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7.4pc growth

Filipe Naigulevu
Wednesday, March 07, 2018

AN annual growth of 7.4 per cent was registered by gross assets of the Fijian financial system reaching a record level of $18.1 billion as of June 30, 2017.

The Reserve Bank of Fiji (RBF) August 2016-July 2017 Annual Report tabled in Parliament on Monday, stated that the banking sector continued to account for the majority of financial system assets at 54.9 per cent, followed by the FNPF at 31.1 per cent and the insurance industry 8.9 per cent.

The central bank also noted that the composition of the capital markets industry recorded a similar annual growth of 9.2 per cent reaching $5.2b as of June 30, 2017.

Looking at the commercial banking industry, the central bank noted that it performed satisfactorily for the most part of the period under review.

This was attributed to acceptable levels of capital, asset quality, earnings and liquidity.

The report also noted that the total assets of commercial banks stood at a record $9.4b as at 30 June 2017.

This was 8.0 per cent higher from $8.7b recorded in June 2016, largely underpinned by the growth in loans and advances ($646.0 million) and other assets ($283.0m).

The increase in assets over the review period had also more than offset the decreases in balances due from banks ($173.0m) and investments ($71.0m).

Increased lending to private sector business entities and private individuals was reflected in the increase in gross loans and advances (including leases, bills receivable and foreign currency loans) which stood at $6.5b at the end of June 2017.

This represented an increase of 11.0 per cent from June 2016, attributed to total borrowing by private business entities of $4.2b.

These were mainly for the wholesale, retail, hotels and restaurants (30.2 per cent), real estate (19.1 per cent), building and construction (15.3 per cent) and manufacturing (11.6 per cent) sectors.

Similarly, private individual loans of $1.8b as at June 30, 2017 were mainly for housing (72.0 per cent) and transportation (7.4 per cent) purposes.

The report also noted that the commercial banks' balances with the Reserve Bank stood at $1.5b at the end of June 2017, which comprised $739.6m in statutory reserve deposits and $735.7m in bank demand deposits.

In terms of the industry's liabilities, total deposits increased by 8.2 per cent from June 2016 to $7.7b at the end of June 2017.

The majority of deposits comprised demand deposits (62.4 per cent), followed by term and savings deposits at 33.5 per cent and 4.1 per cent, respectively.

The combined capital adequacy ratio of commercial banks stood at 15.7 per cent as at 30 June 2017, above the minimum capital adequacy requirement of 12 per cent.

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