Banks’ real estate exposure up 10%

Philippine banks’ exposure to real estate rose by 10.74 percent year-on-year as of end-September this year, with loans accounting for the bulk.

Latest Bangko Sentral ng Pilipinas (BSP) data showed real estate exposure (REE) of banks and trust departments reached P2.36 trillion as of the first nine months of 2019, up by P229.4 billion from the P2.13 trillion recorded a year earlier.

Accounting for the bulk of the total, real estate loans made up 85.89 percent of the banks’ REE, while securities investments accounted for the remaining 14.10 percent.

The loan component of the total exposure rose by 10.95 percent to P2.03 trillion from P1.83 trillion a year earlier.

Commercial real estate loans accounted for 63.84 percent of the total loans, while borrowers acquiring residential properties took the remaining 36.15 percent.

Investments in real estate securities, meanwhile, grew by 9.50 percent to P333.49 billion at the end of the third quarter from P304.55 billion a year earlier.

The central bank’s latest data showed that about 73.4 percent of residential real estate loans (RELs) extended by banks in the second quarter of the year were for the purchase of new houses.

By type, about 45.8 percent of residential property loans were for condominium units, followed by single detached/attached houses (43 percent) and townhouses (10.5 percent).

By area, most of the loans granted in the National Capital Region (NCR) were for the purchase of condominium units, while RELs granted in areas outside of NCR were mostly for single detached/attached houses.

By region, NCR accounted for 43 percent of the total number of loans granted, followed by Calabarzon (27.4 percent), Central Luzon (8.9 percent), Central Visayas (6 percent), Western Visayas (4.3 percent), Northern Mindanao (3.3 percent), and Davao Region (3 percent).

Together, NCR and the six other regions accounted for 95.9 percent of total housing loans extended by banks.