Banks' Real Estate Loans Reach P842.6B

Manila Bulletin, September 12, 2013 | Go to article overview
Save to active project

Banks' Real Estate Loans Reach P842.6B

The Bangko Sentral ng Pilipinas (BSP) yesterday reported that the 37 big banks' real estate exposures remain manageable and are covered adequately by capital.

Based on its internal credit risk simulations, the banks will be able to comply with the 10 percent capital adequacy ratio - which is the minimum imposed by the BSP - even if 50 percent of all real estate exposures will have a write down or reduced value.

As of end-March, the universal and commercial banks' real estate exposures rose 2.5 percent to P842.6 billion in the first quarter from end-2012. In a statement, the BSP attributed the minimal increase to the big banks' real estate loans during the quarter which rose 1.7 percent to P715.5 billion.

About 85 percent of total industry real estate exposure is contributed by real estate loans. Of these real estate loans, 78 percent are residential for the acquisition, construction and improvement of housing units. "The exposure of banks to such residential real estate loans remains manageable as the non-performing portion was only four percent of residential real estate loans in March," said the BSP.

The central bank also monitored banks' investments in real estate securities which increased by seven percent to P127.1 billion during the period. These real estate investments accounted for 15 percent of total real estate exposures.

According to the BSP, after assessing the industry's real estate exposure using its own internal simulations on credit impairment, banks' capital adequacy ratio will comfortably stay above the 10 percent minimum requirement even with a simulated 50 percent write down on real estate exposures.

The BSP again explained that under the expanded real estate reporting system for banks, real estate exposure covers loans to developers of socialized and low-cost housing, loans to individuals, loans supported by non-risk collaterals or Home Guarantee Corp.

The rest of this article is only available to active members of Questia

Sign up now for a free, 1-day trial and receive full access to:

  • Questia's entire collection
  • Automatic bibliography creation
  • More helpful research tools like notes, citations, and highlights
  • Ad-free environment

Already a member? Log in now.

Notes for this article

Add a new note
If you are trying to select text to create highlights or citations, remember that you must now click or tap on the first word, and then click or tap on the last word.
Loading One moment ...
Project items
Cite this article

Cited article

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited article

Banks' Real Estate Loans Reach P842.6B


Text size Smaller Larger
Search within

Search within this article

Look up

Look up a word

  • Dictionary
  • Thesaurus
Please submit a word or phrase above.
Print this page

Print this page

Why can't I print more than one page at a time?

While we understand printed pages are helpful to our users, this limitation is necessary to help protect our publishers' copyrighted material and prevent its unlawful distribution. We are sorry for any inconvenience.
Full screen

matching results for page

Cited passage

Citations are available only to our active members.
Sign up now to cite pages or passages in MLA, APA and Chicago citation styles.

Cited passage

Welcome to the new Questia Reader

The Questia Reader has been updated to provide you with an even better online reading experience.  It is now 100% Responsive, which means you can read our books and articles on any sized device you wish.  All of your favorite tools like notes, highlights, and citations are still here, but the way you select text has been updated to be easier to use, especially on touchscreen devices.  Here's how:

1. Click or tap the first word you want to select.
2. Click or tap the last word you want to select.

OK, got it!

Thanks for trying Questia!

Please continue trying out our research tools, but please note, full functionality is available only to our active members.

Your work will be lost once you leave this Web page.

For full access in an ad-free environment, sign up now for a FREE, 1-day trial.

Already a member? Log in now.

Are you sure you want to delete this highlight?