An audit of the Jamaica Mortgage Bank has revealed that progress has been made in reducing its non performing loans, but there are still areas of concern.
Jamaica Mortgage Bank reduces non-performing loans
9:14 am, Wed January 11, 2017
The entity, which finances housing developments, had a loan portfolio of $1.7 billion as at March 31, 2016.
The Auditor General found that $970 million, or 57 per cent, was outstanding for more than a year.
The Auditor-General noted instances of inconsistent application of Jamaica Mortgage Bank’s loan policy between 2003 and 2015, which may have contributed to the high level of non-performing loans.
The Auditor-General's report, which was tabled in the House of Representatives on Tuesday, said non-performing loans averaged 68 per cent of the total loan portfolio from 2010 to 2016.
Although there was a decline in non-performing loans, performing loans also declined during the period.
The decline in non-performing loans was due mainly to settlement arrangements with delinquent borrowers.
The Jamaica Mortgage Bank, in response to the Auditor-General's concerns, has asserted that its non-performing loans are sufficiently collateralized.
However, the Auditor-General says the accumulation of such assets should be of concern to the Mortgage Bank and the Government, as the entity may be left holding assets which may prove difficult to liquidate.
In addition, the Auditor-General says, in the event that the assets are disposed of, the Jamaica Mortgage Bank may not realize the full value of the loans.