NASSAU, BAHAMAS — Bahamian commercial banks saw total private sector loan arrears reduced by just over $27 million last month, according to recent data released by the Central Bank.
The regulator in its Monthly Economic and Financial Developments report for July noted that during the month of July, commercial banks’ credit quality indicators further improved, reflective of decreases in both short and long-term arrears.
“Specifically, total private sector arrears were reduced by $27.2 million (3.9 percent) to $661.9 million, corresponding with a 48 basis point decrease in the associated ratio, to 12.2 percent of outstanding claims,” the Central Bank noted.
A breakdown of the average age of loan delinquency showed that, non-performing loans (NPLs) fell by $23.9 million (4.9 percent). Additionally, short-term arrears (31-90 days) reduced by $3.3 million (1.6 percent).
“Banks’ total provisions for loan losses declined by $18.3 million (3.9 percent) to $447.9 million, in July,” the report read.
“As a result, the ratio of total provisions to arrears was unchanged at 67.7%. However, the ratio of total provisions to NPLs firmed by 97 basis points to 96.5 percent. Further, the coverage ratio of specific provisions to non-accruals rose by 80 basis points to 76.5 percent. During the review month, banks wrote off an estimated $19.4 million in overdue loans and recovered approximately $4.5 million,” the regulator noted.
The Central Bank also noted that the growth in total Bahamian dollar deposits moderated to $64.3 million, down from $71.2 million in the corresponding period of 2021. “By component, the buildup in savings deposits accelerated to $49.3 million from $33.0 million a year earlier.
Further, demand balances rose by $26.4 million, extending last year’s accumulation of $24.4 million. Providing some offset, fixed deposits decreased by $11.4 million, a reversal from the $13.8 million gain in the previous year. Meanwhile, the contraction in residents’ foreign currency deposits slowed to $7.3 million from $41.3 million in 2021,” the Central Bank noted.
