BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED | CONSOLIDATED ANNUAL REPORT 2021 18 The Group remained highly liquid with total cash resources of $381.8 million compared to $308.2 million in the prior year. Liquid resources therefore increased by $73.6 million or 23.9 perecent. Asset quality The delinquency ratio increased to 14.4 percent at the end of March 31, 2021, compared to 10.0 percent at the end of March 31, 2020. This represented an increase in non-performing loans of $62.5 million. While this rate was above the prior year, we recognize and acknowledge that the economic impact of the COVID-19 crisis is far-reaching and profound and the challenges our members and customers face in these uncertain times are real. During the 2021 fiscal the Credit Union offered borrowers cash flow relief through loan payment moratoria which allowed for a deferral of loan payments while interest continued to accrue on outstanding balances. The initial moratoria periods ranged from three to six months and were intended for members who faced financial difficulty due to COVID-19 but who were previously in good standing. Loans subject to moratoria were not treated as non-performing during the deferral period. The moratoria programme adopted an opt-in approach where members were required to request the moratoria if needed. All payment deferrals ended on March 31, 2021 and the organization remains committed to providing support to financially challenged members through the below options. Options available for members upon expiry of the initial deferral period include: • extension of loan terms • converting outstanding interest to a separate loan; and • consolidation of debt We are committed to providing relief and solutions according to individual needs, and to assisting with working through the financial implications of the economic fallout. Liabilities The Group’s liquidity position continues to be strong and is primarily driven by the continued growth in deposits. At the end of the financial year, the Group’s deposits totaled $1.6 billion, an increase of $88.6 million or 5.8 percent compared to an increase of $127.6 million or 9.1 percent in the prior year. The Group’s only external borrowing pertains to the subsidiary, CAPITA Financial Services Inc. and at the end of the financial year, this remained at $1.3 million. Equity As at March 31, 2021, the Group’s total equity was $174.0 million. This is an increase of $6.8 million or 4.1 percent compared to an increase of $16.1 million or 10.7 percent in the previous year. This increase included the issuance of $430.6 thousand in additional shares (2020 - $732.1 thousand), and the distribution of $3.6 million in dividends and interest rebate to members during the year consistent with that of the prior year. The Group’s capital adequacy ratios continue to be well above regulatory requirements. This ratio is a key measurement relative to the Group’s ability to absorb market shocks and as such is continually monitored on an ongoing basis. Economic Review 2021-2022 Fiscal The Central Bank of Barbados in its April 2021 press release indicated that “uncertainty continues to cloud the outlook for the Barbados economy for 2021”. Additionally, they indicated that “the pace of the global economic recovery is expected to quicken this year and the IMF has recently raised its growth forecast, partly on the expectation of a revitalized US economy and the anticipated favourable impact of the vaccine roll-out across countries”. Notwithstanding the level of optimism for economic recovery, it was further stated that given the level of uncertainty, significant downside risks remain and the global recovery is likely to be uneven. Despite the decline in economic activity last year, predictions are that the Barbadian economy will achieve growth ranging from 1.0 to 3.0 percent. This however, is dependent on the country’s ability to contain and manage the spread of the COVID-19 pandemic domestically, combined with maintaining targeted levels of tourism activity as more world economies achieve their desired vaccination level. Barbados has introduced a “Welcome Stamp” initiative designed to tap into non-traditional markets which will be critical to rebuilding the tourism sector. This programme offers the potential of converting otherwise short-term visitor arrivals into repeat tourists and investors. To facilitate the ease of business activity, efforts are being made to transition the Barbadian economy to a digital economy. The Management Discussion and Analysis (Continued) 2017 2018 2019 2020 2021 Loan and Advances Loans and Advances
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