The real estate exposures of universal, commercial, thrift banks and trust departments rose 5.9 percent to P1.5 trillion at the end of 2015 from a quarter ago, the Bangko Sentral ng Pilipinas said over the weekend.
The amount accounted for 23.7 percent of the banks’ total loan portfolio during the period, slightly lower than 24.1 percent posted at the end of September 2015.
“The end-2015 REE is 5.9 percent higher than that posted by the banks a quarter earlier. The rise is attributed to the banks’ real estate loans, which grew by 6 percent to P1.3 trillion quarter-on-quarter,” the regulator said.
The loans comprised 86.2 percent of banks’ real estate exposures at end-2015.
Real estate loans and investments in securities as a percentage to total loan portfolio stood at 20.4 percent and 3.3 percent, respectively, as of end-2015.
The banks’ investments in real estate securities, meanwhile, expanded 5.1 percent quarter-on-quarter to P209.7 billion at the end of last year. The banks’ exposure to real estate securities accounted for 13.8 percent of real estate exposures during the period.
“While real estate exposures sustained an increase, the non-performing real estate loans ratio of universal, commercial and thrift banks followed a downtrend. At end-2015, the banks’ non-performing real estate loans ratio stood at 2.1 percent, marginally lower than the 2.2 percent recorded a quarter earlier,” the Bangko Sentral said.
Most of respondent banks, or 95.2 percent, in a Bangko Sentral survey for the first quarter of 2016 indicated unchanged credit standards for commercial real estate loans. The diffusion index approach, however, showed a net tightening of overall credit standards for the said type of loans.
“The tighter overall credit standards for commercial real estate loans reflected respondent banks’ reduced tolerance for risk, deterioration in the profile of borrowers, and perception of stricter financial system regulations,” the Bangko Sentral said.
The regulator monitors the real estate exposures of banks as part of its broader role of assessing the quality of bank exposures to the different sectors of the economy.
It said maintaining high loan quality was essential to the promotion of financial stability, one of its key policy objectives.
