Bank Exec Sees Increase in NPLs after Bayanihan 2 Expires

An executive of Philippine National Bank (PNB) expects the bank’s non-performing loans (NPLs) to increase after the Bayanihan to Recover as One Act expires on Dec. 19.

In a virtual briefing Friday, PNB president and chief executive officer (CEO) Wick Veloso said they registered a big jump in NPLs after it merged with PNB Savings Bank last March, which resulted in “some technical past due” loans.

He, however, said this is being addressed now.

“So the real picture will come out after Bayanihan 2, which I estimate would be around (the) end of December. One thing is certain, after the law expires, NPLs will increase but I cannot provide you with a number as we continue to monitor how the situation will be,” he said.

Under Bayanihan 2, borrowers are given a 60-day leeway on the payment of their loans.

Borrowers that PNB officials are monitoring are those into restaurants, hotels, construction and transportation that are greatly affected by the pandemic.

“Because if their businesses eventually will be able to survive, as long as the economy continues to grow, then we can continue to give support to these kinds of businesses,” Veloso added.

As of end-September this year, the bank registered a gross NPL ratio of 6 percent.

For PNB alone, the figure is 3.9 percent while it is 32.7 percent for PNB Savings.

NPL coverage ratio of PNB stands at 79 percent, while it is 31 percent for PNB Savings. (PNA)