The non-performing loan (NPL) ratio was manageable at 3.4 percent as of end-September 2020, slightly higher than the 2.1 percent ratio as of end-September 2019. Loan loss reserves have been generally increasing since the start of this year but inched down as of end-September 2020, resulting to a lower NPL coverage ratio of 91.7 percent.
We expect the banking industry to book additional provisions as they continue to reassess the quality of the loan portfolio. The year-on-year growth of financial assets (aside from loans) sharply fell from 15.2 percent in September 2019 to 2.9 percent in September 2020 as banks opted to reduce Treasury activities to be liquid.