Hand-in-Hand Trust Corporation registered a profit of $14.3 million for the year ended December 2016 compared to a loss of $48.4 million for 2015.
Hand-in-Hand Trust was one of those institutions severely affected by investment of money in the Antigua-based Stanford International Bank whose fortunes collapsed when its founder Allen Stanford was arrested over a massive Ponzi scheme. Stanford was later jailed in the US for 110 years. Hand-in-Hand was said to have lost around $822 million in investments. Hand-in-Hand offers a number of services including mortgages, loans and property management.
According to Hand-in-Hand’s financial statements published in the April 22 edition of the Guyana Chronicle, interest income for 2016 was $696.7 million compared to $525.6 million in 2015. Interest expense rose from $196.5 million in 2015 to $251.7 million last year. Operating expenses also climbed from $275.5 million in 2016 to $296.3 million in 2016. Provision for losses jumped from $195.7 million in 2015 to $236.4 million in 2016. Loan losses have become a severe problem across the finance industry.
Profit before impaired investment was $25.6 million in 2016 compared to a loss of $8.6 million in 2015. Impaired investments totalled $4 million in 2016 compared to $33.3 million in 2015. Taxation for 2016 was $7.1 million compared to $6.5 million in 2015.
In his Chairman’s remarks, Paul Chan-A-Sue said that several initiatives “were pursued to enhance the viability of the institution and shall be continued during the new financial period”.
Maurice Solomon and Co in its independent auditor’s report addressed as a key audit matter, the impairment provision for loans and mortgages. It said that loans and mortgages of $5.65 billion after the impairment provision represent 80% of the total assets of the Trust. It noted that the impairment provision for loans and mortgages included in the financial statements for the current period totaled $377.9 million or 6.2% of the total loans and mortgages. The auditors said that they found the assumptions employed by management in arriving at the total impairment provision to be in line with its expectations.
It drew attention to the note in the accounts on liquidity risk.
“As can be seen from this Liquidity Risk Table there is an asset/liability gap of over $4 billion in the projected 3-12 month period. Management has assured that they are addressing this situation as a matter of urgency to correct this projected asset/liability. We recommend urgent attention in this matter,” the auditor’s report said.
