The Philippines: Banks’ soured loans climb in Jun 20

• Local banks saw soured loans rise by a fourth as of end-Jun 20, reflecting the economic impact of the coronavirus pandemic, data from the central bank showed.
• According to preliminary data from the Bangko Sentral ng Pilipinas (BSP), gross nonperforming loans (NPLs) jumped by 26.7% to PHP273.6bn in Jun 20 from the PHP215.9bn in Jun 19. This is against the industry’s total loan book that slipped 1.27% to PHP10.82tr in Jun 20 from the PHP10.96tr in Jun 19.
• NPLs are loans left unsettled at least 30 days past due date. These are seen as risky assets as there is little chance of borrowers settling their outstanding balances, which would mean losses for the lender.
• The gross NPL ratio as of end-Jun 20 stood at 2.53%, inching up from 2.43% in May 20 and the 2.1% seen in 2019.
• The quality of the banking industry’s portfolio is anticipated to deteriorate amid the ongoing pandemic crisis, Bangko Sentral ng Pilipinas (BSP) Deputy Governor Chuchi G. Fonacier said.

External Link : https://www.bworldonline.com/banks-soured-loans-climb-in-june/