MANAGING Director of Citizens Bank, Eton Chester, has announced that the bank’s Automated Telling Machines (ATM) network will join the national switch, and will commence the issuance of Visa debit cards.Chester made the announcement during his address at the bank’s Annual General Meeting held earlier this week at the Georgetown Club. The ATM Switch Service would allow customers to be able to use the ATM of any Bank regardless of where their account is. Some of the local commercial banks have already activated the service. Chester said too that the bank will launch its e-banking services this year and that a new, fully functioning Disaster Recovery and Business Continuity Site will become operational. “We remain steadfast and confident and anticipate sustainable growth and expansion in the coming year,” Chester said.
Meanwhile, the bank has recorded a $3.1B net income for last year, the Chairman, Clifford Reis told the AGM. In his report to the AGM, Reis disclosed that during the first half of fiscal 2015, the local banking system remained relatively sound and stable with commercial banks reporting higher levels of capital and profits, notwithstanding an increase in the level of non-performing loans. He said the average capital adequacy ratio of 25.7% remained well above the prudential benchmark of 8.0%. “Deposits at the commercial banks recorded modest growth, and at September 30, 2015 deposits grew by 5.7% to $336.5 billion year over; private sector deposit, which grew by 1.8% to $277.9 billion, accounted for 82.6% of total banking sector deposits.”
According to Reis, total loans and advances grew by 6.1% to $206.6 billion at September 30, 2015 with credit to the private sector increasing by 3.2% to $130.1 billion. Reis said liquidity in the banking sector remains relatively high with required reserve requirement being exceeded by 46.9%, while liquid assets of the sector exceeded the requirement amount by 55.0%, confirming the high liquidity within the sector. “The Bank of Guyana continues to use the auction of Treasury Bills through its open-market operations, to sterilise the excess liquidity in the sector and at September 30, 2015, outstanding Treasury Bills totalled $74.6% billion with commercial banks holding $61.9 billion or 83.0%.” Reis said the 91-day Treasury Bill rate, used as a market reference, improved to 1.9% at September 30, 2015, while the average saving rate was 1.6% as September 30, 2015, the same as September 30, 2014. He said the weighted average lending rate declined form 11.2% to 10.6% at September 30, 2015, while the average saving rate was 1.3% at September 2014.
Performance of the bank
Meanwhile, touching on the bank, Reis reported that the institution recorded Net Income for the year ended September 30, 2015 of $3.1 billion compared to $2.7 billion the previous year, an increase of $368.1 million or 13.4%. Profit before taxation stood at $1.5B compared to $1.65B in the previous year and profits after taxation of $906.8 million compared to $989.2 million the prior year, representing a decrease of 82.4 million.
“Our performance reflected the many challenges in the operating environment including, but not limited to, a slowdown in the economy from the decline in the performance of the major production sector, decline in asset quality, and the still unsettled, ongoing political situation. During the year, total revenue grew by $0.5 billion or 15.2 % to 3.7 billion, while modest growth was recorded for loans, total assets and deposits by 6.2%, 2.3% and 16.4% respectively,” Reis disclosed. The bank’s chairman told the AGM that the return on average assets was 2.1%, while the return on shareholders’ equity was 13.3% compared to 2.4% and 16.4% respectively. “The bank’s loan portfolio remains relatively sound. However, the various challenges experienced by our customers because of the decline in business activities during 2015, has impacted the performance of our overall portfolio. Non- performing loans at September 30, 2015, represented 10.9% of our total loans portfolio compared to 8.0% at September 30, 2014. The consolidated banking sector ratio for non-performing loans was 10.8% at september30, 2015.
The bank’s shares were last traded on the local stock exchange at $144.00 per share,” Reis said.
Redouble risks
Additionally, Reis told the AGM that during the financial year 2016, the bank will redouble its efforts to improve and strengthen its assessment and management of risk, and improve operational efficiencies and customer care, “which are keys to our remaining competitive achieving strong and sustainable results.” “Construction of our modern state-of-the-art building that will house our main branch and corporate office will be completed during the financial year. Upgrades will be done at our Bartica and Thirst Park branches to provide modern facilities and improved accommodation as we seek to provide an improved level of service to our customers.” Reis also said that this year greater focus will be placed on the continuing effort to improve human resources management capacity, “ensuring that our human resource management capability, ensuring that our employees are motivated and are well equipped, so that our clients will benefit through the consistent delivery of quality customer care.”