Banks helping economy grow
By Sasha Harrinanan Thursday, March 22 2012
THE local economy continues to improve because of increased activity in the banking sector, according to Group CEO of First Citizens bank, Larry Howai.
Noting that during the global economic decline, which started in 2008 and subsequently led to the stagnation of the economy, only real estate mortgages showed any signs of growth, Howai yesterday said demand has picked up “across the board.”
“In the last five months; October to February, everything across the board has actually been up. We’ve seen continuous growth in business lending, commercial lending, corporate lending, real estate lending and in consumer lending,” Howai said.
He was speaking to reporters at the National Information and Communication Technology (ICT) Consultations yesterday at Hyatt Regency, Port-of-Spain. The consultations are being conducted by the Ministry of Science, Technology and Tertiary Education in conjunction with the State’s ICT implementation body, iGovTT.
Referring to data from First Citizens, Howai said even accounting for inflation, the volume of transactions has increased since the start of the bank’s financial year last October.
“Transactions are up 18 percent year-over-year. Even accounting for inflation, we’re starting to see growth in terms of the actual spend taking place (including) electronic payments. We’re monitoring what is coming through, so as fast as you swipe your card, we know how much and where. So we know that the volume of transactions and the value are up over last year,” Howai stated.
Questioned about this increase being an indicator of the International Monetary Fund’s (IMF) prediction last month that the economy would grow by 1.7 percent this year, Howai said “yes.”
“The growth in lending means businesses have started to borrow again. It’s still early but the fact that it’s been consistent suggests to us that, that momentum is likely to continue and I think once the US economy starts to move forward, you’re going to see movement on our side too.
“Although the rest of the Caribbean will pick up too, it will lag behind the US growth,” Howai predicted, “and since a lot of our manufactured goods are exported within the region, this could provide a slight drag for us but we have a lot of other things happening locally (including) in the energy and service sectors. So I think there will continue to be growth, with some momentum going forward.”