Central Bank deputy inspector: $3.4 mil. in deferred loans still in banking system

At the end of 2021 there were still roughly $3.4 million in deferred loans in the banking system, according to a top official at The Central Bank of The Bahamas (CBOB).

Deputy Inspector, Banking Supervision Karen Rolle said it’s significantly less than the more than $400 million in deferred loans at the height of the pandemic, when banks offered various programs for borrowers adversely impacted by the COVID-19 pandemic, which caused an economic downturn.

“Much of last year, banks continued a more narrow-scaled deferral program, which would have been for persons who continued to need some assistance and that would have been on a case-by-case basis. At the height of the pandemic, the deferral program had escalated to in excess of $400 million for the sector and what we see total at the end of 2021 is the program is in the region of some $3.4 million,” Rolle said during an appearance on Guardian Radio talk show Z Live.

“We are also seeing an uptick in terms of normal payments. That would mean that some of those furloughed employees who were clients of banks and had monthly obligations, they would have either returned to some form of employment or may have somehow improved the household income to meet some form of monthly obligation to the bank. So we have seen some improvement in terms of normal payments coming to the banks.”

Rolle said while the Central Bank is seeing banks moving towards a recovery phase, there has been an uptick in non-performing loans compared to the pre-COVID period.

“When we look at the level of non-performing loans pre-COVID to what we see today, we have seen a rise in non-performing loans,” she said.

“But we have also seen that banks entered the pandemic in a strong position in terms of their provisioning levels as well as their capital cover, so now that we are two years out we see that banks are still holding strong in terms of the average capital in the system, as well as the level of provisions that they have to support the level of non-performing loans in the system. We are not overly concerned that there are any near-term issues for the banking sector.”

At the height of the pandemic, consumer loans accounted for 45 percent of the deferred facilities. Residential mortgages accounted for 39 percent and commercial loans 15 percent.

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Paige McCartney

Paige joined The Nassau Guardian in 2010 as a television news reporter and anchor. She has covered countless political and social events that have impacted the lives of Bahamians and changed the trajectory of The Bahamas. Paige started working as a business reporter in August 2016. Education: Palm Beach Atlantic University in 2006 with a BA in Radio and Television News

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