CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Bermuda Banking Sector Assets Fall

Bermuda Banking Sector Assets Fall

by Jason Gorringe,, London

17 September 2012

The Bermuda Monetary Authority (BMA) has reported that customer deposits and banking assets declined in the second quarter, although capitalization levels improved.

Total customer deposits declined by 4.5% during the quarter, from BMD21.1bn (USD21.1bn) to BMD20.2bn, and by 2.5% year-on-year (from 20.9bn), mainly as a result of the withdrawal of some US dollar-denominated deposits - these were down 5.4%, with the currency now accounting for 47.4% of locally-held deposits.

For the sector as a whole, total assets decreased by 4.2% during the second quarter, from BMD24.7bn to BMD23.7bn and are down 2.8% year-on-year. The quarterly decline was mainly as a result of lower deposits with other financial institutions, which were down some 18% during the quarter, and 38.8% lower than in June 2011.

The Authority reported that some banks are continuing to experience significant asset quality challenges driven by the recessionary environment. It said that, although non-performing loans relative to total loans declined from 8.3% to 8.1%, large exposures to the real estate sector have led to a rise in specific provisioning and charge-offs, which has affected the sector's profitability.

Provisions to Non-Performing Loans increased from 16.2% in Q1 to 26.2% in Q2 2012 as a result of efforts aimed at safeguarding against the impact of future asset impairments. As a result the sector's annualized Return on Equity ratio declined from 8.9% in the first quarter to 1.2% in Q2 2012, and the annualized Return on Assets ratio fell from 1% to Q1 2012 to 0.1% in Q2 2012.

The BMA reported that solvency for the sector remains high as capitalization improved slightly during the last quarter. The aggregate risk asset ratio rose to 22.1% in Q2 2012, as net capital rose by 0.6%, while risk-weighted assets declined by 0.7%.

The leverage ratio (equity to total assets) showed improvement during the quarter rising from 11.1% to 11.6% as total assets decreased compared to the slight increase in shareholder equity (up 0.3%).

TAGS: tax | investment | banking | international financial centres (IFC) | Bermuda | offshore | offshore banking | currency

To see today's news, click here.


Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »

Stay Updated

Please enter your email address to join the mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.

To manage your mailing list preferences, please click here »