Total outstanding loans issued by commercial banks up to January 2010 stood at $252.37 billion some $43 million below 12-months prior indicating the first year-on-year decline since the ongoing economic rescission, according to Bank of Jamaica (BOJ) data.

Total loans have been inching down month by month since last year but December 2009’s total loans was some $4 billion above the total at the end of January 2009, but now year-on-year total loans are down.

Up to January 2010, major loan categories declined over January 2009 including personal loans at $89.8 billion from $91.4 billion, tourism at $39.79 billion from $42.97 billion, transport storage & communication at $7.6 billion from $12 billion and distribution at $23.8 billion from $24.9 billion.

Despite the decline, outstanding loans in two important categories increased year-on-year including government services at $36.1 billion from $29.1 billion and construction & land development at $16.6 billion from $14.5 billion in 2009. Government sector loans are up even when compared month-over-month but not so for construction & land development loans which are down from the $19.9 billion recorded in December 2009.

“There are not many new projects (but) people are trying to finish the jobs they have started and need financing… there is no sense leaving the job half-way done,” the immediate past-president of the Jamaica Institute of Engineers Joseph Aryee told the Observer in last December. He added that 2010 would be a difficult year as developers reduce their projects and finance requirements.

Businesses are finding debt servicing increasingly difficult with non-performing loans (NPLs) jumping to $16.4 billion at the end of 2009 up 68 per cent year on year. NPLs, which are unserviced over three months, started 2009 at $10.6 billion in March, increased to $14.6 billion in June, then eased to $14.2 billion in September before rising again in December. Commercial banks accounted for the bulk of NPLs at $10.8 billion with building societies at $4.8 billion and FIA institutions or near banks at $808 million.

Most commercial banks increased their loan portfolios up to December 2009 over 12 months including National Commercial Bank (NCB), up five per cent to $87.1 billion, Scotia Group Jamaica at $83.6 billion, up 5.6 per cent, Citibank, up 122 per cent from $450.7 to $1 billion, First Global Bank (FGB) up 23 per cent to $10.5 billion, and Pan Caribbean Bank up 6.7 per cent to $6.5 billion. Over the review period two commercial banks cut their loan portfolios including: FirstCaribbean International Bank Jamaica (FCIBJ) and RBTT Bank by 8.1 per cent to $26.9 billion and 5.3 per cent to $34.55 billion, respectively.