Banks’ 2015 real estate exposure up 22.8%


Philippine banks’ exposure to real estate increased by 22.8 percent year-on-year as of end-2015, data from the Bangko Sentral ng Pilipinas (BSP) showed, with loans accounting for the bulk but also marking a drop in terms of soured transactions.

The latest central bank data showed the real estate exposure (REE) of universal, commercial, thrift banks and trust departments at P1.5 trillion as of the end of last year, up by P279 billion from the P1.221 trillion recorded at end-2014.

The REEs accounted for 23.7 percent of the banks’ total loan portfolio (TLP) during the period.

Real estate loans (RELs) and investments in real estate (RE) securities as a proportion of TLP stood at 20.4 percent and 3.3 percent, respectively, as of end-2015.

Accounting for the bulk of the total, real estate loans made up 86.2 percent of the banks’ REE, while securities investments accounted for the remaining 13.8 percent.

The loan component of the total exposure rose by 24.6 percent to P1.3 trillion from P1.043 trillion a year earlier.

Investments in real estate securities, meanwhile, grew by 17.8 percent to P209 billion at the end of 2015 from P178 billion a year earlier.

The central bank data also indicated that banks’ credit positions with respect to real estate exposure improved despite the increase in REE.

Non-performing real estate loans accounted for 2.1 percent, down from 2.8 percent in the previous year.

The BSP said it monitors the REEs of commercial, universal, and thrift banks as part of its broader role of assessing the quality of bank exposures to the different sectors of the economy.

“Maintaining high loan quality is essential to the promotion of financial stability, which is a key policy objective of the BSP,” it said.


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