The Bermuda Monetary Authority has published statistics for the territory's banking industry during 2011, showing that total assets rose by 6% in Q4 2011 and 9.3% year on-year.
The figures show that investment activity increased markedly during the year and the uptake of demand deposits, those that can be withdrawn without prior notice, was up 17.9%.
Total customer deposits rose by 7.3% during the final quarter, and by 12.2% year-on-year. The quarterly change was driven by higher USD demand deposits (up 30.1%), which was partly offset by lower foreign exchange deposits (down 11.2%). USD demand deposits continue to show quarterly growth, particularly when compared to a year earlier (up 49.7%). Deposits with other financial institutions, as a percentage of total assets, continue to decline and are at their lowest level since end-Q3 2009.
The increase in banks' total assets by 9.3% year-on-year, was primarily influenced by increased investment activity, which saw a 38.1% increase during the quarter, and 42.2% increase year-on-year. The proportion of assets allocated to investments continues to rise, up 35.5% in Q4 2011 from 27.3% in Q3 2011.
Investment exposure to sovereign debt more than doubled with investment in highly-rated sovereign investments having increased to 42.3%, up from 19% in Q3 2011.
Non-performing loans to total loans have steadily increased throughout 2011, but have remained fairly flat since Q2 2011. Capitalization continues to be high, the BMA said. The aggregate risk asset ratio of Bermuda banks remained flat at 23.2% during the quarter as lower risk-weighted assets (down by 3.8%) offset an increase in leverage.