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Exposure to Real Estate Sector Up 1.8 Percent in 1st Quarter

06.04.2010

As of end-March 2010, the combined exposure of universal and commercial banks (U/KBs) and thrift banks (TBs) to the real estate sector increased by 1.8 percent to P400.7 billion from last quarter’s P393.6 billion and by 9.0 percent (or P33.3 billion) from year ago’s P367.4 billion. The additional exposure for the quarter came primarily from real estate loans (RELs), which grew by 1.1 percent to P387.9 billion. Likewise, investments in securities issued by real estate companies also went up by 2.8 percent to P12.7 billion.
The huge portion of the exposure was held by U/KBs at 72.9 percent (or P292.0 billion) share while the remaining 27.1 percent (or P108.7 billion) was accounted for by TBs.

The exposure of U/KBs to the real estate sector went up by 2.2 percent to P292.0 billion from P285.7 billion the previous quarter and by 10.0 percent from year ago’s P265.4 billion. Similarly, the exposure of TBs expanded by 0.7 percent to P108.7 billion from last quarter’s P108.0 billion and by 6.6 percent  from year ago’s P102.0 billion.

Consistent with the higher level of RELs, the ratio of RELs to total loan portfolio, exclusive of interbank loans (TLP) of U/KBs and TBs increased to 15.2 percent from the 14.1 percent ratio posted last quarter and year ago. By industry, U/KB’s ratio of RELs to TLP increased to 12.5 percent from last quarter’s 11.5 percent and year ago’s 11.4 percent ratio. Similar ratio for TBs also went up to 34.3 percent from last quarter’s 33.9 percent yet lower than year ago’s 34.5 percent ratio.

Consistently, RELs extended for the construction and development of real estate properties for commercial purposes held the bulk at 56.6 percent (or P219.7 billion) of total RELs while the remaining 43.4 percent (or P168.2 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, 72.2 percent (or P201.7 billion) of U/KB’s RELs were extended for commercial purposes while the remaining 27.8 percent (or P77.6 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 83.4 percent (or P90.7 billion) of total RELs while the remaining 16.6 percent (or P18.0 billion) were used for the construction and development of real estate properties for commercial purposes.

Non-performing RELs barely changed from previous quarter’s P23.2 billion but was favorably down by 8.1 percent from year ago’s P25.3 billion. Consequently, the ratio of non-performing RELs to total RELs was the same as last quarter’s 6.0 percent which was better than the 7.1 percent ratio posted a year ago. Likewise, as a percentage of TLP, delinquent RELs was unchanged from last quarter’s 0.9 percent but eased slightly from year ago’s 1.0 percent. By industry, U/KBs have a better ratio of non-performing RELs to total RELs at 5.0 percent compared to the 8.5 percent ratio posted by TBs.

Investments in debt securities (DS) issued by and in equity securities (ES) of real estate companies amounted to P12.7 billion, up by 28.2 percent from last quarter’s P9.9 billion and by 32.3 percent from year ago’s P9.6 billion. The ratio of combined RELs and investments to the real estate industry to TLP plus total debt and equity investments went up to 9.5 percent from last quarter’s 9.1 percent and year ago’s 9.2 percent ratio.

View   Table 1 | Table 2 | Table 3

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