Philippine bank assets grew by 9.9% at end-Nov.

THE PHILIPPINE banking sector’s total assets climbed by 9.9% year on year as of end-November 2023, mainly driven by the continued growth in loans.

Preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed banks’ assets stood at P24.37 trillion as of November from P22.18 trillion a year ago.

Banks’ assets are mainly supported by deposits, loans, and investments. These include cash and due from banks as well as interbank loans receivable (IBL) and reverse repurchase (RRP), net of allowances for credit losses. 

The banking industry’s total loan portfolio inclusive of IBL and RRP rose by 9.4% to P12.88 trillion as of end-November from P11.77 trillion in the comparable year-ago period.

Net investments — or financial assets and equity investments in subsidiaries — increased by 9.7% to P7.02 trillion from P6.4 trillion in the previous year.

On the other hand, cash and due from banks dropped by 2.6% to P2.66 trillion in the eleven-month period against P2.73 trillion a year ago.

Net real and other properties acquired (ROPA) inched up by 1.8% to P105.02 billion from P103.15 billion in the same period in 2022.

Other assets stood at P1.72 trillion, surging by 47% from P1.17 trillion a year ago.

Meanwhile, the total liabilities of the banking system grew by 9.5% to P21.34 trillion in the first eleven months of 2023 from P19.49 trillion in the comparable year-ago period.

“The improvement in loan growth, as well as the continued growth in deposits largely led to the high single-digit growth in banks’ total assets,” Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message.

“Furthermore, sustained strong growth in banks’ net income also contributed to the continued growth in total assets and capital, as this also showed more lending and investment activities, as well as the continued growth in banks’ capital,” he said. 

Latest BSP data showed outstanding loans by big banks rose by 7.1% to $11.3 trillion in October from $10.55 trillion a year earlier.   

The October credit growth was faster than the 6.5% expansion seen in September, marking the fastest pace in bank lending in two months or since the 7.2% seen in August.

The banking industry’s nonperforming loan (NPL) ratio also inched down to 3.41% in November from 3.44% in the previous month but still above 3.35% a year prior. It marked the lowest NPL ratio since the 3.4% in September.   

However, bad loans inched up by 1.1% to P454.281 billion in November from P449.454 billion in the prior month. Year on year, it rose by 11.3% from P408.097 billion in November 2022.

Lenders’ total loan portfolio expanded by 9.3% year on year to P13.34 trillion as of November.

Separate BSP data also showed the Philippine banking industry’s profits climbed by 10.4% to P270.352 billion in the January-to-September period from P244.876 billion last year. — Keisha B. Ta-asan