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FCDU Loan Portfolio Posted Slight Decline in Fourth Quarter 2005

04.11.2006

As of end-December 2005, the outstanding loan portfolio of Foreign Currency Deposit Units (FCDUs) of banks was recorded at US$4,046 million, reflecting a slight decline (1.6 percent or US$65 million) from the end-September 2005 level. 

Loan releases during the period October to December 2005 reached US$1,286 million, posting a growth of 27 percent from the previous quarter’s level. Loan repayments, on the other hand, declined by 14 percent to US$1,269 million, resulting in an overall net availment of US$17 million from a net repayment of US$469 million in the previous quarter.

The decline in FCDU loan portfolio in the last quarter of 2005 was, thus, attributable to negative adjustments totaling US$82 million which came from the lower US dollar value of third-currency denominated loans following the strengthening of the US dollar against other currencies, and the transfer/sale of certain loans to Special Purpose Vehicles/offshore banks.

During the year, new credits granted grew by 22 percent (US$878 million) to reach US$4,958 million. A similar trend was noted for loan repayments which increased by 19 percent to US$5,278 million, resulting in an overall net repayment figure of US$320 million for 2005. Net downward adjustments of US$160.6 million (which included disposition of certain NPLs to SPVs) were likewise recorded, reducing the FCDU loan portfolio by 10.6 percent (or about US$481 million) relative to the level in 2004.

 Private sector accounts comprised 61 percent of outstanding FCDU credits. In terms of maturity profile, the ratio of short-term loans to medium and long-term accounts stood at 29:71, reflecting a slight shift from the 28:72 mix a year ago.  Exporters and public utility enterprises remained as the major beneficiaries, accounting for a combined 40 percent share of total.

FCDU deposit liabilities expanded by 4 percent to reach US$16,459 million by December 2005.  About 95 percent of these accounts pertained to residents.

The overall loans-to-deposits ratio (which relates the level of FCDU deposits two quarters back to the current period’s loan portfolio) slightly increased from 25 percent in September to 26 percent by end-2005.

Please refer to attached table for details.

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