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U/KBsí Exposure to Real Estate Sector Widen Anew


As of end-December 2007, the exposures of U/KBs (bank proper and trust department) to the real estate sector stood at P225.8 billion, wider by 2.6 percent (or P5.8 billion) from last quarter’s and last year’s P220.0 billion. Additional exposure for the quarter principally came from real estate loans (RELs) amounting to P5.1 billion. Meanwhile, investments in equities of real estate companies chalked a P0.7 billion contribution in the quarterly increment.

Concurrently, the industry’s total loan portfolio (TLP), exclusive of interbank loans (IBL) rose faster at 11.7 percent to P1,904.7 billion. Thus, the ratio of RELs to TLP slid to 10.4 percent from the previous quarter’s 11.3 percent and last year’s 11.5 percent ratio.

Majority or 97.2 percent of total RELs was held by U/KBs’ bank proper while the remaining 2.8 percent was accounted for by U/KBs’ trust department.

RELs extended for the construction and development of real estate properties for commercial purposes including infrastructure projects held the bulk at 79.9 percent (or P158.0 billion) of total RELs while the remaining 20.1 percent (or  P39.7 billion) was granted for the acquisition of residential units by individual homeowners/borrowers.

Past due RELs increased slightly by 2.9 percent or P0.4 billion to P15.4 billion from previous quarter’s P15.0 billion, matching up the growth rate in RELs. Consequently, the ratio of past due RELs to total RELs hardly changed from previous quarter’s 7.8 percent but registered better than last year’s 10.5 percent ratio. Meantime, the proportion of past due RELs to TLP eased to 0.8 percent from last quarter’s 0.9 percent and last year’s 1.2 percent ratio.

Investments in commercial papers (CPs) issued by and in equities of real estate companies reached P28.1 billion, higher than last quarter’s P27.4 billion and last year’s P21.1 billion. The ratio of combined RELs and investments to the real estate industry to TLP plus total debt and equity investments stood at 6.1 percent. This was slightly lower than last quarter’s 6.2 percent and last year’s 6.3 percent ratio.

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