11 deposit-taking institutions under BOJ’s supervision end of 2019

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Jamaica News: A total of 11 deposit taking institutions (DTIs), with assets valued $1,809.5 billion, were under the Bank of Jamaica’s (BOJ) supervision at the end of the 2019 calendar year.

This is according to the Planning Institute of Jamaica’s (PIOJ) Economic and Social Survey for the period.

The document indicates that the value of the assets at the institutions, comprising commercial and merchant banks and building societies, represents a nominal 10.6 per cent increase, relative to 2018.

The institutions’ total deposits increased by 9.4 per cent to $1,170.2 billion during the review period, while loans rose by 17.2 per cent to $932 billion. Their overall capital base went up by 8.1 per cent to $191.9 billion.

Meanwhile, the benchmark for credit quality non-performing loans (NPL) nominally increased by 4.1 per cent to $20.7 billion.

According to the document, NPL as a share of total loans was 2.2 per cent, an improvement of 0.3 percentage point relative to 2018.

It further indicated that the main driver in the deterioration of credit quality was commercial banks, as their NPL increased nominally by 7.6 per cent to $18.5 billion. Building societies, on the other hand, improved their credit quality.

In the meantime, the number of DTIs with Deposit Insurance Scheme (DIS) coverage, facilitated by the Jamaica Deposit Insurance Company (JDIC), remained at 11 members at the end of 2019.

These, according to the Survey, comprised eight commercial banks, two building societies, and one merchant bank.

The DIS provides full coverage for approximately 95 per cent of all insurable deposit accounts per institution. This is consistent with the international best practice range of 90 to 95 per cent.

The Deposit Insurance Fund (DIF) balance at the end of the review period was $23.4 billion, representing a 13.2 per cent increase relative to the end of 2018.

In the meantime, the sum covered, which now stands at $600,000, will be doubled to $1.2 million per depositor at each institution, by virtue of a Ministerial Order piloted by Minister of Finance and the Public Service, Dr. the Hon. Nigel Clarke, that was approved by both Houses of Parliament.

A statement from the Ministry on Thursday (August 20) indicated that the increase will take effect on August 31, 2020, after publication in the Gazette.

It further indicated that at the new threshold, approximately 97 per cent of all DTI accounts will be covered.

“The doubling in the maximum payout under the Deposit Insurance Act will help increase depositors’ confidence in deposit taking institutions, support market discipline, and, of course, ensure continued financial system stability,” Dr. Clarke indicated.


Source: JIS News

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