Latest update November 26th, 2024 1:00 AM
GBTI after-tax profits drop by $358M in first half of year
- foreign currency fluctuation, $956M bank fraud among issues faced
GBTI records lower after-tax profit for first half of 2017
The Guyana Bank for Trade and Industry (GBTI) has recorded a whopping $358M drop in its AfterTax profit for the first half of 2017, when compared to the same period last year.
In addition to a reduction in performance, the bank had to deal with fluctuations in foreign currency and a $956M bank fraud that is still before the court.
This is disclosed in the Chairman’s report published today in this newspaper. According to Chairman of the GBTI Board, Robin Stoby, for the first six months of the year, the bank and its subsidiary recorded an AfterTax profit of $603M. This represents a 37 per cent reduction ($358M) from the $961M AfterTax profit that was recorded for the same period last year.
The Chairman’s report noted that the local economy experienced significant disruptions in the first quarter of the year due to cyclical fluctuations in the foreign currency market. However, Stoby said that the Bank is happy to report that it has been able to resume significant Correspondent Banking Relationships which has relieved the pressure on the delivery of foreign exchange supplies.
Back in 2016, GBTI, in its half year report had said that it, along with other banks in the Caribbean and Latin America, were facing the prospects of losing correspondent banking relationships with prime banks of the United States of America. This was termed ‘de-risking’.
The Bank of America had cut ties with Guyanese banks in August of last year. Governor of the Central Bank had said that the effects of Bank of America’s withdrawal would be negligible and that other banks will take up the slack.
Moreover, Stoby said that crime continues to affect the struggling economic growth as well as the investment climate.
Further, it was reported by the Chairman that local banks are faced with rising levels of non-performing loans and slower credit with growth in private sector lending only growing sluggishly, on average, by two per cent from the first half of 2016 to the first half of 2017.
Further, the report said that economic growth in the first half of 2017 rose by a modest 2.2 per cent, compared to a two per cent growth recorded in the first half of 2016. Stoby said that growth was recorded in the agriculture, fishing, forestry, manufacturing, construction and services sector. However, the Board Chairman said that rice exports continue to be problematic.
Further, Stoby said that the Board is pleased to declare an interim dividend of $4 per share. Based on records, the interim dividend for the same period last year was $6.
Meanwhile, Stoby reported that GBTI has prudentially provided for the fraud perpetuated on the bank earlier this year. He said too that the bank remains optimistic that the legal process will be concluded before the year comes to an end.
The fraud referenced to, is the over $956M fraud allegedly committed by embattled gold dealer Saddiqi Rafeek Mohamed ‘Bobby’ Rasul.
The gold dealer had appeared before the Georgetown Magistrate’s Court charged with six counts of obtaining money by false pretence.
Based on the charges, it was alleged that between March 21 and March 22 of this year, with intent to defraud, Rasul obtained the sum of $290M, $298M, $138M, $45M, $89M and $96M from GBTI’s Bartica branch by encashing cheques drawn on his Citizens Bank account. However, apparently Rasul’s Citizens Bank account could not honour the amount of cash being drawn with the cheques.
It is the protocol that banks would hold other banks’ cheques until they are cleared, before making payments against them. However, this procedure was not followed and the sums of money totalling $956M were deposited into Rasul’s GBTI account. Based on information reaching this newspaper, one senior official has been sent home following an investigation into the matter.
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