The Maldivian financial sector has foreseen development in the past few years. The banking sector, especially has taken great strides as one of the fastest developing components of the Maldivian economy.
Statistics from the Maldives Monetary Authority (MMA) show that in 2016, the key performance indicators of both the banking and non-banking sectors showed improvements. Significant loan recoveries in the banking sector caused a decrease in non-performing loans (NPLs), and fueled a marked increase in profitability and capital.
img:http://s3.psmnews.mv/images/660x400/7974.jpg|Maldives Islamic Bank - File Photo: PSM News
The loan portfolio continued to grow, while liquidity remained adequate at the same level as the previous year. The composition of liquid assets showed a shift, with an increased investment in government treasury bills. The banking sector's credit risk was mitigated by a high level of loan loss provisions that fully covered the NPLs.
MMA noted that the financial sector was strong during 2016, especially in the banking sector. The banks' balance sheet strengthened due to the recovery of few large nonperforming loans, and combined with increased lending activities, further improved their profitability.
img:http://s3.psmnews.mv/images/660x400/14597721323093.jpg|State Bank of India - File Photo: PSM News
Significant development of the financial sector in 2016 was the establishment of a new commercial bank and two new insurance companies, which would bring more competitiveness and development to the financial sector, according to the central bank.