Stand-Alone TBs and RCBs Remain Well-Capitalized


Stand-alone thrift banks (TBs), and rural and cooperative banks (RCBs) remained well capitalized at end-December 2015.

The Capital Adequacy Ratio (CAR) of TBs stood at 19.80 percent at end-December last year, higher than the 19.56 percent posted by the banks a quarter earlier.

The TBs’ CAR rose quarter-on-quarter as the growth in the banks’ total qualifying capital (TQC) outpaced the rise in their risk weighted assets (RWAs) during the period amid profitable operations.

The RCBs, on the other hand, posted a CAR of 18.50 percent at end-2015. The RCBs’ CAR decreased from the 18.77 percent recorded at the end of the third quarter last year as their RWAs rose at faster rate than their TQC quarter-on-quarter.

The capitalization of stand-alone TBs and RCBs remained mainly composed of Tier 1 which refers to common equity and other qualified instruments.

At end-December 2015, Tier 1 ratios of stand-alone TBs and RCBs stood at 18.25 percent and 17.36 percent, respectively.

The stand-alone TBs and RCBs accounted for 3.2 percent of the Philippine banking system’s assets at end-2015. These entities adhere to the Basel 1.5 capital framework for stand-alone banks with simple operations.

The banks’ strong capital position indicates their continued effort to set aside sufficient buffer against unexpected losses that may arise in times of stress. This is in line with the mandate of the Bangko Sentral ng Pilipinas to promote financial stability.