By LEE C. CHIPONGIAN
The Bangko Sentral ng Pilipinas (BSP) reported yesterday that the
banking sector’s capital health remain robust at 17.43 percent at the end of the third quarter in 2011, higher than the previous quarter's capital adequacy ratio (CAR) level of 17.25 percent.
The CAR, which measures banks’ capability to meet its liabilities and other credit exposures and risks, is well above the BSP’s benchmark of 10 percent. Based on consolidated basis, the industry average CAR stood at 16.44 percent on solo basis and 17.43 on consolidated basis and both levels are higher compared to second quarter ratios.
The tier 1 capital ratios are also at adequate levels and better than international averages, at 14.14 percent and 14.23 percent on solo and consolidated bases, respectively, said the BSP.
“The slight improvement in the banking system’s CARs resulted from the higher growth rate of qualifying capital vis-à -vis that of risk weighted assets (RWA),†the central bank explained in a statement.
From June to September last year, qualifying capital increased by 2.61 percent or P19.9 billion on solo basis to P782.8 billion and on consolidated basis, went up by 2.93 percent or P24.5 billion to P861.9 billion. The BSP said bank profits and additional float of common shares contributed to the increase in qualifying capital.
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