26 January 2016

Liberia: 'Profitability Major Challenge to Banking Sector'

A Central Bank of Liberia (CBL) financial and economic bulletin released Friday says "profitability remains a major challenge in the banking sector."

The bulletin, which covers CBL's monetary and banking activities between July and September 2015, attributed the shortfall to poor asset quality of a number of banks, weak credit administration and the relatively high operating expenses incurred by banks.

During the period under review, seven of the nine banks in the country showed growth in total assets, while the other two banks experienced negative growth, the bulletin stated.

It, however, did not identify the banks. The bulletin added that eight of the nine banks showed growth, while one experienced a decline in terms of total capital position.

"Despite these challenges, the banking system continues to be well-capitalized and liquid, reflecting the continuous public confidence in the system," the bulletin noted.

However, developments in the industry during the same period showed favorable growth rates "indicating soundness of the banking system," the bulletin pointed out.

It indicated that compared to the second quarter of 2015, the banking sector's total assets, deposits, gross loans and capital increased by 0.1 percent, 3.2 percent, 11.6 percent and 5.6 percent, respectively.

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