47 | 86,921,859.14 | 51.26% | ||
| PRODUCERS SAVINGS BANK CORPORATION | 208,502,774.27 | 384,458,590.47 | 54.23% | ||
| RCBC SAVINGS BANK INC | 2,266,957,467.57 | 4,169,995,103.97 | 54.36% | ||
| CITYSTATE SAVINGS BANK INC | 77,047,455.98 | 136,247,026.40 | 56.55% | ||
| PAMPANGA DEVELOPMENT BANK | 33,789,534.28 | 56,036,372.72 | 60.30% | ||
| AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS | 2,733,679.43 | 4,111,569.36 | 66.49% | ||
| BUSINESS AND CONSUMERS BANK (A DB) | 10,017,575.29 | 14,966,364.02 | 66.93% | ||
| BANGKO KABAYAN INC (A PRIVATE DEVELOPMENT | 28,689,168.15 | 42,442,605.42 | 67.60% | ||
| UNITED COCONUT PLANTERS BANK | 3,861,794,657.80 | 5,637,030,450.60 | 68.51% | ||
| BPI FAMILY SAVINGS BANK INC | 7,176,599,160.70 | 10,468,965,854.84 | 68.55% | ||
| EAST WEST BANKING CORP | 6,163,885,463.22 | 8,947,748,783.20 | 68.89% | ||
| FIRST CONSOLIDATED BANK INC (A PDB) | 654,503,708.14 | 930,922,550.94 | 70.31% | ||
| HIYAS BANKING CORPORATION | 28,859,545.81 | 40,456,381.87 | 71.33% | ||
| CORDILLERA SAVINGS BANK INC | 15,115,504.60 | 20,233,158.02 | 74.71% | ||
| UNION BANK OF THE PHILS | 5,886,754,006.60 | 7,764,720,733.10 | 75.81% | ||
| STANDARD CHARTERED BANK | 2,060,854,781.77 | 2,633,305,802.50 | 78.26% | ||
| PHIL SAVINGS BANK | 4,393,946,529.27 | 5,541,695,108.80 | 79.29% | ||
| LEGAZPI SAVINGS BANK INC | 267,915,422.76 | 329,578,715.05 | 81.29% | ||
| PHILIPPINE BUSINESS BANK INC A SAVINGS | 1,564,463,062.38 | 1,854,076,328.08 | 84.38% | ||
| BATAAN DEVELOPMENT BANK | 21,551,136.32 | 25,467,010.45 | 84.62% | ||
| BANK ONE SAVINGS CORPORATION | 44,360,200.39 | 51,920,016.00 | 85.44% | ||
| BANK OF MAKATI (A SAVINGS BANK) INC | 2,014,409,463.94 | 2,271,355,751.00 | 88.69% | ||
| ASIA UNITED BANK CORPORATION | 2,707,980,036.40 | 3,000,943,436.40 | 90.24% | ||
| SUN SAVINGS BANK INC | 19,004,436.35 | 20,766,750.32 | 91.51% | ||
| YUANTA SAVINGS BANK PHILIPPINES INC | 105,932,765.93 | 114,070,749.99 | 92.87% | ||
| PHIL BANK OF COMMUNICATIONS | 2,230,711,405.42 | 2,377,981,312.50 | 93.81% | ||
| INTER-ASIA DEVELOPMENT BANK | 6,847,736.00 | 7,160,669.24 | 95.63% | ||
| PENBANK INC (A PDB) (FORMERLY: PENINSULA | 122,667,240.05 | 127,664,962.18 | 96.09% | ||
| BPI DIRECT BANKO INC A SAVINGS BANK | 787,492,845.37 | 814,235,200.14 | 96.72% | ||
| RIZAL COMM'L BANKING CORP | 3,433,264,411.45 | 3,537,445,273.10 | 97.05% | ||
| MALAYAN BANK SAVINGS AND MORT BANK INC | 361,423,970.33 | 369,652,752.94 | 97.77% | ||
| NORTHPOINT DEV'T BANK INC | 118,459,622.13 | 112,927,580.50 | 104.90% | ||
| DEVELOPMENT BANK OF THE PHIL | 7,345,351,988.80 | 6,833,844,003.90 | 107.48% | ||
| PHILIPPINE VETERANS BANK | 2,462,760,755.53 | 2,244,899,440.80 | 109.70% | ||
| MAYBANK PHILIPPINES INCORPORATED | 2,088,668,695.90 | 1,893,373,519.10 | 110.31% | ||
| MERCHANTS SAVINGS & LOAN ASSN INC | 80,188,059.67 | 72,606,891.31 | 110.44% | ||
| LEMERY SAVINGS & LOAN BANK, INC. | 2,374,586.45 | 2,090,392.45 | 113.60% | ||
| ROBINSONS BANK CORPORATION | 872,785,890.55 | 758,692,635.02 | 115.04% | ||
| BANK OF COMMERCE | 2,276,436,875.69 | 1,790,008,869.00 | 127.17% | ||
| DUMAGUETE CITY DEV BANK INC | 19,299,237.59 | 14,935,890.88 | 129.21% | ||
| PHIL NATIONAL BANK | 12,466,978,484.90 | 8,855,596,734.50 | 140.78% | ||
| LAND BANK OF THE PHILIPPINES | 13,933,110,440.10 | 9,702,134,275.60 | 143.61% | ||
| CTBC BANK (PHILIPPINES) CORP | 761,964,752.87 | 496,519,465.43 | 153.46% | ||
| FARMERS SAVINGS & LOAN BANK INC | 26,635,401.48 | 16,432,486.76 | 162.09% | ||
| BANK OF THE PHIL ISLANDS | 17,231,821,061.20 | 10,576,324,545.00 | 162.93% | ||
| CARD SME BANK INC A THRIFT BANK | 160,862,682.64 | 98,098,716.66 | 163.98% | ||
| CHINA BANKING CORP | 5,546,148,140.10 | 3,199,071,460.70 | 173.37% | ||
| CENTURY SAVINGS BANK CORPORATION | 19,537,665.62 | 10,875,949.65 | 179.64% | ||
| BDO UNIBANK INC | 32,288,167,672.00 | 17,834,422,711.00 | 181.04% | ||
| LIFE SAVINGS BANK INC | 5,424,695.67 | 2,830,739.19 | 191.64% | ||
| METRO CEBU PUBLIC SAVINGS BANK | 18,669,869.21 | 9,340,189.11 | 199.89% | ||
| METROPOLITAN BANK & TCO | 17,584,868,216.20 | 7,598,997,495.60 | 231.41% | ||
| SECURITY BANK CORP | 6,170,190,831.40 | 2,264,379,743.30 | 272.49% | ||
| PHIL TRUST COMPANY | 3,241,974,941.72 | 1,119,876,214.30 | 289.49% | ||
| HSBC SAVINGS BANK(PHILS) INC | 110,492,201.78 | 34,454,464.98 | 320.69% | ||
| HONGKONG & SHANGHAI BANKING CORP | 1,752,444,541.53 | 501,255,503.13 | 349.61% | ||
| QUEZON COCONUT BANK INC (A THRIFT BANK) | 1,433,319.51 | 409,148.47 | 350.32% | ||
| KEB HANA BANK - MANILA BRANCH | 86,823,705.95 | 23,050,214.36 | 376.67% | ||
| CITIBANK, N.A. | 3,965,629,763.80 | 982,359,482.14 | 403.68% | ||
| QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK | 23,456,387.15 | 5,386,169.19 | 435.49% | ||
| BANGKOK BANK PUBLIC CO LTD | 431,981,327.30 | 28,260,972.33 | 1528.54% | ||
| ING BANK N.V. | 109,725,921.33 | 108.68 | 100962386.21% | ||
| AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED | 92,198,639.03 | 0.00 | NA | ||
| BANK OF AMERICA N.A. | 10,539,078.03 | 0.00 | NA | ||
| BANK OF CHINA LIMITED-MANILA BRANCH | 213,607,441.58 | 0.00 | NA | ||
| BDO PRIVATE BANK, INC. | 9,027,427.33 | 0.00 | NA | ||
| CATHAY UNITED BANK CO LTD - MANILA BRANCH | 40,955,384.07 | 0.00 | NA | ||
| FIRST COMMERCIAL BANK LTD MANILA BRANCH | 7,558,600.00 | 0.00 | NA | ||
| HUA NAN COMMERCIAL BANK LTD MANILA BRANCH | 0.00 | 0.00 | NA | ||
| INDUSTRIAL BANK OF KOREA MANILA BRANCH | 24,462,732.17 | 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 | 141,821,431.83 | 0.00 | NA | ||
| MIZUHO BANK LTD - MANILA BRANCH | 519,990,226.78 | 0.00 | NA | ||
| MUFG BANK, LTD. | 388,210,030.46 | 0.00 | NA | ||
| PHIL STAR DEVELOPMENT BANK INC | 312,222.47 | 0.00 | NA | ||
| SHINHAN BANK - MANILA BRANCH | 22,491,063.77 | 0.00 | NA | ||
| SUMITOMO MITSUI BANKING CORPORATION-MANILA BRANCH | 175,897,695.44 | 0.00 | NA | ||
| UNITED OVERSEAS BANK LIMITED MANILA BRANCH | 16,444,498.47 | 0.00 | NA | ||
Source: www.bsp.gov.ph
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