Untitled Document

Monday, October 23, 2017 | MANILA, PHILIPPINES
Untitled Document
   economic indicators

Date posted: Wednesday, August 31, 2016 | Manila, Philippines

BY Arnold S. Tenorio Research Head

Bank asset growth picks up further

GROWTH in assets of the country’s biggest banks picked up pace last quarter as loan expansion quickened.

BusinessWorld’s 2nd Quarter Banking Report (QBR) shows the combined assets of the country’s universal and commercial banks (U/KBs) grew by 12.97% to P12.299 trillion in the April-June period of 2016 from P10.887 trillion in 2015’s same three months.

The latest asset growth figure is higher than the 11.15% year-on-year increase in the first quarter of this year and quicker than the 7% expansion of the country’s gross domestic product (GDP) in the second quarter. GDP, which is the amount of final goods and services produced in the country, measures the country’s economic performance for a period.

Fuelling asset growth in the second quarter of this year was the 18.28% year-on-year increase in bank loans to P6.011 trillion from last year’s P5.082 trillion. Loans already comprise half of big banks’ assets, up from 48% in the first quarter.

The growth in bank lending comes amid the upbeat outlook for GDP growth, which is expected to hit 6-7% for the entire 2016. Economic growth is expected to be driven by consumer spending and investment, as inflation remains below target and the government has committed to ramp up infrastructure expenditures.

Despite the acceleration in bank lending, the country’s biggest banks have kept loan quality high, with their gross non-performing loan ratio averaging 2.09% in the second quarter, down from 2.30% in the first quarter.

BusinessWorld Research has tracked the financial performance of the country’s U/KBs on a quarterly basis since the late 1980s using banks’ published statements of condition.

*For inquiries, send e-mail to research@bworldonline.com

E-mail | Print |


Other stories