Citizens Bank profits grow

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Minister of Finance Winston Jordan addressing officials of Citizens Bank Guyana Inc. (Carl Croker photo)

…records close to 60% increase in profit for 2019
…Bartica, Thirst Park branches to be relocated to state-of-the-art buildings

By Navendra Seoraj
CITIZENS Bank Guyana Inc., in capitalising on Guyana’s buoyant economy, was able to earn a profit after tax of $955.2 million for 2019.

The profit earned last year, reflected an increase of 58.6 per cent when compared to the $602.3 million which was recorded in 2018, said Chairman of Citizens Bank Guyana Inc., Clifford Reis, during his remarks at the company’s Annual General Meeting (AGM), on Tuesday.

Minister of Finance, Winston Jordan, in congratulating the bank on its achievement, said Guyana is going through a period of growth and it is important that the financial institution capitalises on the growth and even seek to command a greater share in the local market.
“It [the market] is ripe for the picking and the bank has to right size and manage the growing environment that is coming. We are in for good things…we just shipped our first million barrels of oil and money should start rolling…this is not a time for regrets, it is time to think how to manage the fortune and how the bank can offer a different type of service,” said the minister in his brief remarks to officials and other stakeholders of the bank.

In speaking about the bank’s success, Reis said: “this result was noteworthy given the existing market factors including, but not limited to, high liquidity and intense competition among leading institutions with a resultant decline in interest rates.”

He added that the results were attained mainly through the growth and improvement of the overall quality of the company’s loan portfolio and through prudent management of expenses. A growth of 8.3 per cent, 8.7 per cent and 9.5 per cent were recorded for deposits, assets and revenue respectively.

Chairman of Citizens Bank Guyana, Clifford Reis (Carl Croker)

In addition, the bank’s loan portfolio remained sound and performed relatively well during the financial year, said Reis, noting that the financial institution worked closely with customers to minimise any negative impact on the portfolio, that may have arisen due to varying challenges some borrowers may have encountered. The chairman said non-performing loans, at September 30, 2019, represented 8.9 per cent of total the bank’s loan portfolio compared to 11.6 per cent at September 30, 2018. Total banking sector loans and advances, however, grew by 7.8 per cent to $245 billion in 2019, with private sector credit increasing by 6.9 per cent to $237.9 billion.

“Deposits at the commercial banks increased by 7.2 per cent to $425.3 billion at September 30, 2019, with private sector deposits growing by 7.0 per cent to $350.6 billion, representing 82.4 per cent of total banking sector deposits,” said Reis.

He was confident that those figures will continue to improve as 2020 progresses, and in expressing this confidence, Reis said: “in the fiscal year 2020, the Guyana economy is expected to record an improved performance with the commencement of oil production which will undoubtedly result in significant growth in this subsector and other major sectors.

“However, while the growth in the oil and energy sector will bring with it, opportunities for the financial and other sectors, the local financial environment will continue to be characterised by intense competition amongst commercial banks and other financial institutions for the relatively limited lending and investing opportunities and the resultant decline in interest rates.”

With the commencement of oil production, the medium and long-term outlook for Guyana will improve as revenue becomes available to support additional fiscal spending, which will help to meet social infrastructure needs and reduce both public debt and the current account deficit.

In that regard, Reis said an enabling environment remains critical for the continued growth of the economy. In ensuring that the bank stays on track, the chairman said the company will continue utilise all presented opportunities and focus on areas that they (the bank) anticipates will ensure growth and stability.

In 2020, the bank will continue its efforts to prudently manage its expenses through improved operating efficiencies and the strict adherence to robust risk management policies and practices to assure the growth and stability of the company, while remaining competitive. “The sales and marketing of our commercial and retail banking products, including commercial mortgages, consumer loans and mortgages will intensify during 2020 as well as the continuance of our customer service strategies,” said Reis.

MODERN FACILITIES
As part of its renewed commitment to focus on customers’ convenience, the bank will be relocating its Thirst Park and Bartica Branches to “state-of-the-art buildings.”
In stressing the use and focus on technological advancements within the institution, Reis said: “technology continues to be a key driver of our financial and operational performances and during 2020, we will continue to invest in and utilise new technology to upgrade existing services and introduce a number of technology-driven services, which will not only improve our customers experience and convenience, but will ensure that our core and other banking systems are protected, safe and secure.”

The potential improvements are geared at ensuring that the bank is in a position to capitalise on the expected expansion of the economy. The local economy grew by four per cent during the first six months of 2019, reflecting economic activities which were bolstering by the emerging oil and gas sector. Increases in the output of the financial and insurance sectors, construction, wholesale and retail trade, transportation and other services, also contributed to the growth recorded.

The local economy was projected to grow by 4.5 per cent during the fiscal year 2019, fuelled by anticipated growth in all the major productive sectors, including the emerging oil and gas sector.

And, according to the International Monetary Fund (IMF), Guyana’s real Gross Domestic Product (GDP) is expected to grow by approximately 86 per cent in 2020. A report from Bloomberg had stated that Guyana’s GDP will grow 14 times as fast as China’s next year.
The country’s $4 billion annual GDP is also expected to expand to about $15 billion by 2024, said the IMF. “We remain confident that the year 2020 shall see the continuation of a buoyant economy. Citizens Bank Guyana remains firm in its commitment to and intends to play a pivotal role in the development of the banking sector and the Guyana economy and will continue to invest here,” said Reis.