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Private sector credit up $6 million

Private sector credit increased by $6 million during the month of April, following a double digit falloff during the same period a year ago, The Central Bank of The Bahamas revealed yesterday.

While mortgages and commercial credit were up, there was a slight decline in consumer credit, the bank said.

“Total Bahamian dollar credit grew by $67.6 million in April, a reversal from a $108.5 million contraction in the prior year. Underlying this outturn, net claims on the government rose by $63 million, a shift from an $80.3 million reduction a year earlier. Likewise, credit to the private sector increased by $6 million, a reversal from a $27.2 million decrease in the preceding year,” the Central Bank’s Monthly Economic and Financial Developments report for April revealed.

“In particular, commercial credit recovered by $6.0 million, after a $17.9 million falloff in 2022, while mortgages increased incrementally, again, by $0.5 million. Meanwhile, the decline in consumer credit moderated to $0.5 million from $9.4 million in the previous year. Conversely, credit to public corporations reduced by $1.4 million, extending the $0.4 million downturn in 2022.”

Meantime, credit quality indicators continued to improve during the month, with a reduction in delinquencies across the board.

“Total private sector arrears decreased by $2.6 million (0.4 percent) to $586.4 million, with the accompanying ratio narrowing by six basis points to 10.9 percent of total private 

sector loans. A disaggregation by average age of delinquency revealed that NPLs [non-performing loans] reduced by $1.5 million (0.4 percent), to $401.3 million, corresponding with a three basis points decline in the attendant ratio to 7.5 percent – with decreases in the NPL rates for mortgages by five basis points to 9.8 percent; commercial loans, by three basis points to 4.6 percent; and consumer loans, by two basis points to 5.8 percent. Similarly, short-term arrears (31-90 days) fell by $1.1 million (0.6 percent) to $185.1 million, lowering the associated ratio by two basis points to 3.4 percent,” the CBOB said.

“An analysis by loan type showed that the falloff in total delinquencies was led by consumer credit, which moved lower by $1.1 million (0.7 percent) to $165.9 million, as both the short- and long-term segments decreased by $0.9 million (1.7 percent) and by $0.2 million (0.2 percent), respectively. Likewise, mortgage arrears declined by $0.8 million (0.2 percent) to $364.1 million, owing to a $1 million (0.4 percent) falloff in non-performing loans, versus a $0.1 million (0.1 percent) uptick in the short-term component. Further, commercial delinquencies reduced by $0.6 million (one percent) to $56.4 million, divided equally between the falloff in short-term arrears and the non-accruals segment.”