Local banks keep solid capital position in Q2 says BMA
Bermuda’s banking sector maintains a solid capital position, with total assets of $24.5 billion, representing a slight increase of 0.4 per cent, according to the Bermuda Monetary Authority’s second-quarter banking digest.
Growth was driven by a $1 billion increase in investments and a $0.1 billion increase in other assets.
The BMA said these increases were partially offset by declines in interbank deposits, as well as in loans and advances, which fell by 25 per cent, (or $0.9 billion, and 1.3 per cent ($0.1 billion), respectively.
Total assets rose by $0.7 billion compared with a year ago, attributable to a $1.5 billion increase in investments and a $0.1 billion increase in other assets.
These increases were partially offset by a 22.9 per cent decline in interbank deposits and a 1.3 per cent reduction in loans and advances.
Bermuda’s banking industry also experienced growth of 2.9 per cent or $0.7 billion compared to the same quarter last year.
The ratio of non-performing loans to net loans was 4.6 per cent, a decrease of 0.5 percentage points from the previous quarter
Meanwhile, total deposit liabilities rose by 0.9 per cent to $22 billion over the quarter. This growth was attributed to an uptick in time deposits, which increased by 1.9 per cent or $0.1 billion, and savings deposits, which increased by 1.6 per cent or $0.1 billion.
Total deposit liabilities growth of $0.8 billion was fuelled by a $1 billion increase in demand deposits. This was partially offset by a $0.1 billion decline in time deposits and $0.1 billion decline in savings deposits.
Capital adequacy and leverage measures remained above the minimum regulatory requirements, the BMA said.
The sector’s risk asset ratio declined by 0.8 percentage points to 27.5 per cent, while the common equity tier 1 ratio increased by 0.6 percentage points to 27.4 per cent compared to the prior quarter.
The decline in RAR during the quarter was mainly fuelled by the redemption of $0.1 billion of subordinated debt that is classified as tier 2 capital.
Furthermore, the leverage ratio marginally declined to 7.5 per cent from 7.6 per cent in the prior quarter.
• For the full report see Related Media
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