Universal and commercial banks kept their gross non-performing loans low at 2.6 percent of total loan portfolio in September, the Bangko Sentral ng Pilipinas said in its website.
The gross NPL ratio stayed low amid a year-on-year decline in soured loans and the continued rise in lending.
U/KBs posted P 102.09 billion in NPLs in September, lower than the P103.42 billion recorded a year earlier.
The banks’ TLP, meanwhile, increased to P3.92 trillion in September from P 3.44 trillion during the same month last year.
The industry also continued to set aside substantial reserves for potential credit losses as U/KBs provisioned for 128.80 percent of their gross NPLs in September.
Aside from gross NPLs, which are the actual level of NPLs, the BSP also monitors the NPLs net of specific allowances for potential credit losses.
The net NPLs of U/KBs also remained low at 0.45 percent of TLP in September, the bank said.
The U/KBs NPL levels also continue to remain low across economic sectors. This is seen in the financial intermediation, real estate, manufacturing and wholesale and retail trade sectors which together accounted for 62.8 percent of the banks’ TLP in September.
Low NPL ratios and robust loan loss provisioning indicate prudent management of credit risks, the BSP said.*