21 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED | CONSOLIDATED ANNUAL REPORT 2022 operative Credit Union Ltd’s separate and consolidated financial statements to have been finalized and approved by the parent Board in accordance with accounting standards. The non-completion, and by extension the non-approval, of CAPITA Financial Services Inc.’s financial statements prior to the AGM is however not aligned to our corporate standards nor good governance, and you are assured that this matter is currently engaging both the parent and subsidiary boards’ attention to ensure such a situation is not repeated. Credit Union Performance As we stood in the moment of our AGM of December 2021 and looked ahead to this financial period, we foresaw the need for continued caution and conservatism given our uncertainty about what the new norm would be like coming out of the height of the pandemic years. Our outlook, specifically that prospects of a fully recovered economy and the related benefits it would bring were optimistic and hopeful at best, was validated as the economy has continued to struggle to fully reopen and the primary sectors contributed at a shadow of their previous levels of performance. Despite the continued environmental and economic turmoil your credit union was able to perform admirably, recording strong business growth in a challenging environment. Management, fully guided and supported by the board, was able to make prudent business decisions that resulted in positive performance metrics as shown in the below highlights: Income Statement • Membership grew by 4,531 or 4.4 percent to reach 107,506 • Total income, comprised of interest and non-interest income, of $91.2 million was earned for the year ended March 31, 2022 - a 4.4% increase over the prior year • Total operating expenses for the year were reported at $52.3 million compared to prior year $46.9 million - an increase of $5.4 million or 11.5 percent • Net interest income (interest earnings on assets - loans and securities - less interest expense paid - lease liabilities deposits and wholesale funding - increased by $4.0 million or 6.7 % • Net operating income increased from $54.9 million in the prior year to $62.5 million - a $7.6 million or 13.9% improvement • Surplus for the year was recorded at $10.3 million, up from $8.0 million in the prior year – a 28% increase Statement of Financial Position • Asset growth was recorded at $96.0 million, a 6.1% increase, which resulted in total assets of $1.673 billion being recorded as at March 31, 2022 • Net loans and advances to members, primarily driven by mortgages, were $1.115 billion at March 31, 2022 - an increase of $60.4 million or 5.7 % over prior year. • Members’ deposits totalled approximately $1.453 billion at March 31, 2022 - representing growth of $78.8 million or 5.7%. Full details and commentary around the financial performance will be provided within the Treasurer’s Report and presentation. The Barbados Public Workers’ Co-operative Credit Union Ltd continues to be strong, stable and well capitalised, above the level set by the regulator and the Board and Management remain committed to delivering strong surpluses while providing a diversified portfolio of products and services to meet our members’ needs. Our commitment is to become more innovative and to deepen our relationships with you, acknowledging that the pandemic’s impact continues to run deep and affects everyone differently even at this stage. To support that commitment, our continued focus will be on providing workable and flexible solutions, whether through a product or service, for the varying circumstances you face. Subsidiary Performance Capita Financial Services Inc. CAPITA Financial Services Inc.’s Group audit was not finalised and approved as at the time of this report. This is a matter that is being taken very seriously by this board which has, and continues to express its disapproval and discontent about the matter to the subsidiary board charged with oversight of the CAPITA Financial Services Inc Group. We have mandated that the necessary work be done by all parties to ensure this unacceptable position is rectified within the very short term. In addition, we will also be conducting a review upon completion of the CAPITA audit, and will be taking the requisite and focused actions required to eliminate the root causes of this undesirable performance in order to avoid a repeat by any entity within the Group. As we reflect on the subsidiary’s performance, we therefore advise that the synopsis is being given based on the draft financials available as at the time of this report. There is a possibility that the final audited financials will be different to what has been reviewed to provide this synopsis and we therefore do not present it as a final position, but more so as an indicative one at this point in time. Based on the draft reports, at the end of the financial period ended March 31 2022, the CAPITA Group balance sheet had increased by 4.67% to $327.7 million dollars, up from the
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