NBS registers record surplus of $772M

Amid robust demand for mortgages, the New Building Society (NBS) rattled up a record surplus of $772M for 2011, 34% higher than in 2010.

NBS is to hold its Annual General Meeting on April 28, 2012 and it will be held at the Society’s new head office at Lot 1 North Street and Avenue of the Republic for the first time.

In his statement in the annual report, Chairman Dr N K Gopaul said that the record surplus was attained despite lower mortgage rates for lower, middle and higher income mortgagors at the start of the year from 4.75%, 6.95% and 7.95% respectively to 4.25%, 6.25% and 7.45% respectively.

Dr N K Gopaul

Gopaul said that during the year mortgage advances totalling $4.2B were disbursed and this was 43% higher than in the previous year. He said that the mortgage portfolio was 52% of assets or 61% of total savings. Total mortgages increased by 9% to $23,572M  and low levels of arrears of 0.4% and a similar figure for provisioning on loan impairment were recorded.

Total mortgage loans for 2011 were 4,201 compared to 2,948 in 2010 – an increase of 29.8%. However, compared to 2009, it was only 6.6% higher. The number of mortgage loans in 2009 was 3,922 but in 2010 this fell to 2,948.

Noting that the Society is governed by Special Ordinance of the Laws of Guyana and is therefore circumscribed in its investment opportunities, Gopaul said that over 78% of the Society’s cash is invested in Govern-ment of Guyana Treasury Bills which yield around 2% in interest. He said that rates for fixed deposits at commercial banks are not much different.

Total assets grew by 9% to $45.4B, Gopaul said, while reserves stood at $6.7B representing 15% of total assets.

Adverting to the liquidity and the rising prices for imported building materials and consequently for building homes, Gopaul said that to meet these challenges the Society ratified an increase in its ceiling for any one security last year from $12M to $15M. “This, however, will have to be assented to by the Minis-ter of Finance before it becomes operable. We are working towards making this a reality, so that our financial resources can be more beneficially utilized…”

In his report, Chief Executive Officer, Ahmad M Khan said that the NBS’ investment in the Berbice Bridge continued to yield the highest returns in the Society’s investment portfolio. At the end of 2011, the NBS had earned interest totalling $179M on the bonds. Total earnings to date were $584M or 32% of the total investment in the venture.

In relation to anti-money laundering, Khan’s report said that the society is continuing to take measures to pinpoint and prevent money laundering and financing of terrorism activities. He said that there are ongoing efforts to “fully implement the requirements of the Anti-Money Launder-ing and Countering the Financing of Terrorism Act 2009”.

In the report of the directors on corporate governance it was stated that the board of the society recognizes that “transparency, disclosure, financial controls and accountability are the pillars of any good system of governance and as such, has adopted the recommendations contained in Supervision Guide-line No.8 issued by the Bank of Guyana under the Financial Institutions Act 1995”.

The report also disclosed that each mortgage or advance granted by the NBS is recommended under the hand of at least one director and “triennially, valuations of all mortgaged properties are performed by a physical site visit of a Director”.

Further, the report said that the NBS has formulated ethical rules and policies “to ensure the affairs of our customers and members remain confidential. We promote a culture of honesty and integrity and have a zero tolerance approach against discrimination” of all forms.

At its AGM approval will be sought for the sum of $8M to be donated to charity and for educational purposes for 2012.

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