Financial Institutions Resilient in The Face of COVID-19

• The balance sheets of deposit-taking institutions (DTIs) indicate that they continue to grow, are properly capitalized, and comply with prudential liquidity standards according to the Bank of Jamaica (BOJ).
• Governor Richard Byles noted that notwithstanding the moderating impact of the COVID-19 pandemic, loan growth for DTIs has remained fairly resilient, despite a slowdown in the pace of growth. The stock of private-sector loans and advances grew 8.8% year on year in March, relative to the 15.8% for March 2020. He added that although loan quality for the system is naturally showing some weakening, it remains well below the bank’s threshold for concern and is fully provided for by the system.
• Financial institutions have facilitated clients with approximately $210.0Bn in payment accommodations since the onset of the pandemic. Mr. Byles pointed out, however, that the outstanding stock of moratoria, as of February 2021, totaled $65.0Bn, reflecting a significant decline since the start of the pandemic.
• The BOJ Governor has said that the BOJ reached an agreement with finance holding companies (FHCs) and DTIs in April to resume the distribution of dividends to large shareholders, within the context of the fall in the stock of loans under moratorium, the improving economic environment as well as the financial system’s strong capacity to absorb unexpected losses.
• However, he emphasized that given that significant uncertainty associated with the pandemic remains, the Bank continues to urge financial institutions to remain prudent in their decision to declare and distribute dividends.

Source: (JIS News)