Republic Bank (Guyana) Limited has recorded an after-tax profit of $1.98 billion for its financial year, up from last year’s figure of $1.82 billion.
Managing Director John Alves, in his report in the bank’s 2010 Annual Report, said that the profit achieved this year is $161M or 8.8 percent over that achieved in the previous year. “This result is the product of prudent risk management, optimum investment and lending decisions and the recovery of the losses owing to fraud in 2009,” Alves said. The bank recovered $176.2M from its insurers after a $246M fraud in the previous year. “Corporation Tax paid during the year was $1,257 million compared with $1,172 million in 2009,” the Managing Director said.
Net interest income at $4.6 billion exceeded the $4.4 billion earned in 2009 by $215 million or 4.9 percent, he said. This, he attributed primarily to the increase in the lending portfolio and tight management of interest expense. According to Alves, “the ratio of the Bank’s average interest-earning assets to average customer deposits, continues to be approximately 86 percent, reflecting a policy of making maximum use of customers’ deposits in a challenging environment where investments and lending opportunities are relatively scarce.” Almost 50 percent of the Bank’s interest-earning assets at the end of September consisted of Government of Guyana treasury bills.
According to the report, the interest paid on deposits for 2010 at $922 million, was lower than that of 2009 ($1 billion) as the Bank continued to manage its assets and liabilities in an environment of inadequate investment opportunities.
Meanwhile, during this financial year 46 percent of the bank’s revenue came from loans and advances, 29 percent from investments, 15 percent from foreign business and 10 percent from other sources. Loans and advances were 21.5% higher, moving from $23.3B to $28.3B. Deposits rose from $79.2B to $84.2B. The number of active savings, chequing and deposit accounts moved from 168,925 to 207,428 or 22.8% higher. Of the $84.2B held in these accounts, the annual report said that $12.1B was held for the State, $7.98B for the corporate and commercial sector, $59.6B comprised personal accounts and $1.67B was being held for other institutions.
“Other income which amounted to $1.9 billion and contributed 25.1 % to total income, exceeded the 2009 amount of $1.79 billion by $76 million, or 4.3 percent,” Alves said. He said that continued emphasis on foreign exchange trading resulted in exchange gains for 2010 of $1,136 million which represents a modest increase of $4.1 million, or 0.4 percent, over 2009. According to him, exchange earnings continue to be the main source of Other Income, contributing 63.4 percent of the total. Net income and other income grew by $121 million or 2 percent to $6.2 billion in 2010, compared to the $6.1 billion generated in 2009, Alves said.
Non-interest expenditure, which comprises operating expenses, impairment loss on assets classified as held-for-sale, and provision for loan losses, decreased by $354 million over that which was recorded in 2009. There were significant increases in depreciation charges ($50 million), and loan losses net of recoveries of $119 million. Alves pointed out that “the 2010 income statement reflects a turnaround of $400 million as a result of a fraud in 2009 and its settlement in 2010.
Earnings per stock unit in dollars moved from 6.07 in 2009 to 6.61 this year. Over the same period, the return on average assets moved from 2.06 to 2.11 and return on average equity from 25.89 to 24.10. The bank’s number of stockholders moved from 1,187 to 1,223. The number of employees moved from 583 to 592.
In his Chairman’s review, David J. Dulal-Whiteway said that Republic Bank (Guyana) Limited drew confidence from the performance of the economy which had been commendable despite the “setbacks” in the sugar industry. “The sugar sector, however, is essential to the fortunes of the economy and we look forward to all parties coming together to arrive at mutually beneficial long term arrangements”.
Dulal-Whiteway noted that the Takutu and Berbice river bridges, the new GT&T fibre-optic technology and the eventual completion of the Ogle Airport development will present opportunities for all players in the local economy. He said the bank’s new branch at Diamond would be ready during the first half of fiscal 2011. The bank held its twenty-sixth Annual General Meeting on December 13, at the Pegasus Hotel.
