2018 Financial Stability Report

Figure 14: Bank Stability Index (BSI) ECCU

(Figure 16). The evolution of credit growth over the past ten years (2009 -2018), is shown in figure 15. When credit portfolios are adjusted for non-performing loans, the total value in 2018 increased by EC$346.5m to EC$11.1b compared with the level at the end of December 2017. This point of inflection reflected the gradual recovery of bank credit, which will ultimately benefit the overall economy. Figure 15: Banking Sector Loans and Advances

0.00 2.00 4.00

0.0 2.0

Increasing values point to more stability

(8.0) (6.0) (4.0) (2.0)

(8.00) (6.00) (4.00) (2.00)

(12.0) (10.0)

(12.00) (10.00)

Jun-14 Capital Adequacy Mar-15

Jun-17

Sep-13

Sep-16

Dec-15

Dec-18

Mar-18 Asset quality

Profitability

Liquidity

BSI (RHS)

Source: Eastern Caribbean Central Bank (ECCB)

Overall, the ECCU banking sector expanded in 2018. Total banking sector assets increased by 3.9 per cent (EC$1.1b) to EC$30.8b. On the liabilities side, deposits in the banking system grew by 2.1 per cent in 2018 to EC$21.3b. Both outcomes surpassed the performance observed in 2017, when annual growth was 3.0 per cent and 4.9 per cent for total deposits and total assets, respectively. Growth in total assets were mostly a function of the commercial banks’ investment activities along with contributions from growing loan portfolios. At the end of 2018, commercial banks’ outstanding loan balances increased by EC$291.4m (2.4 per cent) to EC$12.5b

Quarterly

Percent change, annual rate

10.00 12.00

0.00 2.00 4.00 6.00 8.00

(8.00) (6.00) (4.00) (2.00)

Jun-11

Jun-14

Jun-17

Sep-10

Sep-13

Sep-16

Dec-09

Dec-12

Dec-15

Dec-18

Mar-09

Mar-12

Mar-15

Mar-18

Notes: Shaded area represents the 19 consecutive quarters in negative territory. Source: Eastern Caribbean Central Bank (ECCB)

Financial Stability Report 2018

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