GBTI records $1.5B in profit... A rocky year dented by $940M fraud, charges for Directors

GBTI records $1.5B in profit… A rocky year dented by $940M fraud, charges for Directors

Jun 02, 2018 News

Chairman, Robin Stoby, SC

The Guyana Bank for Trade and Industry (GBTI), after a rocky 2017, has something to smile about despite a major fraud of more than $900M and the charges of its Directors for contempt.
In its recently released Annual Report for 2017, Chairman, Robin Stoby, S.C., admitted that
2017 was a “very challenging year” with the final results constrained by a “singular event”.
Stoby would most likely be referring to the $941M fraud at its Bartica branch, Region Seven involving gold dealer, Saddiqi ‘Bobby’ Rasul.
Rasul is facing fraud charges in court and the Bartica Branch Manager has been sacked.
The high profile fraud, which led to eventual yanking of Rasul’s gold dealer licence, involved the bank paying that massive sum against uncleared cheques deposited by Rasul.
According to the Chairman, the bank and its Board have addressed the weakness and its remote possibility that there will ever be a repeat again.
“At our last General Meeting, I addressed the unfortunate issue of an act of gross employee’s dishonesty and collusion committed against the Bank that resulted in a customer fraudulently accessing a large uncleared deposit of $941M,” the official said in his Chairman’s report.
“I informed you that the matter was reported to the Police and appropriate criminal charges were instituted. The Bank also filed a civil case in this matter, both of which are now being heard in the Courts.
“I now wish to update you that the Bank initiated a claim under our insurance coverage for incidents of this nature, and we are pursuing the recovery of the amount so grossly denuded from our reserves.
“However, we will not cease to follow up all legal avenues to recover the full loss.”

GBTI has 12 branches across the country.

At the end of the year, the bank’s profit was $1.52B, down from $2.03B the previous year.
The bank, which operates 12 branches across the country, says that $560M will be allocated to pay dividends to shareholders.
Stoby disclosed that the economies of the region’s major commodity exporting countries: Guyana, Trinidad & Tobago and Suriname performed somewhat better in 2017 than in 2016 as international crude oil and commodity prices experienced modest upswing.
Locally, Guyana experienced growth in real Gross Domestic Product for 2017.
Inflation is projected to reach a rate of 2.0% compared to the 1.3% for 2016, he said.
“Gold production again showed itself to be the country’s most valuable mining activity and a major contributor to GDP with declarations topping 653,754 ounces in 2017.”
The agricultural sector expanded on account of higher output of rice, fishing and other crops, with rice benefitting from growing optimism for its future due to the gaining of Mexico, Panama and Cuba as new export markets. On the other hand, sugar output fell by 15.2 percent while forestry output also declined.
With regards to the bank’s financial results, the Chairman disclosed that the yearend profit of $1.5B was made on gross revenues of $7.4B.
Deposits totaled $83B at the end of 2017 while gross loans amounted $48.4B.
“The bank continues to contribute significantly to the economy, returning $462M of profits to the Government in corporation and property taxes and providing $10B in new lending to businesses and individual customers to help them grow their ventures and achieve their life dreams. Overall, the bank processed over 2.2 million transactions in 2017 for its business and retail customers.”
However, the bank’s operating income declined due to net interest income from its lending activities falling as the bank kept the credit quality of its loan portfolio “under control”.
On the strengthening of the banking systems, the Chairman said that a general review of internal policies and procedures was undertaken in the last quarter of the year.
Several measures were updated, particularly in the areas of credit quality, transaction approval, procurement, AML compliance and premises security.
“We join with the business community in applauding the Government for the step it took in address’ calls for a revision of the rate of VAT, which was reduced to 14%, while the registration threshold was increased to $15 million, along with the revision of the income tax structure for workers.”
Recent legislation passed in Parliament, including the Cybercrime Bill 2016 and the Protected Disclosures Bill 2017, will go a far way to strengthen the environment for doing business in Guyana, Stoby said.
“Further, as a member of the banking community we look forward to supporting efforts for legislations to promote greater development of financial investment products, especially in the areas of t mutual funds and bonds markets.