Friday, March 29, 2024

‘No problem’ lending to Government

Date:

Share post:

THE HEAD OF A COMMERCIAL BANK operating in Barbados insists the institution has no problem lending money to Government but would not do so willy-nilly.

Karen Darbasie, chief executive officer of Trinidad-based First Citizens Bank, said her organisation’s willingless to lend Government money was illustrated by the US$25 million loan it provided for Barbados to join the Development Bank of Latin America.

The 2015 Financial Stability Report released recently by the Central Bank and Financial Services Commission revealed that the five commercial banks operating here had so much cash that they had $1 billion deposited at the Central Bank.

They don’t earn interest on this cash and Central Bank Governor Dr DeLisle Worrell said that banks appeared fearful of lending to Government because of concerns about its ability to repay.

However, speaking in a recent interview, Darbasie said: “I don’t have an issue in terms of lending to Government. I have to balance my portfolio accordingly.

“From a macroeconomic standpoint things are turning the corner in Barbados and there are several signals along that direction, but the other point on lending to Government is again the risk-free return tends to be the lowest yield on the instruments as well.

So I have to balance the deployment of the funds to lending to third party customers as well as by instruments from the Government, but I think we have a fairly diversified balance sheet.”

She added: “When I look at Barbados’ stand alone financials actually our investment in state corporations stepped up over the last financial year, so we are doing our part not just directly to the sovereign but across the state sector of Barbados.”

Up to the end of September last year, commercial bank loans had decreased by $35 million. The $1.1 billion the banks had deposited at the Central Bank up to that time included $367 million last year alone. (SC)

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Related articles

No decision yet on Lester Vaughan School

A firm decision has not yet been made regarding when the Lester Vaughan School will be reopened. Following a...

BDF to conduct simulation exercise on April 2 & 3

The Barbados Defence Force (BDF) will conduct a Mass Casualty Simulation Exercise from Tuesday, April 2, to Wednesday,...

Barbadians reminded to file taxes online as filing season starts

The Barbados Revenue Authority (the BRA) is advising that tax filing season for 2023 begins on April 1 this...

Minister Abrahams’ statement on Ismail Patel’s passing

Below is the full statement by Minister of Home Affairs and Information, Wilfred Abrahams: I was saddened to...