As of end-September 2010, the combined exposure of universal and commercial banks (U/KBs) and thrift banks (TBs) to the real estate sector increased by 1.4 percent to P415.6 billion from last quarter’s P410.0 billion and by 10.3 percent from year ago’s P376.8 billion. Significant portion of the exposure was held by U/KBs at 73.3 percent share while the remaining 26.7 percent was accounted for by TBs.
The exposure of U/KBs to the real estate sector went up by 0.6 percent to P304.6 billion from the P302.7 billion posted the previous quarter. This was also higher by 12.8 percent from year ago’s P269.9 billion. Similarly, the exposure of TBs increased by 3.5 percent to P111.0 billion from last quarter’s P107.3 billion and by 3.9 percent from year ago’s P106.8 billion.
The additional exposure for the quarter came primarily from real estate loans (RELs), which grew by P5.5 billion to P403.8 billion while investments in securities issued by real estate companies also contributed P0.1 billion to the increment in total real estate exposure.
Despite the higher level of RELs, the ratio of RELs to total loan portfolio, exclusive of interbank loans (TLP) of U/KBs and TBs slightly dropped to 14.7 percent from last quarter’s 14.8 percent as TLP rose at a faster rate of 1.9 percent. Nonetheless, this quarter’s ratio was the same as year ago’s 14.7 percent ratio. By industry, U/KBs’ ratio of RELs to TLP declined to 12.1 percent from last quarter’s 12.2 percent but still higher than year ago’s 11.8 percent while TBs’ ratio narrowed to 33.7 percent from last quarter’s 33.8 percent and year ago’s 36.2 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 P225.0 billion) of total RELs while the remaining 44.3 percent (or P178.8 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 intended for commercial purposes accounted for majority or 70.3 percent (or P205.8 billion) of the U/KBs’ RELs while the remaining 29.7 percent (or P87.0 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 82.7 percent (or P91.8 billion) of total RELs while the remaining 17.3 percent (or P19.2 billion) were used for the construction and development of real estate properties for commercial purposes.
Non-performing RELs rose by 6.4 percent or P1.6 billion to P27.1 billion from previous quarter’s P25.5 billion. Consequently, the ratio of non-performing RELs to total RELs increased to 6.7 percent from previous quarter’s 6.4 percent. As a percentage of TLP, delinquent RELs slightly rose to 1.0 percent from last quarter’s 0.9 percent. By industry, U/KBs had a better ratio of non-performing RELs to total RELs at 5.4 percent compared to the 10.1 percent ratio posted by TBs.
Investments in debt securities issued by and in equity securities of real estate companies amounted to P11.8 billion, up by 0.7 percent from last quarter’s P11.7 billion and by 19.2 percent from year ago’s P9.9 billion. The ratio of combined RELs and investments to the real estate industry to TLP plus total debt and equity investments declined to 9.2 percent from last quarter’s 9.3 percent but higher than year ago’s 9.1 percent ratio.
View Table 1 | Table 2 | Table 3