2018 Financial Stability Report
Figure 16: Commercial Banks Dollar Change in Loans and Advances (in millions)
Figure 17: Business and Household Credit as a per cent of GDP 5
0 10 20 30 40 50 60
100 200 300 400
Households Business
(600) (500) (400) (300) (200) (100) 0
Jun-09
Jun-10
Jun-11
Jun-12
Jun-13
Jun-14
Jun-15
Jun-16
Jun-17
Jun-18
Dec-09
Dec-10
Dec-11
Dec-12
Dec-13
Dec-14
Dec-15
Dec-16
Dec-17
Dec-18
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018
Source: Eastern Caribbean Central Bank (ECCB)
Note: The shaded bars indicate periods of recession. Source: Eastern Caribbean Central Bank and Staff calculations
Figure 17 shows loans disaggregated across two main categories: households and businesses. Both categories have grown relatively slower than GDP, particularly after the financial crisis. In recent periods (2017 and 2018), growth outcomes in both categories have been moderate. Business credit appears to have bottomed out, declined at a decreasing rate for 2018.
There was continued strengthening of the sector as indicated by the increasing CAR and the declining NPL ratios. The aggregate CAR of the banking sector was 19.1 per cent at the end of 2018, 0.4 percentage points above the ratio at the end of 2017, (Figure 18). The increase in the CAR was due to outpaced growth in total regulatory capital (6.0 per cent), relative to adjusted risk-weighted assets at 3.6 per cent. Simultaneously, the tier-one capital ratio increased to 16.8 per cent from 16.3 per cent at the end of December 2017.
5 Business credit tends to track the business cycle more closely compared to household credit.
Financial Stability Report 2018
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