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LandBank reports NPL ratio increase |
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By: VG CABUAG, Reporter
TODAY, 15 October 2004 LandBank of the Philippines, the country’s third-largest in terms of assets, on Thursday disclosed that the firm’s nonperforming loan (NPL) ratio swelled to 14.7 percent in August, slightly higher than the previous month’s 13.4 percent. The bank said its nonperforming assets also rose to 14.6 percent from July’s 14.1 percent, as it still has to unload its real and other properties own or acquired (Ropoa) under the Special Purpose Vehicle Act of 2002. NPL refer to loan accounts whose principal or interest remained unpaid for 30 days or more after the due date. This applies to loans payable in lump sum and loans payable in quarter, semi-quarter, or annual installments, which the total balance would be considered as nonperforming. The banks’ NPLs drag down its bottom line, and in the long-term would be unhealthy for the whole banking system, even if it reported strong earnings. Both of LandBank’s NPL and NPA ratios are higher than the industry’s ratio of 13.92 percent and 12.3 percent. “We still need to work on improving our NPL and NPA ratios ideally to a single digit,” LandBank president and CEO Gary Teves. At the moment, the bank is still auctioning off their P17.4 billion worth of bad assets, some P3.6 billion of which were Ropoas while the rest were its NPLs extended to 78 borrowers. LandBank posted a net income of 1.6 billion during the eight months of the year, even if the state-pension fund Government Service Insurance System have pulled out most of its deposits from the bank. Reports said GSIS pulled out P19 billion from LandBank, which started last year. Teves attributed such strong earnings from the bank’s lending and investing activities. Its income from loans rose by 17 percent to 6.6 billion during the period while earnings from investments grew by P295 million to P5.4 million. |
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