ISLAMABAD: Fresh disbursements to the tune of Rs 1.61 billion were made to 766 borrowers during the quarter ending March 31, 2012, a State Bank of Pakistan (SBP) report said.
According to the Central Bank Report, Private Banks extended new disbursements with Rs 888 million followed by Islamic banks with Rs 407 million, public sector banks with Rs 15 million and foreign banks with Rs 6 million.
HBFCL's fresh disbursements for the quarter were reported to be Rs 296 million.
Among commercial banks, the number of new borrowers totaled 400, with private banks serving 290 borrowers and Islamic banks 98 customers.
HBFCL extended loans to 366 new borrowers during the reporting quarter.
Fresh disbursement for Islamic Banking Industry was Rs 717 million to 141 new borrowers during the quarter ending March 31, 2012.
This includes new disbursements of Rs 310 million to 43 customers by IBDs of conventional banks.
The outstanding for outright purchase stood at Rs 32.98 billion as on March 31, 2012; a 56% share in total outstanding of Rs 58.56 billion.
This is followed by the construction category where outstanding reported at quarter-end stood at Rs 18.99 billion and that of renovation stood at Rs 6.58 billion.
Active portfolio shows that private banks have taken a lead in financing for two sectors; outright purchase 57% and renovation 37% but HBFCL has taken lead in financing construction category i.e. 47%.
Analysis of Loan Variables adopted by Banks/DFIs & HBFCL loan variables across all banking sectors including weighted average interest rate, average maturity period, Loan-to-Value ratio (% financing by banks) and average loan size.
The overall weighted average interest rate was 15.8% at the end of the current quarter. Highest weighted average profit rate was reported by Foreign Banks 17%, followed by Islamic banks 16.2%, HBFCL 16%, Private Banks 15.3, while public sector banks average came to 14%.
Average maturity periods of outstanding loans as on March 31, 2012 came to 12.3 years.
HBFCL's average maturity period is reported to be 13 years, while that of Private Banks is 11.7 years.
Among commercial banks, Islamic Banks have extended housing loans for an average tenure of 10.4 years followed by Public Sector Banks with 10.2 years and Foreign Banks with 9.8 years.
The percentage of financing (Loan to Value ratio) extended by banks and DFIs decreased during last year from 46.6% to 39%.
Average LTVs of commercial banks have decreased from 48.5% to 38.1%. The average LTV for HBFCL has decreased from 44.7% to 39.8% over the year.
The Average loan size for disbursements made during the quarter ending March 31, 2012 is Rs. 3 million for all banks, except HBFCL.
The average loan size for HBFCL is reported to be Rs. 2.1 million for the reporting quarter.
Private Banks reported an average financing size of 4.2 million, Foreign Banks as well as Islamic Banks Rs. 3.7 million, Public sector banks 2.1 million.
The housing finance market is still inclined towards lending to high income groups.
The total outstanding housing finance as on March 31, 2012 of Micro Finance Banks (MFBs) stood at Rs. 174.4 millions, which was Rs. 174.4 millions at the end of December 31, 2011, remained almost unchanged over the last quarter.
Total number of outstanding borrowers increased from 2,634 to 2,883 since March 31, 2011; an increase of 9.45%.
Non-Performing Loans for MFBs have increased from Rs. 1.62 million (Dec-31, 2011) to Rs. 1.72 million (Mar-31, 2012); showing an increase of 6.17% over the last quarter.
NPLs of MFBs arising out of housing finance business are around 1.01% of their outstanding housing finance portfolio.
Outstanding finances of Commercial Banks, DFIs and Micro finance banks were equal to Rs. 75.57 Billion as of March 2012.
Amount of finance availed by employees of the Commercial banks and DFIs was Rs. 58.55 Billion as of March 2012.
Recognizing the importance of housing sector in boosting the domestic economy, following initiatives have been taken by SBP to further develop market based mechanisms and enhance the flow of credit to this priority sector.
As part of its earlier efforts, SBP had established a Housing Advisory Group (HAG) with an intention to conduct a thorough analysis of the existing regulatory and policy framework affecting housing finance.
The HAG made number of recommendations stressing on the need to enhance access of financial services for the development of housing sector.
These include reforms in legal and regulatory framework, establishment of secondary mortgage market, development of market intelligence, provision of affordable/low income housing finance products.
The SBP disseminated the recommendations to the concerned stakeholders and is currently coordinating with Provincial Governments, Association of Mortgage Bankers (AMB) and Association of Builders and Developers (ABAD) for implementation of some of the key recommendations.
The IH&SMEFD is continuously in consultation with Federal and Provincial governments by making presentation on HAG recommendations and holding meetings with them for the implementation of HAG recommendations. During the quarter from Jan - Mar 2012, IH&MSEFD made presentation on HAG recommendation to the Provincial Government of Baluchistan.
Regarding Automation of Housing Finance Quarterly Data, SBP report said that a Software has been developed to acquire online housing finance quarterly data from banks through Data Acquisition Portal (DAP4).
The development of this software has eliminated the need for submission of housing finance quarterly data in paper form and would also help in ensuring data accuracy. Quarterly housing finance data of quarter Jan- Mar 2012 has been submitted by banks through DAP 4.
In addition to initiatives taken to institutionalize housing finance, SBP realized that a simultaneous development of human capital will play a critical role in ensuring sustainability of housing finance.
A training programme on the topic "Issues in Housing Finance" was held in Quetta to create the awareness regarding the housing finance in the underdeveloped markets.
The IH&SMEFD officials attended the conference on "Growth with Stability in Affordable Housing Markets" jointly organized by National Housing Bank (NHB) of India and Asia Pacific Union for Housing Finance (APUHF) at New Delhi, India.
The prevailing scenarios of underdeveloped countries of Asia Pacific were discussed in detail along with the way forward to flourish the housing finance.
Pakistan's central bank aims to spur lending to small companies, farming and housing in the next three years to boost growth in an economy where government borrowing has curbed credit and kept interest rates elevated.
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