As of end-September 2005, real estate exposure of thrift banks amounted to P56.5 billion. This is 4.8 percent and 13.6 percent higher than its level last quarter and a year ago. Additional exposure for the quarter came from real estate loans or RELs (P2.6 billion), partially reduced by the decline (P0.2 billion) on investments in securities issued by real estate companies.
The industry’s total RELs grew by 4.8 percent to P56.5 billion from last quarter’s P53.9 billion, continuing the uptrend for 10 consecutive quarters. Simultaneously, total outstanding loans (TOL), exclusive of interbank loans (IBL) decreased by 1.9 percent, raising the ratio of RELs to TOL (exclusive of IBL) to 32.6 percent from 30.5 percent. Likewise this ratio is 1.7 percentage points higher than year ago’s 30.9 percent.
Nearly all of total RELs was granted by the industry’s bank proper, while a meager 0.01 percnt was lent by thrift banks’ trust department.
Loans were concentrated to finance the acquisition of residential property by individual homeowners/borrowers. This comprised 72.8 percent (or P41.1 billion) of total RELs while the remaining 27.2 percent (or P15.4 billion) was used for the construction and development of real estate properties for commercial purposes.
The ratio of past due RELs to total RELs further improved to 12.3 percent from 12.8 percent last quarter and 14.0 percent a year ago. This favorable development took place as the expansion in RELs outpaced the 1.3 percent increase in past due RELs. Meantime, the ratio of past due RELs to TOL (exclusive of IBL) inched up to 4.0 percent from last quarter’s 3.9 percent, still 0.3 percentage point better than year ago’s 4.3 percent ratio.
RELs comprised 99.9 percent of the P56.5 billion total thrift bank exposure to the real estate industry. The remaining 0.1 percent was in the form of investments in the equities of real estate companies.