$2.2B profit for Dem Bank despite pandemic – says prepared for Oil and Gas

Nov 14, 2020 News

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Kaieteur News – Despite a tough financial year, Demerara Bank Limited, has posted a $2.263B after tax profit and set to open its eighth branch.
The 26-year-old bank, locally owned, has been chalking up profits, describing itself as one of the soundest financial institutions in Guyana.
“Our performance over the years has been steady and nothing short of remarkable and this year is no different. Despite, the challenges of the banking environment and the effects of COVID-19, Demerara Bank Limited continued to excel in many areas and our performance this year supersedes all preceding years, on account of the very efficient management of our assets and liabilities, wise investment decisions and prudent lending strategies,” the bank disclosed yesterday.
The bank was able to achieve a profit-before-taxation of $3.5B, an increase of 2.8% over the previous year, and an after-tax-profit of $2.263B, an increase of 4% for the period ended September 30th, 2020.
“The shareholders’ funds increased by10% to $15.4B. The bank has maintained exceptionally high returns on shareholder’s funds over the years, recording a return of 14.6% in 2020.”
The bank reported that total deposits increased from $68.3B to $78.1B; an increase of 14.4% over the previous year. “Loans and Advances moved from $36.7B to $40.4B, an increase of 10% over the 2019 corresponding period. Investments of the bank stood at $33B for the year ended September 2020.”
The bank also reported that it has paid an “excellent dividend over the years and this year we will be paying our highest dividend yet, once approved at our AGM. The share price which was $3 in 2003-2004 now stands at $91 which gives substantial capital appreciation to investors.”
The bank boasted that the profit and profitability is exceptional when compared to other financial institutions in Guyana – it has the highest return on assets – averaging 2.6% and the lowest cost-income ratio of 40%.
The bank said it is also in the process of completing its eight branch – this one is located at Mahaica, East Coast Demerara.
“This branch is integral to bridge the banking needs for residents in the area and environs as customers are currently required to travel to either Georgetown, Rosignol or Rose Hall to conduct banking business, which is an inconvenience and a security risk. The Mahaica branch will provide the full line of services, similar to that of our other locations.”
With regards to its services, the bank said it has been approved for a revolving line of credit for trade financing purposes and other concessions which will see the support of the Inter-American Development Bank (IDB) in many areas including building international partners, providing guarantees for the bank and support for future upcoming projects.
“Guyana is on the brink on tremendous development and this relation with IDB poses a strategic benefit for Demerara Bank Limited. We will continue to promote a green and sustainable environment which to date has seen all the buildings owned by the bank retrofitted with solar, resulting in substantial savings over the last four years. The Bank is also reviewing its strategies to benefit from opportunities that exist in the oil and gas industry, which could have tremendous advantage for all local businesses.”

This includes the development of what Demerara Bank described as an advanced corporate internet banking platform which will drastically improve the convenience and services to its corporate customers.
“This platform will include advanced features such as customizable authorization instructions, ability to view cheque images and the ability to make request for wire transfers and other instructions. On the retail side, we are finalizing the testing of a mobile banking application which will also improve the delivery of our services.”
Meanwhile, with regards to the COVID-19 pandemic, the bank said it continues to monitor the rapidly progressing situation regarding the spread of the pandemic – recognizing the socio-economic impact this can have on customers, staffers and the community at large.
A number of measures have been introduced: “The bank continues to play its role as a corporate citizen and during the year we have concentrated our efforts on providing relief to vulnerable communities and entities affected during the pandemic. Donation of relief items and sanitization agents were provided to various charitable organizations, hampers were distributed to various communities including Peters Hall, Herstelling, Linden, Uitvlugt, etc. Donation of electronic devices (tablets) to the Ministry of Education for students of Region Nine.”
The bank said it also offered general concessional reductions of interest rates on customer loans and has applied special treatment to the interest accrued during the moratorium period.
“All bank charges, including ATM and merchant bank charges were waived to encourage more out-of-bank transactions, as well as charges for transactions by senior citizens. Further, senior citizens are given priority, especially during this time, whenever they visit the bank.”

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