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Banks' real estate exposure rises 10.3% in 9 months

By Lawrence Agcaoili (The Philippine Star) Updated December 22, 2010 12:00 AM
MANILA, Philippines - The combined exposure of universal, commercial and thrift banks to the real estate sector went up 10.3 percent in the first nine months of the year on the back of higher loans and investments, data from the Bangko Sentral ng Pilipinas (BSP) showed yesterday.
The BSP said the combined exposure of universal, commercial and thrift banks to the real estate sector reached P415.6 billion as of end-September this year or P38.83 billion higher than the P376.77 billion registered as of end-September last year.
The central bank reported that real estate loans of banks increased 10 percent to P403.85 billion from P366.89 billion while investments in securities issued by real estate companies surged 19.2 percent to P11.78 billion from P9.88 billion.
A significant portion of the exposure was held by universal and commercial banks at 73.3 percent share while the remaining 26.7 percent was accounted for by thrift banks.
Data revealed that the exposure of universal and commercial banks to the real estate sector went up 12.8 percent to P304.6 billion in the first nine months of the year from P269.9 billion in the same period last year while the exposure of thrift banks to the sector went up 3.9 percent to P111 billion from P106.8 billion.
The industry’s total loan portfolio increased 10.25 percent to P2.752 trillion in the first nine months of the year from P2.496 trillion in the same period last year.
This translates to a real estate loans to total loan portfolio of 14.67 percent as of end-September this year, practically flat from 14.7 percent in the same period last year.
By industry, the ratio of real estate loans to total loan portfolio of universal and commercial banks increased to 12.1 percent from a year ago level of 11.8 percent while the ratio of thrift banks narrowed to 33.7 percent from 36.2 percent.
Consistently, loans extended for the construction and development of real estate properties for commercial purposes held the bulk at 55.7 percent or P225 billion of total loans 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.
Non-performing real estate loans rose 11 percent or P1.6 billion to P27.1 billion from the previous year’s P24.41 billion.
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