Republic Bank (Guyana) Limited on Monday held its 25th Annual General Meeting, after recording a 17% improvement in its financial performance over the previous year despite a $246.2M fraud.
According to the Bank’s Annual Report, it recorded an after-tax profit of $1.8B for the financial year, $262 million over last year’s figure. During the year, which ended on September 30, it recorded a 2.06% Return on Assets and a Return on Equity of 25.89%.
The Bank also saw its earnings per share increase from $5.20 to $6.07. The Report said “prudent risk management, sound investment and lending decisions and rigid cost controls were largely responsible for the excellent performance in the context of the present global financial crises.”
The Report also showed that a $246.2M fraud had occurred at its Camp Street branch. “The Bank has made a prudential provision of 100% on a fraud of $246.2M committed at its Camp Street Branch and continues to engage the insurance providers regarding the claim,” the Report stated.
The bank had been tight-lipped on the fraud, which was discovered last year November but which this newspaper understands occurred over a period and started at the bank’s former Camp and Regent streets location and continued at the new Robb and Camp streets facility.
While it is not exactly clear how the fraud was perpetrated, Stabroek News was told that so-called “customers” went into the bank and using fraudulent signatures made money transfers to various banks in Canada.
The police had contacted their counterparts at the Royal Canadian Mounted Police (RCMP) for assistance. One of the loopholes at the bank which the perpetrators may have taken advantage of was the fact that there was no way of verifying addresses and identities in other countries. Sources had told Stabroek News that verification of information is done on the telephone with numbers provided by the persons conducting the transaction. It was pointed out that the person could provide the number of someone who was working in collusion with him/her.
It was reported that when the bank found out about the fraud it halted some transfers that were in progress, but sources said that maybe the bank should have allowed the transfers to go through in an effort to ascertain who was receiving the money.
At Monday’s AGM, held at the Pegasus Hotel, three Directors-namely Corporate Secretary John Alves, Managing Director Edwin Gooding and Financial Director of William H. Scott Limited William Scott were re-elected to the Board. Shareholders also passed resolutions relating to dividends, Directors’ service agreements providing for their remuneration and remuneration of the auditors. The Report was also approved.
One “sore point” raised by shareholder, Dr. Jose Da Silva was that the Bank was discontinuing its premier banking service from January 4, 2010. He said that other local banks were opening premier banking services and expressed the hope that the Committee re-considers its decision.
In response, Managing Director Gooding said that the decision was easy, noting that over the years the bank tried to enrol other clients: “What we found was that we were not getting the take-up from customers to avail of the service…” He said despite their best efforts to engage and enrol customers, they just didn’t get the take-up. After a number of reviews, the decision was taken not to continue the service, he explained.
Republic Bank (Guyana) Ltd is a subsidiary of Republic Bank Ltd (RBL).
