Non-performing loans up 11.7 million in November

Wed, Dec 28th 2016, 11:11 AM

Non-performing loans increased by $11.7 million in November, according to The Central Bank of The Bahamas' (CBOB) Monthly Economic and Financial Developments (MEFD) November 2016 report that was published recently.
However, banks' credit quality indicators "continued to improve", as private sector arrears contracted by $18.5 million (1.7 percent) to slightly over $1 billion in November.
In addition, banks' total write-offs amounted to $4.6 million and loan recoveries totaled $1.6 million in November.
The report provided a breakdown by the average age of delinquencies. Short-term arrears (31-90 days) fell significantly by $30.2 million (9.6 percent) to $284.9 million. "In contrast, the non-performing segment increased by $11.7 million, resulting in the attendant ratio firming by 16 basis points to 13.5 percent of total private sector loans," the report states.
The regulator pointed out that the largest contraction was recorded in consumer arrears, which fell by $16.4 million (5.9 percent) to $259.7 million, as an $18.8 million (18.9 percent) reduction in the short-term segment overshadowed a $2.5 million (1.4 percent) uptick in non-accrual loans.
Commercial and mortgage delinquencies also experienced declines by $1.1 million each to $233.7 million and $596.4 million respectively, "reflecting declines in the 31-90 day components by $5.8 million (13.3 percent and $5.6 million (3.3 percent)". This decline, according to the report, "overshadowed increases in non-performing loans by $4.7 million (2.5 percent) and $4.5 million (1.1 percent), respectively."
"Against this backdrop, banks decreased their total loan provisions marginally by $1.4 million (0.3 percent) to $514.7 million.
"As a consequence, the ratio of total provisions to non-performing loans fell by 1.1 percentage points to 64.0 percent; however, the significant decrease in arrears led to the corresponding ratio to provisions firming by 66 basis points to 47.2 percent," the report states.

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