The Top Distressed Philippine Banks as of September 30, 2018

Editor's Note: This post has been updated to reflect new information on the BSP website. The number of non-reporting banks has decreased from 21 banks as of January 2, 2019 to just 9 banks as of January 16, 2019.
Editor's Note: According to the BSP website, www.bsp.gov.ph, a record 9 banks do not have Published Statements of Condition for the quarter ended on September 30, 2018. This comprises over 9% of the 100 Philippine Universal and Commercial Banks (U/KBs) and Thrift Banks tracked by this blog. A google search reveals that these non-reporting banks are still operating and there has been no adverse news about them. So why have they gone dark?


The number of non-reporting banks has gone up substantially in 2018. As of March 31, 2018, only two banks failed to have their Published Statements of Condition available at the BSP website. On June 30, 2018, that number went up to six. And now that number is now 9 as of September 30, 2018.


Have these banks opted-out from the required financial disclosures? It's not clear if they have done so. Apparently, banks can opt-out of mandatory public disclosure.

 "Banks that do not want their statement of condition published must get approval from at least five members of the seven-man Monetary Board.2 The regulators themselves may also decide to exclude certain kinds of banks from mandatory public disclosure."

Let's hope that this is a mere glitch in the BSP website. Perhaps, their financial disclosures were improperly uploaded in the BSP website. Otherwise, the depositors have no means of evaluating the health of their bank other than what is disclosed in the individual bank's website or what is available in back-dated issues of obscure newspapers.
 
Not all of these banks are small banks, some of them are UKBs that are fairly substantial in size. Here's the list:

Philippine Banking System
Banks with No Published Statement of Condition
September 30, 2018
Bank	Type of Bank	Published Statement of Condition
ANZ BANKING GROUP LTD	U/KB	NA
BANGKOK BANK PUBLIC CO LTD	U/KB	NA
BATAAN SAVINGS AND LOAN BANK	Thrift Bank	NA
LUZON DEVELOPMENT BANK	Thrift Bank	NA
MALASIQUI PROGRESSIVE SLB, INC	Thrift Bank	NA
MAXIMUM SAVINGS BANK	Thrift Bank	NA
PHILIPPINE VETERANS BANK	U/KB	NA
THE PALAWAN BANK (PALAWAN DB) INC	Thrift Bank	NA
UNITED OVERSEAS BANK LIMITED MANILA BRANCH	U/KB	NA

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

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

This is a list of the top distressed Universal and Commercial (U/KB) as well as Thrift Banks in the Philippines as of September 30, 2018.  It updates a previous blog post: "The Top Distressed Philippine Banks as of June 30, 2018".

 To see where your bank stands relative to these banks, please check the previous blog post: "Philippine Banks Improve Slightly in the 3rd Quarter of 2018"

The list of Philippine Banks classified as distressed as of September 30, 2018 are as follows:

1. Inter-Asia Development Bank (Distressed Asset Ratio of 370.88%)
2. United Coconut Planters Bank (Distressed Asset Ratio of 322.75%)
3. Overseas Filipino Bank Inc (Distressed Asset Ratio of 292.01%)
4. Bangko Kabayan Inc (Distressed Asset Ratio of 236.82%)
5. Yuanta Savings Bank Philippines (Distressed Asset Ratio of 173.40%)
6. Malayan Bank Savings and Mortgage Bank (Distressed Asset Ratio of 168.70%)
7. Enterprise Bank Inc (Distressed Asset Ratio of 155.18%)
8. RCBC Savings Bank Inc (Distressed Asset Ratio of 133.34%)
9. Equicom Savings Bank (Distressed Asset Ratio of 122.89%)
10. Bank of China Limited - Manila Branch (Distressed Asset Ratio of 115.52%)
11. China Bank Savings Inc (Distressed Asset Ratio of 109.14%)
12. Philippine Resources Savings Banking (Distressed Asset Ratio of 103.36%)

Source: www.bsp.gov.ph


Disclaimer:


This list only serves as a screening guide.  It is not a definitive guide and must be taken in the context of other factors.  The figures are based on the individual banks' statement of condition as of June 30, 2018 and September 30, 2018 as published in the BSP website (www.bsp.gov.ph). For this analysis, no attempt was made to go through the audited financial statements of each bank. Readers are suggested to make their own investigations and verify the figures presented. Both BSP and PDIC have their own problem bank screening systems that are much more sophisticated in scope and design, given that they have more access to information over the banks they regulate.