The assets of the financial system reached RD$3.28 trillion at the end of the first quarter of 2023, for a year-on-year growth of 9.3%, according to data from the quarterly report on the performance of the financial system of the Superintendency of Banks (SB).
The solvency index of the financial system also presented an increase in relation to the previous quarter, reaching 17.2%, for a variation of 52 basic points, maintaining its stability, despite the increase in interest rates during the past year.
Similarly, technical equity maintains its healthy growth trajectory, reaching RD$355,815 billion for an increase of 14.7% in relation to March 2022. 83.6% is made up of primary capital, characterized by its greater absorption capacity of losses.
In the case of deposits, they presented an interannual growth rate of 9.5%, totaling RD$2.3 trillion, with an interannual increase of RD$202,579 million.
Assets
According to the SB publication, bank assets continue to grow at a rate close to pre-pandemic levels, especially due to the good performance of the loan portfolio, since it contributed 87.2% of growth.
Indeed, the gross credit portfolio was placed at RD.66 trillion (26.6% of GDP), for a year-on-year increase of RD$216,498 million, with a faster upward trajectory than the rest of the economic activity.
This behavior has been stimulated mainly by the credit and consumer card segments, with year-on-year expansions of 19% and 14.2%, respectively.
According to the report, “interest in the money market is showing early signs of moderating given the favorable context in the recent inflation trend. This panorama was presented before the most recent reduction of the Monetary Policy Rate from 8.50% to 8.00%, applied by the Monetary Board.
Thus, the active and passive weighted average interest rates (TIPP) of commercial banks closed March at 15.5% and 10.2%, respectively (+5.1 and +5.4 percentage points since March 2022).
Provisions
The publication of the SB reveals that, in March of this year, the provisions were in RD$60,000 million, decreasing 2.1 percentage points with respect to the previous quarter, equivalent to 3.8% coverage of the total loan portfolio.
delinquency
The delinquency rate remains at historically low levels, barely reaching 1.1% last March.
The stressed delinquency of the system was 7.31%, affected by the restructurings that accumulated 5.36 percentage points, the write-offs of the last 12 months contributed 0.88 percentage points, while the other components represented 1.07 percentage points.
The stressed delinquency indicator is used to provide a more complete view of the EIF’s credit risk management process, as well as the situation of its loan portfolio. It is built by combining different indicators that capture the impact of debtors who are not current with their obligations. Said indicator incorporates, in addition to the overdue portfolio, the one that is in judicial collection, credit cards with arrears of 31 to 60 days, restructured loans and write-offs and adjudications of the last 12 months.
utilities
The financial system obtained a growth in its return on equity (ROE) of 2.3 percentage points, as well as 0.3 percentage points in return on assets (ROA), compared to the same quarter of the previous year.
Return on equity before taxes rose to 11%, while return on assets held at 14.3%.