As of end-September 2009, the combined exposure of universal and commercial banks (U/KBs) and thrift banks (TBs) to the real estate sector amounted to P376.8 billion, down by 0.3 percent from last quarter’s P377.8 billion but higher by 17.5 percent from year ago’s P320.7 billion. The reduced exposure came from real estate loans (RELs), which dropped by P2.0 billion to P366.9 billion outweighing the P1.0 billion expansion to P9.9 billion in investments in securities issued by real estate companies.
The bulk of the exposure was held by U/KBs at 71.6 percent (or P269.9 billion) share while the remaining 28.4 percent (or P106.8 billion) was accounted for by TBs.
The exposure of U/KBs to the real estate sector declined by 1.3 percent to P269.9 billion from the P273.4 billion posted the previous quarter. Nonetheless, this was still higher by 20.9 percent from year ago’s P223.2 billion. In contrast, the exposure of TBs rose by 2.4 percent reaching P106.8 billion from last quarter’s P104.4 billion and by 9.6 percent from year ago’s P97.5 billion.
Despite the lower level of RELs, the ratio of RELs to total loan portfolio, exclusive of interbank loans (TLP) of U/KBs and TBs increased to 14.7 percent from last quarter’s 14.4 percent as TLP declined at a faster rate of 2.6 percent. Likewise, this ratio was higher than year ago’s ratio of 13.2 percent. By industry, U/KBs’ ratio of RELs to TLP increased to 11.8 percent from last quarter’s 11.7 percent and year ago’s 10.4 percent while TBs’ ratio also widened to 36.2 percent from last quarter’s 33.9 percent and year ago’s 34.1 percent ratio.
Consistently, RELs extended for the construction and development of real estate properties for commercial purposes held the bulk at 55.7 percent (or P204.4 billion) of total RELs while the remaining 44.3 percent (or P162.5 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 72.6 percent (or P188.8 billion) were intended for commercial purposes while the remaining 27.4 percent (or P71.3 billion) were for residential purposes. On the other hand, RELs granted by TBs 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 85.4 percent (or P91.2 billion) of total RELs while the remaining 14.6 percent (or P15.6 billion) were used for the construction and development of real estate properties for commercial purposes.
Non-performing RELs rose by 0.5 percent to P24.4 billion from previous quarter’s P24.3 billion. Consequently, the ratio of non-performing RELs to total RELs increased to 6.7 percent from previous quarter’s 6.6 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 5.6 percent compared to the 9.3 percent ratio posted by TBs.
Investments in debt securities issued by and in equity securities of real estate companies amounted to P9.9 billion at end-September 2009, up from last quarter’s P8.9 billion and year ago’s P8.2 billion. The ratio of combined RELs and investments to the real estate industry to TLP plus total debt and equity investments stood at 9.1 percent, slightly lower than last quarter’s 9.2 percent but higher than year ago’s 8.8 percent ratio.
View Table 1 | Table 2 | Table 3