Bank resources grow 11.31% to P15.71 trillion in Q1 – BSP

Published May 18, 2018, 12:00 AM

by manilabulletin_admin

By Lee  C. Chipongian

Combined resources of the country’s banking system grow 11.31 percent to P15.71 trillion on-year from P14.12 trillion, the Bangko Sentral ng Pilipinas reported.

Bangko Sentral ng Pilipinas (BSP) logo

Big banks’ combined assets amounted to P14.24 trillion in the first quarter this year, up 11.89 percent year-on-year from P12.73 trillion, the latest BSP data) showed.

Including thrift banks and rural/cooperative banks, total resources of the banking system increased by 11.31 percent to P15.71 trillion from P14.12 trillion.

For the first three months, thrift banks’ resources went up by 5.65 percent to P1.21 trillion from P1.15 trillion same time in 2017, while rural/cooperative banks grew by 7.64 percent to P256.5 billion from P238.3 billion.

Non-banks, in the meantime, had a combined resources of P3.49 trillion as of end-March, up a bit by 0.80 percent from P3.47 trillion the same period last year. Non-banks are investment houses with trusts businesses, non-stock savings and loan associations (NSSLA), pawnshops, financing companies, security dealers/brokers, and trust corporations.

Overall, the BSP noted that the entire financial system – banks and non-banks – have total resources of P19.21 trillion, 9.24 percent from P17.58 trillion.

BSP Governor Nestor A. Espenilla Jr. has said that the domestic banking system continues to be “safe and sound, with robust performance and sustained expansion in credit.” This is complemented by improved asset quality, firm liquidity position, and strong capitalization, he said.

Local banks comply with Basel III standards and follow stricter regulations on capital, leverage and liquidity.

At the end of 2017, the banking sector’s total resources were equivalent to 98.1 percent of gross domestic product (GDP). Savings and demand deposits remain the primary sources of funds for the banking system.

As of end-March this year, there are 43 big banks, 55 thrift banks, 462 rural banks and 25 cooperative banks.

The BSP is supervising about 120 non-bank financial institutions with quasi-banking functions such as investment houses and financing firms. The 16,889 non-bank financial institutions without quasi-banking functions and about 16,582 are pawnshops and 196 NSSLAs.

In a review last April, Moody’s Investors Service said domestic banks’ loans and revenue growth will continue this year but sees some stress on the industry’s effort to match growth with required capitalization.

Moody’s said the “capital ratios of Philippine banks will stay pressured, because increases in retained earnings will not prove sufficient to cover the banks’ rapid asset growth, against the backdrop of their low cost efficiency.”

Moody’s report, “Banks — Philippines: Robust loan growth lifts earnings in 2017 but will continue to weigh on capitalization” project the same scenarios for 2018.