Consumer credit quality indicators continued the positive improvement trends solidified at the end of 2022 into January, the most recent data from The Central Bank of The Bahamas (CBOB) reveals.

The Monthly Economic and Financial Developments report for January showed that private sector credit was up by $12.6 million in January, led by commercial credit which was up 23.4 million, while mortgages were down 3.9 million and consumer credit was down $6.9 million.

"Total Bahamian dollar credit contracted by $5.0 million during the review month, a reversal from a $74.9 million growth in 2022. Underpinning this development, net claims on the government declined by $17.5 million, a shift from an $81.9 million expansion a year earlier. In contrast, private sector credit grew by $12.6 million, a turnaround from a $5.9 million reduction in the preceding year," the CBOB states in the report.

"Specifically, the increase in commercial credit extended to $23.4 million from $9.0 million in the prior year. Further, the contraction in consumer credit slowed to $6.9 million from $23.4 million a year earlier. However, mortgages declined by $3.9 million, a reversal from the $8.5 million buildup in the preceding year. Meanwhile, the decrease in credit to the rest of the public sector tapered to $0.1 million from $1.1 million in the previous year."

There were also notable decreases in loan arrears and non-performing loans (NPLs) in the consumer, commercial and mortgage categories.

In total, private sector arrears fell 1.9 percent to $598.8 million.

Short-term arrears, those that are delinquent between 31-90 days, decreased 4.4 percent, accounting for 3.5 percent of total private sector loans.

Non-performing loans had a lesser reduction of 0.7 percent to $412.2 million.

"A disaggregation by loan type revealed that mortgage arrears reduced by $10.7 million (2.8 percent) to $370.8 million, as both the short- and long-term components fell by $6.5 million (5.2 percent) and by $4.2 million (1.7 percent), respectively," the Central Bank said.

"Likewise, consumer loan arrears declined by $0.9 million (0.5 percent) to $172.7 million, owing to a $3.2 million (5.2 percent) reduction in short-term arrears, which outstripped the $2.3 million (2.0 percent) growth in the non-accrual segment. In contrast, mortgage delinquencies rose by $0.2 million (0.4 percent) to $55.4 million, as the long-term arrears decreased by $0.8 million (1.7 percent), as opposed to the $1.0 million (10.1 percent) growth in the short-term component."

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