Government's back-up fund for bank savers grew by 35 per cent to $2.415 billion in 2005, according to documents tabled in Parlia-ment this week.

The funds represent 1.8 per cent of deposits in the financial system, said Finance Minister Dr. Omar Davies.

The Jamaica Deposit Insurance Corporation (JDIC), through the JDIC Fund, covers a maximum of $300,000 of deposits by individual savers, in the event of the collapse of any of the 15 institutions - inclusive of commercial banks, trust and merchant banks, and building societies - covered by the fund.

Davies said in a statement accompanying the audited accounts of the corporation, which is run by Winston Carr, for its financial year ending March 31, 2006, that recent information suggests that close to 100 per cent of savers were fully covered.

Fruitful reviews

"During the review period, an annual survey of insurable deposits was conducted to assist the corporation in assessing the risk to the Deposit Insurance Fund," said the minister. "It was revealed that an estimated 96.4 per cent of number of accounts in the system had balances that are within the present coverage limit of $300,000."

Another review is to be done in the year ahead, according to Davies.

The fund earned income of $724 million in the year under review, $388.75 million of which were insurance premiums and $331.7 million interest income.

Premiums grew 14.4 per cent relative to the $339.6 million recorded in 2004/05, which fed into a 14.5 per cent improvement in its net surplus, from $544.7 million to $623.5 million.

Huge improvement

Expenses also grew by $14 million, or 16 per cent, to $101 million, the majority of which was an additional $8.8 million of staff costs linked to the recruit-ment of four new employees.

The JDIC's current net worth of $2.43 million - that is, $2.69 billion of total assets less $264 million of liabilities - is a 33 per cent improvement on its position in the prior year. The improvement has boosted the JDIC's solvency ratio to 10.21.

The corporation is projecting a minimum 2.0 per cent growth in the fund in its 2007/08 year.

lavern.clarke@gleanerjm.com