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Demerara Bank’s Pre-Tax Profit surges to $4.9B record high in spite of COVID-19 pandemic
Kaieteur News – Demerara Bank Limited has disclosed that its pre-tax profits grew by 40 percent to $4.9 billion for the financial year ended September 30, 2021, while its profit after taxes increased by 31 percent to $3 billion.
This reflects an improvement from the $2.3 billion it recorded last year. Commenting on the published results, Chairman of the Bank, Dr. Yesu Persaud attributed the Bank’s impressive performance to its staunch focus on operational excellence and the execution of solid business strategies that created sustainable value for all stakeholders.
Furthermore, Demerara Bank Limited, which is the youngest among all commercial Banks in Guyana, observed its 27th anniversary yesterday. In this short period, Kaieteur News understands, the financial institution has grown into one of the soundest financial institutions and currently ranks the second highest in pre-tax profits amongst its competitors. This newspaper also understands from the financial institution that the challenges of the pandemic continue to result in considerable volatility throughout the global business environment. Nevertheless, the Bank’s record-setting performance, through prudent management, planning and efficient deployment of resources, underpins its resilience and capability of steering through the ever-changing operating landscape.
In addition to increase profitability, the financial statements as at September 30, 2021 revealed the following:-
· The Bank’s Deposit Base was at its highest of $92.9 billion, registering a rise of 19 percent when compared to 2020.
· Total Loans and Advances increased from $40.5 billion to $46.4 billion, showing a rise of 15 percent over the previous year.
· Investments of the Bank stood at $33.6 billion.
· Interest Income on Investments went up from $1.7 billion to $2 billion; an increase of 13 percent over the previous year whilst Interest Income on Loans and Advances increased from $3.1 billion to $3.5 billion; a rise of 10 percent over the corresponding year, 2020. Total Interest Income rose to $5.4 billion; 11 percent higher than 2020.
· Demerara Bank’s listing of its assets grew by 21 percent to $114.5 billion as at the close of financial year 2021 when compared with $94.7 billion. Moreover, the Bank’s Return on Average Assets as at September 30, 2021 was 2.8 percent.
· Return on Shareholders’ Funds has been substantial over the year and recorded a return of 16.2 percent for the year ended September 30, 2021, while shareholders’ earnings per share has increased to 6.56 percent over the said period.
· The Book Value of the shares has gone up from $34.33 per share in 2020 to $40.46 per share in 2021; showing a rise of 18 percent over the previous year.
· The share price of the Bank increased from $91.00 to $199.00 as at the financial year end, an increase of 119%.
Further, the Bank maintains a strong Capital Adequacy Ratio that is well above the prudential 8.0 benchmark set by the Central Bank.
Kaieteur News also conducted an analysis of the profitability trend of the six commercial banks in Guyana and the following graphs give an understanding reading of their performance in comparison to other banks.
A comparison of the Pre-Tax Profit and After-Tax Profits among the commercial Banks are as follows:-
Source: Published Financial Statements
(KEY FOR TABLES: RBGL : Republic Bank Guyana Limited; DBL : Demerara Bank Limited; BNS: Bank of Nova Scotia; CBGI: Citizens Bank Guyana Inc.; BOB: Bank of Baroda; and GBTI : Guyana Bank for Trade and Industry.)
Pre-tax Profit
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