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Banking system passes $1T mark

Published:Friday | June 13, 2014 | 12:00 AM

Avia Collinder, Business Reporter

Newly released quarterly data show deposit-taking institutions or DTIs, topping $1 trillion in assets for the first time at the end of March.

Among the Bank of Jamaica-supervised institutions, liquidity was reduced and deposits down for all sectors for the quarter. However, they have all shored up their capital base and remain sufficiently capitalised.

Deposit-takers include commercial banks, merchant banks, and mortgage banks or building societies.

The three groups, now comprising 12 players, grew assets by 12 per cent, from $911 billion to $1.02 trillion in one year. A year ago, March, there were 13 players but one building society has since given up its licence.

The seven commercial banks continue to dominate with assets now topping $774 billion, up 12 per cent year-on-year.

The two merchant banks improved assets by 29 per cent to $28.9 billion; while the remaining three building societies grew by nine per cent to $216 billion during the March quarter.

Their combined deposit bases have expanded to $645 billion.

While the building societies had the lowest rate of asset growth, they had the best pretax profit margins at 25 per cent for the quarter; the commercial banks followed at 19 per cent and merchants banks with just under 10 per cent.

Deposit growth slowed for all segments, averaging 5.9 per cent improvement for the quarter, compared to 12.7 per cent for the similar period last year.

Similarly, loan growth slowed from 14 per cent to 9.8 per cent, largely due to an eight-point drop within the building societies segment.

On the plus side, the DTIs shed more non-performing loans (NPLs), down by more than $3 billion across three banking categories, from $26 billion to less than $23 billion in a year. The fall has been more dramatic relative to March 2012 when NPLs were close to $10 billion higher at $32 billion.

NPLs to total loans are now at 4.9 per cent.