GBTI after-tax profit rises by 20%

After-tax profit for the Guyana Bank for Trade and Industry (GBTI) was up by 20% for 2013 over the previous year.

The Bank’s annual report revealed that the after-tax profit for last year hit $2.178B compared to $1.181B in 2012. The return on equity was 21.42% and the return on average assets was 2.28%.

GBTI is to hold its Annual General Meeting on April 30 at the GBTI Head Office in Kingston. On the agenda will be a motion to recommend a dividend of $17 per share of which $5 has already been paid.

In his report, Chief Executive Officer John Tracey noted that the rate of growth of the economy slowed in the

second half of the year and with lower export earnings the local currency came under pressure at the end of 2013.

The bank’s total assets at the end of last year amounted to $95B, a growth of $10B or 12% over the previous year. Tracey said that this represents 23% of the total commercial bank assets in the country. Earnings per share jumped by 20% to $54.47 with the book value per share rising to $254.34.

John Tracey
John Tracey

Revenues for 2013 totalled $6.4B, a rise of 17% over 2012. Net interest income rose by 12% while non-interest income jumped by 39%.  Interest income from loans and advances rose from $3.5B in 2012 to $4B last year. Interest expense grew from $856M in 2012 to $960M last year while operating expenses climbed from $2.1B in 2012 to $2.41B last year. Profit before taxation was $3B in 2013 compared to $2.5B in the previous year.

Tracey reported that asset distribution has changed marginally with loans now accounting for 45% of total assets, up from 40% in 2012. Investments now represent 27% of total assets, up by 3%. The bank’s deposit base recorded overall growth of $6.3B or 8%. The bank’s investment portfolio was up by $5.5B to $25.5B as a result of the growth in Treasury Bills subscription to $14.1B from $9.5B. Tracey said that with the global events of 2013 some exposures within the investments portfolio have suffered and while there has been no default, developments within Caricom are being carefully monitored. He said that diversification of the portfolio has helped to cushion the exposures within Caricom.

The bank’s loan portfolio grew to $42.8B in 2013 from $35.3B and this rate exceeded that of the banking sector. As a result, Tracey said that the bank’s share of total loans in the banking sector appreciated from 21% to 24%. Non-performing advances represented 6% of total loans, down from 7% in 2012.

The bank’s asset base has expanded by $7.8B or 9% and while this was slower than in 2012, the rate was in line with that of the banking sector, Tracey said.

Looking ahead, Tracey said that this year will pose significant challenges as the global economy continues to struggle. With the bank entering the third year of its five-year strategic plan, Tracey said that GBTI foresees a “year of slower growth and consolidation”. He said it is hoped that the major investments made in the bank’s information technology systems and infrastructure will result in greater efficiency and cost effectiveness.

Tracey said that Guyana could also face the “most serious challenges that it has had to face for some years” from the stalemate over the anti-money laundering legislation. He noted that an “uncompromising and uncertain legislative environment” has led to the country being blacklisted by the Caribbean Financial Action Taskforce and another deadline is looming with more international sanctions likely.

“The consequences of international sanctions are dire and serious political maturity is required to avoid this”, he asserted.

Tracey also sounded a warning over the rice sector. He said that the industry had become too dependent on the Venezuelan market and when the timing of inflows were not as expected this also helped to put pressure on the local currency. He pointed out that the local dollar slipped from a fairly stable $204.50 in 2012 versus the US dollar to $206.08 at the end of last year.

He said that the drop in gold prices and lower sugar earnings reduced the availability of foreign exchange.

Tracey said that expansion will continue this year with the opening of at least one new branch. The debut of a local ATM switch service is expected late this year and this will coincide with the planned launch of the Kaieteur Classic VISA debit card which will enable cardholders “limited international access to their funds at the bank”.

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