On the face of it, no.
At 1.26% as of December 31, 2018, NPLs as a percentage of Total Loan Portfolios are at historic lows.
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 4.51% 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 December 31, 2018, LLR/TLP stands at 1.64%, which is below the historical average of 4.51%, 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 | |||||
| December 31, 2018 | |||||
| Bank | Loan Loss Provisions | Gross NPLs | NPL Coverage Ratio | ||
| UCPB SAVINGS BANK | 586,168,305.86 | 2,520,179,947.97 | 23.26% | ||
| PACIFIC ACE SAVINGS BANK INC | 2,348,484.84 | 7,984,007.00 | 29.41% | ||
| MARITIME SAVINGS BANK CORPORATION | 6,948,645.24 | 22,037,335.09 | 31.53% | ||
| EQUICOM SAVINGS BANK INC | 241,713,735.53 | 678,665,503.25 | 35.62% | ||
| WEALTH DEVELOPMENT BANK CORPORATION | 162,085,067.38 | 425,898,417.61 | 38.06% | ||
| ASIA UNITED BANK CORPORATION | 1,101,213,227.88 | 2,843,723,749.05 | 38.72% | ||
| LUZON DEVELOPMENT BANK | 217,112,698.31 | 511,816,689.86 | 42.42% | ||
| STERLING BANK OF ASIA INC (A SAVINGS BANK) | 633,695,238.36 | 1,479,597,307.93 | 42.83% | ||
| PNB SAVINGS BANK | 1,112,566,622.49 | 2,489,981,239.03 | 44.68% | ||
| PRODUCERS SAVINGS BANK CORPORATION | 174,370,395.80 | 369,105,717.33 | 47.24% | ||
| QUEZON COCONUT BANK INC (A THRIFT BANK) | 1,303,520.97 | 2,662,507.14 | 48.96% | ||
| RCBC SAVINGS BANK INC | 2,258,272,487.07 | 4,538,925,881.88 | 49.75% | ||
| BPI FAMILY SAVINGS BANK INC | 5,828,635,522.01 | 11,106,593,641.57 | 52.48% | ||
| CHINA BANK SAVINGS INC | 1,852,672,792.44 | 3,487,278,553.65 | 53.13% | ||
| PHIL SAVINGS BANK | 3,524,948,822.74 | 6,615,926,206.09 | 53.28% | ||
| ALLBANK (A THRIFT BANK) INC | 32,418,962.81 | 58,307,833.04 | 55.60% | ||
| PAMPANGA DEVELOPMENT BANK | 32,638,326.43 | 58,019,633.67 | 56.25% | ||
| LEMERY SAVINGS & LOAN BANK, INC. | 3,226,233.46 | 5,620,497.35 | 57.40% | ||
| 1ST VALLEY BANK INC A DEVELOPMENT BANK | 314,268,918.97 | 545,183,711.79 | 57.64% | ||
| BANGKO KABAYAN INC (A PRIVATE DEVELOPMENT BANK) | 20,709,613.77 | 34,853,596.58 | 59.42% | ||
| ENTERPRISE BANK INC (A THRIFT BANK) | 206,217,463.29 | 334,690,957.76 | 61.61% | ||
| CITYSTATE SAVINGS BANK INC | 74,322,686.83 | 116,312,839.73 | 63.90% | ||
| BATAAN DEVELOPMENT BANK | 22,420,075.55 | 34,980,091.08 | 64.09% | ||
| PHILIPPINE RESOURCES SAVINGS BANKING CORPORATION (PR SAVINGS | 1,000,583,422.40 | 1,556,381,247.87 | 64.29% | ||
| FARMERS SAVINGS & LOAN BANK INC | 26,526,351.09 | 41,255,102.82 | 64.30% | ||
| DUMAGUETE CITY DEV BANK INC | 19,299,237.59 | 29,686,507.43 | 65.01% | ||
| EAST WEST BANKING CORP | 6,783,668,064.65 | 10,239,430,293.81 | 66.25% | ||
| BUSINESS AND CONSUMERS BANK (A DB) | 9,629,770.26 | 14,297,923.05 | 67.35% | ||
| LIFE SAVINGS BANK INC | 5,424,695.67 | 7,909,027.36 | 68.59% | ||
| BANK OF MAKATI (A SAVINGS BANK) INC | 1,416,211,879.00 | 2,061,100,494.13 | 68.71% | ||
| UNION BANK OF THE PHILS | 6,376,143,862.37 | 8,681,263,266.47 | 73.45% | ||
| FIRST CONSOLIDATED BANK INC (A PDB) | 702,400,198.51 | 937,301,137.75 | 74.94% | ||
| STANDARD CHARTERED BANK | 1,988,192,954.24 | 2,613,663,314.20 | 76.07% | ||
| MALAYAN BANK SAVINGS AND MORT BANK INC | 176,590,880.31 | 232,068,015.56 | 76.09% | ||
| HIYAS BANKING CORPORATION | 23,858,848.68 | 28,152,649.56 | 84.75% | ||
| LEGAZPI SAVINGS BANK INC | 276,759,960.86 | 325,749,920.79 | 84.96% | ||
| SUN SAVINGS BANK INC | 18,733,181.51 | 21,977,627.97 | 85.24% | ||
| BANK ONE SAVINGS CORPORATION | 44,360,200.39 | 50,920,016.00 | 87.12% | ||
| RIZAL COMM'L BANKING CORP | 3,354,013,913.93 | 3,778,814,274.91 | 88.76% | ||
| BPI DIRECT BANKO INC A SAVINGS BANK | 711,470,070.69 | 797,910,869.09 | 89.17% | ||
| UNIVERSITY SAVINGS BANK INC | 38,806,861.19 | 41,532,383.06 | 93.44% | ||
| YUANTA SAVINGS BANK PHILIPPINES INC | 100,931,349.56 | 105,709,543.16 | 95.48% | ||
| INTER-ASIA DEVELOPMENT BANK | 7,309,690.80 | 7,591,147.82 | 96.29% | ||
| PHIL BANK OF COMMUNICATIONS | 2,167,506,753.56 | 2,204,146,296.88 | 98.34% | ||
| PHILIPPINE BUSINESS BANK INC A SAVINGS BANK | 1,706,381,776.70 | 1,654,529,173.88 | 103.13% | ||
| NORTHPOINT DEV'T BANK INC | 101,947,108.84 | 98,818,586.90 | 103.17% | ||
| PENBANK INC (A PDB) (FORMERLY: PENINSULA RB INC) | 112,139,598.46 | 104,417,002.42 | 107.40% | ||
| DEVELOPMENT BANK OF THE PHIL | 7,133,850,586.50 | 6,424,374,586.99 | 111.04% | ||
| MERCHANTS SAVINGS & LOAN ASSN INC | 79,682,059.26 | 70,743,639.74 | 112.63% | ||
| SECURITY BANK CORP | 3,161,010,688.45 | 2,796,885,255.23 | 113.02% | ||
| CORDILLERA SAVINGS BANK INC | 14,379,069.48 | 12,123,604.31 | 118.60% | ||
| BANK OF THE PHIL ISLANDS | 15,839,711,208.04 | 13,052,121,266.84 | 121.36% | ||
| CTBC BANK (PHILIPPINES) CORP | 815,157,667.55 | 632,988,633.22 | 128.78% | ||
| MAYBANK PHILIPPINES INCORPORATED | 2,319,584,041.63 | 1,639,158,444.58 | 141.51% | ||
| ROBINSONS BANK CORPORATION | 1,054,220,185.44 | 730,058,854.95 | 144.40% | ||
| BANK OF COMMERCE | 2,321,448,605.10 | 1,574,874,658.91 | 147.41% | ||
| CARD SME BANK INC A THRIFT BANK | 209,329,524.53 | 135,584,638.32 | 154.39% | ||
| PHIL NATIONAL BANK | 14,824,944,768.63 | 9,449,896,609.90 | 156.88% | ||
| LAND BANK OF THE PHILIPPINES | 15,765,027,265.62 | 9,134,879,593.32 | 172.58% | ||
| CHINA BANKING CORP | 5,018,293,472.15 | 2,672,209,854.94 | 187.80% | ||
| CENTURY SAVINGS BANK CORPORATION | 19,537,665.62 | 9,670,265.48 | 202.04% | ||
| BDO UNIBANK INC | 37,125,293,082.34 | 17,108,039,954.27 | 217.00% | ||
| PHIL STAR DEVELOPMENT BANK INC | 9,482,646.07 | 4,367,377.11 | 217.12% | ||
| METROPOLITAN BANK & TCO | 17,762,616,961.78 | 8,041,215,004.71 | 220.89% | ||
| METRO CEBU PUBLIC SAVINGS BANK | 20,809,073.56 | 8,869,721.90 | 234.61% | ||
| CITIBANK, N.A. | 3,133,374,962.15 | 1,156,260,580.22 | 270.99% | ||
| HSBC SAVINGS BANK(PHILS) INC | 102,141,722.09 | 37,517,115.56 | 272.25% | ||
| PHIL TRUST COMPANY | 3,312,326,017.46 | 1,158,278,288.02 | 285.97% | ||
| QUEEN CITY DEVELOPMENT BANK INC OR QUEENBANK A THRIFT BANK | 23,293,288.66 | 6,842,722.12 | 340.41% | ||
| HONGKONG & SHANGHAI BANKING CORP | 1,842,444,054.04 | 511,083,509.97 | 360.50% | ||
| KEB HANA BANK - MANILA BRANCH | 87,545,320.21 | 23,050,211.32 | 379.80% | ||
| BANGKOK BANK PUBLIC CO LTD | 514,119,420.00 | 23,558,872.16 | 2182.28% | ||
| MEGA INT'L COMM'L BANK CO LTD | 249,403,952.44 | 4,815,000.00 | 5179.73% | ||
| AL-AMANAH ISLAMIC INVESTMENT BANK OF THE PHILS | 7,728,107.81 | 107,342.00 | 7199.52% | ||
| ING BANK N.V. | 17,741,700.39 | 107.16 | 16556271.36% | ||
| AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED | 58,845,125.55 | 0.00 | NA | ||
| BANK OF AMERICA N.A. | 9,403,669.08 | 0.00 | NA | ||
| BANK OF CHINA LIMITED-MANILA BRANCH | 120,837,688.40 | 0.00 | NA | ||
| BDO PRIVATE BANK, INC. | 7,976,407.70 | 0.00 | NA | ||
| CATHAY UNITED BANK CO LTD - MANILA BRANCH | 33,383,797.25 | 0.00 | NA | ||
| CHANG HWA COMMERCIAL BANK LTD - MANILA BRANCH | 3,190,909.05 | 0.00 | NA | ||
| CIMB BANK PHILIPPINES INC | 0.00 | 0.00 | NA | ||
| DEUTSCHE BANK AG | 213,855,823.57 | 0.00 | NA | ||
| FIRST COMMERCIAL BANK LTD MANILA BRANCH | 7,409,560.00 | 0.00 | NA | ||
| HUA NAN COMMERCIAL BANK LTD MANILA BRANCH | 0.00 | 0.00 | NA | ||
| INDUSTRIAL BANK OF KOREA MANILA BRANCH | 30,371,287.79 | 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 | ||
| MIZUHO BANK LTD - MANILA BRANCH | 564,948,450.39 | 0.00 | NA | ||
| MUFG BANK, LTD. | 387,752,746.02 | 0.00 | NA | ||
| SHINHAN BANK - MANILA BRANCH | 43,985,672.68 | 0.00 | NA | ||
| SUMITOMO MITSUI BANKING CORPORATION-MANILA BRANCH | 57,509,951.73 | 0.00 | NA | ||
| UNITED OVERSEAS BANK LIMITED MANILA BRANCH | 16,131,526.95 | 0.00 | NA | ||
| Grand Total | 179,351,042,002.08 | 147,814,383,446.62 | 121.34% | ||
Source: www.bsp.gov.ph
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