Post on 31-Dec-2015
description
The Trinidad and Tobago Banking System:
Some Stylized Facts
Ewart S. Williams
Governor
Central Bank of Trinidad and Tobago
Selected Economic Indicators 1995-2000 2001-2006p
Growth in Real GDP (%) 4.9 9.2
Energy 4.8 14.6
Non Energy 5.1 6.3
Unemployment 14.7 9.1
1995 2000 2001 2006*
Inflation (end of period) % change 3.8 5.6 3.2 9.6
Core 3.0 4.2 2.4 3.9
Food Prices 10.4 13.4 7.5 27.4
Gross Official Reserves (US$Mn) 352.1 1405.5 1,876.0 6,089.5
External Current A/c Balance (US$Mn) 269.9 544.3 446.0 3,340.1
* Inflation and Reserves data are for Sept. 2006; External A/c data are provisional to June 2006
Source: Central Statistical Office and Central Bank of Trinidad and Tobago
Commercial BanksChanges in Assets and Liabilities
1996-2000 2001-2005
Assets
Loans 11.7 17.4
Investments 15.1 10.1
Liquid Funds 10.3 10.2
Liabilities
Deposits 8.6 13.4
Fund Raising Instruments 18.3 6.3
Borrowings 24.4 16.9
(Annual Average Growth Rates – per cent)
Conglomerates Share of Total Assets - 2004
Conglomerates Total Assets ($Mn) % of System Assets
CL Financial Group 23,268.8 23.50
RBL Group 18,831.5 19.00
RBTT Financial Holdings
18,668.2 18.90
GHL Group 5,450.7 5.50
TOTAL 66,219.2 66.9%
Source: Central Bank of Trinidad and Tobago
Contribution to Total Assets of the Financial System
Type of Institution 1995 1999 2001 2002 2003 2004p 2005p
Central Bank 15.7 13.0 13.9 14.5 13.5 15.1 17.8
Commercial Banks 41.2 40.2 36.8 35.4 33.7 32.1 29.4
Finance Companies & Merchant Banks 4.3 6.1 5.4 5.8 5.8 8.3 7.0
Trust & Mortgage Finance Companies 7.7 7.4 10.2 8.3 7.8 6.8 5.1
Development Banks 2.0 1.5 1.5 1.2 1.1 1.4 1.1
Credit Unions 5.1 4.2 3.2 2.6 2.4 2.0 1.7
Insurance Companies 11.2 12.9 14.1 13.8 15.1 16.2 13.5
Thrift Institutions 0.2 0.1 0.1 0.1 0.1 0.0 0.0
National Insurance Board 6.7 7.3 7.1 7.7 8.1 7.9 6.6
Stock Exchange 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Mutual Funds 2.7 4.3 4.9 7.8 9.5 7.6 15.7
Deposit Insurance Corporations 0.4 0.5 0.6 0.5 0.5 0.5 0.4
Home Mortgage Banks 1.3 1.2 1.0 1.1 1.4 1.2 1.0
Trinidad & Tobago Mortgage Finance 1.4 1.3 1.2 1.1 1.0 0.9 0.7
Total 100 100 100 100 100 100 100
(per cent)
Aggregate Mutual Fund Values and Commercial Bank Deposits
0
5,000
10,000
15,000
20,000
25,000
30,000
35,000
40,000
2000 2001 2002 2003 2004 2005 Jun-06
TT
$Mn
Aggregate Fund Values
Total Deposits
Source: Central Bank of Trinidad and Tobago
Sectoral Distribution of Commercial Bank Loans
PERCENT OF AVERAGE TOTAL LOANS 2001 2002 2003 2004 2005
Real Estate Mortgages 5.2 5.5 5.4 9.9 12.5
Public Sector 6.5 9.4 5.6 8.4 14.6
Agriculture 0.9 0.7 0.5 0.6 0.4
Petroleum 4.3 2.7 2.9 1.6 1.5
Manufacturing 10.7 12.5 10.0 8.5 7.6
Construction 3.7 4.1 6.1 6.3 4.6
Distributive Trades 7.8 7.5 7.3 5.9 7.0
Transport, Communication & Storage 5.0 3.5 3.0 2.3 2.0
Finance, Insurance & Real Estate 11.7 11.5 17.2 15.8 15.2
Personal Services 2.4 3.9 4.0 4.2 3.1
Consumer Loans 38.5 37.4 35.7 32.7 31.0
Miscellaneous 3.4 1.3 2.2 3.9 2.4
TOTAL 100 100 100 100 100
Source: Central Bank of Trinidad and Tobago
Exposure of Domestic Banking System
Regions Dec-04 Dec-05 Jun-06
Caribbean 6,331 6,320 6,216
Belize 416 316 313
Dominica 13 11 11
Grenada 558 311 365
Barbados 1,789 1,571 1,533
Jamaica 1,954 2,579 2,161
St Lucia 1,601 1,532 1,833
Rest of the World 4,269 4,580 7,984
Total 10,600 10,900 14,200
% of Total Assets 14.8 14.6 16.9
Source: Central Bank of Trinidad and Tobago
(TT$ Millions)
Macro Prudential IndicatorsSelected Countries
Macro Prudential Indicators - 2005
US UK* Jamaica Barbados T & T
Prudential
Capital Adequacy 12.3 12.7 17.8 13.0 18.2
Non-Performing Loans to Gross Loans
0.5 1.9 2.3 5.5 2.2
Loan Loss Provisions to Gross Loans 0.7 … … … 3.7
Profitability
Return on Assets 1.3 0.7 3.6 1.9 2.5
Return on Equity 12.9 10.9 … 15.1** 20.2
* Data up to 2004
** Data up to 2003
Interest Rate Spreads
1995 2000 2001 2002 2003 2004
Barbados 6.60 7.05 8.00 7.74 7.61 7.30
Bahamas 9.06 7.77 7.23 7.22 8.11 7.47
Belize 9.10 10.80 11.10 10.00 9.30 8.80
Guyana 9.92 10.40 10.90 12.98 13.23 12.49
Jamaica 30.74 13.20 11.87 11.38 12.62 11.68
Suriname 0.00 13.60 12.40 12.90 12.50 11.40
Trinidad and Tobago 9.46 10.50 9.12 8.64 8.34 6.74
Average OECS 6.34 7.35 7.21 7.47 8.28 7.11
Average Caribbean 8.37 8.81 8.56 8.71 9.19 8.18
Source: ECLAC based on official data
Distribution of Loans by Interest Rate Bands
2003 2004 2005 Jun-06
0 % - 5 % 9 9 11 9
5 % - 7 % 16 20 16 14
7 % - 8 % 6 9 13 15
8 % - 9 % 11 25 17 19
9 % - 10 % 15 11 17 8
10 % - 12 % 20 14 14 19
Over 12 % 23 13 11 17
Total 100 100 100 100
(per cent)
Source: Central Bank of Trinidad and Tobago
Challenges for Regulation
• the presence of financial conglomerates;
• the increase in cross-border lending;
• the introduction of higher risk lending
Pending Legislative Amendments
The Central Bank is currently amending legislation to:
(i) provide for the supervision of conglomerates;
(ii) to accommodate a harmonized approach to regulation among regional jurisdictions, including the exchange of information;
(iii) to emphasize risk-based capital adequacy; and
(iv) to strengthen risk management and governance procedures
The end