THE Philippine banking system posted smaller earnings in the first half of 2020 as the soured loans it incurred grew, according to the Bangko Sentral ng Pilipinas (BSP).
Preliminary data from the central bank showed on Wednesday that the industry’s P86.04-billion net income in January to June was 22.45 percent lower than the P110.96 billion in the same period in 2019.
Total operating income picked up by 19.19 percent to P449.67 billion in the six months to June from P377.24 billion a year ago, but losses soared by 466 percent to P103.25 billion from P18.24 billion year-on-year.
Banks’ provision for credit losses on loans and other financial assets surged by 425 percent to P103.77 billion in the first two quarters from P19.74 billion a year ago.
Lenders wrote off P1.42 billion in bad debts in the first half, 24.46 percent smaller than the year-earlier P1.88 billion.
In a text message to The Manila Times, BSP Governor Benjamin Diokno attributed a “big part of” the industry’s reduced profit to lenders’ loan loss provisions.
Meanwhile, banks’ gross nonperforming loans (NPL) rose by 26.72 percent to P273.60 billion in the period from P215.90 billion a year ago.
NPLs are past due loans where the principal or interest is unpaid for 30 days or more after the due date, including the outstanding balance of loans payable in monthly installments when three or more installments are in arrears.
Lenders’ total loan portfolio grew by 5.25 percent to P10.82 trillion from P10.28 trillion a year earlier, translating to a gross NPL ratio of 2.53 percent, higher than 2019’s 2.10 percent.
This ratio is the share of bad loans to total loans, inclusive of interbank loans.
Goodluck Ph.. this pandemic is really a pain on the ass