Barbados’ financial sector remained a pillar of economic strength in 2024, with commercial banks and finance companies continuing to play a vital role in supporting household and business savings, credit expansion, and economic activity. While overall profitability dipped compared to 2023, the sector still posted solid earnings and maintained a trajectory of asset growth, according to the latest annual report from the Barbados Deposit Insurance Corporation (BDIC).
Commercial Banks Lead With Resilient Performance
Commercial banks, which hold the lion’s share of the country’s financial assets, continued to dominate the sector, accounting for 93.2% of total deposit-taking assets at the end of 2024. This dominance reflects strong consumer trust in Barbados’ banking institutions.
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The banks’ asset growth was driven by a 14.2% increase in loans and advances year-on-year, as well as a remarkable 69% surge in “other deposits,” which climbed by $273.3 million. This growth underscores increased lending activity and higher deposit inflows, both signs of a healthy and active financial system.
Despite a dip in profitability, commercial banks still reported robust earnings of $186.5 million in 2024. The previous year saw higher earnings of $257 million after taxes, as highlighted by Prime Minister Mia Amor Mottley during her March 2025 Budgetary Proposals presentation.
“We are asking banks to be far more proactive… It’s time to start taking a chance on ordinary people in this country,” Mottley urged, calling for more accessible mortgage financing for Barbadians.
Sector-Wide Profitability Down, But Stable
The combined net income of Barbados’ deposit-taking entities (banks and finance companies) in 2024 stood at $198.6 million, a 26.5% drop from the previous year. The decline was largely attributed to higher operating costs, increased interest expenses on time deposits, and reduced recoveries on bad debt provisions, which came in at $26.1 million, down $78.2 million from 2023.
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The non-bank deposit-taking sector—which includes finance companies—earned $12.1 million in profits, reflecting only a slight 2% dip from the year before. This segment’s total assets stood at $1.1 billion, representing 7% of the combined sector.
Finance companies also experienced a healthy 6.6% growth in loans and advances, with a $50.4 million increase over 2023, along with a $20.5 million rise in transferable deposits. This indicates continued demand for credit and resilience among smaller financial players.
External Pressures Impact Profit Margins
In addition to rising expenses and tighter margins, the banking sector’s 2024 performance was influenced by the government’s increase in corporate tax to 9%, effective January 2024. This contributed to the year-over-year dip in retained profits.
However, the Central Bank of Barbados noted that higher net interest income continued to support profitability among commercial banks, even as finance companies felt the squeeze from non-interest expenses.
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Outlook for 2025 and Beyond
Despite the reduced profitability figures, the Barbados banking sector remains in a strong position. Expanding loan portfolios, increased deposits, and sustained asset growth across both commercial and non-bank institutions point to ongoing confidence in the financial system.
The BDIC’s latest findings reinforce the importance of Barbados’ financial institutions in supporting national economic goals—from expanding homeownership opportunities to driving business development. With continued calls for more inclusive lending and strategic investment, the sector is poised to evolve in ways that better serve all Barbadians.
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