Bank loans

Banks' Exposure to Local Property Sector Declines in Q2 Amid High-Interest Rate Environment

Strategic Insights

Oct 8, 2024 — 1 min read

Banks in the Philippines reduced their exposure to the local property sector in the second quarter, but the proportion of soured home loans remained elevated. The Bangko Sentral ng Pilipinas reported that real estate loans accounted for 19.92% of the total loan portfolio as of end-June, a slight decrease from the 20.31% ratio in the first quarter. Broken down, home loans jumped by 8.9% to P1 trillion, while credit used to buy commercial spaces grew by 6.2% to P1.7 trillion.

Key Takeaways:

Real estate loans accounted for 19.92% of the total loan portfolio as of end-June, a slight decrease from the 20.31% ratio in the first quarter.
Home loans increased by 8.9% to P1 trillion, while commercial space loans grew by 6.2% to P1.7 trillion.
Total loans and investments extended to the real estate industry reached P3.16 trillion in the second quarter, up by 3.61% year-on-year.
Banks reduced their exposure to the real estate sector as they dealt with defaulting home borrowers due to high interest rates and inflation.
Residential real estate loans that are 90 days late on a payment and at risk of default reached P70.5 billion, accounting for 6.76% of total home lending portfolio in the second quarter.
2.32% of commercial real estate loan book had turned sour by the end of June, easing from the 2.33% ratio posted as of last March.

Statistics:

Real estate loans accounted for 19.92% of the total loan portfolio as of end-June.
Home loans increased by 8.9% to P1 trillion and commercial space loans grew by 6.2% to P1.7 trillion.
Total loans and investments extended to the real estate industry reached P3.16 trillion in the second quarter, up by 3.61% year-on-year.
Residential real estate loans that are 90 days late on a payment and at risk of default reached P70.5 billion, accounting for 6.76% of total home lending portfolio in the second quarter.
2.32% of commercial real estate loan book had turned sour by the end of June.

Sources:

Data from the Bangko Sentral ng Pilipinas (BSP)

The End of American Hypergrowth

For two centuries, the US economy grew by adding workers. That's over.

Healthcare's $5.3 Trillion Drag

How Medical Spending Became America's Biggest Productivity Tax

Breakthrough in Nanotechnology: Electromagnetic Shock Treatment Shows Promise

Researchers at the Wuhan University of Technology in China have made significant progress in the field of nanotechnology, specifically in the area of nanoindentation. A novel electromagnetic shock treatment (EST) method has been developed to enhance the microscale mechanical properties of a titanium alloy, with promising results obtained through array-based

Gut Microbiota Plays Crucial Role in Immunotherapy Success for Colon Cancer Patients

Research investigators at the Zhengzhou Central Hospital Affiliated to Zhengzhou University have made groundbreaking discoveries on the role of gut microbiota in determining the efficacy of immunotherapy for colon cancer patients. The study, which was recently published in Biochimica et Biophysica Acta, reveals that specific bacterial species and microbial metabolites

Read more

The End of American Hypergrowth

Healthcare's $5.3 Trillion Drag

Breakthrough in Nanotechnology: Electromagnetic Shock Treatment Shows Promise

Gut Microbiota Plays Crucial Role in Immunotherapy Success for Colon Cancer Patients