Q3 consumer lending up 16.9% to P702B

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Consumer loans (CLs) by universal, commercial (U/KBs) and thrift banks (TBs) rose to P702.6 billion in the third quarter of 2013 as the loans for residential real estate increased.

Data from the Bangko Sentral ng Pilipinas (BSP) on Monday showed that the end-September CLs was 16.9 percent higher than the P601.03 billion posted a year ago.

“The latest figure reflects an increase of 3.3 percent from the prior quarter. This sustains the trend of quarter-on-quarter growth since the time the current reportorial template was introduced in 2008,” the BSP stated.

The central bank attributed the rise in consumer lending to the increased residential real estate loans (RRELs), on the account of continued household investments in residential properties and a slow rise in the cost of construction materials.


Auto and credit card loans, on the other hand, rose at a slower pace because of the lean season, it said.

“While the consumer finance portfolio expanded, banks managed the rise in soured CLs,” the BSP added.

Data showed that the nonperforming CLs of U/KBs and TBs represented 6.13 percent of their total CLs in September 2013, a slight increase from the 6.09 percent registered in June 2013.

U/KBs and TBs also set aside loan loss reserves of 67.8 percent of their nonperforming CLs as a safety net against consumer credit risks.

Nonperforming CLs represent only 1 percent of the banks’ total loan portfolio.

“Furthermore, the consumer credit exposure of the banks remained low compared to their regional peers,” the central bank further said.

At end-September 2013, the CL exposure in Malaysia stood at 57.1 percent; Indonesia, 28.8 percent; Thailand, 26.8 percent; and Singapore, 26.4 percent, the data added.

“The Bangko Sentral ng Pilipinas monitors the quality of all types of bank loans as part of efforts to promote high credit standards. This is essential to fostering financial stability, which is a key policy objective of the BSP,” it said.

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