Banks’ real estate holdings up 5.5% to P301B as of Sept

The combined real estate holdings of universal, commercial and thrift banks increased by an average of 5.5 percent as of end-September 2007, the Bangko Sentral ng Pilipinas (BSP) said.

The BSP said the surge in the private residential housing sector pushed housing loans in the third quarter, offsetting the decline in commercial real estate lending.

The BSP said total real estate loans of universal, commercial and thrift banks amounted to P301 billion, up significantly from P285.4 billion over the same period in 2006.

The BSP reported that as of end-September, the combined real estate exposures of U/KBs (bank proper and trust department) stood at P220 billion, higher by 0.9 percent from P218 billion in the previous quarter and by 2.4 percent from P214.8 billion a year ago.

The quarter-on-quarter increment primarily came from the P2.6-billion growth in residential real estate loans(RELs) which completely diluted the P2.3-billion decline in commercial RELs. Likewise, investments in equities of real estate companies contributed P1.7 billion.

Total loan portfolio (TLP) of U/KBs, the BSP also reported, expanded by 1.7 percent, outpacing the 0.2 percent increase in RELs (net of interbank loans).

This resulted to a lower ratio of RELs to TLP at 11.3 percent from the previous quarter’s 11.5 percent. Likewise, this ratio was also 0.4 percentage point lower than the prior year’s 11.7 percent ratio.

The growth in the combined RELs of U/KBs was due primarily to the P5 billion worth of new RELs extended by several U/KBs. This completely offset the P4.7-billion combined decline (mostly due to payments made by corporate borrowers) in the RELs of other U/KBs.

The majority or 96.8 percent of total RELs was held by U/KBs’ bank proper while the remaining 3.2 percent was accounted for by U/KBs’ trust department.

RELs extended for the construction and development of real estate properties for commercial purposes including infrastructure projects held the bulk at 79.9 percent (or P154 billion) of total RELs while the remaining 20.1 percent (or  P38.6 billion) was granted for the acquisition of residential units by individual homeowners/borrowers.

On the other hand, the BSP said the past due RELs of UKBs fell 17 percent to P15 billion from the previous quarter’s P18.1 billion. The improvement was mainly due to banks’ rigorous collection, settlement, restructuring and foreclosure efforts. 

The RELs of thrift banks, meanwhile, reached P81.7 billion. The amount is higher by 0.9 percent from the previous quarter’s P81 billion and by 15.7 percent from the year ago’s P70.6 billion.

Additional exposures for the quarter principally came from RELs amounting to P0.7 billion. On the whole, the industry was able to sustain an uptrend in RELs for 18 consecutive quarters.