13 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED | SEPARATE FINANCIAL STATEMENTS 2022 Review of Financial Performance Total Income and Net Income Total income, comprised of interest and non-interest income, was reported at $91.2 million for the year ended March 31, 2022 compared to $87.3 million in the prior year; a 4.4 percentage increase. As a result of this increase, net income for the year was also positively impacted, ending at $10.3 million, up from $8.0 million in the prior year. Net Interest Income Net interest income, comprised of interest earnings on assets such as loans and securities, less interest expense paid on lease liabilities deposits and wholesale funding, increased by $4.0 million or 6.7 percent in 2022. The primary contributor to the change was an increase in non-interest earning non-accrual loans, coupled with decreased deposit costs which fell by $1.1 million or 4.7 percent. Interest income from loans and advances, together with that from cash resources increased by $2.7 million or 3.3 percent and $182.0 thousand or 28.5 percent respectively. Similarly, interest from financial investments increased by $141.5 thousand or 9.7 percent to reach $1.6 million. Other Income Other income increased by $858.5 thousand or 23.1 percent during the financial year to reach 4.6 million. Fee income increased by 388 thousand or 24.0 percent as the institution rolled out its new international debit card during the fiscal. The collection of income from charged-off loans increased by $357.1 thousand or 46.9 percent, while rental income increased by $127.3 thousand and legal income declined by $134.9 thousand. Efficiency and Expense Management Staff Costs & Support During the financial year, staff compensation and benefits increased by $1.0 million or 5.4 percent to end the year at $19.5 million. In line with the organization’s objective to reposition itself to better serve its members, the total staff complement increased from 279 at March 31, 2021, to 285 at March 31, 2022. Despite this year’s customer satisfaction score being down 0.6 points from last year’s score of 9.6, the organization once again achieved its internal benchmark by scoring 9 out of 10 or 90 percent. Total Operating Expenses Total operating expenses for the year were reported at $52.3 million representing an increase of $5.4 million or 11.5 percent compared to the prior year’s $46.9 million. This was spread across various lines of expenditure as evidenced by reductions in some critical expenses and increases in others. Year on year increases were recorded in Publicity and promotion of $1.2 million or 61.0 percent, Repairs and maintenance of $1.1 million or 28.2 percent, Legal and professional fees of $611.1 thousand or 28.5 percent, Janitorial services of $477.8 or 63.8 percent, Security services of $440.4 thousand or 32.0 percent, Utilities of $387.6 or 30.5 percent and Audit fees of $290.9 thousand or 89.5 percent. Compensating reductions in Office stationery and supplies of $461.0 thousand or 43.3 percent, Anniversary expenses of $442.0 thousand or 100 percent and Direct cost of services of $260.1 thousand or 24.2 percent reduced the overall 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 $95.4 thousand or 2.2 percent. Net Operating Income Net operating income increased by $7.7 million or 13.9 percent to end the year at $62.5 million (2021- $54.9 million). This was primarily attributed to an increase in interest income of $3.0 million or 3.6 percent, and a decrease in Expected Credit Losses (ECL) of 2.7 million or 29.7 percent over prior year. Assets Asset growth of $96.0 million was below prior year of $104.5 million by 8.5 million or 8.1 percent. Current year total assets exceeded the average total assets of the last five years by $213.4 million. Net loans and advances to members, inclusive of allocation for expected credit loss allowance of $39.8 million, were $1.115 billion compared to $1.055 billion inclusive of expected credit loss allowance of $33.1 million at the end of the 2021 financial 2018 2019 2020 2021 2022 Net Interest Income 2018 2019 2020 2021 2022 Membership 3 Net Interest Income
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