Central Bank of Bahamas Issues Bank Lending Conditions Survey Report
The Central Bank of The Bahamas published a report on the results from the bank lending conditions survey. The results from the survey suggest that, during the first half of 2020, the demand for credit reduced sharply across all markets, as application volumes fell to historically low levels. The contracted domestic economic environment, dominated by the COVID-19 pandemic accounted for this outcome. Notwithstanding, the average rate of approval on loan applications remained favorable across all categories. Loan eligibility and debt-servicing abilities of borrowers worsened in the review period. Most banks expect conditions to deteriorate or remain unchanged in the coming year.
The results highlight that appetite for consumer credit maintained its dominance. However, the volume of such requests still declined broadly, except for interest in purchases of commercial vehicles. Despite the downturn, the average approval rates remained elevated at 87.2%, the highest since the second-half of 2016. In the mortgage sector, financing demand for already built homes remained dominant, but interest in new construction was the only category with overall increased applications. The commercial credit requests reduced by 9.7% year-on-year, although increased applications were measured compared to the six months to December 2019. A lesser fraction of the applications were approved vis-à-vis the first half of 2019, but the acceptance rate held steady in comparisons to the second half of 2019.
The Bank Lending Conditions Survey contains 12 questions on lending to the private sector, seeking information on the number of loan applications received, approved, and denied. Thus, the survey provides a perspective on the demand for credit. The survey participants are also asked about their views on changes in lending conditions one quarter to the next.
Keywords: Americas, Bahamas, Banking, COVID-19, Credit Risk, Mortgage Loans, Central Bank of Bahamas
Previous Article
CMF Publishes Regulations Under Basel Framework in ChileRelated Articles
SEC Finalizes Climate-Related Disclosures Rule
The U.S. Securities and Exchange Commission (SEC) has finalized the long-awaited rule that mandates climate-related disclosures for domestic and foreign publicly listed companies in the U.S.
US Regulators Release Stress Test Scenarios for Banks
The U.S. regulators recently released baseline and severely adverse scenarios, along with other details, for stress testing the banks in 2024. The relevant U.S. banking regulators are the Federal Reserve Bank (FED), the Federal Deposit Insurance Corporation (FDIC), and the Office of the Comptroller of the Currency (OCC).
Asian Governments Aim for Interoperability in AI Governance Frameworks
The regulatory landscape for artificial intelligence (AI), including the generative kind, is evolving rapidly, with governments and regulators aiming to address the challenges and opportunities presented by this transformative technology.
EBA Proposes Operational Risk Standards Under Final Basel III Package
The European Union (EU) has been working on the final elements of Basel III standards, with endorsement of the Banking Package and the publication of the European Banking Authority (EBA) roadmap on Basel III implementation in December 2023.
EFRAG Proposes XBRL Taxonomy and Standard for Listed SMEs Under ESRS
The European Financial Reporting Advisory Group (EFRAG), which plays a crucial role in shaping corporate reporting standards in European Union (EU), is seeking comments, until May 21, 2024, on the Exposure Draft ESRS for listed SMEs.
ECB to Expand Climate Change Work in 2024-2025
Banking regulators worldwide are increasingly focusing on addressing, monitoring, and supervising the institutions' exposure to climate and environmental risks.
BIS Bulletin Examines Cognitive Limits of Large Language Models
The use cases of generative AI in the banking sector are evolving fast, with many institutions adopting the technology to enhance customer service and operational efficiency.
ECB is Conducting First Cyber Risk Stress Test for Banks
As part of the increasing regulatory focus on operational resilience, cyber risk stress testing is also becoming a crucial aspect of ensuring bank resilience in the face of cyber threats.
EBA Continues Momentum Toward Strengthening Prudential Rules for Banks
A few years down the road from the last global financial crisis, regulators are still issuing rules and monitoring banks to ensure that they comply with the regulations.
EU and UK Agencies Issue Updates on Final Basel III Rules
The European Commission (EC) recently issued an update informing that the European Council and the Parliament have endorsed the Banking Package implementing the final elements of Basel III standards