21 CONSOLIDATED FINANCIAL STATEMENTS 2023 Audit Transition Our transition last year from the previous auditors to our new auditors, PwC was a challenging one which tested both parties with an outcome that was not in keeping with good practice or our normal corporate standards. We assured you that the situation would not be repeated and are pleased to report that the financial audits were completed within the statutory timelines for all entities across the Group this year. Our commitment to you coming out of the past AGM was that the lessons learnt from last year’s experience, would be used to bring about improvements, and as a Board we can confirm that improvements were evidenced across all aspects of the audits during the reporting period. Having returned to an AGM timeline that is in keeping with our legal requirement, and which syncs with our pre-COVID meeting schedules, we express thanks to the auditors, management, and all other parties involved for rectifying the previous challenges and returning us to a position of general compliance and good corporate practices. Credit Union Performance As we looked into the 2022-2023 reporting period from the platform of last year’s AGM we noted the solid predictions for economic growth and expansion that were emanating from various commentators. To date there has been some validation of those predictions, albeit tempered and not to the expected levels given the economic downturns experienced by our major trading partners which slowed our local rate of growth and economic improvement. Throughout it all your Credit Union has generally performed well in what has been an improving, but still challenging environment and we continue to execute on the vision of attaining long-term stability through sustainable and profitable growth. A snapshot of the financial performance over the previous reporting period is outlined below: Income Statement • Membership grew by a net of 3,612 or 3 percent to reach 111,118 members, up from 107,506 at prior year end. • Total income comprised of interest and non-interest income earned for the year was $95.1 million and this represents an increase of $3.9 million or 4 percent over the prior year. • Operating expenses for the year totalled $59.7 million and this represented an increase of $7.4 million or 14 percent over prior year. • Net interest income (interest earnings on assets, loans and securities less interest expense paid on lease liabilities, deposits, and wholesale funding) increased by $3.2 million compared to a $4.0 million increase in the year ending 2021-22 (5 percent increase versus 6.7 percent increase). • Net operating income for the year was $67.7 million which represents an increase of $5.2 million or 8 percent over prior year. • The cumulative impact of the year’s operational performance was an ending surplus of $9.4 million, compared to $10.3 million for the prior year. This was a decrease of $900 thousand or 8.7 percent. Statement of Financial Position • Total assets grew by $50.5 million or 3 percent over prior year. Total assets at the end of the financial year were $1.723 billion compared to $1.673 billion at the end of the prior year. • Net loans and advances to members, primarily driven by mortgages, grew by $31.4 million, increasing from $1.115 billion at the end of March 31, 2022, to $1.146 billion as of March 31, 2023. • Members’ deposits grew by 3 percent or $47.8 million to end the year at $1.501 billion as at March 31, 2023 compared to $1.453 billion at the end of the prior year. • Retained earnings of $4.9 million were recorded for the year compared to $4.8 million in the previous year, representing an increase of 3 percent, year on year. Subsidiary Performance Capita Financial Services Inc. (CFSI) Through its diversified product offerings and regional footprint, CAPITA Financial Services Inc. plays a crucial role in the overall strategic positioning of the Barbados Public Workers’ Cooperative Credit Union Ltd. Group of Companies, and continues to positively contribute to its overall success. An overview of some of its key financial highlights for the past fiscal period is provided below: Income Statement • Total income, comprised of interest and non-interest income (including fees and commission) for the year ended March 31, 2023, was $25.6 million, an increase of $2.9 million or 13 percent over the prior year total of $22.7 million. • Net interest income (interest earnings on assets, loans, and securities less interest expense paid on lease liabilities, deposits, and wholesale funding) increased by approximately $557 thousand or 5 percent, moving to $11 million at the end of the financial year compared to prior year of $10.4 million. • Total expenses for the year were reported at $25.4
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