Confidence in St. Kitts and Nevis’ economy is high, fueling further sustainable growth as banks lend more
(PRESS SEC) – Banks are extending more credit to businesses and households, with confidence in St. Kitts and Nevis’ economy being high and consumer spending continuing to grow strongly under the leadership of Dr. the Honourable Timothy Harris, the country’s Prime Minister and Minister of Finance, and his Team Unity administration.
St. Kitts-Nevis-Anguilla National Bank Limited, for instance, reported in its 2016 Annual Report that, “Total loans and advances to customers increased by $57.4 million or 8.9% to $703.9 million in 2016 over 2015,” while adding: “Commercial demand loans, which were recorded at $260.1 million in 2016, accounted for 46.6% of the total productive loans and advances portfolio.” Its 2016 Annual Report also noted that mortgages accounted for 17.0% of the total productive loans and advances portfolio.
Moreover, “Scotiabank [in St. Kitts and Nevis] achieved good results for the year…recording a near 60% increase in mortgages,” according to The Banker Magazine, a Financial Times publication, which named Scotiabank Bank of the Year 2016 in St. Kitts and Nevis.
This positive growth in consumer banking is indicative that the middle class is growing.
At National Bank, customer deposits grew by $53.2 million or 1.8% to $3.0 billion in 2016 over the year 2015. Fixed deposits at the Bank rose by $84.7 million or 6.2% and Savings deposits rose by $14.7 million or 3.7%.
The fact that consumers in St. Kitts and Nevis are spending more (for instance, sales in the wholesale and retail sector grew by 9.13% in 2015 compared to 0.35% in 2014) while depositing more savings in the bank indicates that incomes are rising.
Speaking at his press conference on Wednesday, April 5th, 2017, Prime Minister Harris said earnings data from 2016 show that a lower portion of employees earned minimum wage in relation to 2015 (10% less than in 2015), as well as compared to previous years. The minimum wage in St. Kitts and Nevis is set at $9.00 per hour or $360.00 per week.
Dr. Harris further reported that there was an 18% increase in workers earning in the highest income category, according to Social Security data for the year 2016.
The three income categories that Social Security bases its calculations on are: (1) up to $6,500.00 ECD per month, (2) above $6,500.00 ECD up to $8,000.00 ECD per month, and (3) above $8,000.00 ECD per month.
What’s more, the Prime Minister of St. Kitts and Nevis reported back in April that, “In 2016, we outdid all preceding years with an average of about 24,773 jobs monthly.”
The Honourable Prime Minister continued: “That’s just about 25,000 people being put to work in a small country such as St. Kitts and Nevis. Something good is indeed happening.”
The Prime Minister of St. Kitts and Nevis went on to note that the average monthly wage bill was also the highest on record, adding: “The total earnings for 2016 being reported by Social Security have been put at about $995 million.”
The growing economic prosperity in St. Kitts and Nevis – reflected in the largest ever job gains and rising incomes – means that banks have more cash on hand and are therefore more likely to lend money.
For instance, National Bank’s 2016 Annual Report stated that, “Liquidity remains very strong and available for new opportunities – to this end, the Bank has contracted with St. Kitts Nevis Development Bank to reactivate its Fresh Start programme for which demand has substantially exceeded initial expectations and which offers financial support to new local enterprises which can significantly impact the local economy.”