Consolidated Annual Report 2023

22 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED million compared to prior year $21.3 million, an increase of approximately $4.0 million or 19 percent. • The cumulative impact of the increased expenses versus income was a material decline in the overall profitability of the CFSI Group. Profit before taxes decreased by 52 percent or approximately $1.2 million to $1.1 million (2022 - $2.3 million, 2023 – $1.1 million) while profit after taxes decreased by 83 percent or just over $1.1 million to $129 thousand (2022 - $1.3 million, 2023 - $129 thousand). Statement of Financial Position • Assets decreased by approximately $1.2 million moving from $327.5 million at year-end 2022 to $326.3 million as at the end of the reporting period. • Loans and advances which is the core component of CFSI’s business model decreased by 2 percent or $4.9 million over the reporting period, moving from $283.8 million at year end 2022 to approximately $278.9 million at year end 2023. • Deposits were relatively stable over the reporting period, growing by 0.1 percent or $290 thousand to end at $278.9 million at March 31, 2023 compared to $278.6 million at the previous year-end. • Retained earnings of $9.67 million were recorded at the end of the financial year in comparison to $10.67 million in the previous period; a year on year decrease of 9 percent. • Total equity was relatively stable and moved from $28.35 million for the year ending 2022 to $28.15 million as at year ending March 31, 2023; a $196 thousand or 0.7 percent movement over the period. Following the very public scrutiny and adverse publicity it experienced last year, the subsidiary has taken action to enhance its governance structures and processes, and has put measures in place to re-establish its credibility and image while becoming even more resilient and continuing to serve its customers. The Board which was reconstituted coming into the reporting period is actively seeking a full-time C.E.O to fill the vacancy arising out of the departure of the previous President and C.E.O and is currently being supported by an experienced and wellrespected Interim CEO while the recruitment process is ongoing. It is anticipated that the vacancy will be filled during the 202324 period. We remain committed to investing in our subsidiary’s growth and supporting the initiatives that will guarantee its ongoing success, locally and regionally, while ensuring it attains and maintains a financial performance that provides incremental value to the overall Group. Allied Co-operators Inc. (ACI) For the 2022-23 reporting period, the focus of ACI’s operations has been to increase its revenue and revenue generating capacity. As at the end of the reporting period revenue stood at $267.3 thousand, representing an increase of approximately $169 thousand or 172 percent over the prior year. Generally speaking, most start-ups become profitable within the first three to five years of operation - ACI having only been recently introduced into the market, falls into this category. Since its introduction there has been good progress and a consistent decline in the recorded losses over the past two years. The majority of revenue continues to be generated through services provided to smaller Credit Unions within Barbados, a focus ACI intends to continue into the future. While the highlighted revenue increase is commendable, the desire to become a profitable entity with a well-diversified client portfolio still remains ACI’s primary objective. Given cash flow constraints experienced by many of the smaller credit unions during the COVID-19 period, market conditions were not as favourable as forecasted during the reporting period and the initial take up of the company’s products and services by the smaller credit unions was subsequently below what was projected. As a result and to mitigate against the sluggish market conditions the decision was taken to extend the company’s services to businesses in industries outside of the Credit Union sector. Market research was conducted to determine potential target markets and results indicate insurance companies and the small & medium sized off-shore companies within Barbados and the Caribbean as the best fits. Efforts have been made to seek out clientele in those areas and the results have been encouraging as multiple requests for proposals have been received by management as a direct result of these growth and expansion initiatives. Board of Directors’ Report (Continued) Affordable access to Best-in-class Assurance Services for small to medium sized entities. The regulatory landscape for financial services in the Caribbean is becoming increasingly complex and more and more pressure in the form of increased regulatory requirements from external authorities is being placed on our regional institutions.

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