Wednesday, July 27, 2016
RBC Royal Bank's quarterly loan losses hit $1.1 billionWednesday, September 21, 2011
BAD debt continued to plague RBC Royal Bank Jamaica's profitability as the Bank of Jamaica (BOJ) accounted for a $1.1-billion loss to the commercial bank for the three-month period ended June 30, 2011.
All the loss may not go straight to RBC Royal Bank Jamaica's bottom line, as it reflects unappropriated losses of $1.68 billion up to June 30, 2011, compared to $593 million loss as at March 31, 2011, which, in June, the bank said reflected "the difference between operational profit reported under International Financial Reporting Standards (IFRS) for the five months ended March 31, 2011 and BOJ loan loss reserves booked".
According to the BOJ report on commercial bank's assets and liabilities for June 2011, RBC Royal Bank Jamaica's loan loss provision as per IFRS requirement was increased from $1.14 billion at end March 2011 to $2.05 billion at end June 30, 2011, while the prudential reserves, required by the BOJ, remained at $1.56 billion, bringing the total provision ot $3.41 billion.
Last week, in a written statement to the Business Observer, RBC Royal Bank Jamaica said that "in the context of continued economic challenges facing our clients, the results of RBC Royal Bank (Jamaica) Ltd are impacted by reduced loan growth and an increase in provision for credit losses."
"These efforts, after being successfully implemented, have established firm strategies to guide the bank in how to grow and manage our credit portfolio in terms of quality as well as collecting those loans that have gone bad. The current economic situation, with slow GDP growth in the region, continues to challenge banks in their drive to improve credit quality in the near term," added the statement.
RBC Royal Bank Jamaica racked up $1.25 billion in losses during the 19 months to October 31, 2010, before a $383-million tax credit reduced the net loss to $864 million. Then, a $2.66-billion impair-ment loss on loans and advances during the review period (compared to $175 million during the year ending March 31, 2009) dragged the company into a huge loss position.
RBC Royal Bank Jamaica's total loans net of provision for credit losses fell from $38.1 billion to $31.2 billion at end-October 2010, according to its audited financial statements, and stood at $31.15 billion as at December 31, 2010, before falling to $27.5 billion at the end of March 2011, according to BOJ data.
Home | Lifestyle | Teenage | Regional | Environment | Editorial | Columns | Career | Food | All Woman | Letters | Auto | Video | Weather | Contact Us
Mobile | View Standard Version
Subscribe to our RSS Feeds
Follow us on Twitter!
Copyright © 2012 Jamaica Observer. All Rights Reserved.
Terms under which this service is provided to you.