NASSAU, BAHAMAS — Bahamian commercial banks saw total private sector arrears decline by just over $57 million or 7.3 percent last month, according to the Central Bank.
The regulator, in its Monthly Economic and Financial Developments Report for February, noted that bank’s credit quality indicators for the month were “slightly improved” amid reductions in both short-term delinquencies and non-performing loans (NPL).
“Specifically, total private sector arrears declined by $57.3 million (7.3 percent) to $727.8 million, resulting in a 1.1 percentage point rise in the accompanying rate, to 13 percent,” the Central Bank reported.
“An analysis by average age of delinquency showed that short-term arrears contracted by $53.6 million (18.1 percent) to $242.2 million, corresponding with a 97 basis point falloff in the relevant ratio to 4.3 percent.”
The regulator further noted that NPLs moved lower by $3.7 million (0.8 percent) to $485.7 million, as the non-accruals rate softened by nine basis points to 8.7 percent.
“Disaggregated by loan type, mortgage delinquencies decreased by $45.7 million (9.3 percent) to $444.8 million, as the $47.3 million (24.5 percent) decline in the short-term category, outstripped the $1.7 million (0.6 percent) uptick in non-accrual loans,” the Central Bank noted.
“Similarly, consumer arrears fell by $16.2 million (6.9 percent) to $216.7 million, underpinned by respective reductions of $10.7 million (13.2 percent) and $5.5 million (3.6 percent) in the short and long-term components.”
In contrast, commercial delinquencies rose by $4.5 million (7.3 percent) to $66.3 million, as short-term arrears grew by $4.4 million (20.6 percent) and the long-term segment edged up by $0.1 million (0.3 percent).
“Notwithstanding, banks increased their total provisions for loan losses by $11.5 million (two percent) to $580.2 million, owing to the uncertainty surrounding the severity of the impact of the pandemic,” the Central Bank noted
“During the month, banks also wrote off approximately $7.2 million in claims, and recovered an estimated $2.1 million.”
The regulator also noted that the country’s external reserves reduced by just under $63 million to $2.2 billion in February.
“During February, external reserves reduced by $62.8 million to $2,257.1 million, a reversal from the $106.0 million buildup in the prior year,” the Central Bank reported.
“This was reflective of the ongoing travel restrictions related to the COVID-19 pandemic, combined with the demand for foreign currency by the public sector and the commercial banks.
“In particular, the Central Bank’s foreign currency transactions with the public sector reversed to a net sale of $48.8 million, from a net purchase of $9.1 million in 2020.
“Similarly, the bank’s transactions with commercial banks switched to a net sale of $15.1 million, from a net purchase of $91.2 million in the preceding year, as commercial banks reported a net sale of $16.3 million to their customers, following a net intake of $80.3 million a year earlier.”