Let me start by wishing you a happy
new year 2017!
In my previous article, I wrote that
the slowdown of the economy has had an enormous impact on the financial sector.
Thanks to the Central Bank Governor exchange of greetings ceremony speech, we
now have some figures to back what could be seen as speculations in my previous
article.
Indeed, in his speech, the governor,
who revised the growth downward one more time to 2.5% for 2016 compared to 9.5%
and 6.9% respectively for 2014 and 2015, confirmed my previous assertion.
At the end of November 2016, the
total balance sheet of the banking industry decreased by 5% to USD 4.9 billion compared to an
increase of 11% for the same period the previous year.
Loans and advances to customers grew
by a meager 0,6% compared to 15,4% for the same period the previous year while
de total deposits have decreased by 6% to USD 3,4 billion.
The industry profit has decreased by
USD 25,51 millions during the same period. I wrote in my previous article that:
“the shrinkage of the economy led to
several (small) businesses to close shop. The impact on the financial sector is
enormous with a significant increase in provisions for non-performing loans”.
The governor confirms this by affirming that the portfolios of bad loans in the
industry have increased by 6 points of percentage from 13% to 19%.
The liquidity ratio of the industry went
from 125% to 111% while the Capital Adequacy Ratio went down from 21 to 14%!
Although those ratios are still within the regulator’s limits of 100% and 10%,
this decrease is enormous and cannot be ignore…
Obviously, the governor has argued
that things would have being worse without the measures taken during the year
to prevent another bank’s bankruptcy but who can really tell…
According to Reuters, the BCC
forecast a growth of 2.9% in 2017 which is better than the 2.5% of 2016 but yet insufficient to reduce the unemployment rate of the country and subsequently
its level of poverty…
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