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Universal and Commercial Banks' Exposure to the Real Estate Sector as of End-Year 2003

06.10.2004

The exposure of the universal and commercial banking (U/KBs) to the real estate sector as of end-December 2003 aggregated to P195.0 billion, consisting of P183.5 billion (94.1 percent) loans and P11.4 billion (5.9 percent) investments. This was higher by 2.7 percent than a year ago’s P189.9 billion exposure. This exposure also accounted for 6.5 percent of the combined total loans, exclusive of interbank loans (IBL) and investment portfolio of U/KBs as of end-December 2003.

Year-on-year, the real estate loans (RELs) registered an expansion of 2.4 percent from P179.2 billion. Nonetheless, the ratio of RELs to total loans (exclusive of IBL) was contained at 11.8 percent (vs. 11.9 percent a year ago) since total loans (exclusive of IBL) had a higher growth rate of 3.4 percent.

Commercial RELs amounted to P151.5 billion, corresponding to 82.6 percent of total RELs. This is higher by P4.5 billion or 3.1 percent from P147.0 billion last year. Meantime, residential RELs aggregated to P32.0 billion or 17.4 percent of total RELs. This is lower by P0.2 billion or 0.7 percent from P32.2 billion a year ago.

Past due REL ratio improved by 2.4 percentage points to 21.7 percent from 24.1 percent last year as past due RELs declined by 7.7 percent to P39.8 billion. Further breakdown showed that the past due ratio of residential RELs inched up from 14.8 percent last year to 15.6 percent. This, however, is much lower than the past due ratio of commercial RELs which nonetheless went down from 26.1 percent to 23.0 percent.

Aside from loans, U/KBs’ exposure to the real estate industry included investments in commercial papers which posted a 21.6 percent year-on-year growth to P2.8 billion and investment in equities of real estate companies which grew by 3.9 percent to P8.7 billion.

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