Thrift banks that count the Philippine Savings Bank and the BPI Family Savings Bank as members reported aggregate NPLs averaging lower to 6.18 percent at end-June 2011 from 6.56 percent just three months earlier.
Rural lenders such as the Bank of Makati or CARD Bank Inc., for instance, also reported lower incidence of soured loans averaging only 10.42 percent or marginally lower than three months earlier when this averaged 10.39 percent.
Even cooperative banks, the most embedded of lenders in the countryside, reported marginally lower soured loans of only 8.11 percent from 8.14 and testament to an on-going effort to put a lid on soured or non-performing loans.
For thrift banks the reduction brought the aggregate soured loans portfolio lower to only P22.7 billion, allowing the industry to allocate more of their resources to the financing requirements of so-called small and medium scale entrepreneurs that form the bulk of their clients.
These are borrowers that typically take out loans as small as P5 million or P30 million and higher.
Thrift banks typically finance the acquisition of first-time home buyers or the purchase of cars by upwardly mobile young professionals.
The quality of their lending was such that their collective NPLs diminished by some P310 million during the period.
“The industry resorted to restructuring and foreclosure proceedings to lessen the holdings of delinquent loans. The proportion of restructured loans (RLs) to TLP rose to 1.19 percent from last quarter’s 1.16 percent as RLs grew by 7.47 percent to P4.43 billion from P4.12 billion last quarter,” the Bangko Sentral ng Pilipinas said.
Rural banks reported marginally higher soured loans to 10.42 percent from 10.39 percent, largely because of a 2.91 percent NPL expansion that outpaced the loan portfolio which grew by only 2.9 percent.
But according to the BSP, rural banks in the Mindanao area exhibited better loan quality at 5.52 percent compared with rural banks in Luzon and Visayas which registered NPL ratios of 11.98 percent and 10.22 percent, respectively.
As for cooperative banks, the quarter-on-quarter improvement in the NPL ratio resulted from the increment in NPLs by 0.54 percent to P970 million from previous quarter’s P960 million which was outpaced by the 0.81 percent expansion in total loan portfolio to P11.90 billion from P11.80 billion, the BSP said.
