NASSAU, BAHAMAS — Banks wrote off $10 million in bad loans during the month of May according to the Central Bank, which noted that during that time non-performing loans (NPLs) fell by $14.9 million.
The Central Bank in its monthly economic and financial developments for May 2020 noted that during the month of May total private sector arrears decreased by $37.7 million (5.4 percent) to $659.0 million.
“ A breakdown by length of delinquency, revealed that short-term arrears (31-90 days) declined by $22.8 million (9.7 percent) to $212.8 million, with the accompanying ratio reducing by 39 basis points to 3.8 percent. Similarly, non-performing loans (NPLs) fell by $14.9 million (3.2 percent) to $446.2 million, corresponding with a 24 basis point narrowing in the relevant ratio to 7.9 percent,” the Central Bank reported.
According to the regulator, an analysis by loan category showed that the fall-off in arrears was led by consumer delinquencies, which decreased by $24.1 million (11.7 percent) to $182.5 million, due to respective reductions of $20.3 million (25.9 percent)and $3.8 million (three percent) in both the short and long-term segments.
“Similarly, the commercial loan component fell by $9.4 million (12.5 percent) to $66.0 million, as non-accrual loans reduced by $14.2 million (24.3 percent), outstripping the $4.8 million (28.5 percent)rise in short-term arrears.Further, mortgage delinquencies contracted by $4.1 million (1 percent) to $410.5 million, on account of a $7.3million (5.2 percent) decline in short-term arrears, which outweighed the $3.2 million (1.2 percent) growth in the long-term portion.”
The regulator noted that during the month, banks also wrote off approximately $10.5 million in bad loans and recovered an estimated $1.0 million.
Due to the COVID-19 pandemic, commercial banks implemented loan payment deferral schemes ranging between 3 -6 months to assist customers whose debt servicing capacity had been adversely impacted. As at April 2020, the total loans under COVID-19 impacted deferral stood at $1.9 billion, representing 32.8 per cent of total private sector credit.
The regulator noted that of this amount, consumer loans accounted for $832.4 million (45 percent) of the deferred facilities; residential mortgages, $725.0 million (39.2 percent);and commercial loans, $292.3 million (15.8 percent).
