THE non-performing loans (NPLs) of rural (RBs) and cooperative banks (CBs) represented 11.85 percent of the combined total loan portfolio (TLP) of these banks at end-2014.

The latest figure is the lowest gross NPL ratio posted collectively by RBs and CBs since the 11.49 percent recorded at end-September 2012.

Compared with September 2014 figures, the NPL ratio for RBs and CBs declined following a rise in the banks’ TLP and a slight decrease in their gross NPLs.

At end-2014, the banks’ TLP stood at P138.44 billion, 2.84 percent higher than the P134.61 billion posted a quarter earlier. The gross NPLs of RBs and CBs, on the other hand, dropped by 0.45 percent from P16.48 billion to P16.40 billion during the period.

Coverage ratio

Meanwhile, the banks’ reserves for potential credit losses also rose quarter-on-quarter. At end-2014, RBs and CBs provisioned for 58.30 percent of their gross NPLs. The banks’ NPL coverage ratio stood at 57.58 percent at the end of the third quarter last year.

Among economic sectors, the biggest recipients of loans from RBs and cooperative banks at end-2014 were agriculture, hunting, forestry and fishing; wholesale and retail trade; real estate, renting and business activities; and loans to individuals for consumption purposes.

The Bangko Sentral ng Pilipinas (BSP) looks into the loan exposures of the country’s banks as part of its mandate to promote adherence to sound credit underwriting standards. This is essential to financial stability, which is the overarching supervisory policy objective of the BSP. (PR)