Citing oil and gas developments, Republic Bank (Guyana) Limited says it remains optimistic about Guyana’s growth prospects.
In his Chairman’s review for the bank’s Annual General Meeting (AGM), to be held on December 14, Nigel Baptiste said, “With two new discoveries by ExxonMobil; the commencement of the Corentyne Block well by Frontera Energy; the consultations for the US$900 million gas-to-shore project; the (arrival) of the second Floating Production and Storage and Offloading vessel (FPSO), the commencement of the third FPSO in Singapore and development of the new onshore facility on the West Bank of Demerara, Republic Bank remains optimistic about Guyana’s growth prospects”.
Baptiste projected that Guyana’s economy “will remain a global top performer in the coming quarters, with a revised growth rate of 19.5 [%] in 2021…”
The Chairman’s review said that sustained capital inflows and higher government outlay will spur investment growth in the long term “coupled with reduced economic and political uncertainty”. Baptiste said that the government has “prioritised attracting foreign direct investment from developed markets and is committed to developing the Natural Resource Fund for longer-term development”.
In his discussion and analysis, Managing Director of the bank Stephen R. Grell was also upbeat about Guyana.
He said that despite the challenges of the COVID-19 pandemic “Guyana’s political stability and the effects of the expanding oil and gas sector have positively impacted the economy. The exclusion of new taxes and introduction of tax benefits and COVID-19 grants in the national budget, are expected to further bolster the nation towards achieving the budget’s goal of “economic dynamism and resilience”.
Grell added that the government’s plans for infrastructural development, housing, the environment, agriculture and the extractive industries are all “positive indicators for anticipated growth and development”.
Republic Bank (Guyana) Limited’s after-tax profit rose by 2.47% for the year ended September 30, 2021 compared to the previous year.
According to its audited financial statements, Republic Bank registered after-tax profit of $3.580billion for 2021 compared to $3.494billion for 2020. Profit before taxation was $5.607 billion for 2021 compared to $5.326 billion for 2020.
Interest income was marginally down. The figure for 2020 was $9.576 billion compared to $9.568 billion for 2021. Interest expense rose substantially from $692.7 million in 2020 to $751.2 million in 2021. The credit loss expense on financial assets was $324.2 million in 2021 compared to $366.5 million in 2020. Operating expenses declined slightly from $6.038 billion in 2020 to $5.966 billion in 2021.
Earnings per stock unit were 11.94 in 2021 compared to 11.65 in 2020.
The bank, which has 12 branches and 50 ATMS across the country, says that in keeping with its climate finance goals, it intends to increase the proportion of loans for electric cars, loans linked to promotion of clean fuels, renewable energy use and technology, loans contributing to improved energy efficiency and construction loans that utilise climate resilient technology.
The bank’s annual report says that an interim dividend of $1 per stock unit ($300 million) was paid during 2021 and a final dividend of $3.50 per stock unit ($1.050 billion) for the year ended September 30, 2021 is recommended for approval at the AGM on December 14.
Grell, in his discussion, pointed out that during the last fiscal year, Republic Bank extended its first ever financing arrangement for a medium-to large-scale renewable energy project here – the development of two solar farms at Bartica and Lethem, which will provide 1.5 megawatts and 1 megawatt, respectively, of renewable energy. Around 20,000
citizens are expected to benefit and the commissioning of the plants is expected during next year.
In relation to customer service, Grell said that a further VISA OneCard BIN attack required Republic Bank to “adopt stringent measures to safeguard customers’ cards from fraudulent activity. Regrettably, these precautions impact some customers’ online transaction experience as additional authentication is required prior to processing”.
He noted that complimentary Wi-Fi service is now available for customers during business hours at most of its branch locations and the bank has collaborated with telecommunications providers GTT and Digicel for zero rating of mobile data for customers using the RepublicOnline banking platform via their networks. The bank says this affords customers without an active data plan “uninterrupted access and convenience”.
Grell said that the bank’s financial statements include an Expected Credit Losses (ECL) provision on its performing portfolio of $414.6 million at September 30, 2021. At the end of the 2021 financial year the specific provision on non-performing loans rose to $433.2 million. Overall in 2021, Grell said that expenses related to ECL totalled $324.3 million compared to an expense of $366.5 million last year. Recoveries on loans, which were previously written-off amounted to $225.2 million this year, compared to $121.3 million in 2020.
In terms of advances, Grell said that the retail loans sub-sector recorded an 18.62% rise in value from $11.3 billion to $13.4 billion. The mortgages sub-sector also jumped by 9.78% from $32.6 billion to $35.8 billion. Grell said that the bank “remains poised to aggressively support the Government’s planned home ownership thrust”.
