Q2 consumer lending up, soured loans fall

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Home and automobile purchases drove consumer lending in the second quarter, the Bangko Sentral ng Pilipinas reported on Monday, with universal/commercial and thrift banks posting year-on-year growth of 19.3 percent.

Still, domestic banks’ consumer credit exposure remained low compared to other Asean economies, the central bank noted, although loan quality improved from a quarter earlier—an indication of sound standards.

Loans granted to consumers in the April to June period rose to P959.18 billion from P804.05 billion a year earlier. Quarter on quarter, growth was 2.8 percent from P932.78 billion in the first quarter of 2015.

The BSP data showed an increase in real estate loans, by 17.3 percent to P409.17 billion from a year earlier, although this was down 0.55 percent from the first quarter’s P411.44 billion.


Auto loans, meanwhile, grew by 25.3 percent to P259.36 billion from a year earlier, also rising by 6.03 percent from the first quarter’s P244.61 billion.

Credit card receivables rose by 5.9 percent to P166.45 billion and salary loans by 89.6 percent to P84.57 billion.

Other types of loans, meanwhile, contracted by 14.8 percent to P39.61 billion.

The BSP data showed non-performing consumer loans accounted for 4.5 percent of the banks’ total consumer loans, an improvement from the 5 percent recorded for April to June 2014.

Banks set aside provisions equivalent to 61.2 percent of the non-performing consumer loans, lower than the 66.9 percent a year ago.

As a percentage of total lending, consumer lending by the banks stood at 16.7 percent, higher than the 15.8 percent in the second quarter of 2014. This, however, is lower than the rest of the top five Asean economies.

In Malaysia, banks’ consumer credit exposure stood at 57.1 percent as of end-June 2015, in Indonesia it was at 28.3 percent, 27.9 percent in Thailand and 25.9 percent in Singapore.

The BSP said it was monitoring the level and quality of consumer and other bank loans to ensure banks’ adherence to credit standards.

“This is in line with the BSP’s supervisory efforts to promote sound credit risk management and financial stability,” it said.

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