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Banks’ exposure to real estate sector hits P538 billion

Written by  Aileen Lor
Friday, 29 June 2012 00:00 [ tribune.net.ph ]

As of the end of March, the combined exposure to the real estate sector of universal and commercial banks (U/KBs) and thrift banks (TBs) is at P538.1 billion, Bangko Sentral ng Pilipinas (BSP) said.

Data showed that the exposure was up by 3.8 percent from previous quarter’s P518.6 billion and by 21 percent from last year’s P444.9 billion.

Additional exposure during the quarter came exclusively from real estate loans (RELs), which grew by 3.6 percent (P18.3 billion) to P524.1 billion while investments in securities issued by real estate companies grew by 9.9 percent (P1.3 billion) to P14.0 billion.

BSP said that the RELs accounted for the majority of the real estate capturing 97.4 percent share, while the remaining 2.6 percent were in the form of investments in securities which issued by real estate companies.

By industry, U/KBs accounted for a significant exposure held at 76.9 percent share and the remaining 23.1 percent was accounted for by TBs.

The P18.3 billion additional RELs in the first quarter of 2012 came from the P11.7 billion expansion in residential RELs and the P6.5 billion growth in commercial RELs.

In the breakdown of RELs by industry showed that the RELs of U/KBs were concentrated for commercial purposes at 67.0 percent and the remaining 33.0 percent were for residential purposes.

In contrast, RELs of TBs granted to residential borrowers is 80.9 percent of total RELs while the balance of 19.1 percent were for commercial borrowers.

Ratio of RELs to total loan portfolio, exclusive of interbank loans (TLP) continued to remain stable at around 14 to 15 percent level.

Non-performing RELs also rose by 5.5 percent from previous quarter’s P25.4 billion. Consequently, the non- performing RELs ratio slightly went up to 5.1 percent from previous quarter’s 5.0 percent.

Meantime, non-performing residential RELs ratio was still better at 4.2 percent than non-performing commercial RELs ratio at 5.8 percent.

Data also showed that the ratio of combined RELs and investments to the real estate industry to TLP plus total debt and equity investments rose to 10.2 percent from last year’s 9.5 percent.
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