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Thrift Banks' Real Estate Exposures Reach P84 Billion in 4th Quarter 2007


As of end-December 2007, the exposures of thrift banks (TBs) to the real estate sector reached P84.4 billion. The amount is higher by 3.0 percent from last quarter’s P81.9 billion and by 11.0 percent from last year’s P76.0 billion.

Additional exposure for the quarter solely came from real estate loans (RELs) amounting to P2.5 billion. On the whole, the industry was able to sustain an uptrend in RELs for 19 consecutive quarters now.

Meanwhile, total loan portfolio (TLP), exclusive of interbank loans (IBL), expanded at a faster rate of 5.0 percent to P250.2 billion. Thus, the ratio of RELs to TLP slid to 33.5 percent from last quarter’s 34.2 percent.

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 departments.

RELs were concentrated in financing the acquisition of residential property of individual homeowners/borrowers. These comprised 79.6 percent (or P66.8 billion) of total RELs while the remaining 20.4 percent (or P17.1 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 9.4 percent, better than last quarter’s 9.7 percent and last year’s 10.2 percent ratio. The improvement in ratio during the quarter was a combined effect of the 0.7 percent marginal decline in past due RELs and the modest growth in total RELs. Likewise, the ratio of past due RELs to TLP eased to 3.1 percent from last quarter’s 3.3 percent and last year’s 3.5 percent ratio.

RELs comprised 99.4 percent of the P84.4 billion total TB exposure to the real estate industry. The remaining 0.6 percent was in the form of equity investments. Altogether, the ratio of RELs and investments in real estate companies to TLP plus total investments in securities narrowed to 23.5 percent from last quarter’s 24.1 percent and last year’s 23.6 percent ratio.

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