Non-bank sector posts robust growth in Q1

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The country's non-banking sector continued to demonstrate robust growth as the industry saw an increase in profitability in the first quarter, preliminary data from the Bangko Sentral ng Pilipinas (BSP) showed.

Based on the central bank's report on recent trends in the Philippine financial system, the net profit of non-bank financial institutions with quasi-banking functions (NBQB) rose by 24 percent to nearly P530 million as of March from P426 million a year ago.

The BSP said the sector's total assets expanded by 9.6 percent to P167.4 billion in the first quarter, a turnaround from the 8.7-percent decline in assets in the same period in 2023.

'The industry's assets in March 2024 consisted largely of loans at 86.5 percent,' the central bank said.

Lending activity among NBQBs also jumped by 11.4 percent to P144.7 billion from January to March. This was accompanied by an improvement in loan quality as non-performing loans (NPL) declined by 10.4 percent to P6.6 billion.

As of March, the NPL ratio eased to 4.5 percent from last year's 5.6 percent. Likewise, the NPL coverage ratio stood at 46.5 percent, higher than the 38.6 percent in the same period last year.

'In terms of funding, bills payable remained the main source of NBQBs' funding, accounting for 81.9 percent (P117.8 billion) of the industry's total liabilities in March 2024,' the BSP said.

Meanwhile, the sector's total capital grew by 8.9 percent to P23.6 billion year on year, a turnaround from the 26.8 percent contraction recorded in the comparable year-ago period.

As of March, the BSP supervises five NBQBs. These include one investment house, three financing companies and one other NBQB.

Regarding network, the three financing companies have 14 branches, while the investment house and other NBQB are single head office units.