Deposit-taking institutions growing despite pandemic says Byles

Governor of the Bank of Jamaica, Richard Byles, says deposit-taking institutions' (DTIs) balance sheets continue to indicate that they are growing, properly capitalised and in compliance with prudent liquidity standards.

Speaking at the bank's digital quarterly briefing on Friday, Byles said notwithstanding the “moderating” impact of the COVID-19 pandemic, loan growth for DTIs has remained “fairly resilient.”

“The stock of private sector loans and advances recorded year-on-year growth of 8.8 per cent as at March 2021, compared to 15.8 per cent a year earlier,” the BOJ governor said.

Byles said the quality of loans, while naturally showing some weakening, remains well below the BOJ's threshold for concern and is fully provided for by the system.

“You may also recall that banks have been affording their customers payment accommodation since the onset of the pandemic. A total of approximately $210 billion in payment accommodations had been provided over the period, to date. However, as at February 2021, the outstanding stock of moratoria was $65 billion, reflecting a significant decline since the start of the pandemic,” he indicated.

Byles said consequent to the decline in the stock of loans under moratorium, the improving economic environment, as well as the strong capacity of the financial system to absorb unexpected losses, the BOJ reached an agreement with finance holding companies and DTIs in April for the resumption of the distribution of dividends to large shareholders.

“However, given that significant uncertainties associated with the pandemic remain, the bank continues to urge financial institutions to remain prudent in their decision to declare and distribute dividends,” he emphasised.

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