Malé, Maldives – The financial health of the Maldives’ banking sector remained robust at the close of the previous year, according to statistics released by the Maldives Monetary Authority (MMA), the nation’s central bank.

Capital Adequacy

The MMA’s report indicates an enhancement in banks’ capital adequacy, a key measure of their financial resilience. The Capital Adequacy Ratio (CAR), which represents the reserve banks must maintain to withstand financial risks, was reported at 45.0% by November of the preceding year. This figure is significantly high and considered safe when benchmarked against international standards.

Loan Performance

Furthermore, the proportion of non-performing loans (NPLs) – loans that have not been repaid by borrowers – decreased by the end of the previous year. By November, the ratio of NPLs to total loans stood at 5.3%.

The report also highlighted an increase in provisions for non-performing loans, which rose to 105.7%. This measure is designed to mitigate potential losses for banks in the event of loan defaults, underscoring strong risk management practices.

Profitability

The MMA also noted an improvement in the banking sector’s profitability compared to the previous reporting period. The Return on Equity (ROE) for banks was recorded at 18.7%, while the Return on Assets (ROA) reached 4.6%.