Bank sets aside 5pc to write off loans

ONE per cent of the total loans from the Bank of South Pacific are non-performing – “quite low” in comparison to the bank’s past performance, according to chief executive officer Robin Fleming (pictured).
He told The National that the bank had a 5 per cent provision for non-performing loans.
“The prudent management of non-performing loans with a reliable future assessment of economic prospects in the country the bank operated from was important,” Fleming said.
“The non-performing loan ratio is at the end of the first quarter that is now down below 1 per cent.”
He said it was quite low.
“So that is 1 per cent of our total loans that are not performing,” he said.
“Our provisions to total loans is about 5 per cent which means we got a coverage ratio of three and a half times for provisions against non-performing loans.
“We do have a balance sheet that has the capability to allow for any changes in the economic environment.
“It is somewhat difficult at the moment.
“It is how you manage non-performing loans in surer ways so that you have provisions to allow for those non-performing loans and to have a future assessment of what the economic activity of Papua New Guinea that we operate in will be like in the next two to three years.”