Banking on growth in 2016
With local banks awash with cash and eager to lend, banking executives are optimistic that 2016 will be a good year.
In fact, they are already reporting positive trends, with fewer delinquent and non-performing loans.
President of the Barbados Bankers’ Association Glyne Harrison has admitted that demand for credit in 2015 had not reached pre-recession levels. However, he anticipated an improvement next year.
“We are still very liquid as a community. Customers are still being cautious in exercising their financial options,” Harrison told Barbados TODAY as he reflected on the year 2015.
However, he said “some shoots of green” were beginning to appear and he expected the recovery to accelerate come 2016.
“There is also sign of recovery in areas such as provisions and write offs, and even though again we are nowhere near where we were in the beginning, you can definitely see that some of these indicators are trending in the right direction. So things like delinquencies and non-performing loans, those are going in the right direction, which shows that there is recovery in the economy as well.
“Because of the level of liquidity, the loan to deposit ratio is not as strong as it used to be by a few basic points. But again that is starting to trend in the right direction as well,” Harrison insisted.
The banker said he anticipated “a trickle down effect” from high profile tourism projects such as the Sam Lord’s Castle and Hyatt Hotel that are scheduled to get underway in the New Year.
“Once those come into being you will start to see that there is a trickle down effect because you start to have more employment. More employment means that there is money in the economy; more money in the economy means that persons now start to look at their personal situation and determine what they need to do. Often that is putting down something either for a child or looking at a home repair or in the case of people who are renting, looking for mortgages.
“Overall 2016 . . . I expect that we will not see major growth in the sense of huge percentage points change, but we definitely should be seeing that the upward trend is continuing. The investment that we have made within the last year and the previous year we should continue to build on those and continue to look out for customers,” Harrison said.