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Citizens Banks – a 51% owned subsidiary of Banks DIH Group – recorded $1.1B in profit after tax in 2021, resulting in a 7.5% increase when compared to 2020, its Board Chairman, Clifford Reis has reported. The increase represents an improvement of $73.4M.
“This performance should be seen in the context of the continuing negative impact of the global pandemic on our economy and customers from every industry sector, coupled with other market factors including the high level of liquidity and declining interest rates,” Reis reported as part of the Bank’s 2021 Annual Report.
Despite the challenges, the Bank was able to improve its performance through growth in its loan portfolio, and effective management of its expenses, Reis reported. According to him, Citizens Bank Net Income for the Financial Year was $3.6B compared to $3.4B in 2020 – an increase of $0.2M or 5.9%.
Additionally, the annualized return on average assets was 1.4% while the returns on shareholders’ equity was 10.0% compared to 1.7% and 10.1% respectively in the prior year.
“The Bank’s loan portfolio remained sound and performed relatively well during the financial year with the bank working closely with our customers as we sought to minimize any negative impact on our portfolio that may have arisen due to the impact of COVID-19 on many of our borrowers,” Reis said.
It was noted too that non-performing loans at September 30, 2021 represented 7.7% of the total loan portfolio compared to 8.7% at September 30, 2020. The Bank’s shares, notably, were last traded on the local stock exchange at $146.00 per share.
Reis said the anticipated growth in Guyana’s economy will undoubtedly provide opportunities for Citizens Bank, however, the Bank is cognizant of the intense competition amongst commercial banks and other financial institutions in the country.
“Our success will therefore require that we remain creative and take appropriate initiative to address those components of our operations that will ensure sustainable performances and that will allow us to offer existing and potential clients unmatched customer service and product services,” the Board Chairman said.
In moving forward, the Bank promises to remain focus on the management of its expenses and risk management practices that would improve its assessment and management of risk.
Reis disclosed that during the course of 2022, Citizens Bank will commence operations at its new Mandela Branch to ensure that customers and staff conduct business in an enabling environment while experiencing new and improved types of services. Work, he said, will also commence on the construction of new branch at Bartica.
“The COVID-19 pandemic and its many protocols including physical distancing, has highlighted the need for an expanded digital strategy, and in 2022, we intend to increase the utilization of technology to drive our financial and operational performances by expanding our digital platform to include digital onboarding and the process leading to the introduction of a Mobile Banking Application,” he further reported.
The Managing Director Eton Chester, in his report, said he was pleased with the Bank’s satisfactory performance.
“During the year, we were able to achieve key strategic objectives in terms of growth in loans, deposits, total assets, revenue and shareholder’s equity,” Chester said.
He noted that the Bank’s return on average assets was 1.4% compared to 1.7% in 2020 while the return on average equity was 10.0% compared to 10.1% in 2020.
According to the Managing Director Report, the net loans and advances increased by $2.1B or 6.6% to $33.8B from $31.7B. The growth was recorded in lending to the household, real estate, construction and services sectors which grew by 22.5%, 11.0%, 6.9% and 3.7% respectively.
“Competition amongst lending institutions, given the high level of excess liquidity, resulted in nominal lending rates remaining flat and during 2021, the yield recorded from our loans and advances was 10.0% compared to 9.8% the prior year. Income from loans and advances represented 97.5% of interest income in 2021, compared to 96.1% in 2020,” Chester detailed.
Customers’ deposit also grew by 34.6% with total deposits standing at $69.7B as of September 30, 2021 – an increase of $17.9B. Savings deposits also grew to $29.2B, and as such, now represents 41.9% of the Bank’s deposit base.
Additionally, the Bank’s Net Investments at September 30, 2021 were $9.4B compared to $7.7B in 2021. Chester said that investments in the Government of Guyana Treasury Bills continue to account for significant portion of the Bank’s investment securities. It was noted that as of September 30, 2021, the Treasury Bills held amounted to $8.8B or 93.6% of total investments.