BARBADOS NATIONAL BANK (BNB) is lending out about 80 per cent of the $1.90 billion it has in deposits.

However, BNB's managing director Robert Le Hunte said he was comfortable with the bank's degree of exposure because of the level of liquidity in the system and the fact that it could leverage the access it has to parent company Republic Bank's resources.

"The challenge is that it means we have to spend a greater amount of time assessing the risk, but we feel that we understand the risk of Barbados and we understand the risk of the Caribbean.

"There is sufficient liquidity in the market and we are very comfortable with the exposure we are having and our results to date. [Because] our delinquency levels are well within international standards, we feel that our formula is right for the bank and the country because it results in growth and development of the country. It also results in the growth and development of the institution," he told the media last week.

More important, the experienced banker said, increased deposits and lending by commercial banks were key to increased economic activity in the country.

"Savings equals investment; the more you are able to generate savings, the more you are able to invest it back, and that is what creates the multiplier effect," he noted.

Speaking at the bank's Fairchild Street branch to announce BNB's annual financial report, Le Hunte said the bank had earned after-tax profits of $53.14 million, up from $48.01 million last year.

Total assets of the Republic Bank subsidiary also improved, increasing from $2.20 billion in 2006 to $2.43 billion this year. BNB also recorded an increase in total loans from $1.48 billion last year to $1.60 billion this year. (GE)