Bank loan

Near-bank bad debt ratio in 2021 deteriorates to 9.9%

Non-Performing Loans (NPLs) held by quasi-banks reached 14.081 billion pesos at the end of 2021, representing an NPL ratio of 9.9%, based on data from Bangko Sentral ng Pilipinas (BSP).

These bad debts increased by 4.1% compared to the 13.523 billion pesos recorded at the end of 2020. The NPL ratio increased slightly compared to the 9.6% observed a year earlier, but was lower than the 10.3% at the end September.

Meanwhile, the industry’s gross loan portfolio grew by 0.7 percent to reach 141.976 billion pesos at the end of 2021, from 140.948 billion pesos a year earlier.

Non-performing assets (NPA), which include real estate and other acquired, increased by 2.9% to 15.432 billion pesos in December 2021, from 15.004 billion pesos a year earlier.

Restructured loans held by the industry amounted to 2.106 billion pesos in 2021, up 67% from the 1.26 billion pesos observed at the end of December 2020.

Quasi-banks have boosted their loan loss reserves, which reached P5.646 billion at the end of last year. This increased by 27.5% from the 4.43 billion pesos recorded at the end of 2020.

At the end of 2021, near-bank loan loss reserves were equivalent to 4% of their portfolio, up from 3.1% a year earlier. With that, the NPL coverage ratio improved to 40.1% from 32.8%.

Meanwhile, quasi-banks’ provision on NPAs increased by a quarter to 5.816 billion pesos from 4.637 billion pesos.

This brought the NPA coverage rate to 37.7% from 30.9%.

Supervised by BSP IfFinancial institutions with quasi-banking functions include finance companies and investment companies. — Luz Wendy T. Noble