Separate Annual Report 2021

13 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED | SEPARATE FINANCIAL STATEMENTS 2021 Total Operating Expenses Total operating expenses for the year was reported at $46.9 million, representing a decrease of $778.0 thousand or 1.6 percent compared to the prior year. This was primarily attributable to a net off between reductions in key expenses and increases in others. Increases were recorded in Legal and Professional fees of $1.1 million or 109.9 percent, Members Security of $484.0 thousand or 11.7 percent, Direct Cost of Services of $548.3 thousand or 104.1 percent and Meetings and Conferences of $367.6 thousand or 77.2 percent. Compensating reductions in Publicity and Promotion of $1.1 million or 35.1 percent, Elected Officials & Committees Training of $384.9 thousand or 99.3 percent and Utilities of $288.7 thousand or 18.5 percent resulted in the overall favorable variance. While routine maintenance of property, plant and equipment occurred during the fiscal, there were no significant upgrades which merited capitalization and hence depreciation expenses decreased by $578.7 thousand or 11.6 percent. Net Operating Income Net operating income decreased by $9.9 million or 15.2 percent to end the year at $54.9 million. This was primarily attributed in part to a decrease in interest income of $6.3 million or 7.0 percent, and an increase in Expected Credit Losses (ECL) which was $9.5 million. This increased by $3.1 million or 51.0 percent over prior year. This was due to increases in delinquent loans over ninety days. Assets Your credit union finished the year in a healthy and stable financial position with asset growth of $104.5 million or 7.1 percent. This was moderately below prior year where the growth in assets was recorded at $120.4 million or 8.9 percent. Growth primarily occurred in cash and cash equivalents of $89.9 million (2020 - $63.3 million) or 34.4 percent (2020 - 32.0 percent). Net loans grew by $8.6 million (2020 - $48.5 million) or 0.8 percent (2020 - 4.9 percent), while financial investments at amortized cost increased by $5.4 million or 29.7 percent mainly due to additional purchases during the 2021 fiscal. Net loans and advances to members were $1.1 billion, inclusive of allocation for expected credit loss allowance of $33.1 million, compared to $1.1 billion inclusive of expected credit loss allowance of $23.8 million at the end of the 2020 financial year. During the course of the financial year members focused on owning their own homes, evidenced by increases in net mortgages of $36.9 million (2020 - $22.3 million) or 10.9 percent (2020 - 7.0 percent), the largest increase over the past five years. Consumer loans decreased by $27.9 million (2020 – increased by $23.7 million) or 4.0 percent (2020 - 3.5 percent) as seasonal spending contracted due to depressed business activity, sluggish macroeconomic conditions and COVID-19 related national shutdowns. Asset Quality The Credit Union’s delinquency ratio moved from 9.9 percent at March 31, 2020 to 13.6 percent at March 31, 2021. Non- performing loans increased by $42.5 million compared to $16.9 million in 2020. This equated to a 40.6 percent increase for the period ended March 31, 2021 compared to a 19.2 percent increase in the prior year. Liabilities The organization currently maintains a higher than market rate on its core deposits to ensure its members receive a premium on their savings. This benefit to members was provided while balancing the need to remain competitive and ensuring the continued financial strength and stability for which we are known - both of which were achieved. The Credit Union’s operations continued to be funded solely by membership deposits. Deposits at March 31, 2021 totaled approximately $1.3 billion representing growth of $94.7 million (2020 - $104.6 million) or 7.4 percent (2020 - 8.9 percent). During the fiscal the average deposit cost decreased from 1.9 percent in 2020 to 1.7 percent in 2021 but still remained over the average market rate. Table 1 !"#$ !"#% !"#& !"!" !"!# !"#$%&#$'& (')#$*+% ,--.//- ,01.-23 ,,3.040 5.-/2.-1- 5.-0/.220 6+7"%89% ,02.540 5.-00.1/3 5.530.--/ 5.:3,.0,1 5.43/.4-2 ;"9#<&(%%+9% 5.555.031 5.::4.2/4 5.40:.453 5./3:.35: 5.033.531 =+9&>$9+?+%9& 8$*"@+ 00.5,5 25./41 24.:/4 22.40- 2-./50 A+@B+?%C87 1/.--- 1,.:-- ,0.--- 5--.5-- 5-4.--- 2017 2018 2019 2020 2021 LOANS AND ADVANCES 1 Loans and Advances (Net) 2017 2018 2019 2020 2021 Total Assets 2017 2018 2019 2020 2021 Deposits Total Assets