Bank assets grow 11% in third quarter

Indicating a strong financial structure in the Northern Marianas, CNMI’s banking industry has surpassed the $600 million-mark, posting a strong growth of 11 percent in the third quarter of the year.

Bank assets jumped to $631.024 million by end-September 2000 as against the $571.85 million recorded during the same period in 1999, a report obtained from the Banking Division of the commerce department disclosed.

However, the Quarterly Report revealed that bank resources in the July-September 2000 period suffered a modest fall when compared with the figures recorded during the second quarter of the year’s $632.050 million.

Experts said the second quarter-third quarter deficiency is considered a very minimal drop and does not pose significant threat to the Commonwealth’s financial infrastructure.

Bank assets registered consistent growth in each of the four quarters last year, reaching $589.9 million as of end-December 1999, up from the previous quarter figure of $571 million.

Deposits totaled $570.4 million in the fourth quarter of 1999, higher by about $15 million from the quarter-ago’s $555 million. In the second quarter of last year, total bank deposits amounted $554 million, inching upwards from the previous period’s $529 million.

Total deposit demands for the Commonwealth government and other agencies reached $19 million in 1999, while demand for private clients amounted $133.8 million.

Government savings deposit totaled $27.3 million, lower than the private sector’s $157 million.

However, savings deposit from both the government and the private sector dropped to $184 million from $191.5 million between the third and fourth quarters of 1999.

The 1999 level registered an even lower aggregated savings deposit compared with the second quarter figures of $203 million. First quarter savings deposit totaled $204 million.

The commerce department quarterly report also noted that interest income grew by $5.23 million from $18.4 million in the third quarter of last year to $23.7 million by end-December 1999.

The banking industry hit the half-a-billion mark in 1996, making it one of the healthiest sectors after garment manufacturing and tourism.

The CNMI is home to 10 banks — nine are in operation with physical facilities and locations while two were licensed and are operating via their resident agents.

By end-1998, commercial and savings banks in the CNMI registered about $522 million in total deposits, up from the 1997 figure of $481.1 million.

Despite the adversities brought about by the Asian currency crisis to the Commonwealth’s tourism and garment industries, banks have gained much importance as they amplify the magnitude of problems in the domestic economy.

Recession normally result to a more resilient banking system since banks are in the position to help replenish the economy through debt restructuring. This may hold especially true with businesses that are experiencing intolerable volatility because of the recession.