The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

The Arawak Port Development Company’s (APD) repayment of its $43 million Royal Bank of Canada (RBC) bridging loan resulted in total bank commercial loans declining by $40.6 million in August.

The development was revealed by the Central Bank of the Bahamas’ monthly report for August, which noted: “Amid subdued domestic demand conditions, the contraction in claims on the private sector accelerated by $29.4 million to $31.9 million, as the repayment of an outstanding bridging loan facility by a major port operator resulted in commercial and ‘other’ loans declining by $40.6 million, extending the year-earlier $8.2 million falloff.

“However, mortgages firmed modestly by $2.6 million, a turnaround from last year’s slight $0.4 million contraction, while gains in consumer credit steadied at $6.2 million.”

Meanwhile, Bahamian commercial banks saw their loan arrears worsen by $13.1 million or 1 per cent to $1.273 billion at end-August, a figure that represented 20.66 per cent - or more than one out of every $5 lent.

The increase is likely to have been aided by timing, the summer holidays meaning borrowers were away and missed due payments, or instead spent funds on vacations, as indicated by the fact the majority of the increase came in the 31-90 day category.

“Arrears in the short-term, 31-90 days, segment advanced by $11.4 million (2.9 per cent) to an estimated $407. million, boosting the corresponding ratio to total loans by 21 basis points to 6.61 per cent,” the Central Bank said.

“Similarly, the non-performing category - arrears in excess of 90 days and on which banks have ceased accruing interest - firmed marginally by $1.7 million (0.2 per cent) to $866.1 million, which was a steady 14.1 per cent of total loans.”

And the Central Bank added: “The growth in total loan arrears was largely attributed to an $11.8 million (1.8 per cent) rise in mortgage delinquencies to $676.9 milion, as both the short-term and non-accrual categories moved higher by $9.2 million (5.5 per cent) and $2.6 million (0.5 per cent), respectively.

“Further, the consumer segment rose slightly by $1.2 million (0.5 per cent) to $251 million, reflecting a $2.9 million (3.5 per cent) expansion in short-term delinquencies, which was offset by a $1.6 million (1 per cent) contraction in the non-accrual component.

“Commercial arrears were relatively unchanged at $345.2 million, as a $0.7 million (0.4 per cent) rise in non-accrual loans negated an identical reduction in the short-term category.”

On the tourism front, the 14 major New Providence hotels suffered a collective 8 per cent drop in total room revenues.

This stemmed from a 4.4 percentage point drop in the average occupancy rate to 71.3 per cent, more than offsetting the 1.3 per cent gain in average daily room rate (ADR) to $208.61.

“Over the eight-month period, revenues from the properties surveyed contracted by 7 per cent, owing to a broad-based decrease in the occupancy rate by 4.9 percentage points to 69.8 per cent, which outweighed the 3 per cent rise in the average daily room rate (ADR) to $245.76,” the Central Bank said.

The 2013-2014 fiscal year started more brightly for the Government, as the overall deficit narrowed by $9.4 million or 38.5 per cent to $15 million.

This came from a $5.1 million, or 4.8 per cent, expansion in total revenues to $112.4 million, while total spending dropped by $4.3 million to $127.4 million.