The banking sector saw total outlays increase 3.7 percent to $574.6 million in 2010, with total salary payments up 2.5 percent for the year, an indicator of the input the sector is making to the Bahamian economy.

The industry, which accounts for an estimated 15 to 20 percent of gross domestic product, was beset with challenges in 2010 on both the domestic and international sides, according to The Central Bank of The Bahamas (CBB) in its recently release Quarterly Economic Review for March 2011.  Despite them, however, 2010 saw increased outlays for salaries, training and other administrative costs, though government revenue from the sector contracted.

"Operational costs, which made up the bulk (95.7 percent) of total outlays, grew by 3.1 percent to $549.8 million, a turnaround from the previous year's 0.8 percent decline and a 13.5 percent increase over the average value of the previous five years," read the report in an article, "Gross economic contribution of the financial sector in The Bahamas".  Salary payments--inclusive of bonuses--at 52.3% of total operational spending, rose by 2.5% to $287.7 million, to recover from the 3.3% decline of 2009.
A 3.6 percent increase in average base salaries for the sector outpaced the average rise in consumer price inflation of 1.34 percent.  Average bonuses, however, contracted 4.7 percent as profitability levels were generally reduced, according to the report.
Administrative costs, a category that includes rental expenses, public utilities and other associated costs, increased by 4.5 percent to $234.6 million.  They had increased by 0.1 percent in 2009.

Government revenue from the sector went in the opposite direction, however.  "In contrast, government-related payments declined by 2.9% ($0.7 million) to $25.3 million, following a 32.5% increase in the preceding year when bank license fees were raised," read the report.  Capital expenditure was also up for the year, seeing an 18.4 percent increase to $24.9 million, following a 36.7 percent reduction the previous year.  Staff training also saw an increase, up $0.3 million to $2.2 million.  Training outlays had been as high as 3.2 million in 2008.

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