Jamaicans pour billions more into bank, credit union savings in 2023

Jamaicans increased their savings over the past year, adding nearly $70 billion more to deposit accounts in eight commercial banks, and $14 billion more at credit unions.

The numbers represent a eight to nine per cent annual growth in savings at banks up to last November, and more than 11 per cent at credit unions as at October 2023.

Jamaica has 25 credit unions in operation, three times the number of traditional banks, but still just a fraction of the size of the commercial banking sector in terms of assets and deposits.

In November, savings at the eight commercial banks hit a new high of over $875 billion, up from $806 billion in November 2022, according to Bank of Jamaica data. Their combined assets topped $2.4 trillion.

Meanwhile, the credit unions grew savings to just around $139 billion as of October 2023, up from $124.6 billion the previous year. Their combined assets amounted to nearly $181 billion, based on preliminary numbers for November, the central bank said. That’s just seven per cent of the size of the banks.

The BOJ, the watchdog for banks and other deposit-taking institutions, lists credit unions among the group it regulates, but it is still awaiting the passage of legislation for its full takeover of the supervisory role.

The credit union movement represents a million savers, a number that has been static for at least nine years.

The small member-based financial institutions, which are sometimes referred to as community banks, are primarily monitored by the Department of Cooperative and Friendly Societies, which requires all cooperatives to be registered. The department’s revised role regarding credit unions will be reflected in pending legislative amendments to the Cooperative Societies Act, the BOJ said, but supervision of the community banks will primarily be the responsibility of the central bank. Its prudential or regulatory role will be defined under the Credit Union (Special Provisions) Bill, which is also awaiting passage.

“The legislative framework is being finalised,” BOJ said, while noting that it was one of many competing for the Chief Parliamentary Counsel, the body that drafts legislation that eventually goes to the House for review and debate by lawmakers.

“Until the framework is settled, the prudential and conduct supervision of the sector remains with the DCFS,” the central bank noted.

avia.collinder@gleanerjm.com