By Loose Wendy T. Nobel, Reporter
Another asset management company (AMC) has been given regulatory approval to buy the bank’s bad assets in the wake of the epidemic.
This is because more banks intend to get incentives under the Financial Institutions Strategic Transfer (FIST) Act because they want to improve the quality of assets by disposing of non-performing assets (NPAs).
As of March 24, there are already six FISTCs (FISTCs) based on the latest directives from the Securities and Exchange Commission (SEC). PI One FISTC-AMC has been added to the list
The finance department said there were five FISTCs as of January, such as Philippine Equitable Recovery FIST-Asset Management Corp., Philippine Recovery Co. FISTC-AMC, Inc., Argo Global Services Philippines (FIST-AMC), Collectius FISTC-AMC Pvt. Corp., and Resurgent Capital (FISTC-AMC), Inc.
The Republic Act 11523 or FIST Act was signed in February last year and allowed the creation of SEC-registered AMCs that could help banks clean up their balance sheets after bad assets increased during an epidemic.
Assets that are deemed invalid by December 31, 2022 will be eligible to be sold to FISTC under the law.
Banco Central NG Pilipinas (BSP) Deputy Governor Chuchi G. Fonasier said they had received applications from 14 banks for verification of a master list of non-performing assets. As of January, it was higher than 11 banks.
So far, the BSP has given legitimacy to four banks. StayThe master list of NL eligible NPAs, the rest are still at various stages of evaluation, said Mrs. Fonsecier.
“Based on the latest simulations, the implementation of the FIST Act estimates that NPAs will be disposed of including P157.2 billion non-performing loans (NPLs) and P49.2 billion acquired real and other assets under an estimated settlement rate of 30. %, Similar to the experience during the 1997 Asian financial crisis, “said Mrs. Fonseca in a Viber message.
Mrs Fonacier said they had not yet received a certificateStayBSP-supervised qualification class StaySo far, financial institutions are subject to NPA transfers under the FIST Act.
“However, the application for master list is submitted to BSP by these banksStayTheir purpose is to get incentives under the law, ”he said.
A certificate of eligibility of a financial institution seeking to sell NPAs will be issued to the SEC and the Bureau of Internal Revenue for reference of tax incentives.
Among the major banks are the Philippine National Bank (PNB) and Rizal Commercial Banking Corp. (RCBC) says it is interested in selling NPAs through the FIST Act
“We are considering offloading consumer and business loans that are not sensitive to the normal collection process and will take a long time to collect,” PNB said in an e-mail. The commercial world.
“RCBC wants to offload some of its assets through the FIST Act, as we want investors to take advantage of their increased appetite to invest in distressed assets, which they may receive due to tax incentives,” the Yuchenko-led lender said in an e-mail.
BDO Unibank, Inc. And Metropolitan Bank & Trust Co. When asked who they are not interested in using the provisions of FIST Act 6
Recent BSP data show that the NPL ratio in the banking industry reached a three-month high of 4.24% in February. Bad debts rose 2.38% to P472.774 billion compared to a year ago.
During the epidemic, the NPL ratio reached a 13-year high of 4.51% from July to August 2021, which is still much lower than the 17.6% seen in 2002 after the Asian financial crisis.