As of end-September 2008, the exposure of thrift banks (TBs) to the real estate sector reached P97.6 billion, wider by 4.7 percent (or P4.4 billion) from last quarter’s P93.2 billion and by 20.0 percent (or P16.2 billion) from year ago’s P81.4 billion. The exposure was all in real estate loans (RELs) as the industry had no investments in debt securities issued by and in equity securities of real estate companies.
Total loan portfolio exclusive of interbank loans (TLP) posted a slower expansion of 3.7 percent during the quarter but a faster growth rate of 20.3 percent on an annual basis with reference to RELs. Thus, the proportion of RELs to TLP went up to 34.1 percent from last quarter’s 33.8 percent yet slightly lower than year ago’s 34.2 percent ratio.
RELs were concentrated in financing the acquisition, construction and/or improvement of residential units that are or will be occupied by individual/household borrowers. These comprised 83.1 percent (or P81.1 billion) of total RELs while the remaining 16.9 percent (or P16.5 billion) were used for the construction and development of real estate properties for commercial purposes.
The ratio of non-performing RELs to total RELs stood at 8.3 percent, better by 0.4 percentage point from last quarter’s 8.7 percent. The improvement in ratio during the quarter was due to the 0.4 percent marginal decline in non-performing RELs, bundled with the ample growth in total RELs. Likewise, the ratio of non-performing RELs to TLP eased to 2.8 percent from last quarter’s 2.9 percent.