Bad Loans A Long Term Problem
Bahamian commercial banks expect that high liquidity and non-performing loan levels, the latter of which now exceeds 19 per cent, will be “maintained for another 12-18 months” at least unless something sparks a dramatic reduction in unemployment.
Total private sector loan delinquencies increased by a further $7.3 million or 0.6 per cent during April 2012 to close the month just shy of $1.2 billion, and top banking officials said the data – while showing the situation had stabilised – also indicated there was no prospect of rapid improvement.
The Central Bank of the Bahamas’ report on monthly economic and financial developments for April 2012 disclosed that 19.1 per cent, or almost $1 out of every $5 in credit extended by the Bahamian commercial banking sector, was in arrears at that month’s end.
During that month, non-performing loans – those more than 90 days past due, and upon which the commercial banks have stopped accruing interest, increased by $7.5 million or 0.9 per cent to hit $829 million. The latter figure is equivalent to 13.2 per cent of total bank loans, meaning that $1.3 out of every $10 lent as credit is now non-performing.banks, financial