In his report contained in the bank’s 2009 annual report, Chief Executive Officer John Tracey said that last year the bank again delivered a solid profit. Earnings per share rose by 5.4% to $24.79 with the book value per share increasing to $141.30. Revenues for last year totalled $3.8b which was 6.5% higher than the previous year. Revenue from loans and advances grew from $1.5b in 2008 to $1.7b last year. Earnings from Treasury Bills and Foreign Bank Deposits declined from $883m in 2008 to $764m last year. Net interest income rose by 12.6% while non-interest income grew by 9.2% – from $903m to $987m. There was a significant hike in the exchange gain from $663m to $733m.
The bank’s asset base has grown by $4.6b compared to the $6.4b in the previous year. The bank, which will be holding its annual general meeting on April 19th saw its share of commercial bank assets remaining stable at 21%.
Deposits grew by $4.8b or 11.8%. Tracey, who took over the position from RK Sharma last year said, “Our deposits continue to record strong growth in response to our marketing efforts for our range of deposit services: Early Savers and Prime Life Accounts, Regular and Statement Savings Accounts, and Term Deposits and Special Investment Accounts”. GBTI’s share of commercial deposits remained stable at 18%, he noted.
The bank’s loan portfolio was $15.1B at the end of the year. The distribution sub-sector, as has been the recent trend in the banking industry, accounted for $4.6B or 30.5% of these loans. The rice sector accounted for $1.6b or 10.7%. This figure includes $305m disbursed under the EU rice facility.
Housing loans which has seen a boom across the industry soaked up $1.5b or 9.8% while timber and sawmilling accounted for $1b or 7.6%. Tracey said the bank’s share of commercial lending at the end of 2009 was 23.5% – slightly better than the 23% at the end of 2009.
A review of the 2009 loan portfolio shows performing accounts totalling $13.6b or 90% compared to 87% in the previous year.
The CEO said that the lending strategy for the bank in 2009 continued to revolve around the GBTI quality lifestyle and commercial loan plans. At the end of 2009 the balance of the quality lifestyle loans was $1.7b while the balance of the commercial loan plan was $12.5b.
The bank’s expenses for the year amounted to $2.42b compared to $2.48b in 2008. The interest income on savings deposits declined from $694m to $686m and on term deposits from 218m to 216m. In relation to non-interest expenses, salaries and other staff costs declined from $617m to $612m while there was a rise in expenses for premises and equipment from $313m to $342m. Other expenses declined from $537m to $516m.
Total investments decreased by $1.6b and the bank said this was a result of it capitalizing on price gains within the portfolio. Tracey said that investments continue to be concentrated in regional sovereign bonds “which are extremely sound, carry low risk and offer premium yields”.
The bank however revealed in the notes to its accounts that it has contravened the Financial Institutions Act 1995 by investing in government of Trinidad and Tobago Sovereign Bonds in excess of the Single Borrowers Limit. The bank said it intended to correct this position within the first quarter of this year. It noted that the bonds are a direct charge on the Treasury of Trinidad and Tobago and have been rated `A’ by Standard and Poor’s. It said that the bonds currently yield 7.20% and are tax-exempt under the Double Taxation Relief (Caricom) Order and are currently being traded above the bank’s purchase price.
Tracey said that the bank will build on its historic strengths in lending and by providing a wider range of services and products. It said that its planned web-based portal will allow customers enhanced access to their accounts and other opportunities will be examined to expand the branch, ATM and Point of Sale network. The CEO said that the new Kingston head office building is nearing completion and is expected to be inaugurated by mid-year.
“The bank intends that this new facility will allow it to enhance its service to its corporate clients and drive out initiatives for improving our overall level of services to our customers”, he added.
The corporate governance statement in the report said that the bank is characterized by the “strong commitment of the Board of Directors to various ethical and prudential guidelines in managing the affairs of the Bank and the adherence to the principle of transparency in all decision making”. It added that the board “exhibits true transparency by not allowing its members to participate in decision making where they may have an interest in the subject matter”. The bank has committees for audit and risk, human resources and compensation, credit and building. It says the credit committee comprises the full board. “This committee expends much effort in the analyzing of the risk related to credit decisions, and reviews and monitors the processes for the maintenance of credit quality, and gives direction on the areas where surplus funds may be invested after taking full account of the relevant risks”.
GBTI holds 30% of the share capital of the Guyana Americas Merchant Bank. In 2009, the Merchant Bank registered a loss of $3.5m on income of $29m compared to a profit of $3.2m in 2008 on income of $33m. GBTI’s share of this loss was $1,059,000.
