Bank profit up

THE National Bank of Solomon Is lands has declared a profit of 5151.33 million, an increase of 61.4 per cent over the previous year.

The bank attributed much of the in creased profitability to record levels of

foreign exchange turnover.

Work is well under way on the refur bishment of the bank’s five-storey build ing in central Honiara. When completed, it will include new international and corporate branches. Three new branch offices are being built at Auki in Malaita province, Gizo and Noro in Western province. There will also be a new branch at Chinatown in Honiara.

In its general comments on the Solo mon Islands economy, the National Bank’s annual report said the country’s future prospects would always be heavily dependent on how well the natural re sources and agriculture were handled and developed. More emphasis would have to be placed on added value rather than merely exporting raw materials.

The bank said the new tuna proces sing plant was a step in this direction.

There was also a likelihood of decreasing log exports and a substantial rise in tim ber processing. Present gold prospects will probably contribute to economic de velopment over the next decade.

A tight liquidity situation had affected the bank during the 1988-89 financial year. Faced with strong growth in money supply and domestic credit, and a rising rate of inflation, the central bank had

tightened monetary controls by regulat

ing interest rates and the introduction of a five per cent statutory reserve deposit requirement. The liquidity situation was further exacerbated when the central bank introduced the “Bokolo” bond to soak up excess liquidity in the commer cial banking system. This had led some banks to introduce temporary lending restraints, the National Bank annual re port said. □