The Tribune

By NEIL HARTNELL

Tribune Business Editor

nhartnell@tribunemedia.net

Delinquent bank loans pushed beyond the $1 billion mark in May, with net passenger departures through the Bahamas’ major airport down 3.4 per cent for the first five months of 2017.

The Central Bank said data produced by the Nassau Airport Development Company (NAD), which excludes domestic departures, suggested that the tourism industry “continued to face challenges in 2017” when it came to stopover arrivals figures.

The regulator’s report on May’s economic developments said this was partly due to the Grand Lucayan’s closure in Grand Bahama, and the loss of significant room inventory, which had yet to be offset by Baha Mar’s partial opening.

Yet it also acknowledged the flat arrivals data from the Lynden Pindling International Airport (LPIA), which “showed a 2.4 per cent reduction in visitor traffic - net of domestic departures - during May, in contrast to the 3.3 per cent gain recorded during the same period last year.

“Specifically, departures to the United States fell by 2.6 per cent, a reversal from the 4.3 per cent increase in 2016, while the non-US international component contracted by 1 per cent following a 2.1 per cent reduction recorded last year,” the Central Bank added.

“Data for the first five months of the year exhibited a similar trend. Net passenger departures through NAD fell by 3.4 per cent, a turnaround from the 2.5 per cent hike recorded in the comparable period of 2016, as travellers to the United States declined by 4.1 per cent, a reversal from growth of similar magnitude in the prior year.

“In a mild offset, non-US international passengers rose marginally, by 0.8 per cent, relative to a 6.6 per cent reduction in the previous period.”

May also saw a reversal of previous trends that reduced delinquent private sector loans below the $1 billion mark, with the Central Bank also seeming to become slightly more bearish in forecasting that the Bahamian economy “will remain only mildly expansionary” through 2017.

“Private sector loan arrears expanded by $29.1 million (2.9 per cent) to $1.034 billion, and the corresponding ratio of arrears to total loans firmed by 55 basis points to 17.5 per cent, as short-term delinquencies (31-90 days) rose by $30.4 million(11 per cent) to $306.5 million, resulting in a 53 basis point increase in the associated arrears rate to 5.2 per cent,” the Central Bank said.

“Non-performing loans (NPLs) decreased by $1.3 million (0.2 per cent) to $727.1 million. However, the non-accrual rate edged-up, by two basis points, to 12.3 per cent, as the reduction in the total private sector loan portfolio carried more weight in the overall trends.”

Loan delinquencies increased across all categories, with the Central Bank adding: “Delinquent commercial facilities advanced by $11.9 million (5.2 per cent) to $241.6 million, as the $12.8 million (34.5 per cent) increase in the short-term segment negated the $0.9 million (0.5 per cent) reduction in the non-performing component.

“Similarly, mortgage delinquencies firmed by $10.5 million (2.1 per cent) to $520.6 million, reflecting a $12.1 million (8.2 per cent) increase in the 31-90 day category, as opposed to the $1.6 million (0.4 per cent) decrease in the non-accrual portion.

“Meanwhile, consumer loan arrears rose by $6.7 million (2.5 per cent) to $271.4 million, owing to increases in both the short-term and non-accrual segments by $5.5 million (6.1 per cent) and $1.1 million (0.7 per cent), respectively.”

The Central Bank added that the delinquency rates for mortgages and commercial loans stood at 19.3 per cent and 29.1 per cent, which were down year-over-year, while those for consumer loans were at 11.4 per cent.