The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

TOTAL private sector loan arrears decreased by 2.3 per cent in February according to the Central Bank, with short-term (31-90 day) loan delinquencies falling by 8.7 per cent to $315.7 million.

According to the Central Bank’s Monthly Economic & Financial Developments for February 2013, commercial delinquencies rose by 7.6 per cent or $20.4 million. “Total private sector loan arrears contracted by $27.6 million (2.3 per cent) to $1,197.7 billion, which corresponded to 19.36 per cent of total loans — for a 37 basis point reduction in the ratio. A breakdown of the average age of delinquencies showed that the decline was concentrated in the short-term (31-90 day) segment, which fell by $29.9 million (8.6 per cent) to $315.7 million, and narrowed by 46 basis points to 5.10 per cent of total loans,” the Central Bank said.

According to the Central Bank, non-performing loan delinquencies exceeding 90 days rose however by $2.4 million (0.3 per cent) to $882.1 million, with the attendant arrears to loan ratio firming by 9 basis points to 14.26 per cent. “An analysis by loan categories revealed that the improvement in credit quality during the month was led by a $38.2 million (5.6 per cent) contraction in mortgages, split between decreases in the short-term segment of $37.8 million (20.3per cent) and in the non-performing component of $0.4 million (0.1 per cent). Similarly, consumer loan arrears narrowed by $9.8 million (3.7per cent) to $256.8 million, as 31-90 day delinquencies were reduced by $7.8 million (8.7per cent), while non-accrual loans waned by $1.9 million (1.1 per cent). Conversely, commercial delinquencies rose by $20.4 million (7.6 per cent) to $290.2 million, as both the short-term and non-performing components grew by $15.6 million (22.6 per cent) and $4.8 million (2.4per cent), respectively. Amid the decline in total arrears, banks reduced their total provisions for loan losses by a marginal $0.2 million (0.1per cent) to $392.6 million. As the decrease in total delinquencies outpaced the reduction in provisions, the corresponding ratio of provisions to arrears firmed by 72 basis points to 32.78 per cent, while the attendant non-performing ratio softened by 15 basis points to 44.51 per cent,” the Central Bank said. Banks wrote off an estimated $6.4 million in overdue loans in February and had loan recoveries of approximately $2 million.

The Central Bank also noted that data from a sample of large hotels in New Providence and Paradise Island showed total room revenues lower by 6.3 per cent in February, “as a decrease in room stock at one property combined with a one day reduction in the number of available room nights relative to last year, contributed to a 4.1 percentage point contraction in the occupancy rate to 65.9 per cent. In contrast, the average daily room rate firmed by 5.5 per cent, reflecting increases in over half of the hotel properties. For the performance over the first two months of the year, hotel receipts decreased by 4.1per cent, as the contraction in the average occupancy rate, by 2.8 percentage points to 61.7 per cent, eclipsed the 4.5 per cent rise in the average daily room rate to $246.10”.