Finance and Planning Minister, Hon. Dr. Peter Phillips,is hailing the success of the country's commercial banking sector despite the global economic down turn challenges.
According to Dr. Peter Phillips,Jamaica should take pride in the fact that despite continuing stresses in Europe and other parts of the world, the local banking sector has held strong.
He was speaking at the official opening of the GraceKennedy Financial Centre located in downtown Kingston on March 7.
The Finance Minister said in December 2011, commercial banking assets stood at $613.6 billion, with loans net of provision of $258 billion or 42.1 per cent of assets.
“While there has been some deterioration in asset quality, with non-performing loans representing 8.7 per cent of total loans as at end December 2011, up from 2.8 per cent at year end 2008 capital ratios of the Jamaican banking sector, although lower than before the crisis, remain well in excess of both national and international minimum requirements,” he said.
In addition, he noted, the banking system has set aside proactive loan loss provisions, which coupled with capital buffers, mostly retained earnings, and provide further protection against the risk of erosion of regulatory capital.
“It must be noted that the resilience of the financial sector comes against the background of the difficulties experienced by Jamaica’s financial sector in the 1990s, and this led to consolidation in the sector including the strengthening of the regulatory powers of the Bank of Jamaica and the Financial Services Commission to enforce prudential requirements and to take early action,” Dr. Phillips said.
The Finance Minister also noted that the general insurance industry as well as the securities dealers industry has also been doing well.
He also highlighted other initiatives used to further strengthen the financial system in ensuring maintenance of financial stability. These include: introduction of a Credit Reporting Regime; strengthening of bank supervision; strengthening of FSC Supervision; corporate governance; and promotion of financial literacy and consumer awareness.
“(The administration) wants to place on record our commitment to create this kind of environment that will strengthen, promote and maintain stability in the financial sector,” he said.
By Chris Patterson, JIS Reporter