The local banking system remained strong and its capital base more fortified no matter the global and more domestic headwinds last year, based on latest data from the central bank.
Latest figures on the capital adequacy ratios (CAR) of universal and commercial banks show the observance of above-minimum thresholds as at end-2015, the Bangko Sentral ng Pilipinas (BSP) said in its latest report.
According to the BSP, the bigger lenders in the industry reported CAR of 14.91 percent on solo basis and 15.78 percent on consolidated basis.
Both standards surpass the regulatory the threshold of 10 percent and the international minimum of 8 percent for CAR.
Quarter-on-quarter CAR compliance, however, show a deterioration from the September 2015 CAR print, averaging 15.55 percent on solo and 16.40 percent consolidated basis.
“The decrease can be attributed to the growth of universal and commercial banks’ risk-weighted assets than their qualifying capital amid banks’ increased lending activities,” the BSP said.
The BSP report also stated the banks’ capital base remained mainly composed of common equity Tier 1 (CET 1), considered the highest quality among instruments eligible as bank capital.
(Bianca Cuaresma, reporter, with Krysten Mariann Boado and Tam Natividad, Trainees)