Bangko Sentral ng Pilipinas said Tuesday universal and commercial banks remain well capitalized.
Bangko Sentral said in a statement the capital adequacy ratio—a measure of financial strength of big banks—stood at 14.91 percent on solo basis and 15.78 percent on consolidated basis in the fourth quarter of 2015.
“The latest numbers remain well above Bangko Sentral’s regulatory threshold of 10 percent and the international minimum of 8 percent for CAR,” Bangko Sentral said.
Bangko Sentral, however, said the capital adequacy ratios in the fourth quarter were lower than 15.55 percent on solo basis and 16.40 percent on consolidated basis registered in the third quarter, as risk-weighted assets grew at a faster pace than their qualifying capital amid the banks’ increased lending activities.
“The banks’ capitalization remains mainly composed of common equity Tier 1, the highest quality among instruments eligible as bank capital,” Bangko Sentral said.
The CET1 ratio represented 12.37 percent and 13.33 percent of risk-weighted assets on solo and consolidated bases in the fourth quarter. The latest CET1 ratios are more than twice the regulatory minimum of 6 percent.
The industry’s Tier 1 ratio, meanwhile, stood at 12.55 percent and 13.48 percent on solo and consolidated bases in the October-December period.
The ratios for the banks’ Tier 1, which is comprised of common equity and qualified capital instruments, remained higher than the regulatory requirement of at least 7.5 percent.
Bangko Sentral said the recent figures indicated that the banks continued to set aside adequate buffers for risk-taking activities. A robust capital position supports financial stability, which is a key policy of the BSP, it said.
There are currently 40 universal and universal banks in the country. Latest report from Bangko Sentral showed that the Philippine banking system remained strong as balance sheets were marked by a sustained growth in assets and deposits.
Banks’ total deposits as of end-January 2016 hit P7.3 trillion, up by 11.3 percent or P700 billion from a year ago. The growth in deposits outpaced the 8.9-percent expansion posted in the previous quarter.
