Thursday, 26 January 2012 08:02
4 Comments
The following is the most recent balance sheet for the Bank of Montserrat Limited up to the period ending September 11, 2011.
It is also important to note that the Bank of Montserrat has written off EC$25.6 million in CLICO investments over the last three years.
A question to consider is, could this vast sum of money been better spent in Montserrat via wider loan distributions for citizens to build homes and set up businesses in the northern sector of the island, helping to add some life into a stagnant economy?
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Comments
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2012-01-26 12:23
Bad CLICO investments biting them hard ?. EC$25.6 Million written off since 2009. How much more to go ?.
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2012-01-26 21:45
There is still plenty of leeway in the Balance Sheet for good loans as the percentage of loans to Deposits is only 33%. Most Banks operate at a percentage of 80% and even the more conservative ones have a threshold of 60%. The reason for the large investment in securities is to utilise the surplus of deposits over loans in some interest generating capacity if good lending opportunities cannot be found.
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2012-01-27 11:30
Can current and future Loans in the Montserrat Economy be repaid at this time ? Total Loans stood at EC$70 million at 30 November 2011.
Compare this to EC$62 million at 31 December 1997 "Full population" figures .
www.eccb-centralbank.org/PDF/monetary/ms-mnt.pdf
what about Bom's capital ratios and Reserves ? Will they hold up to the requirements by September 2012 ?
BoM needs some new leaders with experience and vision.
Compare this to EC$62 million at 31 December 1997 "Full population" figures .
www.eccb-centralbank.org/PDF/monetary/ms-mnt.pdf
what about Bom's capital ratios and Reserves ? Will they hold up to the requirements by September 2012 ?
BoM needs some new leaders with experience and vision.
0
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2012-01-29 19:04
From the Banking Act
agc.gov.ms/wp-content/uploads/2011/10/Banking-Act.pdf
PART II
FINANCIAL REQUIREMENT AND LIMITATIONS
Minimum paid-up or assigned capital
13. (1) Every licensed financial institution shall maintain in Montserrat unimpaired, paid-up or, as the case may be, assigned capital at least equal to the minimum amounts specified in accordance with the following requirements—
(a) if operating as a bank, the minimum required capital shall be not less than $5,000,000;
(b) if operating as a credit or other financial institution, the minimum required capital shall be not less than $1,000,000.
(2) The Governor after the Minister has consulted with the Central Bank may, from time to time—
(a) by written notice to the main office of each licensed credit or financial institution in Montserrat; or Banking CAP. 11.03 19 Revision Date: 1 Jan 2008 LAWS OF MONTSERRAT
(b) by notice in a newspaper of general circulation in Montserrat or in the Gazette;
increase or vary the minimum amounts of required capital specified in sub-section (1) in respect of all or any appropriate class of financial or credit institution.
(3) Any financial institution which contravenes subsection (1) commits an offence and is liable on summary conviction to a fine not exceeding $50,000.
Maintenance of Reserve Fund
14. (1) Subject to this section every licensed financial institution shall maintain a reserve fund and shall, out of its net profits of each year transfer to that fund a sum equal to not less than 20 percent of such profits whenever the amount of the reserve fund is less than a 100 percent of the paid-up or, or as the case may be, assigned capital of the financial institution.
(2) No financial institution shall declare credit or pay any dividend or make any other transfer from profits whenever such declaration, credit, payment or transfer would result in an impairment of the capital required under section 13.
(3) Notwithstanding the provisions of subsection (1), the Governor, acting upon recommendation by the Central Bank may, on application made by a foreign financial institution, exempt such an institution from the requirements of this section.
Adequacy of Capital
15. (1) A licensed financial institution shall not at anytime have a capital adequacy ratio of less than such percentage, and calculated in such manner, as the Central Bank may determine, in respect of all or any appropriate class of financial institution.
(2) Any ratio required under subsection (1) shall be calculated on a consolidated and a solo basis for every licensed financial institution within a financial group.
(3) Where there is a deficiency in the prescribed capital adequacy ratio, the Central Bank shall require the licensed financial institution to present a plan that is satisfactory to the Central Bank to reconstitute its capital adequacy ratio within thirty days or such longer period as may be determined by the Central Bank.
(4) Where the financial institution—
(a) fails to present a satisfactory plan pursuant to subsection (3); or
(b) fails to implement a plan presented pursuant to subsection (3), 20 CAP. 11.03 Banking Revision Date: 1 Jan 2008 LAWS OF MONTSERRAT
the Central Bank shall take such remedial action as it deems
in accordance with section 22.
agc.gov.ms/wp-content/uploads/2011/10/Banking-Act.pdf
PART II
FINANCIAL REQUIREMENT AND LIMITATIONS
Minimum paid-up or assigned capital
13. (1) Every licensed financial institution shall maintain in Montserrat unimpaired, paid-up or, as the case may be, assigned capital at least equal to the minimum amounts specified in accordance with the following requirements—
(a) if operating as a bank, the minimum required capital shall be not less than $5,000,000;
(b) if operating as a credit or other financial institution, the minimum required capital shall be not less than $1,000,000.
(2) The Governor after the Minister has consulted with the Central Bank may, from time to time—
(a) by written notice to the main office of each licensed credit or financial institution in Montserrat; or Banking CAP. 11.03 19 Revision Date: 1 Jan 2008 LAWS OF MONTSERRAT
(b) by notice in a newspaper of general circulation in Montserrat or in the Gazette;
increase or vary the minimum amounts of required capital specified in sub-section (1) in respect of all or any appropriate class of financial or credit institution.
(3) Any financial institution which contravenes subsection (1) commits an offence and is liable on summary conviction to a fine not exceeding $50,000.
Maintenance of Reserve Fund
14. (1) Subject to this section every licensed financial institution shall maintain a reserve fund and shall, out of its net profits of each year transfer to that fund a sum equal to not less than 20 percent of such profits whenever the amount of the reserve fund is less than a 100 percent of the paid-up or, or as the case may be, assigned capital of the financial institution.
(2) No financial institution shall declare credit or pay any dividend or make any other transfer from profits whenever such declaration, credit, payment or transfer would result in an impairment of the capital required under section 13.
(3) Notwithstanding the provisions of subsection (1), the Governor, acting upon recommendation by the Central Bank may, on application made by a foreign financial institution, exempt such an institution from the requirements of this section.
Adequacy of Capital
15. (1) A licensed financial institution shall not at anytime have a capital adequacy ratio of less than such percentage, and calculated in such manner, as the Central Bank may determine, in respect of all or any appropriate class of financial institution.
(2) Any ratio required under subsection (1) shall be calculated on a consolidated and a solo basis for every licensed financial institution within a financial group.
(3) Where there is a deficiency in the prescribed capital adequacy ratio, the Central Bank shall require the licensed financial institution to present a plan that is satisfactory to the Central Bank to reconstitute its capital adequacy ratio within thirty days or such longer period as may be determined by the Central Bank.
(4) Where the financial institution—
(a) fails to present a satisfactory plan pursuant to subsection (3); or
(b) fails to implement a plan presented pursuant to subsection (3), 20 CAP. 11.03 Banking Revision Date: 1 Jan 2008 LAWS OF MONTSERRAT
the Central Bank shall take such remedial action as it deems
in accordance with section 22.
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