2019 Financial Stability Report

Overall, commercial banks continued to

points to 19.67 per cent. Similarly, the

hold a sizeable amount of liquid assets. The

sector posted ROA of 1.4 per cent at the end

ratio of liquid assets to total assets increased

of 2019 compared to 1.1 per cent at the end

by 3.8 percentage points to 40.2 per cent at

of 2019. This is the largest recorded ROA

the end of 2019 from 36.4 per cent at the

since 2009.

end of 2014. As it relates to capital

Exposures

adequacy in the sector, the CAR for 2019

Over the review period, commercial banks

was 21.2 per cent, which is an increase of

increased their total extension of credit to the

2.0 percentage points relative to the end of

economy. Total loans and advances grew by

2018 levels. Tier 1 capital to risk-weighted

1.4 per cent with total private sector credit

assets increased from 16.9 per cent at the

expanding by 0.5 per cent. The total level

end of 2018 to 17.5 per cent at the end of

of loans and advances by commercial banks

2019. The quality and level of regulatory

now stands at $12.8 billion. On average,

capital held by the commercial banks has

credit to the individual sub-sectors increased

increased consistently over the past five

by 3.7 per cent. Further, the household,

years.

government, tourism, and distributive trade

Commercial banks in the region maintained

sectors accounted for approximately

their profitability in 2019. Reflecting a

80.0 per cent of total outstanding loans

controlled decline in operating expenses, the

(Table 1) .

sector’s ROE increased by 3.4 percentage

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