• Profits for the U.S. banking sector surged 79.5% to US$64.2Bn in the first quarter of 2024, boosted primarily by large banks not shouldering billions in special fees they were directed to pay to recover costs incurred by bank failures last spring. The Federal Deposit Insurance Corporation said most of the higher profits were due to banks not realizing that assessment, which drove down bank profits at the end of 2023.
• Firms also enjoyed boosts in non-interest income and lower provision expenses. Specifically, the FDIC said bank non-interest expense dropped $22.5Bn in the first quarter and was the primary cause of the profit boost. The decline in special assessment costs accounted for over half of those lower expenses.
• Overall, the FDIC said asset quality metrics remained generally favourable, but noted a deterioration in credit card and commercial real estate (CRE) portfolios. In particular, the FDIC said the non-current rate for non-owner occupied CRE loans was now at 1.59%, its highest level since the fourth quarter of 2013, driven primarily by office portfolios at large banks.
• The FDIC also said its "problem bank list" expanded from 52 firms to 63 in the first quarter, and the total assets at those banks rose to $82.1Bn. Currently, 1.4% of total banks are considered "problem banks," which the FDIC said falls within its normal range.
• Bank deposits were up for the second straight quarter, climbing 1.1% or $190.7Bn. Estimated uninsured deposits grew 0.9%, marking its first increase since the end of 2021.

(Source: Reuters)

• U.S. economic activity continued to expand from early April through mid-May but firms grew more downbeat about the future amid weakening consumer demand while inflation continued to increase modestly. These are the findings a U.S. Federal Reserve survey showed on Wednesday, as central bankers mull how long they will need to keep interest rates at current levels.
• The U.S. central bank's latest economic temperature check also showed that the jobs market normalises gradually. According to the Dallas Fed, waning consumer demand was an ongoing concern for many firms. The continued Middle East conflict and geopolitical tensions across the world were also cited as downside risks.
• Contacts in most Fed districts noted consumer pushback against additional price increases. One large clothing retailer told the Boston Fed it planned to implement "modest price reductions on selected items in early fall in a bid to boost sales." However, there are also some signs inflation pressures may be reaccelerating. "Many districts observed a continued increase in input costs," the report said.
• "Consumers are becoming more price-conscious, likely putting pressure on profit margins. We should expect more discounts and incentives as some consumers struggle with persistently high prices," said Jeffrey Roach, chief economist at LPL Financial following the report's release.

 (Source: Reuters)

• Chief Executive Officer of the St. Kitts Tourism Authority, Ellison Thompson, has commended Jamaica for its robust global tourism resilience thrust. In an interview with JIS News, Mr. Thompson credited Jamaica’s Minister of Tourism, Hon. Edmund Bartlett, for leading the tourism resilience charge in the region.
• “Mr. Bartlett has been very helpful to the whole region in terms of putting together sustainable conferences and ensuring that experts were coming in who can guide us in terms of policy towards moving forward. Jamaica has come up with some very good initiatives, which we are definitely very happy to utilise,” he said. 
• Thompson spoke to JIS News following a press briefing held during the 42nd Caribbean Hotel and Tourism Association (CHTA) Caribbean Travel Marketplace event, held recently at the Montego Bay Convention Centre in St. James.
• During the height of the COVID-19 pandemic, Jamaica received international attention and acclaim for implementing measures to safeguard the island’s tourism sector. These measures were also credited for the sector’s rapid recovery post-pandemic.
• In 2023, Jamaica successfully lobbied the United Nations to recognise February 17 as Global Tourism Resilience Day. As part of resilience efforts, the Global Tourism Resilience and Crisis Management Centre was also established.
• Meanwhile, Mr. Thompson outlined that the island is putting measures in place to protect the country’s robust tourism sector from future shocks. “Part of what the country is doing is making sure that we are a sustainable island destination. So, we are looking throughout the Caribbean and globally at practices that were implemented during the COVID-19 pandemic that can be utilised now and moving forward. We are also making sure we are prepared for any further disruption in the world,” he highlighted.

(Source: JIS)

• The Caribbean Hotel and Tourism Association (CHTA) is working with regional and international partners to confront challenges facing the region’s tourism and ensure that citizens across the Caribbean benefit from the sector.
• Among the issues is the matter of airlift, which continues to be a challenge for some destinations, said CHTA President, Nicola Madden-Greig. She noted that while the demand for the Caribbean as a destination remains high, there is no room for complacency, particularly as it relates to airlift.
• “By working with the inter-governmental Caribbean Tourism Organization (CTO), the CHTA will continue to advocate for sufficient airlift coming into the region,” she said, noting that “it is important for the Caribbean to promote intra-regional and multi-destination visitation”.
• As it relates to the pressing issue of climate change and the related impacts, Mrs. Madden-Greig said that the CHTA will continue to be guided by the principles surrounding the signing of a Memorandum of Understanding (MOU) with the Global Tourism Resilience and Crisis Management Centre, which focuses on joint activities around resilience.
• Importantly, pandemics, epidemics, and other threats to the region’s health are high on the Association’s agenda, and the entity recently renewed its MOU with the Caribbean Public Health Agency (CARPHA) to enhance the regional health and security capacity.
• Meanwhile, the CHTA President said she is pleased with the feedback from the 42nd Caribbean Travel Marketplace, so far.  She noted that engagement on the conference floor has been good, and buyers are enjoying the diversity of offerings, with booths spread across different rooms, giving the event a “different feel” this year. 
• Caribbean Travel Marketplace provides an opportunity for local suppliers of tourism products and services to network with, deepen relationships, and conduct business with new buyers from across the globe to promote their products and the destination.

(Source:  JIS)

• Between 2020 and 2024, the number of municipalities in the Dominican Republic classified as “banking deserts”, areas without branches, ATMs, or bank subagents, decreased from eleven to just one, according to the Banking Deserts study published by the Superintendency of Banks (SB).
• The study highlights that the expansion of banking access points (PAB) in 2023 aligns with a nine-year trend, reducing banking deserts from 20 in 2015 to two by the end of 2023. According to the report, Los Cacaos in San Cristóbal is now the only area in the country where residents must travel to another district to access banking services.
• In 2023, in addition to Los Cacaos, the Cristóbal municipality in the Independencia province was also a banking desert. However, in the first quarter of 2024, Banco del Reserva opened the first PAB in Cristóbal, eliminating its status as a banking desert.
• From 2015 to 2023, the estimated population without access to PAB decreased dramatically from 128,906 to just 12,789 people, representing a 90% reduction. By the end of 2023, ATMs were the most prevalent banking access point nationwide, with 3,528 ATMs (48.4% of the total), followed by 2,070 bank subagents (28.4%), and 1,692 branches (23.2%), amounting to a total of 7,290 PAB.

 (Source: Dominican Today)

• The president of this decade's summit for Small Island Developing States on Monday blasted "empty" and "grossly inadequate" climate pledges, saying wealthy nations have failed to meet obligations to limit damages from carbon emissions.
• Small island states across the Pacific, Atlantic, and the Caribbean, with negligible emissions, are particularly vulnerable to economic crises and rising temperatures due to their exposure to natural disasters, high debt, and reliance on imports and tourism.
• "It is not sufficient for nations to simply make empty and grossly inadequate commitments under the Paris Agreement," conference president and Antigua and Barbuda Prime Minister Gaston Browne said, citing a 2015 treaty to limit emissions and prevent temperatures rising more than 1.5 degrees Celsius above pre-industrial levels.
• Browne called for more climate financing, a global carbon tax on oil companies, an end to fossil fuel subsidies and a faster transition to renewable energy sources. He urged rich nations to honour a pledge to send $100 billion a year to poorer countries to help reduce emissions and mitigate extreme weather.
• A Reuters investigation found that billions in funds sent so far have been funnelled back to rich nations. Loss and damage, announced at last year's COP28 (28th annual United Nations (UN) climate meeting) summit after long-standing calls by island states was intended to help poor countries recover from climate disasters, but funding from wealthy nations has been paltry.

(Source: Reuters)

• U.S. trading on Tuesday moved to a shorter settlement cycle for securities transactions, putting investors and regulators on alert for increased trade failures and other hiccups in the world's largest financial market.
• Investors in U.S. equities, corporate and municipal bonds, and other securities must settle their transactions one business day after the trade, instead of two, to comply with a rule change adopted last February by the U.S. Securities and Exchange Commission.
• Regulators hope faster settlement will reduce risk and improve efficiency. They sought the new standard, commonly called T+1, after the 2021 trading frenzy around the "meme stock" GameStop highlighted the need to reduce counterparty risk and improve capital efficiency and liquidity in securities transactions.
• However, T+1 comes with risk since firms have less time to line up dollars to buy stocks, recall shares out on loan, or fix transaction errors, which could heighten the risk of settlement failures and raise transaction costs.
• A big test for the market occurs on Wednesday, when trades executed last Friday, when T+2 was still in place, and on Tuesday, the first day of T+1, will be settled. This is expected to lead to a rise in volume. "There will be some growing pains and a few hiccups," said Joe Saluzzi, co-head of equity trading at Themis Trading.
• Still, some market participants are concerned the change could transfer risks to other parts of the capital markets such as trade-related foreign exchanges to fund transactions and securities lending.

(Source: Reuters)

• China's economy is set to grow 5% this year, after a "strong" first quarter, the International Monetary Fund (IMF) said on Wednesday, upgrading its earlier forecast of 4.6% expansion though it expects slower growth in the years ahead.
• The global lender's new projections come as Beijing steps up efforts to shore up an uneven recovery in the world's second-biggest economy, which has stumbled in the face of a protracted property crisis and its ripple effects across investors, consumers and businesses.
• The IMF stated it revised up both its 2024 and 2025 GDP targets by 0.4% but warned that growth in China would slow to 3.3% by 2029 due to an ageing population and slower expansion in productivity. It now expects China's economy to grow 5% in 2024 and to slow to 4.5% in 2025.
• The IMF's upgrade for 2024 is in line with Beijing's growth target of "around" 5%, which the economy appears to be on track to reach after it blew past expectations to post growth of 5.3% in the first quarter. But deflationary pressures continue to loom large, and a protracted property crisis remains a major drag on growth.
• The property sector crisis remains the biggest stumbling block to a full-blown economic revival, analysts say, and the IMF issued a warning about the risks ahead. "Risks to the outlook are tilted to the downside, including from a greater or longer-than-expected property sector readjustment and increasing fragmentation pressures," Gopinath said.

(Source: Reuters)

• The Government of Jamaica (GOJ) remains committed to the growth and development of the micro, small, and medium-sized enterprise (MSME) sector, which continues to play a pivotal role in the country’s economy, says the Minister with responsibility for Information, Skills, and Digital Transformation, Senator Dr. the Hon. Dana Morris Dixon.
• With more than 422,000 MSMEs in operation, it was highlighted that these enterprises are undoubtedly the backbone of Jamaica's economy. They employ 60% to 70% of the workforce and account for over 90% of private-sector employment. "Your businesses are the ones building our nation. Your businesses have the power to propel Jamaica forward," she stated. 
• Morris Dixon addressed the graduation ceremony for 350 operators in the MSME sector who took part in the Wisynco/Coca-Cola Foundation 'Growing Together' initiative. This event occurred at The Ruins, University of the West Indies (UWI) Mona, on May 25.
• Owners of corner shops, wholesale outlets, groceries, and supermarkets operating within Wisynco’s network have benefited from a complimentary online business management course. Topics covered included inclusion and personal growth, managing your business, digitalisation of the business, electronic payments, WhatsApp business, inventory and financial health.
• "This is certainly a bold and visionary advancement for our community and economy. It demonstrates the Wisynco Group's dedication to its partners and the MSME sector. The graduates were not required to pay a fee or travel to distant classrooms; they could learn at their convenience. Hence, the Growing Together initiative is commendable and deserves praise," she stated

 (Source: JIS)

• The rainy season officially started for the Panama Canal on May 7, which has begun to be reflected little by little in the level of lakes Gatún and Alajuela. This is important news for the country. The serious drought, a product of the El Niño phenomenon, forced the interoceanic waterway to apply drastic measures, reducing the daily traffic of ships to only allow, at one time, the passage of 24 ships.
• The Panama Canal welcomed more ships per day in May, signalling a slow return to normalcy and a wider sigh of relief for shippers hoping for an end to transit restrictions that have been in place since last summer.
• According to the Panama Canal Authority (ACP), as many as 32 ships will be allowed to reserve a spot to sail through the waterway by June based on the present and projected level of the manmade Gatún Lake, which was heavily impacted by a months-long drought during Panama’s May-to-November rainy season last year.
• Clarksons Research said in an analysis earlier this month that total transits in the canal are still down by 30% compared to a year prior. Under normal circumstances, 36 to 38 vessels are allowed to be booked to transit the Panama Canal per day.
• With the country’s dry season coming to an end this month, the ACP has already been easing restrictions that were originally put in place throughout the second half of 2023, most recently increasing the number of daily reservations allowed from 24 to 27. With the completion of the maintenance, this number increased again to 31 per day across both the original Panamax locks (24 vessels) and the newer Neopanamax locks (seven vessels). Additionally, an extra slot will open in the Neopanamax locks starting June 1, with crossings expected to remain at 32 per day until further notice.
• Finally, to prevent a repeat of last year’s events, in March, Panama’s Council of Ministers unveiled the creation of a Multimodal Dry Canal project to speed up the movement of goods and improve clearance times. As part of the project, the country would integrate existing roads, railways, port facilities, airports, logistics warehouses and duty-free zones to create a new special customs jurisdiction to provide a dry route as an alternative to the roughly 50-mile waterway.
• Maersk (shipping and logistics company) debuted a similar “land bridge” service to kick off 2024, bypassing the canal on one of its trade routes amid the shipping delays posed by the transit restrictions. As part of the service, the company would split its Oceania-to-the-Americas route into two loops on each side of the canal, where cargo would be dropped off at a port before being transported to the other side via rail and picked up by a ship.

(Source: Newsroom Panama)