BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED | CONSOLIDATED ANNUAL REPORT 2021 14 2017 2018 2019 2020 2021 84 ,000 89, 200 95 ,000 100,700 103 , 300 Resilience through COVID-19 Continuous member growth Member satisfaction However, financial institutions have tempered the effects of the interruption in employment opportunities and business operations by offering moratoria on loan repayments and restructuring debt in some cases. Given the increase in non-performing loans (NPLs), measures such as these have contained NPLs to levels that are well below expectations, given the jump in unemployment and decline in economic activity. Macro-Financial Environment On a macro level, the world economy was derailed by COVID-19 as travel bans and stay at home orders were imposed to contain the spread of the pandemic. According to the 2020 Financial Stability Report “COVID-19 triggered the most significant economic peril since the financial crisis of 2008”. Nonetheless, the global financial system was in a position to withstand the pandemic due to regulatory measures that were put in place after the 2008 crisis. Consequently, it was reported that “prompt decisive actions were taken by monetary authorities and financial institutions in response to the pandemic, and large banks within the G20 reaped the benefits from pre-COVID-19 capital, liquidity and leverage requirements”. The report indicated that there was global evidence to support “loan payment moratoria” as an effective financial stability tool for abrupt crises such as COVID-19. However, it cautioned against its use to mask deteriorating credit quality, which could potentially undermine the financial stability over the medium term. Management Discussion and Analysis Economic Outlook COVID-19 Impact According to the Financial Stability Report 2020, the COVID-19 pandemic severely impacted the local economy and consequently, there was a shift in economic policy, as the government continued its focus on the protection of lives and livelihoods. The disruption in business cycles resulted in the cessation of activity in the tourism sector and caused business closures across other sectors and ultimately led to a series of national curfews. This by extension elevated the level of credit and other risks within financial institutions. Notwithstanding these challenges, the sector remained stable and well-capitalized. Unemployment levels rose, as a result of reduced economic activity. Consequently, there was an increase in borrowers who faced challenges in servicing their debt obligations. This section of the Barbados Public Workers’ Co-operative Credit Union Limited’s Consolidated Annual Report provides a discussion and analysis of the financial position and performance of the consolidated operations of the Barbados Public Workers’ Co-operative Credit Union Limited and its subsidiaries (“the Group”) for the financial year ended March 31, 2021. This MD&A should be read in conjunction with the audited consolidated financial statements, which have been prepared in accordance with International Financial Reporting Standards (“IFRS”). The Group includes the parent, Barbados Public Workers’ Co-operative Credit Union Limited and its subsidiary BPW Financial Holdings Inc., the holding company for the CAPITA Group that includes subsidiaries CAPITA Financial Services Inc. (“CAPITA”) and CAPITA Insurance Brokers Limited (“CIB”).