Consumer loans up 3.36% in Q1 – BSP

The commercial and thrift banks’ consumer loans went up by 3.36 percent year-on-year at the end of March to 932.78 billion as real estate and automotive credit borrowers continue to take the bait offered by banks’ loan promos during the period.

The Bangko Sentral ng Pilipinas (BSP) in a statement said consumer loans have been growing steadily and continuously on a quarter-on-quarter basis since 2008.

The big banks’ consumer loans totaled 589.59 billion, up three percent year-on-year, while the thrift banks accounted for 343.18 billion, up 3.88 percent from the same time last year.

The BSP noted that in the first three months of the year, residential real estate loans and automotive loans continue to outpace the growth of other loan products, such as credit card, salary and other consumer loans.

“While consumer lending expanded, (the) universal/commercial and thrift banks kept the level of their non-performing consumer loans manageable,” said the BSP.

The industry’s non-performing or soured consumer loans accounted for 4.9 percent of total consumer loan portfolio, slightly higher from the previous quarter’s 4.8 percent. A nonperforming loan is a loan that has not been paid for more than 30 days from due date. If it remains unpaid for 90 days it is considered a loan in default.

Based on BSP data, of the 932.78billion consumer loans, 46 billion are non-performing loans which was higher than the same period last year of 38.41 billion.

Loan loss reserves amounted to 28.64 billion from 26.85 billion in 2014. Despite a small rise in soured loans, the central bank said the banks have loan loss provisions of 62.2 percent of their non-performing consumer loans as “cushion for potential credit losses.”

The Philippines’ consumer credit in terms of access is one of the lowest in the region, which is only at 16.7 percent credit exposure.

“The banks’ consumer credit exposure of 16.7 percent of total loan portfolio remained lower than their ASEAN 5 peers,” said the BSP.

At end-March, the consumer loan exposure in Malaysia was at 53.8 percent followed by Indonesia at 28.6 percent, Thailand at 27.7 percent, and Singapore at 25.8 percent.