17 CONSOLIDATED FINANCIAL STATEMENTS 2023 Asset quality: The Group’s non-performing loans grew by $7.4 million in the 2023 period versus overall portfolio growth of $27.9 million. Consequently, with greater percentage growth in the nonperforming loan segment versus the percentage growth in the overall loan portfolio, the delinquency ratio rose marginally to 14.0 percent at the end of March 31, 2023 compared to 13.8 percent at the end of March 31, 2022. While this rate has only moved marginally, we are committed to providing relief and solutions according to individual needs, and to assisting members/customers with working through any financial difficulties arising out of the economic fallout. In this regard we recognize and acknowledge the efforts of staff, in particular the Collections departments, in providing members/ customers with appropriate payment options during these challenging economic times. Options available for members/customers seeking relief includes the following: • extension of loan terms • converting outstanding interest to a separate loan; and • consolidation of debt Liabilities: The Group’s liquidity position continues to be strong and is primarily driven by the continued growth in deposits. Deposit growth however remained sluggish during the period, rising marginally by $12.8 million or 0.8 percent as compared to $83.1 million or 5.1 percent for the 2022 fiscal to finish at $1.712 billion at March 31, 2023 compared to $1.699 billion the previous year. The Group maintains a liquidity buffer which ensures the statutory reserves are fully met, a percentage deposit cover is maintained and a percentage cover for loan commitments is guaranteed. At March 31, 2023 the Group’s cash and cash equivalents of $371.9 million was 56.3 million over the liquidity buffer of $315.6 million. The Group’s operations are 99.9% funded by its members and customers to the extent that the only external borrowing is that held by its subsidiary, CAPITA Financial Services Inc. At the end of the financial year, this external exposure remained at $1.3 million. Equity: As at March 31, 2023, the Group’s total equity rose to $188.1 million, representing an increase of $2.5 million or 1.3 percent compared to an increase of $11.6 million or 6.7 percent in the previous year. This increase included the issuance of $544.1 thousand in additional member shares (2022 - $634.8 thousand), and the distribution of $2.8 million (2022- $2.6) in dividends and interest rebates to members during the year. The Group’s capital adequacy ratios continue to be above the 10 percent regulatory requirements. This ratio is a key measurement relative to the Group’s ability to absorb market shocks and as such is monitored on an ongoing basis. Ecomonic Outlook 2023 fiscal The January to March 2023 Central Bank of Barbados’ “Review of Barbados’ Economic Performance” indicated that the Barbados economy is expected to record growth of between 4 to 5 percent for 2023 driven by the tourism sector, supported by private sector investments. The downside risks to the economic outlook reported in the publication were the possible slowdown of the global economy and the impact of that on fighting high inflation without stifling global demand, and the potential implication of disruptions to the global supply chains and international trade arising out of any escalations to geo-political tensions on the projection for global economic growth. It was reported in the latest World Economic Outlook (WEO, April 2023) that inflation is expected to stabilize over the remainder of the current period as improvements in international commodity prices and the oil market filter into the Barbadian market. This would, however, be dependent on the upward inflationary pressures from domestic demand for discretionary goods and services as the economy expands The Way Forward Beyond 2023 Given the return of Barbados to pre-COVID 19 levels in key areas of economic activity, the Group remains steadfast in its commitment to making a material difference to the social, environmental and economic wellbeing of our members, customers and the communities in which we serve. The roll-out and implementation of the corporate redesign programme in 2023, and the enhancement of our corporate and governance structures in line with independently derived best practices reinforces our focus on the strategic positioning of the ?.8,#*@77"87 #&'$!&"$! #&(!)&($# #&*!(&*$$ #&$%#&('% #&$+'&+$% A"8*$%(.B"*C"D.E"* #"F$"7*,%G*8,H"7 #'&''+ #$&+"' #"&'** #!&!#( *&'*' I.,%7*8.*B"BC"E7 1,235,760 1,311,851 1,330,140 1,398,822 1,425,341 2019 2020 2021 20 2 2023 Delinquency Ratio 1 Delinquency Ratio
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