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Sluggish economy blamed for Citizens Bank’s lacklustre performance in 2016
Citizens Bank has recorded a profit of $0.8B before taxation and after taxation, a profit
Citizens Bank Chairman, Clifford Reis
of $0.5B.
According to Chairman of the Board of Directors Clifford Reis, the bank’s performance reflects a slowdown in the economy due to underperformance by many major productive sectors, with many borrowers encountering difficulties in meeting their obligations to financial institutions with a resultant increase in non-performing assets.
Reis made these comments during his report at the Bank’s Annual General Meeting yesterday held at its newly opened branch at the corner of Camp Street and South Road.
“The bank’s loan portfolio remains relatively sound. However, the difficulties experienced by our customers because of a decline in business activities during the review period, has impacted the performance of our overall portfolio.”
The Chairman said that non-performing loans at September 30, 2016 represented 15.5% of the bank’s total loan portfolio. He said that the major contributors to this level of non-performing loans were borrowers within the forestry and housing and construction sub-sectors.
He described these facilities as being well secured and expects full recovery within the new financial year. However, “In the interim, the bank has prudently provided for these facilities in keeping with International Accounting Standard 39 and the Financial Institutions Act.”
During his report, Reis said that during 2016 total revenue amounted to $3.3B with growth recorded for investments, deposits and total assets of 116.0%, 21.0% and 16.0% respectively. Further, the return on average assets was 1.0%, while the return on shareholders’ equity was 6.5%.
He said that the bank’s shares were last traded on the local stock exchange at $144.00 per share.
As it relates to predictions for 2017, the Chairman said that it is expected that many of the conditions which prevailed in 2016 and defined the Guyana economy will continue. These include a flat economy, slowdown in business activities, limited lending and investing opportunities and declining credit quality among others.
Therefore, Reis said, “Our success will therefore require us to be creative and to take appropriate initiatives which address those components of our operation that we anticipate will ensure sustainable performances.”
In addition, he said that the bank will play greater emphasis on risk management which is expected to improve and strengthen the bank’s assessment and management of risk. To further improve the bank’s operations, Reis said that in 2017 the bank will not only provide improved accommodation but improvement in the level and types of services provided to customers.
“In 2017, the bank will continue its efforts to improve our Human Resources Management capability ensuring that our most valuable assets, our employees remain motivated and well equipped to meet the ever-changing requirement of our clients and ensure that these clients benefit through the consistent delivery of quality customer care.”
Reis believes that these initiatives among others will ensure that the bank meets the expanding financial needs of customers making Citizens Bank one of the industry’s leading financial service providers.
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