The Philippine banking system’s total assets went up by 4.10 percent year-on-year to P19.536 trillion end-May from P18.766 trillion same time in 2020, based on Bangko Sentral ng Pilipinas (BSP) data.
Amid the COVID-19 pandemic, the BSP said the industry’s asset expansion continue to be positive because of its adequate capital, and funded by deposit generation, bond issuances and capital infusion.
The 46 big banks or universal and commercial banks accounted for the biggest share of the total assets at 92.5 percent or P18.090 trillion. The 48 thrift banks have 5.9 percent or P1.154 trillion. The rural and cooperative banks have 1.5 percent or P291 billion. There are 406 rural banks and 24 cooperative banks as of end May.
The growth in the banking system’s total assets came from financial assets, which other than loans and receivables, are the banks’ investments in debt and equity instruments.
As of end-May, the industry’s financial assets grew by 21.56 percent to P4.814 trillion versus P3.960 trillion same period in 2020.
The cash and due from banks also increased by 7.23 percent to P3.425 trillion from P3.194 trillion in 2020.
The banking system’s gross total loan portfolio – which have the highest share in total assets -- declined to P10.699 trillion from P10.799 trillion last year or down by 1.20 percent.
The BSP has noted in a recent report that banks’ asset mix was medium-term mostly and considered as stable investments.
The SM Group’s BDO Unibank Inc. tops the list of banks in terms of asset size with P3.246 trillion as of end-December 2020, followed by government-owned Land Bank of the Philippines with P2.361 trillion. The Ty family-controlled Metropolitan Bank and Trust Co. have P2.172 trillion assets as of end-2020, while the Ayala Group’s Bank of the Philippine Islands’ and Lucio Tan’s Philippine National Bank have total assets of P1.947 trillion and P1.227 trillion, respectively.
Last week in a forum, BSP Governor Benjamin E. Diokno said the BSP’s various time-bound regulatory relief measures during the pandemic has helped banks to better control the impact of the health crisis on their balance sheets and finances.
He said the banking sector “have kept the impact of the crisis manageable” as indicated by a capital adequacy ratio (CAR) that has remained well above the regulatory requirement.
The CAR has in fact improved to 16.6 percent and 17.1 percent on solo and consolidated bases in 2020 despite the COVID-19 pandemic’s hits on banks’ earnings, capital and operations.
The CAR, which is a bank’s measure of capital health in relation to its risks and liabilities, was an improvement from the previous year’s 15.4 percent and 16 percent. Banks’ risk-taking activities were supported by adequate capital which was mainly composed of common equity and retained earnings.
The existing minimum CAR requirement is 10 percent. The BSP implements minimum capital ratios of six percent Common Equity Tier 1 (CET1) ratio and 7.5 percent Tier 1 ratio. A capital conservation buffer of 2.5 percent, comprised of CET1 capital was also prescribed.