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Bad debt jumped 28% in 3 months
Wednesday, May 25, 2011
NON-PERFORMING loans (NPLs) of commercial banks jumped by $3.7 billion, of 27.5 per cent over the three months to March 31, 2011, according to the Bank of Jamaica (BOJ).
In its quarterly monetary policy report for January to March 2011, the BOJ stated that the ratio of past due loans (loans that have not been serviced for three months and over) to total loans was 6.9 per cent at the end of March 2011.
The latest monthly analysis of commercial banks' loans and advances showed that the combined loan portfolio of commercial banks totalled $248.9 billion, which means that NPLs (not including those held by merchant banks or mortgage lenders) totalled $17.2 billion at the end of March.
The latest figure reflects a continued decline in loan quality which has been fuelled in part by severe contraction in the economy since 2007.
NPLs only three months earlier totalled $13.48 billion, which represented 5.4 per cent of total loans at the end of December 2010.
"Construction and land development, agriculture and fishing and mining and quarrying were the sectors which largely accounted for the overall decline in loan quality," according to the BOJ.
Even then outstanding loans to those sectors, excluding mining, fell.
Agricultural loans and advances fell by $99.3 million, or two per cent — largely due to lower loans related to agricultural production — while construction and land development loans fell by $557.2 million, or three per cent, mainly due to higher net repayment of loans for construction.
Loans to mining totalled $5 million, or one per cent more at the end of March than they did at end-2010.
Overall, loans outstanding fell by $2.4 billion, or just under one per cent since the end of 2010, and the decline was primary as a result of lower loans to the business sector, as personal loans actually grew during the review quarter.
A $2 billion, or eight per cent reduction in loans outstanding to public bodies over the three-month period did contribute significantly to the reduction in loans outstanding, but the reduction in loans to the tourism sector was also nearly $2 billion, or six per cent.
Professional and other services also declined by $358 million, or two per cent.
Contrastingly, loans to the electricity, gas and water sector grew by 49 per cent, or $2 billion, while the manufacturing sector saw loans outstanding to it grow by $181.6 million, or two per cent, which reflected a $166 million, or 26 per cent increase in loans outstanding to chemical manufactures and a $363 million, or two per cent increase in loans to manufacturers not defined in the nine classifications for manufacturers listed by the BOJ.
Personal loans grew by $809 million, or one per cent over the three-month period.
Read more: http://www.jamaicaobserver.com/busin...#ixzz1NMFJMo8Y
Wednesday, May 25, 2011
NON-PERFORMING loans (NPLs) of commercial banks jumped by $3.7 billion, of 27.5 per cent over the three months to March 31, 2011, according to the Bank of Jamaica (BOJ).
In its quarterly monetary policy report for January to March 2011, the BOJ stated that the ratio of past due loans (loans that have not been serviced for three months and over) to total loans was 6.9 per cent at the end of March 2011.
The latest monthly analysis of commercial banks' loans and advances showed that the combined loan portfolio of commercial banks totalled $248.9 billion, which means that NPLs (not including those held by merchant banks or mortgage lenders) totalled $17.2 billion at the end of March.
The latest figure reflects a continued decline in loan quality which has been fuelled in part by severe contraction in the economy since 2007.
NPLs only three months earlier totalled $13.48 billion, which represented 5.4 per cent of total loans at the end of December 2010.
"Construction and land development, agriculture and fishing and mining and quarrying were the sectors which largely accounted for the overall decline in loan quality," according to the BOJ.
Even then outstanding loans to those sectors, excluding mining, fell.
Agricultural loans and advances fell by $99.3 million, or two per cent — largely due to lower loans related to agricultural production — while construction and land development loans fell by $557.2 million, or three per cent, mainly due to higher net repayment of loans for construction.
Loans to mining totalled $5 million, or one per cent more at the end of March than they did at end-2010.
Overall, loans outstanding fell by $2.4 billion, or just under one per cent since the end of 2010, and the decline was primary as a result of lower loans to the business sector, as personal loans actually grew during the review quarter.
A $2 billion, or eight per cent reduction in loans outstanding to public bodies over the three-month period did contribute significantly to the reduction in loans outstanding, but the reduction in loans to the tourism sector was also nearly $2 billion, or six per cent.
Professional and other services also declined by $358 million, or two per cent.
Contrastingly, loans to the electricity, gas and water sector grew by 49 per cent, or $2 billion, while the manufacturing sector saw loans outstanding to it grow by $181.6 million, or two per cent, which reflected a $166 million, or 26 per cent increase in loans outstanding to chemical manufactures and a $363 million, or two per cent increase in loans to manufacturers not defined in the nine classifications for manufacturers listed by the BOJ.
Personal loans grew by $809 million, or one per cent over the three-month period.
Read more: http://www.jamaicaobserver.com/busin...#ixzz1NMFJMo8Y