GOVERNMENT auditors have expressed concern about the health of the United Coconut Planters Bank (UCPB) after past due loans soared by 270.79 percent, according to the bank’s most recent audit.
From P7.1 billion as of yearend 2019, the Commission on Audit said the figure increased by P19.226 billion to end 2020 at P26.326 billion.
The audit team said the bulk of the total were consumer loans totaling P13.491 billion in 2020 compared to P3.767 billion the year before or an increase of 358.14 percent.
On the other hand, past due corporate loans climbed from P3.333 billion in 2019 to P5.735 billion or a 172.07 percent hike.
“Evaluation of the trend of past due loans from 2017 to 2020 revealed that the bank was within the past due targets in 2017 and 2018 but exceeded the past due target in 2019 and 2020,” the COA said.
Based on the aging of the loans, 2.636 billion are already more than a year past due target.
The COA warned that the sudden surge of past due loans means the government-controlled bank is missing out on opportunities to improve its earnings.
“Non-collection of the loans affected the amount of resources for the lending and investment operations of the bank that could have generated additional income,” the commission said.
Bank management said some of the causes of the accumulation of past due loans were failure to closely monitor the loans, relaxed credit packaging, documentary deficiency, grant of excessive loan amounts, and lack of coordination among the UCPB Group lending units to monitor similar accounts.
It said the Corporate Credit and Asset Management Group is implementing remedial measures to address problem credits through restructuring, foreclosures, repossessions, dacion en pago, court-approved settlements, and legal actions.
The Bank also blamed the COVID-19 pandemic for the increase in past due accounts because of the implementation of loan moratorium.
