As of end-September 2006, the exposures of thrift banks (TBs) to the real estate sector reached P70.6 billion. The amount is higher by 8.2 percent from last quarter’s P65.2 billion and by 24.9 percent from year ago’s P56.5 billion.
Additional exposures for the quarter principally came from real estate loans (RELs) amounting to P5.4 billion. On the whole, the industry was able to sustain an uptrend in RELs for 14 consecutive quarters now.
Meanwhile, total outstanding loans (TOL), exclusive of interbank loans (IBL), grew at a slower pace of 7.9 percent. Consequently, the ratio of RELs to TOL (net of IBL) went up to 32.5 percent from last quarter’s 32.3 percent and year ago’s 32.2 percent ratio.
Nearly all of total RELs were granted by thrift banks’ bank proper, while a meager 0.1 percent was lent by the industry’s trust department.
RELs were concentrated in financing the acquisition of residential property of individual homeowners/borrowers. These comprised 75.3 percent (or P53.1 billion) of total RELs while the remaining 24.7 percent (or P17.4 billion) were used for the construction and development of real estate properties for commercial purposes.
The ratio of past due RELs to total RELs stood at 10.7 percent, better than the 11.3 percent last quarter and the 12.2 percent ratio a year ago. The quarterly improvement in ratio was driven by the modest expansion in total RELs, stifling the 2.4 percent increment in past due RELs. Moreover, the ratio of past due RELs to TOL (net of IBL) eased to 3.5 percent from last quarter’s 3.7 percent and year ago’s 3.9 percent ratio.
RELs comprised 99.9 percent of the P70.6 billion total TB exposure to the real estate industry. The remaining 0.1 percent was in the form of equity investments. Altogether, the ratio of RELs and investments in real estate companies to TOL (net of IBL) plus total investments in securities reached 22.4 percent. This was lower than the 24.3 percent last quarter and the 22.9 percent ratio a year ago.