Banks in The Bahamas are slowly but surely beginning to lend again, the Central Bank has confirmed, with credit to the private sector eking up by just around $700,000 — even as non-performing loans hike to $678 million.
It’s a turnaround, said the bank’s monthly report for January 2011, when compared to the $2 million contraction seen in 2010.
“Credit to the private sector rose marginally by $0.7 million,” said the report, “following a $3.5 million reduction last year, mainly reflecting a turnaround in commercial loans, to a gain of $19.6 million from a $2.0 million contraction in 2010.”
That growth, however, cannot be attributed to an uptick in home construction, with loans to mortgages slowing by $4.2 million to $7.1 million and a contraction in consumer credit more than doubling to $25.9 million. Mortgage delinquencies actually grew by around 3 percent or $19.2 million to $637.1 million during the month.
The banking sector is continuing to grapple with “deterioration in their loan portfolios,” said the bank.
“In January, total private sector loan arrears rose by $52.2 million (4.6 percent) to $1,198.9 million, following a $16.1 million (1.5 percent) advance in the same period of 2010, resulting in the ratio of arrears to total loans firming by 86 basis points to 19.2 percent,” the report stated.
