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1st Quarter Exposure to Real Estate of U/KBs & TBs Reached P367.6 Billion


As of end-March 2009, the exposure of universal and commercial banks (U/KBs) and thrift banks (TBs) to the real estate sector amounted to P367.6 billion, wider by 2.2 percent from last quarter’s P359.7 billion and by 27.3 percent from year ago’s P288.7 billion. Additional exposure for the quarter came solely from real estate loans (RELs) which stood at P357.8 billion while investments in securities issued by real estate companies exhibited no change at P9.8 billion.

The bulk of the exposure was held by U/KBs at 72.3 percent share or P265.6 billion, higher by 2.0 percent from last quarter’s P260.5 billion and by 32.3 percent from year ago’s P200.8 billion. On the other hand, the remaining 27.7 percent or P102.0 billion was accounted for by TBs, up by 2.8 percent from last quarter’s P99.2 billion and by 16.0 percent from year ago’s P87.9 billion.

With higher level of RELs, the ratio of RELs to total loan portfolio (TLP) of U/KBs and TBs increased to 14.1 percent from last quarter’s 13.6 percent and year ago’s 13.4 percent. By industry, U/KBs’ ratio of RELs to TLP increased to 11.4 percent from last quarter’s 10.9 percent and year ago’s 10.5 percent while TBs’ ratio went down to 34.5 percent from last quarter’s 35.3 percent, though still higher than year ago’s 33.8 percent ratio. 
RELs extended for the construction and development of real estate properties for commercial purposes held the bulk at 55.2 percent (or P197.4 billion) of total RELs while the remaining 44.8 percent (or P160.4 billion) was granted for the acquisition, construction and/or improvement of residential units that is or will be occupied by the individual/household borrower. By industry, RELs extended by U/KBs at 70.7 percent (or P181.0 billion) were intended for commercial purposes while the remaining 29.3 percent (or P74.9 billion) were for residential purposes. On the other hand, RELs granted by TBs at 83.9 percent (or P85.5 billion) were for housing purposes while the remaining 16.1 percent (or P16.5 billion) were used for commercial purposes.

Non-performing RELs rose by 10.7 percent or P2.4 billion to P25.3 billion from previous quarter’s P22.8 billion. Consequently, the ratio of non-performing RELs to total RELs increased to 7.1 percent from previous quarter’s 6.5 percent. As a percentage of TLP, delinquent RELs also moved up to 1.0 percent from last quarter’s 0.9 percent. By industry, U/KBs have a better ratio of non-performing RELs to total RELs at 6.6 percent (up from 6.1 percent last quarter) compared to the 8.4 percent (up from 7.7 percent) ratio posted by TBs.

Investments in debt securities issued by and in equity securities of real estate companies amounted to P9.8 billion at end-March 2009, same from last quarter but up from year ago’s P5.9 billion. The ratio of combined RELs and investments to the real estate industry to TLP plus total debt and equity investments stood at 9.3 percent. This was higher than last quarter’s 9.2 percent and year ago’s 8.5 percent ratio.

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