Consumer loans increase by 23%

BusinessWorld
December 27, 2007 Thursday
BYLINE: Ma. Eloisa I. Calderon

SECTION: Pg. S2/2

Banks' consumer loan portfolios went up by more than 22% in September from a year ago, as the low interest rate environment encouraged spending.

Data from the Bangko Sentral ng Pilipinas (BSP) showed credit card receivables of the banking industry stood at P106 billion, up by 22.6% from P86.5 billion a year ago.

Automobile loans also went up by 22.2% to 83 billion from a year ago.

The September consumer loan data reflected increasing domestic demand for credit in the wake of the central bank's easing of borrowing costs.

The BSP's key policy rate, which governs bank lending charges, now stands at 5.25% after four rate cuts since July.

Purchases using credit cards accounted for 5.5% of the banking industry's P1.9-trillion loan book, a significant improvement from last year's 4.7%.

Commercial banks took up the biggest chunk of total credit card receivables at 79.9%, while the rest were held by credit card firms and thrift banks.

Delinquency ratio, which is the proportion of past due credit card receivables to the total, stood at 14.3%, better than last year's 19.3%. These past due receivables worth P15.2 billion accounted for 10.4% of the industry's P145 billion worth of bad loans.

Auto loans, meanwhile, made up for 4.3% of the banking industry's total loan portfolio.

Thrift banks cornered a 63.9% share of these auto loans, while commercial banks got the remaining 36.1%.

Past due auto loans, as a ratio of the total auto loan book, settled at 5.1%, higher than last year's 5%.

These accounted for 2.9% of the industry's total nonperforming loans, or those that remain unpaid 90 days after they fall due.