Consumer loans rise 14%

Consumer loans rise 14%

BORROWINGS TO finance big-ticket items such as homes and cars pushed up universal, commercial and thrift banks’ consumer loans by 14.4% last year compared to the year before.

Banks extended 24% more auto loans last year compared to 2009.
Data released by the Bangko Sentral ng Pilipinas yesterday showed consumer loans totaling P472.6 billion as of December, rising from P413.12 billion a year earlier.

The increase pushed the share of consumer loans to 16% from 15.2% of banks’ total loan portfolio.

The highest increases were noted in auto and residential real estate loans, as a strong economic rebound from the slump in 2009 spurred more consumer purchases.

Auto loans rose by 24.5% to P117.8 billion while residential real estate loans, which accounted for bulk of banks’ total consumer loans, followed with a 15.8% growth to P188.3 billion.

“Car sales last year reached record highs,” Chamber of Thrift Banks (CTB) President Patrick D. Cheng said via text.

Mr. Cheng, also the president and chief executive of HSBC Savings Bank (Philippines), Inc. also noted the bullishness of the real estate market “given the number of projects introduced” last year.

In a separate text message, CTB Executive Director Suzanne I. Felix said, “consumers’ continued confidence in the economy” helped sustain demand for auto and real estate loans.

The Chamber of Automotive Manufacturers of the Philippines, Inc.

(CAMPI) said a record 168,490 units were sold last year. Most property firms also reported record profits in 2010.

Other consumer loans -- used to buy household appliances or furniture, settle taxes or pay tuition -- jumped by 14.4% to P46.4 billion.

Credit card loans summed up to P120.30 billion, up by 4.2%.

Universal and commercial banks accounted for 60.2% of total consumer loans, and thrift banks, the remaining 39.8%.

Universal and commercial banks’ consumer loans grew by 14.2% to P284.5 billion from P249.2 billion previously.

Those extended by thrift banks increased by 14.8% to P188.1 billion from P163.91 billion.

Central bank data also showed banks’ loan quality improved. The ratio of non-performing consumer loans -- loans that are in default or close to being in default -- to total loans eased to 8.7% last year from 9% in 2009 due to loan growth outpacing the non-performing loan (NPL) rise.

Thrift banks’ 8.3% NPL ratio was better than universal and commercial banks’ 9%.

Meanwhile, the banking industry’s capacity to absorb loan defaults by consumers also improved with the ratio of loan loss reserves to NPL at a healthy 66.9% compard to 62.7% in 2009. -- Antonio Siegfrid O. Alegado

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