Youngest
Demerara Bank Limited (DBL) is one of the youngest commercial banks in Guyana. Though born in January 1992, DBL did not obtain a licence to conduct banking services until 1994. Less than 10 years later, the Guyana Stock Exchange (GSE) was established, and DBL became a participant on the exchange. As we come to the end of examining the individual banks that are part of the GSE and the Lucas Stock Index (LSI), DBL stands out in more ways than one. At the end of its financial year in 2013, DBL had assets valuing $49.8 billion and a capital base of $6.5 billion. Important to any commercial bank is its deposit base. DBL had a deposit base of $41.5 billion that grew 18 per cent over 2012 and by 12 per cent per annum over the last three years. Today, DBL has a market capitalization of nearly $14 billion making it the third largest bank of the four that are part of the LSI and the focus of this concluding series. This market value is more than twice the size of its book value and compares favourably with the other three banks that were already discussed.
Indigenous bank
From its profile, DBL looks like any regular bank going about its daily business of attracting the excess liquidity of customers and turning it into revenues as best as it can. Yet, DBL has the most interesting story to tell about the commercial banks discussed in this series. Of course, DBL loves to describe itself as the only indigenous bank in the country. Given the history of the other banks and the disappearance of the Guyana National Co-operative Bank, one cannot dispute that claim. DBL’s story is not only about its origins, its name and its logo, all of which possess value for a nation that has shifted from its mercantilist vision of economic independence to a more liberalist one and is straying further from its motto of ‘One People, One Nation, One Destiny.’ Neither is the story about the handsome growth in profits and the return on equity that it generated for its shareholders. The story is about the business strategy of the bank and how it is growing its deposits and how it goes about making money in a market where the demand for loans of good quality is limited. The story is also about how attached Guyana has become to the Venezuelan market as a result of the rice-for-oil deal under the PetroCaribe facility and how that is likely to impact the business strategy of DBL in the long-run.
Old fashioned
To repeat the story of DBL’s 2013 performance as the company tells it in its annual report, it would be necessary to observe the bank’s use of the old-fashioned yet productive way of