Peo­ple are bor­row­ing more from the banks.

Ac­cord­ing to the Cen­tral Bank’s An­nu­al Eco­nom­ic Sur­vey 2024, which was re­leased two weeks ago, 2024 saw a surge in banks’ lend­ing to con­sumers.

The re­port states, “The pace of con­sumer lend­ing sped up in 2024. Sup­port­ed by at­trac­tive fi­nanc­ing terms, con­sumer lend­ing end­ed 2024 in dou­ble-dig­its (12.1 per cent, year-on-year), up from 8.8 per cent in De­cem­ber 2023. In the fourth quar­ter of 2024, the val­ue and vol­ume of con­sumer loans ex­ceed­ed that of 2023, record­ing in­creas­es of 11.9 per cent and 5.5 per cent, re­spec­tive­ly.”

The main rea­son for the loans, ac­cord­ing to the sur­vey, was for the pur­chase of cars, re­al es­tate and ser­vic­ing debt.

The re­port stat­ed, “No­table year-on-year in­creas­es were record­ed in loans for mo­tor ve­hi­cles (15.2 per cent), con­sol­i­da­tion of debt (11.2 per cent), re­fi­nanc­ing (7.5 per cent), land and re­al es­tate (20.3 per cent) and oth­er pur­pos­es (15.4 per cent) which in­cludes cred­it card debt (11.2 per cent) in De­cem­ber 2024.”

The in­crease in re­turns from loan seg­ments was recog­nised by the bank­ing sec­tor.

Three of the coun­try’s banks not­ed re­cent­ly that loan growth con­tributed sig­nif­i­cant­ly to im­pres­sive fi­nan­cial per­for­mances in re­cent fis­cal re­ports.

On May 2, Vin­cent Pereira, chair­man of Re­pub­lic Fi­nan­cial Hold­ings Ltd (RFHL) said as much while an­nounc­ing the group record­ed prof­its at­trib­ut­able to eq­ui­ty hold­ers of $1.01 bil­lion for the pe­ri­od end­ed March 31, 2025. The fi­nan­cial re­turn rep­re­sent­ed an in­crease of 1.1 per cent when com­pared to the pri­or pe­ri­od, Pereira ex­plained.

He said, “Growth for the pe­ri­od was bol­stered by the group’s ro­bust loan growth and pru­dent cost man­age­ment.”

In the First Cit­i­zens Group’s fi­nan­cial re­port re­leased on May 7, group chair­man An­tho­ny Smart al­so stat­ed that the group’s loan port­fo­lio con­tributed sig­nif­i­cant­ly to record­ing prof­it af­ter tax for the or the six-month pe­ri­od end­ed March 31, 2025 of $444.9 mil­lion. This per­for­mance was said to be an in­crease by 2.1 per cent over the bank’s per­for­mance in 2024 at the same time.

Smart said, “This in­crease over the six month pe­ri­od was un­der­pinned by the growth of ap­prox­i­mate­ly $1.5 bil­lion in the loan port­fo­lio.”

At Sco­tia­bank’s 55th An­nu­al Meet­ing of Share­hold­ers in March, the bank’s chief fi­nan­cial of­fi­cer, Re­shard Mo­hammed stat­ed that for bank’s per­for­mance in 2024, “Net in­ter­est in­come in­creased by $90 mil­lion or 7 per cent dri­ven by growth in our loan port­fo­lio as well as im­proved net in­ter­est mar­gins. This is the high­est lev­el of net in­ter­est in­come ever at­tained by our bank.”

Sco­tia­bank chair­man Derek Hud­son al­so said at the meet­ing, “For the year, the group record­ed to­tal rev­enue of $1.95 bil­lion, an in­crease of $67 mil­lion or 4 per cent over the pri­or year, dri­ven main­ly by growth in net in­ter­est in­come of $90 mil­lion or sev­en per cent. This in­crease was achieved through con­tin­ued strong ex­pan­sion in loan bal­ances in both re­tail and com­mer­cial seg­ments.”

How­ev­er, it was not just the av­er­age man walk­ing in­to banks to se­cure loans in 2024, as the Cen­tral Bank sur­vey al­so not­ed that busi­ness­es al­so took the op­por­tu­ni­ty to seek ad­di­tion­al fi­nanc­ing ser­vices from com­mer­cial banks over the course of the year.

The re­port said, “Busi­ness­es’ cred­it ap­petite al­so grew in 2024, al­beit at a slow­er pace. In De­cem­ber 2024, busi­ness cred­it ex­pand­ed by 8.9 per cent com­pared to 10.1 per cent record­ed in De­cem­ber 2023. Ac­cord­ing to sec­toral busi­ness lend­ing da­ta, growth in the val­ue and vol­ume of busi­ness loans de­cel­er­at­ed.

“The val­ue of loans reached 6.6 per cent, and the vol­ume of loans reached 8.4 per cent. No­table in­creas­es were ob­served for loans to the fi­nance, in­sur­ance and re­al es­tate sec­tor (5.4 per cent), con­struc­tion sec­tor (19.7 per cent) and dis­tri­b­u­tion sec­tor (10.4 per cent).

“On the oth­er hand, de­cel­er­a­tions were ob­served in man­u­fac­tur­ing (0.2 per cent), pe­tro­le­um (11.7 per cent) and oth­er ser­vices (5.2 per cent) sec­tors.”

The sur­vey said, “The ro­bust growth in cred­it to the pri­vate sec­tor con­tin­ued in 2024, bol­stered by con­sumer, busi­ness and re­al es­tate mort­gage lend­ing. On a year-on-year ba­sis, con­sol­i­dat­ed sys­tem cred­it growth was 8.0 per cent in De­cem­ber 2024, com­pared to an in­crease of 8.4 per cent in De­cem­ber 2023. Com­mer­cial bank lend­ing was re­spon­si­ble for the growth in 2024, as non-bank lend­ing ex­pe­ri­enced a con­trac­tion.

“Com­mer­cial bank lend­ing in­creased by 9.3 per cent (year-on-year) in De­cem­ber 2024 com­pared to 8.2 per cent in De­cem­ber 2023, while non-bank lend­ing de­clined by 4.5 per cent com­pared with an in­crease of 10.2 per cent, due in part to a falloff in re­al es­tate mort­gage lend­ing and a slow­down in con­sumer loans, over the same pe­ri­od.”

While the re­port not­ed a slow­down in re­al es­tate mort­gage lend­ing to­ward the end of 2024, it con­firmed there was pos­i­tive mo­men­tum over most of the year.

The sur­vey stat­ed, “For re­al es­tate mort­gage lend­ing, growth re­mained healthy in 2024. Over the twelve months to De­cem­ber 2024, de­spite a slight de­cel­er­a­tion to 6.3 per cent, from 6.9 per cent in De­cem­ber 2023, the growth of re­al es­tate mort­gage loans kept mo­men­tum.

“Res­i­den­tial re­al es­tate mort­gage lend­ing out­stripped com­mer­cial re­al es­tate mort­gage lend­ing over the year. In De­cem­ber 2024, res­i­den­tial and com­mer­cial re­al es­tate mort­gage lend­ing record­ed in­creas­es of 6.4 per cent and 5.9 per cent, re­spec­tive­ly, com­pared to 5.4 per cent and 10.1 per cent in De­cem­ber 2023.”

The fi­nal quar­ter slow­down was par­tic­u­lar se­vere with re­gard to home ren­o­va­tion. How­ev­er ac­cord­ing to the da­ta pre­sent­ed in the sur­vey there ap­peared to be greater in­ter­est in new­ly con­struct­ed homes.

“Ac­cord­ing to quar­ter­ly da­ta, in­ter­est rates on ‘new’ com­mer­cial bank re­al es­tate mort­gages edged down from 5.08 per cent in the last quar­ter of 2023 to 4.85 per cent in the last quar­ter of 2024—re­flect­ing a de­cel­er­a­tion in both res­i­den­tial (0.2 per­cent­age point fall) and com­mer­cial (0.7 per­cent­age point fall) mort­gage rates,” the re­port said.”

With the dip in rates, the mar­ket per­for­mance was mixed. Growth in the vol­ume of loans for ren­o­va­tion suf­fered, con­tract­ing by 13.9 per cent in the fourth quar­ter of 2024. How­ev­er, the vol­ume of loans to ac­quire new­ly con­struct­ed hous­es, land and ex­ist­ing hous­es ac­cel­er­at­ed by 40.4 per cent, 14.5 per cent and 14.2 per cent, re­spec­tive­ly, in the fourth quar­ter of 2024.”