PHILIPPINE banks posted improved net income during the first half of the year on account of the decline in loan loss provisions for nonperforming loans (NPLs).

According to preliminary data released by the Bangko Sentral ng Pilipinas (BSP) on Wednesday, the industry’s net profit was P143.12 billion at the end of June 2022, up 16.67 percent from P122.67 billion a year earlier.

Losses slid 34.11 percent to P37.59 billion from P57.06 billion at the end of June 2021, while total operating income climbed 4.33 percent to P471.32 billion from P451.74 billion a year ago.

As of the end of June 2022, banks’ provision for credit losses on loans and other financial assets dropped 26.69 percent to P45.65 billion from P62.27 billion a year earlier.

Nonperforming loan writeoffs shrunk to P1.81 billion, down from P4.94 billion a year ago by 63.31 percent. The quantity of problematic loans in the Philippine banking industry declined to P421.31 billion within the period.

The total loan portfolio of the banking system increased by 8.72 percent to P11.71 trillion from P10.77 trillion a year earlier, with gross NPLs held by lenders decreasing by 12.77 percent.

NPLs are defined by the BSP as “loans, investments, receivables or any financial asset that are considered impaired under existing accounting standards, classified as doubtful or loss, in litigation, or with signs that full repayment of principal and interest is unlikely without foreclosure of collateral, if any.”

The gross nonperforming loan ratio was lower at 3.60 percent than it was at the end of May 2022 at 3.75 and 4.48 percent from a year ago. It was the lowest level in 21 months, or since 3.51 percent in September 2020.

MAYVELIN U. CARABALLO