National Commercial Bank Jamaica (NCB) has so far failed to tame its non-performing loan (NPL) portfolio, which now stands at J$8.8 billion.
But the bank says it continues to maintain tight control on delinquency. On Friday it issued a public invitation to its borrowing customers, to come in and talk about refinancing their debt.
The offer is open for three months.
The campaign includes debt restructuring and debt consolidation. The latter allows a customer with multiple loans and/or credit card and other debt to combine them into one loan "with one affordable monthly payment", the bank said.
NCB is pitching the campaign as a chance for the indebted to overcome financial challenges brought on by the poor economic climate.
"We have seen this demonstrated in the inability of some to meet their debt obligations in the usual manner," said Audrey Tugwell Henry, senior general manager in charge of NCB's retail banking division.
Tame loan defaults
NCB's provisions for loan losses topped half-billion dollars in December; in the previous quarter ending September 2012, provisions amounted to J$662 million amid continuing efforts to tame loan defaults.
"Our activities to ensure that our delinquency management process remains robust and proactive is ongoing, and we continue to make the necessary adjustments to respond to change in the environment," said NCB in its December first-quarter financial performance highlight to shareholders.
The bank's NPLs have grown by 19 per cent in a year, from J$7.4 billion to J$8.8 billion at December 2012.
NCB is the largest player in the market for loans with a market share of 38.1 per cent according to data from the Bank of Jamaica.
At the end of the December quarter, the bank's loans and advances totalled J$116.6 billion, reflecting a growth of 15 per cent when compared to the J$101.2 billion recorded the prior year. The non-performing debt represents 7.2 per cent of gross loans.
The bank holds J$177b in customer deposits.
The new 'We've Got Your Back' debt-refinancing initiative begins today, Sunday, February 24, and runs until May 31. Customers can either text the word 'solution' to 772-6062 or send an email to firstname.lastname@example.org to signal their participation.
We are treating each case individually. It is a delicate matter and we are open to discussing reasonable proposals to meet the overall objective of restoring financial wellness to our customers," said Tugwell.
"We believe in our customers' ability to weather this rough patch and we will help them to get back on track," she said in a company statement.
NCB has an asset base of $379 billion and capital base of J$67 billion. For the bank's December quarter, profits were flat at J$2.8 billion.