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2nd Quarter Exposure to Real Estate of U/KBs & TBs Reached P377.8 Billion

09.10.2009

As of end-June 2009, the combined exposure of universal and commercial banks (U/KBs) and thrift banks (TBs) to the real estate sector amounted to P377.8 billion, wider by 2.8 percent from last quarter’s P367.6 billion and by 23.3 percent from year ago’s P306.3 billion. Additional exposure for the quarter came solely from real estate loans (RELs), which rose by P11.1 billion to P368.9 billion. This more than offset the decline in investments in securities issued by real estate companies by P0.9 billion to P8.9 billion.

The bulk of the exposure was held by U/KBs at 72.4 percent share (or P273.4 billion), higher by 2.9 percent from last quarter’s P265.6 billion and by 28.3 percent from year ago’s P213.1 billion. The remaining 27.6 percent (or P104.4 billion) was accounted for by TBs, up by 2.3 percent from last quarter’s P102.0 billion and by 11.9 percent from year ago’s P93.2 billion. 

With higher level of RELs, the ratio of RELs to total loan portfolio (TLP) of U/KBs and TBs increased to 14.4 percent from last quarter’s 14.1 percent and year ago’s 13.1 percent. By industry, U/KBs’ ratio of RELs to TLP increased to 11.7 percent from last quarter’s 11.4 percent and year ago’s 10.3 percent while TBs’ ratio went down to 33.9 percent from last quarter’s 34.5 percent, though still higher than year ago’s 33.8 percent ratio.

Consistently, RELs extended for the construction and development of real estate properties for commercial purposes held the bulk at 55.3 percent (or P204.1 billion) of total RELs while the remaining 44.7 percent (or  P164.8 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 71.4 percent (or P189.0  billion) were intended for commercial purposes while the remaining 28.6 percent (or P75.5 billion) were for residential purposes. On the other hand, RELs granted by TBs at 85.6 percent (or P89.3 billion) were for residential purposes while the remaining 14.4 percent (or P15.1 billion) were for commercial purposes.

Non-performing RELs went down by 3.9 percent to P24.3 billion from previous quarter’s P25.3 billion. Consequently, the ratio of non-performing RELs to total RELs improved to 6.6 percent from previous quarter’s 7.1 percent. As a percentage of TLP, delinquent RELs remained unchanged from last quarter’s 1.0 percent. By industry, U/KBs have a better ratio of non-performing RELs to total RELs at 6.0 (down  from 6.6 percent last quarter) percent compared to the 8.1 percent (down  from 8.4 percent) ratio posted by TBs.

Investments in debt securities issued by and in equity securities of real estate companies amounted to P8.9 billion at end-June 2009, down from last quarter’s P9.8 billion but up from year ago’s P5.7 billion. The ratio of combined RELs and investments to the real estate industry to TLP plus total debt and equity investments stood at 9.2 percent, same from last quarter but higher than year ago’s 8.7 percent ratio.

View Table 1 | Table 2  | Table 3

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