Philippine banks outdid regional rivals in 2011

The Philippines’ central bank claims the country’s banks did better than most of its Southeast Asian rivals.

As a result, the Bangko Sentral ng Pilipinas, the central bank, said that given their strong metrics in 2011, Philippine banks are expected to remain stable despite a worsening recession in the Eurozone.

The central bank’s latest “Status of the Philippine Financial System” report said key indicators showed further strengthening of banks’ balance sheets with positive growth in assets, loans, deposits and capital.

Banks remained profitable and provided positive returns to shareholders on account of cost-efficient operations, the central bank said. It noted that local banking indicators were better than those of other banking sectors in Southeast Asia.

Combined resources of Philippine banks hit US$179 billion in 2011, up 5% from the previous year’s US$170 billion. The rise in resources was driven by the increase in deposits and profits.

Combined net incomes of banks jumped to US$2.3 billion last year, a rise of 15% from US$1.97 billion the previous year.

The average non-performing loan ratio of universal and commercial dropped to the region of 2% last year to match levels seen prior to the Asian financial crisis of 1997.

The average capital adequacy ratio stands at some17%, which is above the minimum requirement of 10% set by the central bank. A CAR of at least 8% is considered suitable under international standards.