Banks increase provisions for high-risk loans
Ram adds this figure will increase because COVID-19 isn’t over yet, and will eventually hit the bank’s bottom line.
He adds the banks are anticipating a difficult twelve months with indications that many loan accounts will fall through completely.
“We anticipate that the number of our loan qualities will deteriorate significantly. We will be required to create significantly high-level provisioning and we anticipate to create an additional estimation of about 50 to 100 million extra.”
Ram says banks have also provided repayment holidays worth $3.5 billion up to September 2020.
The total lending portfolio for the sector is $7 billion which indicates that banks have given repayment holidays to 50 percent of customers.
“We are trying to support as much as we can, as practically as we can but also have to protect our own business then only we will be able to support others if we have a viable business intact.”
Ram adds that Fijians must recognize banks are pushing the envelope, in relaxing loan repayments and at the same time reducing interest rates to help new borrowers.
Credit: FBC
Date: 11/1/21
