Non-Consolidated Annual Report 2020

BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED | NON-CONSOLIDATED ANNUAL REPORT 2020 13 BOARD OF DIRECTORS REPORT OVERVIEW The Board of Directors of the Barbados Public Workers’ Co- operative Credit Union Limited is pleased to address and report to you our valued members in this our Golden Jubilee; a celebratory year for the credit union. Our members are our lifeblood and the reason we are here, so on behalf of the Board of Directors, Management and staff we want to express our sincere gratitude for your loyalty and support, as well as to let you know how proud we are to serve you. As we report on our performance during the financial year 2019 – 2020 we are mindful of the macro-economic conditions that prevailed during the course of the year. Following a 2018-19 period that adversely impacted the movement and its members, optimism in the economy and its engines of growth was returning when management met to discuss the plans and objectives for 2019-20. The macro-economic environment was recovering, Government’s implementation of the BERT programme was showing early results and Barbados was on track to meet targets agreed with the International Monetary Fund. A year on we have witnessed a dramatic change as our country, region and the world faces a deadly coronavirus pandemic. Our members are once again faced with significant hardships as our borders were closed to international trade and travel and many of our sectors, including the invaluable tourism sector, came to a virtual halt crippling the local economy. From all reports, the fallout from the pandemic will be with us for some time to come. Your credit union remains committed to providing the assistance needed to help you through these difficult times and whether by way of moratoriums, training or access to additional financial support, we will work with you in line with our philosophy of people helping people. While the credit union continues to perform admirably and has achieved much during the past year despite the macroeconomic challenges, there are some movement challenges that must be highlighted as they continue to present obstacles to our rate of growth. These include renewed aggressive drives by the local banking community as a result of excess liquidity and mutual customers/members, new competition in the form of payday type and non-traditional lenders and enhanced weightiness of international regulations from an accounting (IFRS9) and a sector (AML/KYC) perspective. All of these activities invoke additional costs on the credit union including but not limited to revised processes, enhanced marketing, additional staff or staff training, technical system changes and software implementation/adaptation. These operational changes directly impact the benefits available to members through reduced surplus, dividends, rebates and member grants. While we look toward an uncertain future, we cannot remove our “foot” from the pedal, which was pressed into action some fifty odd years ago, through the foresight of the founders of this institution. We must forge ahead to ensure that you our members are provided for, catered to and helped in every way possible. FINANCIAL PERFORMANCE Despite the challenges mentioned the credit union experienced another successful year and remains strong. At the end of the 2019 - 2020 financial year, the Credit Union recorded total assets of $1.5 billion which was representative of an increase of $120.4 million or 8.9 percent over last year’s performance. Cash and cash equivalents totalled $294.9 million, an increase of $61.3 million or 26.2 percent, while amortised cost classified financial investments totalled $18.2 million, decreased by $1.3 million or 6.8 percent. While the loan demand tapered off at the end of the financial year due to the national shutdown and resulting business closures associated with the COVID-19 pandemic, the overall loan portfolio increased during the year under review by $48.5 million. Details of the loan growth and other performance highlights are available in the Financial and Credit Committee reports for the period ended 31 March 2020. SUBSIDIARY PERFORMANCE At the consolidated level, CAPITA Financial Services Inc. had recorded its largest profit to date of $1.6 million which can be attributed to the growth in interest income relating to loans and advances. Assets rose to $307.5 million with loans positively growing to $265.8 million. During the year under review, a shared ATM service, similar to the local CarIFS, was completed in the St. Lucia market. CAPITA St. Lucia, in conjunction with the St. Lucia Co-operative & Credit Union League, was pivotal in the roll-out of this initiative which allows our credit union brothers and sisters to have access to Automated Teller Machines (ATMs) for the first time. To date, the three Credit Unions who have completed their roll-out of the machines have been attaining good transaction levels across their networks. Discussions are also presently underway to provide similar shared access to the banking sector of St. Lucia. CAPITA continues to improve performance in its core functions with credible portfolio diversification being evidenced through growth in vehicle and loan financing. Vehicle leasing has been particularly successful and appealing to local businesses. In recognizing the benefit of having a Central Bank regulated entity as part of the sector, the Barbados Co-operative & Credit Union League Ltd has determined to work with CAPITA to be the conduit through which the local credit unions can avail themselves of digital banking services. This has been evidenced President Bro. Glendon Belle