Total assets in Bermuda’s banking sector grew by two per cent, or $0.5 billion, in the fourth quarter of 2022, the Bermuda Monetary Authority has reported.

Releasing the figures in its quarterly banking digest, the BMA said the increase from the previous quarter was due to increases in interbank deposits, which were up 28.1 per cent or $0.9 billion, and loans and advances, up 1.1 per cent or $0.1 billion.

This was partly offset by the decline in investments, which fell by four per cent or $0.5 billion over the same period.

Year-on-year, total assets contracted by three per cent ($0.8 billion), as reflected in the declines in interbank deposits, which were down 16.3 per cent or $0.8 billion, and investments, down 3.2 per cent or $0.4 billion, partly offset by growth in loans and advances and other assets over the same period.

Total liabilities increased by 1.7 per cent ($0.4 billion) from the previous quarter, mainly driven by the net increase in customer deposits, which were up 2.2 per cent ($0.5 billion) from the prior quarter.

Year-on-year, total liabilities decreased by two per cent ($0.5 billion), primarily due to the net decline in customer deposits.

Savings deposits fell by 11.4 per cent ($0.9 billion), and demand deposits decreased by 1.6 per cent ($0.2 billion).

Time deposits grew by 10.3 per cent ($0.4 billion), offsetting some of the year-on-year declines in total liabilities.

Total loans and advances amounted to $9 billion at the end of the fourth quarter.

The percentage of loans to the real estate sector increased slightly to 57.7 per cent of total loans outstanding at the end of the quarter.

Loans to other financial institutions fell by 0.4 percentage points to 23.5 per cent.

The proportion of loans to the remaining sectors also experienced marginal declines, the BMA said.

The sector increased its allocation of holdings in sovereign investments by 1.2 percentage points to 52.4 per cent, the highest level in 2022.

Investments in securitised (non-equity tranches) grew by 0.9 percentage points to 38.8 per cent for the quarter.

The banking sector’s loan to deposit ratio remained stable quarter-on-quarter but increased by 2.5 percentage points year-on-year to close at 38.4 per cent.

Foreign exchange assets amounted to $22.7 billion, a 2.3 per cent ($0.5 billion) increase from the previous quarter.

Foreign exchange customer deposit liabilities amounted to $19.7 billion, an increase of 3.1 per cent ($0.6 billion) from the previous quarter and down 2.5 per cent ($0.5 billion) compared to the previous year.

The BMA said the quarter-on-quarter increase was driven by higher foreign exchange demand deposits which were up five per cent ($0.5 billion) to $10.5 billion, and time deposits which were up 14.3 per cent ($0.5 billion) to $3.7 billion.

Foreign exchange savings deposits fell by 6.8 per cent ($0.4 billion) to $5.5 billion.

The domestic loan to deposit ratio climbed in the fourth quarter by two percentage points to 78.9 per cent.

The BMA said the increase was primarily due to lower customer deposits, down 2.6 per cent to $3.8 billion, compared to the previous quarter, while loans and advances remained unchanged at $3 billion.

The domestic money supply within the local economy fell by 2.1 per cent to $4 billion for the quarter.

The BMA said the decline was due to the fall in local customer deposits, down 2.6 per cent to $3.8 billion.

Notes and coins in circulation were up 2.7 per cent to $193 million, driven by the increase in currency flow during the seasonal period.