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Citizens Bank records 51% after tax growth in 2017
Despite the challenges in the banking sector, Citizens Bank Guyana Inc. has recorded a profit after taxation growth of 51.6% in
Clifford Reis, Chairman of the Board of Directors of Citizen Bank.
2017.
During the annual shareholders meeting on Tuesday, Chairman of the Board of Directors of Citizen Bank, Clifford Reis, reported that during the year, there were ongoing challenges in the banking sector.
He stated that the challenges included underperforming economic sectors, an increasing level of non-performing loans, slow projects implementation, high liquidity and a reduction in the availability of foreign currency.
Reis said that emphasis was placed by the Bank on improved risk management and asset maintenance, and cost control, the result of which was pivotal to the performance reported.
According to the figures provided, the bank recorded an after tax profit of $726.6M compared to $479.1M the previous year, representing an increase of $247.4M.
Net income for the bank’s financial year ended September 30, 2017 was $2.9B compared to $2.6B the prior year, an increase of $0.3B or 11.5%. Profit before taxation was pegged at $1.2B compared to $0.7B in the prior year, an increase of $0.5B or 71.4%.
Net interest income was $2.5B compared to $2.1B for the prior year, an increase of $0.4B or 19.0%.
Managing Director, Elton Chester, noted that the collection of interest on previously non-performing loans and the lower cost of deposits contributed to the growth in net interest income.
“Interest is the most significant contributor to the bank’s net operating income accounting for 88.2% compared to 86.5% for the prior year,” Chester stated.
Other income amounted to $419.1M compared to $440.1M for the prior period; a decline of 4.8%.
Earnings from foreign currency transactions was $194.2M compared to $187.8M for the prior period while net operating income increased by $0.4B or 16.0% to $2.9B compared to $2.5B recorded in 2016.
During the year, total revenue grew by $0.3B or 9.0% to $3.6B, while balances for total assets, loans, and deposits declined marginally.
The return on average assets was 1.5%, while the return on shareholders’ equity was 9.2% compared to 1.0% and 6.5% respectively in the prior year.
According to Reis, the Bank’s loan portfolio continues to be relatively sound.
“The various challenges experienced by our customers because of the decline in business activities during 2017 remain and continue to impact the performance of our overall portfolio,” Reis stated.
It was noted that non-performing loans at September 30, 2017 represented 13.1% of total loan portfolio compared to 15.5% at September 30, 2016.
The consolidated banking sector ratio for non-performing loans was 13.2% at September 30, 2017.
Overall in the banking sector, deposits at the commercial banks declined by 3.0% to $366.4B at September 30, 2017, with private sector deposits growing by 0.5% to $287.8B; representing 78.5% of total banking sector deposits.
The banking sector continues to report high levels of liquidity with the consolidated required reserve requirements being exceeded by 52.6%, while liquid assets of the sector exceeded the requirements amount by 50.0%, confirming the high liquidity within the sector.
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