Financial institutions which hold the savings of Barbadian households and businesses earned $198.6 million in profits last year.
The bulk of the income, $186.5 million, was earned by commercial banks.
This information was shared in the annual report of the Barbados Deposit Insurance Corporation (BDIC), which provides coverage for billions of dollars deposited in accounts at commercial banks and finance companies.
Prime Minister and Minister of Finance Mia Amor Mottley mentioned the profitability of commercial banks in March during her contribution to the debate on the 2025 Budgetary Proposals.
“The banks, we are asking [them] to be far more proactive, banks that in this country [ended] 2024 with pre-tax profits [of] $208 million, [and in] 2023, $272 million,” she said, adding that commercial banks’ retained after-tax profits in 2023 were $257 million and $186 million in 2024.
Speaking in the context of more mortgage financing being made available to ordinary Barbadians, Mottley said it was time for banks “to start taking a chance
on ordinary people in this country”.
The corporation’s annual report, which has been laid in Parliament, also highlighted the profitability of commercial banks in particular, which noted that these entities earned less last year when compared with 2023.
“Net income for all deposit-taking entities at December 2024 was $198.6 million and was 26.5 per cent below the figure recorded 12 months previously, at year-end December 2023,” it stated.
“The reduced position was due to increased operating expenses and higher interest cost for time deposits. Additionally, despite recording recoveries in provision for bad and doubtful debts of $26.1 million at December 2024, this amount was also lower than that achieved in the prior year and represented a decline of $78.2 million.”
The BDIC added: “The commercial banking sector reported net income at December 2024 of $186.5 million whilst that of the non-bank deposit taking sector was $12.1 million. Both sectors recorded reduced year-on-year profitability positions of 27.6
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Commercial banks dominate financial sector
per cent and two per cent, respectively.”
In addition to the factors noted by the BDIC, bank and finance company net profitability was impacted by the increase in corporation tax to nine per cent effective January last year.
The Central Bank of Barbados also mentioned bank profitability, but did not give figures.
“Higher net interest income supported increased profits among banks. In contrast, profitability among finance companies declined slightly, reflecting higher non-interest expenses,” it stated.
The BDIC, which provides insurance coverage for deposits at six commercial banks and four finance companies, reported that commercial banks continue to dominate the financial sector.
“Total assets of commercial banks continued to account for the lion’s share of deposit-taking sector assets and represented 93.2 per cent at December 2024 (93.4 per cent at December 2023),” it stated.
“The growth in assets on the books of commercial banks was driven by higher loans and advances, other
assets and other deposit categories. The loans and advances book grew by 14.2 per cent year-onyear. Additionally, the commercial banking sector’s total portfolio of other deposits recorded significant uptake of $273.3 million, which represented a 69 per cent increase at December 2024.”
On the other hand, total assets of the non-bank deposit-taking sector, at December 2024, was $1.1 billion and represented seven per cent of the combined sector totals.
“Loans and advances grew by $50.4 million (6.6 per cent) and transferable deposits grew $20.5 million year-on-year. Like the commercial banking sector, expansion and growth for this sector was also fuelled by the increased portfolios of other assets and loans and advances,” the BDIC reported. (SC)
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