Monday, February 3, 2014

The Gambia: Slight decline in bank reserves

Platinum Habib Bank, now Keystone Bank, is one of 10 commercial banks competing in a relatively small market in The Gambia (Photo Credit: M.S.Joof/TNBES/August2011)
The banking sector in The Gambia continues to be stable and sound but the Central Bank says the industry have seen a slight decline in reserves and risk-weighted capital in 2013. 

“The Gambia’s banking sector continued to be stable and sound, the industry’s capital and reserves totaled D3.02 billion,” the Central Bank of The Gambia said on Friday.

The figure represents “a slight decrease of 0.13 per cent from 2012”, a January 31 report by the CBG’s Monetary Policy Committee, MPC, has indicated. The risk-weighted capital adequacy ratio averaged 28 per cent, slightly lower than the 30 per cent in 2012, it added. 

 “All the banks observed the minimum capital requirement of 10 per cent,” CBG Governor Amadou Colley told a briefing in Banjul on Friday.

Despite the minor decline in reserves, total assets of the banking industry rose to D23.8 billion. Colley said this figure shows an increase of D1 billion compared to the D22.8 billion in 2012. 

Loans and advances, accounting for 23.4 per cent of total assets, also rose to D6.04 billion (9.4 per cent) from 2012, he said.

Meanwhile, the quarterly report of the MPC stated that data on the sectoral distribution of credit indicate that loans and advances to the tourism sector grew by 21.6 per cent compared to a contraction of 10.5 per cent in 2012.

Credit extended to agriculture, fishing and manufacturing contracted by 37.5 per cent, 16.7 per cent and 9.4 per cent in 2013 from the robust growth of 8.7 per cent, 40.9 per cent and 2.1 per cent in 2012, the report stated.

It also indicated that the non-performing loans (NPLs) ratio increased significantly to 19 per cent in 2013 compared to 12.1 per cent a year ago, while deposit liabilities rose to D15.05 billion (12.4) per cent in 2012.

The growth in deposit liabilities is driven mainly by the strong growth in demand and savings deposits, Governor Colley explains. 

He also noted that the industry earnings increased significantly, from D17.5 million in 2012 D106.5 million in 2013. 

However, he said the return on assets declined slightly to 1.79 per cent relative to 1.98 per cent in 2012.

Written by Modou S. Joof

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