The Trinidad and Tobago Banking System: Some Stylized Facts Ewart S. Williams Governor Central Bank of Trinidad and Tobago

Selected Economic Indicators p Growth in Real GDP (%) Energy Non Energy Unemployment * Inflation (end of period) % change Core Food Prices Gross Official Reserves (US$Mn) ,876.06,089.5 External Current A/c Balance (US$Mn) ,340.1 * Inflation and Reserves data are for Sept. 2006; External A/c data are provisional to June 2006 Source: Central Statistical Office and Central Bank of Trinidad and Tobago

Commercial Banks Changes in Assets and Liabilities Assets Loans Investments Liquid Funds Liabilities Deposits Fund Raising Instruments Borrowings (Annual Average Growth Rates – per cent)

Conglomerates Share of Total Assets ConglomeratesTotal Assets ($Mn)% of System Assets CL Financial Group23, RBL Group18, RBTT Financial Holdings 18, GHL Group5, TOTAL66, % Source: Central Bank of Trinidad and Tobago

Contribution to Total Assets of the Financial System Type of Institution p 2005 p Central Bank Commercial Banks Finance Companies & Merchant Banks Trust & Mortgage Finance Companies Development Banks Credit Unions Insurance Companies Thrift Institutions National Insurance Board Stock Exchange0.0 Mutual Funds Deposit Insurance Corporations Home Mortgage Banks Trinidad & Tobago Mortgage Finance Total100 (per cent)

Aggregate Mutual Fund Values and Commercial Bank Deposits Source: Central Bank of Trinidad and Tobago

Sectoral Distribution of Commercial Bank Loans PERCENT OF AVERAGE TOTAL LOANS Real Estate Mortgages Public Sector Agriculture Petroleum Manufacturing Construction Distributive Trades Transport, Communication & Storage Finance, Insurance & Real Estate Personal Services Consumer Loans Miscellaneous TOTAL100 Source: Central Bank of Trinidad and Tobago

Exposure of Domestic Banking System RegionsDec-04Dec-05Jun-06 Caribbean 6,331 6,320 6,216 Belize Dominica Grenada Barbados 1,789 1,571 1,533 Jamaica 1,954 2,579 2,161 St Lucia 1,601 1,532 1,833 Rest of the World 4,269 4,580 7,984 Total 10,600 10,900 14,200 % of Total Assets Source: Central Bank of Trinidad and Tobago (TT$ Millions)

Macro Prudential Indicators Selected Countries Macro Prudential Indicators USUK*JamaicaBarbadosT & T Prudential Capital Adequacy Non-Performing Loans to Gross Loans Loan Loss Provisions to Gross Loans0.7………3.7 Profitability Return on Assets Return on Equity …15.1**20.2 * Data up to 2004 ** Data up to 2003

Interest Rate Spreads Barbados Bahamas Belize Guyana Jamaica Suriname Trinidad and Tobago Average OECS Average Caribbean Source: ECLAC based on official data

Distribution of Loans by Interest Rate Bands Jun-06 0 % - 5 % % - 7 % % - 8 % % - 9 % % - 10 % % - 12 % Over 12 % Total100 (per cent) Source: Central Bank of Trinidad and Tobago

Challenges for Regulation the presence of financial conglomerates; the increase in cross-border lending; the introduction of higher risk lending

Pending Legislative Amendments The Central Bank is currently amending legislation to: (i)provide for the supervision of conglomerates; (ii)to accommodate a harmonized approach to regulation among regional jurisdictions, including the exchange of information; (iii)to emphasize risk-based capital adequacy; and (iv)to strengthen risk management and governance procedures

The end