THE Fiji Development Bank needs to lower its high operational costs, says Standing Committee on Economic Affairs chairperson Sakiusa Tunabuna.
While tabling the Committee’s review of the consolidated FDB Annual Reports for 2022 and 2023, he highlighted their recommendations that the Bank and Government needed to address.
“In 2023, FDB showed remarkable improvement in its financial performance, achieving a profit of $3.83 million, which is still below the pre COVID level,” he said.
“It was noted that FDB’s market share declined from 7.35 to 5.5 per cent which indicates the private sector prefer other commercial banks.
“The reason for this is the high interest rates currently offered by FDB which is not competitive.
“In addition, FDB has a high operational and funding cost, resulted in a lending rate of 5.3 per cent making it expensive for borrowing.
“To compete in the market, FDB needs to lower its operational cost.”
He said there was a slight reduction in non-performing loans from $152.3 1 million in 2022 to $116.94 million in 2023, which is still high in comparison to the government guarantee of $115 million.
“In the 2021 – 2022 National Budget, the government made available $200 million for COVID 19 recovery credit guarantee scheme and also approved a $5 million for the RBF to manage the guarantee under the scheme.
“$63 million was disbursed to 4567 their customers, and currently 42 per cent are nonperforming loans, which is $28.2 million.”
