Past-due loans in Jamaica’s banking system surged to $84.6 billion in January 2026 – the highest level on record – driven by a deterioration in tourism sector borrowing that suggests Hurricane Melissa’s economic damage is still rippling through the island’s loan books five months after the storm struck.
The January figure represents a two-thirds jump from December 2025’s $50.7 billion, and nearly double the $45.2 billion recorded in January 2025, according to Bank of Jamaica data.
Past-due loans – those overdue between 30 and 89 days – are considered an early warning signal of financial stress, as they often migrate into the more serious non-performing category if left unresolved. The figure has surpassed the COVID-19 record at $79.9 billion in April 2020.
In January, tourism sector past-due loans ballooned to $27.5 billion from $3.0 billion in December – a ninefold increase in a single month – and from $246 million a year earlier. The sector, which accounts for roughly a fifth of Jamaica’s GDP, was among the hardest hit when Hurricane Melissa made landfall as a Category 5 storm on October 28, 2025.
Many customers would have requested moratoria, said a hotel source, who asked to remain anonymous, in the period of uncertainty. “I think other sectors have suffered too, not just tourism,” he said.
Jason Russell, president of the Montego Bay Chamber of Commerce and Industry, anticipates improvement, presumably as the sector rebounds from weak arrivals. Efforts to reach Chris Jarrett, president of the Jamaica Hotel and Tourism Association, proved unsuccessful by press time.
Also striking was a surge in loans attributed to financial institutions, which jumped to $8.7 billion in January from $249 million in December, suggesting stress outside of banks to the broader financial system.
Construction sector past-due loans more than quadrupled to $3.0 billion from $636 million the previous month – a pattern that, on its face, appears counter-intuitive, given reconstruction activity, but may reflect project delays and cash-flow disruptions in the immediate post-storm period.
Against that backdrop, non-performing loans (NPLs) – those unserviced for more than 90 days – told a more stable story month-on-month, rising a comparatively modest 2.2 per cent to $45.3 billion in January from $44.3 billion in December. The year-on-year picture, however, remains sobering: NPLs are up 20 per cent from $37.6 billion in January 2025, and the Bank of Jamaica (BOJ) previously warned that NPLs could double from pre-Melissa levels of $42.9 billion – which would push them to roughly $86 billion, the highest since records began in 1999.
One notable feature of the NPL data: individual borrowers and households, while still the largest single category at $29.7 billion, actually declined 3.7 per cent month-on-month, even though higher than year-earlier levels. Overseas residents, by contrast, saw their NPLs climb 25 per cent in the month to $9.6 billion – more than double the level a year ago.
The January numbers mark the continuation of a deterioration that began immediately after Hurricane Melissa. Past-due loans first surged in October 2025, jumping more than 50 per cent in that single month to $65 billion – at the time described as one of the fastest quarterly deterioration since the COVID-19 pandemic shutdowns of 2020. They briefly eased in November and December before the January spike pushed them to a fresh peak.
Banks, for their part, remain well capitalised.
NPLs represent some 3.0 per cent of a total loan book of around $1.6 trillion across the commercial banking system. Also capital adequacy ratios remain comfortably above the BOJ’s 10 per cent minimum benchmark. For every dollar of NPLs, the sector holds roughly a dollar in reserves. The BOJ has also cut its policy rate four times since late 2024, bringing it to 5.50 per cent in March 2026, in an effort to ease the burden on borrowers.
business@gleanerjm.com
