WEDNESDAY AUGUST 1ST, 2018, ST. GEORGE’S :- With a current non-performing loan (NPL) ratio of just under 5% the Grenada Development Bank (GDB) can boast of being the best performing development bank in the OECS sub-region in terms of non-performing loans;-which are loans in arrears for over ninety (90) days.
Speaking at the recent launch of the Bank’s redesigned website, Credit Manager, Mr. Donald Williams said just a few years ago it would have been impossible to claim this title, ‘Getting to this point has not been an easy road, being cognizant of the fact that in addition to having a high NPL ratio, the Bank also suffered from a reducing loan portfolio.’ ‘In an effort to remedy the situation a microscope was placed on the Bank’s governance issues inclusive of the review and update of manuals all in a bid to prepare for the turnaround that was expected to occur, and with intervention from the Government of Grenada which is the Bank’s sole shareholder and tenacity from Management and staff, we came from a position where our NPLs were in excess of 40%, gradually reducing it over the years and today it stands at under 5%.’
As a development bank high-risk lending is very common as loan products are designed primarily for low and middle income earners (for mortgages) and micro, small and medium-sized enterprises. A high NPL is therefore almost inevitable hence the reason the required NPL ratio for development banks is 15% as compared to 5% for commercial. It is against this backdrop that it can be said the GDB’s performance is on par with other financial institutions in the local environment.
NPLs are not the only aspect of the Bank’s performance that has seen significant improvements. After years of annual declines in the loan portfolio the light at the end of the tunnel began to shine through when in 2014 with the Bank registering a loan portfolio growth of 26.4 M and 29.5M in 2015. The total portfolio currently stands at 59.3M.
GDB continues to perform exceedingly well so much so that in 2017 for the second consecutive year the Bank was able to declare dividends to its lone shareholder The Government of Grenada.