Total assets of the domestic banking sector increased to P25.649 trillion as of end-March this year, up by 10.8 percent compared to same period last year of P23.147 trillion amid the continued expansion in deposits, loans and investments.
Based on the latest data from the Bangko Sentral ng Pilipinas (BSP), banks’ liabilities comprising of financial and deposit liabilities, also rose by 10.63 percent to P22.526 trillion versus P20.360 trillion same time last year.
As of end-March, banks’ gross loans inclusive of interbank loans receivable and reverse repurchase, totaled P13.692 trillion, up 9.79 percent from same time last year of P12.470 trillion.
The net loans totaled P13.224 trillion. This contributes significantly to total assets after investments and cash and due from banks.
Meanwhile, net investments which are financial assets and equity investments, amounted to P7.355 trillion in the first three months of 2024 from P6.691 trillion previously, or up by 9.92 percent year-on-year.
Cash and due from banks, however, declined by 4.82 percent to P2.942 trillion versus P3.091 trillion last year.
Banks’ net real and other properties acquired or ROPA, on the other hand, went up by 5.89 percent to P106.987 billion from P101.029 billion.
By banking group, the 44 big banks or universal and commercial banks accounted for about 94 percent of total industry assets at P24.077 trillion while its total liabilities stood at P21.205 trillion.
The 42 thrift banks’ assets reached P1.049 trillion as of end-March while its total liabilities totaled P888.418 billion.
The rural and cooperative banks have assets of P425.427 billion and P348.368 billion in total liabilities. There are 387 rural and cooperative banks, of which 365 are rural banks.
The six digital banks have total assets of P96.900 billion as of end-March and liabilities of P83.814 billion.
Based on BSP data as of end-December 2023, the SM Group’s BDO Unibank Inc. is the country’s biggest bank in assets size at P4.283 trillion.
Government-owned Land Bank of the Philippines is second largest lender with total assets of P3.270 trillion followed by the Ty family’s Metropolitan Bank and Trust Co. with P3.057 trillion assets.
The Ayala-led Bank of the Philippine Islands is fourth biggest bank in terms of assets size of P2.853 trillion while another Sy bank, China Banking Corp., is in fifth slot with P1.539 trillion.
The other banks in the top 10 in terms of asset size are the Yuchengcos’ Rizal Commercial Banking Corp. with P1.289 trillion; Lucio Tan Group’s Philippine National Bank with P1.208 trillion; Security Bank Corp. with P1 trillion; Aboitiz-led Union Bank of the Philippines with P990.181 billion; and state-owned Development Bank of the Philippines with P983.649 billion.
In a January 2024 report, credit rating agency S&P Global Ratings said Philippine banks are expected to boost its earnings, capital and assets this year on the back of a recovering economy and on expectation that the BSP policy rate will decline.
S&P noted that bank earnings will “normalize with lower asset yields” amid expectation that the BSP will start reducing its 6.5 percent target reverse repurchase (RRP) rate or the policy rate in the second half of 2024.
Based on the report, with improving economic conditions, this will translate to a 10 percent to 12 percent credit growth this year from five percent to six percent in 2023, while gross non-performing loan (NPL) ratio is expected to remain around 3.5 percent.
Banks’ return on assets, meanwhile, is seen to drop to 1.3 percent this year from 1.4 percent in 2023 while low-cost deposits to total deposits is 70 percent.