H. Wayne Powell, executive vice-president, Scotiabank Jamaica. - file

Six months after Bank of Nova Scotia Jamaica (BNSJ) launched a customer-assistance programme designed, it said, to help borrowers weather the recession while arresting growing delinquency, the bank is reporting a high take-up of the offer as well incremental success in reining in non-performing loans.

With some 2,000 of 4,000 contacted clients qualifying and opting for assistance, various arrangements, including skip payment, moratoriums, extended loan periods and additional loans have been taken up by clients, the bank has reported.

It said where the security offered was adequate, some clients received up to 10- and 15-year extensions on their loan repayment periods.

High delinquency rate

Arising from a range of measures, non-performing loans among BNS's retail clients were reduced by a percentage point in the 12 months to July this year, H. Wayne Powell, executive vice-president of branch banking, told Wednesday Business.

However, at five per cent to six per cent of the total small-business loan portfolio, the delinquency rate is higher among this class of borrowers.

Credit card delinquency was also marginally down to six per cent from 6.6 per cent.

The BNS official would not disclose the current stock of the bank's bad debts, but its second- quarter financials reported $3.573 billion in non-performing loans for the group at April 30.

This has been cause for concern at the bank, which saw at $1 billion spike in bad loans compared to a year ago, and $22 million more than the previous quarter.

Scotia Group's non-performing loans to April represented 3.81 per cent of total loans and 1.16 per cent of total assets compared to 2.78 per cent and 0.83 per cent, respectively, one year before.

No quick fix

With the bank attributing the increased delinquency to the impact of the current economic conditions, especially on retail loan customers,it announced then the remedial measure of the customer-assistance programme.

Meanwhile, BNS's Powell said there is no quick fix for the delinquency problem affecting small-business owners as their entire operations have to be reviewed before solutions can be recommended.

"We have been looking at their business plans, revenue streams, cash flow and expenses to determine what might be available to service loans. Some have been offered extensions to the life of the loan, moratoriums or additional financing wherever cash flow was needed," he said.

With continuing calls for help from customers, the bad-loans assistance programme is to be extended for a further six months.

avia.collinder@gleanerjm.com