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Financial News

Sep 2009 Financial News

Banks bracing for bad loans

Sep 23, 2009

Bank customers are going to continue to take fewer loans and more will start defaulting on their loan payments this year.

Central Bank Governor said also yesterday that commercial banks in the country will have to continue to provide money for loan losses for the remainder of the year.

He was speaking at the launch of the Inaugural Financial Stability Report 2009 at the Central Bank tower in Port of Spain.

"The global recession clearly has an impact on our economy and this is what has had a repercussion on our financial system," he said. "What we are seeing now is a decline in bank loans. You are already beginning to see an increase in non-performing loans, it is still very small but the increase is evident. And many banks have begun to start provisioning for bad loans."

Williams said the rate of growth of credit in the banking system had slowed.

He said the Report projected that the economy was likely to continue in a slump for the remainder of the year.

Notwithstanding the changed economic environment and the challenges and vulnerabilities identified, the financial sector remains strong and well-positioned to withstand shocks, Williams said.

"The partial indicators that we are seeing, they do not point to any turnaround as of now," he added when asked about the outlook for 2010.

"As of now, certainly there is nothing that we have seen that goes against our original projection that we are likely to see a decline in GDP of at least one per cent. It could be slightly higher than that."

Kristy Ramnarine
Trinidad Express
Wednesday, September 23rd 2009