As of end-March 2011, the combined exposure to the real estate sector of universal and commercial banks (U/KBs) and thrift banks (TBs) increased anew by 2.6 percent to P444.9 billion from previous quarter's P433.6 billion and by 11.0 percent from year ago's P400.7 billion.
The additional exposure for the quarter came primarily from real estate loans (RELs), which grew by 2.7 percent to P433.1 billion. This compensated for the 0.3 percent contraction in investments in securities issued by real estate companies, which settled to P11.9 billion this quarter.
Majority of the real estate exposure were RELs capturing 97.3 percent share while the remaining 2.7 percent were in the form of investments in securities issued by real estate companies.
By industry, a significant portion of the exposure was held by U/KBs at 73.4 percent (P330.7 billion) share while the remaining 26.6 percent (P114.2 billion) was accounted for by TBs.
The P11.4 billion additional RELs in the first quarter of 2011 came from the P7.6 billion expansion in commercial RELs and the P3.7 billion growth in residential RELs. In terms of share, commercial RELs held the bulk at 55.6 percent (P241.0 billion) of total RELs while the remaining 44.4 percent (P192.1 billion) were residential RELs.
About 69.6 percent (P222.0 billion) of U/KBs' RELs were for commercial purposes while 30.4 percent (P96.9 billion) were for residential purposes. On the other hand, RELs granted by TBs were mostly concentrated in financing the acquisition, construction and/or improvement of residential units that are or will be occupied by individual/household borrowers comprising 83.3 percent (P95.2 billion) of total RELs while the remaining 16.7 percent (P19.0 billion) were used for the construction and development of real estate properties for commercial purposes.
With increased level of RELs, the ratio of RELs to total loan portfolio, exclusive of interbank loans (TLP) went up to 14.7 percent from last quarter's 14.3 percent. Nonetheless, this quarter's ratio was still lower than year ago's 15.2 percent. By industry, U/KBs' ratio of RELs to TLP rose to 12.3 percent from last quarter's 11.7 percent while TBs' ratio remained unchanged from last quarter's 32.8 percent.
Non-performing RELs declined by 8.0 percent to P26.2 billion from previous quarter's P28.5 billion. Consequently, the ratio of non-performing RELs to total RELs improved to 6.1 percent from previous quarter's 6.8 percent. As a percentage of TLP, delinquent RELs also eased to 0.9 percent from last quarter's 1.0 percent.
The level of non-performing residential RELs substantially declined by 25.3 percent to P9.7 billion at end-March 2011 resulting to a better ratio of non-performing residential RELs at 5.1 percent (from 6.9 percent last quarter) vis-à-vis the non-performing commercial RELs ratio at 6.9 percent (from 6.7 percent).
By industry, TBs outperformed U/KBs in having better quality of RELs. TBs' non-performing RELs ratio notably improved to 5.6 percent from 8.6 percent last quarter while UKBs' ratio went up to 6.2 percent from 6.1 percent.
Investments in debt securities issued by and in equity securities of real estate companies barely changed from last quarter's P11.9 billion. In terms of composition, debt securities held the lion's share of the total real estate investments at 73.7 percent (P8.7 billion) while the remaining 26.3 percent (P3.1 billion) were equity securities.
The ratio of combined RELs and investments to the real estate industry to TLP plus total debt and equity investments stood at 9.5 percent, higher than last quarter's 9.2 percent though remained unchanged from the ratio posted a year ago.