The Fiji Development Bank (FDB) has been urged to reduce its high operational costs by Sakiusa Tunabuna, chairperson of the Standing Committee on Economic Affairs. This recommendation came during discussions on the bank’s consolidated annual reports for 2022 and 2023, where it was noted that FDB achieved a profit of $3.83 million in 2023—an improvement yet still below pre-COVID-19 levels.
Tunabuna highlighted that despite the profit growth, FDB’s market share declined from 7.35% to 5.5%, suggesting a preference among the private sector for other banks, which offer more competitive interest rates. The bank currently faces challenges with its higher lending rates of 5.3%, attributed to its elevated operational and funding costs. This places FDB in a difficult position in comparison to local commercial banks.
Additionally, while there was a slight decrease in non-performing loans from $152.31 million in 2022 to $116.94 million in 2023, the figures remain concerning, particularly when set against a government guarantee of $115 million. The necessity for improvements is echoed in the availability of $200 million provided by the government for a COVID-19 recovery credit guarantee scheme, of which $63 million has already been disbursed to borrowers, with a notable 42% classified as non-performing loans.
In comparison, recent similar reports have noted that as of 2024, FDB recorded a profit increase to $5.5 million, with efforts being made to reduce interest rates on various loan packages to increase competitiveness. Such initiatives foster hope for both the bank’s future and the financial landscape in Fiji, emphasizing a dual focus on profitability and customer support.
As the FDB seeks to navigate these financial challenges and improve lending conditions, it plays a critical role in supporting local businesses and the overall economy. Engaging with loan recipients through feedback mechanisms is expected to help address concerns and better align the bank’s offerings with community needs, fostering a more resilient and inclusive economic environment in Fiji.
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