Latest update April 7th, 2025 6:08 AM
Commercial banks report lower profits as economy struggles
The banking sector is facing challenges with at least two of them reporting lower profits when compared to same period last year.
It would be the first time a number of years that has happened.
Local banks are reporting less profits as the economy continues to struggle.
The two banks are the Demerara Bank Limited and Citizens Bank.
According to published mid-year reports for the six-month period ending March 31, 2016, Demerara Bank has managed to chalk up $711 profit before tax as compared to $902M for the same period in 2015.
Deposits to the bank, according to Chairman, Dr. Yesu Persaud, increased from $47.5B to $51.7B, an increase of 8.8 percent. Loans and advances moves from $23.3B to $24.4B, an increase of 4.7 percent.
According to Dr. Persaud, Guyana economic growth was lower than expected at three percent at the end of 2015.
This was as a result of mixed performance in the major sectors of the Guyanese economy.
“Global growth, estimated at 3.1 percent in 2015, is projected at 3.4 percent in 2016 and 3.6 percent in 2017. The local and global business environment may continue to remain challenging in 2016.”
For Demerara Bank, the drop in profits would be significant since between October 2014 and March 2015, the profit of the bank has gone up to $901.9M against profit of $760.6M in the corresponding period of 2014.
The deposit base of the bank rose from $40.4B in March 2014 to $47.5B as on March 31, 2015, reflecting an increase of 17.6%. “
At present, the bank has a network of six branches countrywide with a new corporate headquarters commissioned.
Meanwhile, the situation of a drop in profits, was also evident at Citizens Bank.
The bank, for its half year, recorded a profit after taxation of $441M compared to the $459M for the corresponding period last year. Net interest income remained $1.2B.
The bank’s operation expense went up to $621M compared to $562M.
As at March 31, Citizens Bank would have chalked up net loans and advances of $29.4B, compared to $31.8B to the corresponding period.
Total deposit was $38.3B compared to the $34.7B at March 31, 2015.
According to Citizens Bank, the remaining six months of its financial year will require them to overcome many challenges.
“Citizens Bank Guyana Inc. is however optimistic that our strategies will yield a satisfactory performance that will result in increased shareholders’ value.”
The downturn in the economy in the local economy has been felt for some time now with businesses complaining of reduced spending by consumers.
This is significant if it is taken into account that consumer spending continues to play a vital role.
The reduction in house lot distribution and by extension, the slowdown in construction have all contributed to the challenges.
Similar Articles
THE BLUNT OF THE DAY
Sports
Features/Columnists
Anticipation without preparation
Peeping Tom… Kaieteur News- The Vice President of Guyana, ever the sagacious observer of the inevitable, has reassured... more
The U.S. “Joining” the Commonwealth: an unreasonable expectation
By Sir Ronald Sanders Kaieteur News- Recent media stories have suggested that King Charles III could “invite” the United... more
Weekend Cartoon
