Local Commercial Banks prospering despite global financial crisis

Aug 17, 2009 News

– Finance Minister

Finance Minister Dr. Ashni Singh is of the opinion that despite all of the measures that the government has put in place to ensure macro-economic stability, the financial sector is pivotal to its maintenance and growth.
He said that the sector has to be active in their monitoring to ensure that their loan portfolios are operating favourable and minimise the number of non performing loans.
To this end he noted that banks are contributing in a very significant way to the economy.
The Finance Minister reiterated that the financial sector continues to be well managed, regulated and remains strong.
According to Dr. Singh, there are statistics to attest to what he is preaching as it relates to stability, given that, “if one were to look at any of the key indicators such as total deposits held by commercial banks which grew by 17.7 per cent over an 18 month ending June 2009.”
This he emphasised was during a time when the world was embroiled in a global financial crisis, leaving millions unemployed or going bankrupt.
“When you look at what was happening throughout much of the rest of the world’s financial sectors were coming under stress.”
He added too that total loans and advances to the resident private sector over the same period also grew, this time by 15.3 per cent.
“Again at a time when in many of the major capitals of the world and in many other places around the world credit was drying up,” the Finance Minister pointed out.
Pointing out the strength of the local commercial banks, the Finance Minister revealed that the total liquid assets held by commercial banks also increased by 16 per cent over the same 18 month period referred to.
“All of these indicators point to a vibrant and strong financial sector.”
The Finance Minister attributed this to the fact that the government has put in place effective regulatory and legislative mechanisms.

Minister of Finance Dr Ashni Singh

The news by the Finance Minister comes on the heels of a report that despite Guyana feeling the effects of the global financial and economic crisis in its real sector, public sector employees will receive a pay increase this year.
That was according to President Bharrat Jagdeo, who at the time explained that Government has maintained spending, especially on the social services to its people, and while other countries in the Caribbean, like Jamaica, have been forced to either cut or freeze wages, Guyanese workers can expect an increase.
The Head of State was at the time being interviewed by the National Communications Network (NCN), and was discussing the role he has been assigned as the Chairman of the Regional Task force established at the recently concluded 30th Heads of Government Conference of the Caribbean Community (CARICOM) held in Guyana, which will seek solutions to the ongoing crisis.
He explained that the crisis has been affecting several CARICOM countries, generating serious social consequences.
In Jamaica, 60 per cent of merchandise exports have been lost, Dominica was forced to take an emergency loan from the International Monetary Fund (IMF) and Antigua and Barbuda has lost over 1,000 jobs from the fallout of the Stanford debacle, which for a country of just over 100,000 people is a major setback.
The President stressed that tourism and financial services, which are significant revenue earners and job providers in the Caribbean, have been severely affected by the crisis.
Remittances, which are a significant contribution to several economies, have slumped as Caribbean nationals in the developed world cope with the economic depression. Millions of people have lost their jobs and homes as a result of the meltdown.
In Guyana, the real sector has been affected, as a fall in global demand for export commodities has resulted in less revenue for the country. Bauxite companies operating in Guyana, BOSAI and RUSAL, have faced difficulties.
Some construction projects have been put on hold because the investors have been unable to raise the finances needed in the tough economic climate.
The Head of State stressed that his Administration’s proper stewardship of the economy has placed Guyana in the position of riding out the crisis without much setback.