CONTENTS Organisational Structure . . . . . . . . . . 3 Our Leaders Barbados Public Workers’ Co-operative Credit Union Limited . . . . . . . . . . . . 4 Legacy Foundation . . . . . . . . . . . . . . 6 Allied Co-Operators Incorporated . 7 BPW Financial Holdings Inc . . . . . . 8 CAPITA Financial Services Inc . . . . 8 CAPITA Insurance Brokers Inc . . . 10 Consolidated Financial Highlights . 12 Management Discussion & Analysis 14 Board of Directors’ Report . . . . . . . . 22 Independent Auditors’ Report . . . . 40 Consolidated Financial Statements 44 A Tribute to Sister Olive Trotman Celebrating Humble Beginnings, Big Dreams: A Tale of Success In the archives of our Credit Union’s history, one name stands out with enduring reverence – that of our beloved Sister the late Olive Trotman. A retired nurse of the Psychiatric Hospital, Sis. Olive’s Credit Union journey began in 1969, a time when visionaries like her carried the torch of financial empowerment. Sister Olive’s duty in her early days was to collect the deposits including registers and receipts, of the Civil Service Saving Society, the organisation from which BPWCCUL was born. Sis. Olive tirelessly visited the Government Treasury once, sometimes twice a week with the now infamous brown “valise” in hand. Armed with the “valise”, Sis Olive embodied tenacity and dedication, qualities that would shape the very ethos of our institution and would lay the foundation for our now billion-dollar enterprise. Through her unwavering commitment, Sis. Olive became one of the cornerstones upon which our values were built. Even in her retirement at the age of 70, Sis. Olive continued to serve and contribute to our Credit Union. Sis. Olive was a member of the Credit Committee having served from 1976, first as Chairman, Secretary and then as a member. In her words, Sis. Olive described her contribution as very rewarding, noting “lots of cars, trucks and small businesses have come out of Credit Union savings.” As we pay tribute to her invaluable contribution, we honor Sister Olive Trotman’s enduring legacy. Recently the “valise” was relocated and given pride of place and prominence in Clarence Greenidge House at the Credit Union’s headquarters at Belmont Road. Sis. Olive’s spirit continues to guide us, reminding us to uphold the principles of integrity and service that defined her tenure. In her memory, we pledge to continue to carry forward her vision, ensuring that our Credit Union remains a beacon of hope and opportunity for all.
2 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED
3 CONSOLIDATED FINANCIAL STATEMENTS 2024 BarbadosPublicWorkers’CooperativeCreditUnionLimited (BPWCCUL)isamemberbased financialco-operative Ittherefore servesmembersonlyandfocusses on providing financial services to individualswiththemaingoalofserviceto members CAPITAFinancialServicesInc (CAPITA)isawhollyowned subsidiaryofBPWCCULandprovidesfinancialservicestoboth individualsandcorporates CAPITAfocussesonincreasing shareholderreturnthroughtheprovisionofcompetitive financial products and services CAPITAInsuranceBrokersInc (CIB)isawhollyownedsubsidiary ofCAPITAFinancialServicesInc ,setup toprovideanadditionalsourceofrevenueandreturnforits shareholdersandincreasethevaluepropositionformembers andclientswithintheGroupofCompaniesCAPITAInsurance BrokersInc (CIB)isawhollyownedsubsidiaryofCAPITA FinancialServicesInc ,setuptoprovideanadditionalsource ofrevenueandreturnforitsshareholdersandincreasethe valuepropositionformembersandclientswithintheGroup of Companies Organisational Structure HOLDINGS BPW LegacyFoundationisaregisteredcharityand philanthropicarmofBarbadosPublicWorkers’ Co-operativeCreditUnion,itssubsidiariesand associated companies Allied Co-operators Inc (ACI) is a wholly owned subsidiary of Barbados Public Workers’ Co-operativeCredit Union Ltd Throughasharedservicespartnershipwith theBarbadosCo-operative&CreditUnion LeagueACIaimstoprovideeveryLeague AffiliatedCreditUnionwithaffordableaccess tobest-in-classassuranceservices,regardless of their size BPWFinancialHoldingsIncwasestablished toholdthesharesofBPWCCUL’ssubsidiary CAPITA Financial Services Inc
4 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Our Leaders Meet the Board of Directors President Bro. Carl Padmore Vice-President Bro. Mark Hope Secretary Sis. Anne Marie Burke-Brewster Director Sis. Caroline Woodroffe-Holder Director Bro. Hasani Evelyn Director Sis. Cheryl Inniss Director Bro. Gerard Prescod Treasurer Sis. Rochelle Belgrave Director Sis. Wendy Knight-Hunte
5 CONSOLIDATED FINANCIAL STATEMENTS 2024 Meet the ExecutiveManagement Team Group Chief Executive Officer Bro. Glyne Harriison Chief Financial Officer Bro. LeVere Catlyn Chief Human Resources Officer Sis. Jacqueline Caesar Chief Information, Communications & Technology Officer Bro. Irwin Gibson Chief Operations Officer Bro. Richard Kennedy Chief Legal & Corporate Affairs Officer Sis. Natalie Holder Chief Internal Auditor Bro. Eric Small Chief Marketing & Member/ Customer Experience Officer Sis. Gail Best-Niles
6 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Our Leaders (Continued) Meet theManagement Team www.legacybarbados.org Meet the Board of Directors Chairman Ms. Maureen Graham Trustee Mr. Hasani Evelyn Trustee Ms. Ayodele Burrowes Trustee Ms. Kieva Cadogan Trustee Mr. Carl Padmore Programme Development Coordinator Mr. Hanif Moore
7 CONSOLIDATED FINANCIAL STATEMENTS 2024 Meet theManagement Team CO-OPERATORS INCORPORATED Meet the Board of Directors Chairman Mr. Mark Hope Secretary Mr. Barry Hunte Operations Manager Mr. Damien Chase Director Mr. Clint Hurley Director Ms. Cheryl Inniss Director Ms. Jameela Hollingsworth
8 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Our Leaders (Continued) FINANCIAL HOLDINGS INC. BPW Meet the Board of Directors Meet the Board of Directors Director Mr. Cameron Haynes Director Mr. Lindell Earle Director Mr. Jaydee Bourne Secretary Mrs. Kimberley Alleyne-Pinder Chairman Mr. Mark Hope Chairman Mr. Derrick Cummins Vice-Chairman Mr. Craig Hinds Director Mr. Trevor Colucci Director Mr. Cornelius Bartlett Director Mr. Romaine Lovell Director Mr. Glyne Harriison
9 CONSOLIDATED FINANCIAL STATEMENTS 2024 Meet theManagement Team Director Mr. Hasani Evelyn Secretary Ms. Lydia R. McCollin Chief Executive Officer Mr. Curtis Knight Card Manager Mrs. Sonia Hall-Hunte
10 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Meet the Board of Directors Meet theManagement Team Our Leaders (Continued) INSURANCE BROKERS Chairman Ms. Jameela Hollingsworth Vice-Chairman Ms. Cheryl Inniss Secretary Mr. Frank Odle Assistant Secretary Mr. Lindell Earle Director Mr. Cornelius Bartlett Director Mr. Clint Hurley Director Mr. Courtney Gibson Operations Manager Ms. Cheryl Browne
11 CONSOLIDATED FINANCIAL STATEMENTS 2024 Bank On The Go! Co Optima • 24x7accesstoBPWCCULaccountwithyourmobilephone • View account balances • Transfer funds within your account • Monitor transaction history • Member to member fund transfers
12 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Consolidated Financial Highlights Financial Highlights - Five Year Review In Bds $’000 2024 2023 2022 2021 2020 Statement of financial position: Assets Cash and equivalents 395,428 371,940 388,880 362,535 279,870 Investments 81,366 60,873 51,512 51,263 53,688 Loans to Members (net) 1,394,550 1,425,341 1,398,822 1,330,140 1,311,851 Property and Equipment 55,747 58,053 62,176 61,604 61,852 Other Assets 29,225 29,286 30,363 22,357 19,530 Total Assets 1,956,316 1,945,493 1,931,753 1,827,899 1,726,791 Liabilities and Owner’s Equity Liabilities Deposits 1,714,654 1,712,183 1,699,399 1,616,272 1,527,678 External Debt 1,182 1,232 1,277 1,317 1,342 Other 49,656 44,006 45,492 36,352 30,606 1,757,421 1,746,168 1,653,941 1,559,626 1,440,956 Equity Share Capital 13,651 13,334 12,901 12,357 12,008 General& Other Reserves 180,747 175,853 171,314 160,361 151,057 Retained earnings 1,050 -1,115 1,370 1,240 4,100 195,448 188,072 185,585 173,958 167,165 Total Liabilities and Owner’s Equity 1,960,940 1,945,493 1,931,753 1,827,899 1,726,791 Statement of income: Interest Income 101,451 105,721 103,466 100,004 106,307 Interest Expense 24,908 26,966 28,447 29,753 30,957 Net Interest Income 76,543 78,755 75,019 70,251 75,350 Other income 14,724 8,003 8,033 6,337 6,883 Net income and other income 91,267 86,758 83,052 76,588 82,233 Impairment (gain) loss on subsidiary 0 0 0 0 0 Impairment expense 3,002 6,824 7,383 10,071 6,445 Net operating income 88,265 79,934 75,669 66,517 75,788 Total operating expenses 77,099 71,349 63,452 55,932 56,383 Net income before extra-ordinary items 11,166 8,585 12,217 10,585 19,405 Derecognition of Government Securities - - Taxes 960 940 1,081 1,059 1,010 Net income after taxes 10,206 7,645 11,137 9,526 18,395
13 CONSOLIDATED FINANCIAL STATEMENTS 2024 2024 2023 2022 2021 2020 Financial statistics in percent: Asset Growth 0.79 0.71 5.68 5.86 8.46 Loan Growth -2.16 1.90 5.16 1.39 6.16 Deposit Growth 0.14 0.75 5.14 5.80 9.11 Net Surplus Growth 33.50 -31.35 16.90 -48.21 71.21 Return on Assets 0.52 0.39 0.59 0.54 1.11 Return on Equity 5.32 4.09 6.19 5.59 11.56 Operating Efficiency 87.35 89.26 83.85 84.09 74.40 Net Interest Margin 3.92 4.06 3.99 3.95 4.54 2024 2023 2022 2021 2020 Other statistics Delinquency ratio (%) 14.6 14.0 14.0 14.4 10.0 # of members 113.8 111.1 107.5 103.0 100.7 # of branches 6 6 6 6 6 2024 2023 2022 2021 2020 Net income per member $89.68 $68.81 $103.59 $92.49 $182.67 Consolidated Financial Highlights Financial Highlights - Five Year Review In Bds $’000 Principal Bankers BarbadosPublicWorkers’Co-operativeCreditUnionLimited- RepublicBank(Barbados)Ltd. BPW Financial Holdings Inc. - CIBC First Caribbean International Bank CAPITA Financial Services Inc. - CIBC First Caribbean International Bank CAPITA Insurance Brokers Inc. - First Citizens Bank (Barbados) Limited Auditors PricewaterhouseCoopers SRL Barbados
14 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED the 83 percent service rating received on the annual customer satisfaction survey. The increase in membership contributed to the Credit Union’s deposits growing by $23.9 million (2023 - $47.8 million) or 1.6 percent (2023 - 3.3 percent). Accordingly, there was new deposit generation of $401.3 thousand and 149 new loans to first-time members totaling $1.5 million. At March 31, 2024 approved loan commitments and pending disbursements cumulatively totaled $59.7 million (2023 -$78.9 million) decreasing from prior year by $19.2 million or 24.3 percent. During fiscal 2024, the Credit Union’s net loans fell by $14.7 million (2023- $31.4 million increase) or 1.3 percent (2023 – 1.3 percent). Consumer loan growth declined by $37 million (2023 - $13.9 million) or 5.7 percent (2023 - 2.1 percent). Business loans also declined by $552 thousand (2023 - $1.1 million) or 14.8 percent (2023 – 2.3 percent). Demand for mortgage loans continue to increase with net mortgages growing by $21.7 million (2023 - $45.8 million) or 4.4 percent (2023 - 10.3) percent. The Credit Union’s growth in other key areas of its balance sheet were as follows: Group Overview: We are a group of companies committed to enhancing the overall financial stability and development of our members and those in the wider community. Through enhanced technological advancement, sustainable growth, community engagement and collaboration and sectorial development the Group continues to experience positive transformation and growth. As we enter into our fifty-fourth year as a Credit Union and fourteenth (14th) as a Group, we acknowledge and laud the foresight and vision of our founding members, and the support of our existing members and customers without whom, this journey would not have been possible. Adoption of New Accounting Standards During the fiscal ended March 31, 2024, there were no newly adopted or implemented accounting standards which had a significant impact on the reporting or performance of the Group. Snapshot of Credit Union’s Performance: In 2024, the Credit Union’s team of dedicated professionals assisted members by helping them identify appropriate financial solutions to meet their needs. The Credit Union’s membership grew by 2,663 or 2.4 percent to reach 113,781 during the financial year that ended March 31, 2024. With our success anchored to providing supreme member experience, staff continued to focus their efforts on transforming the member experience to make the Credit Union the financial services provider of choice. This is evidenced by This section of the Barbados Public Workers’ Co-operative Credit Union Limited’s Consolidated Annual Report provides a discussion and analysis of the financial position and performance of the consolidated operations of the Barbados Public Workers’ Co-operative Credit Union Limited and its subsidiaries (“the Group”) for the financial year ended March 31, 2024 This MD&A should be read in conjunction with the audited consolidated financial statements, which have been prepared in accordance with IFRS Accounting Standards (IFRS) The Group includes the parent, Barbados Public Workers’ Co-operative Credit Union Limited and its subsidiary Allied Co-operators Inc , BPW Financial Holdings Inc , the holding company for the CAPITA Group that includes subsidiaries Capita Financial Services Inc (“CAPITA”) and Capita Insurance Brokers Limited (“CIB”) Management Discussion & Analysis (MD&A)
15 CONSOLIDATED FINANCIAL STATEMENTS 2024 - Overall cash resources ended at $448.5 million (2023 - $435.7 million) representing growth of $12.8 million (2023 - $15.7 million) or 2.9 percent (2023 – 3.7) percent. - Total assets grew by $37.6 million (2023 - $5.5 million) or 2.2 percent (2023 - 3 percent). Operational performance: - The Credit Union’s net surplus declined marginally below prior year by $581 thousand or 6.2 percent to finish at $8.8 million as at March 31, 2024. Total interest income was recorded at $87.1 million (2023 - $88.9 million) which was $1.8 million or 2.1 percent below that of the prior year. Interest expense was reported at $19.6 million (2023 - $21.2 million), which represented a $1.6 million or 7.5 percentage decline below that of the prior year. - Non-interest income increased by $796.7 thousand or 16.4 (2023 - 6.3) percent to end the year at $5.7 million (2023 - $4.9 million). Expected credit losses $2.7 (2023 - $4.8) $2.1 (2023- $1.7) million or 26.7 (2023 - 26.7) percent below that of the prior year, while loans on nonaccrual increased marginally from $162.6 million in 2023 to $172.6 million at March 31, 2024. - Total operating expenses reached $34 million (2023 - $31.5 million) at the end of the fiscal. Notable increases were reported in direct cost of services which grew by $1,963 thousand or 100.1 percent, audit fees increased by $248.6 thousand or 38 percent over the prior year, while maintenance to property and technology services increased by $393 thousand (2023 - 866.6 thousand) or 6.5 percent (2023 - 16.8 percent) over that of the prior year. Snapshot of CAPITA’s Performance CAPITA reported total assets of $335 million (2023- $326.4) million, representing an increase of $9.1 million or 2.8 percent when compared to the prior year. Profit before levies and taxation was reported at $1.8 (2023 - $1.9) million representing a decrease of $12 thousand or 0.7 percent when compared to the prior year. Total operating expenditure for the year was $15.1 (2023- 17.3) million representing an overall reduction of $2.2 million or 12.6 percent when compared to the prior year. The main contributor to the decrease in total operating expenditure was the significant decrease of $1.7 million or 83.7 percent noted in expected credited losses. This was due to improvements in the valuation of the underlying collateral on non-performing loans and the continued efforts of management to reduce overall delinquency and improve collection efforts within the entity. For the Card Services Division, the ATM Acquiring Project, which will enable the BPWCCUL’s ATMS to accept VISA and MasterCard branded cards, is in the testing phase with go-live scheduled for August 2024. The International VISA Debit Card Project in St. Lucia has progressed to the stage where Capita has been accepted by VISA as a Principal Member of the VISA netwok. Work is ongoing with the Credit Unions in St. Lucia for adoption and distribution of the debit cards. The expected launch date is September 2024. These new ventures will provide additional noninterest income streams while allowing members and customers across the Group access to a wider suite of financial products and services. Group Performance Summary: The Group’s net income before levies and taxes for the financial year-end, March 31, 2024, was recorded at $11.2 million as compared to $8.6 million in the prior year. One of the main contributing factors to this increase in net income is the significant decline in expected credit losses relative to loans. Expected credit losses relative to loans decreased from $6.8 million in 2023 to $3.0 million at March 31, 2024, representing a 56 percent decrease below the prior year. During the financial year ended March 31, 2024, the Group’s minimum deposit rate remained fixed at 0.5 percent ensuring that depositors receive a return above that for similar deposits in the market. Deposits Loans to members Deposits
16 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED The Group’s net interest margin as a percentage of average assets declined marginally to 3.92 percent as at March 31, 2024 compared to 4.06 percent at March 31, 2023. The Group’s levies on assets increased moderately by $80.1 thousand or 9.1 percent, while corporation taxes declined by $35.1 thousand or 58 percent. Net income after tax and levies for the year totaled $10.1 million compared to $7.6 million for the year ended March 31, 2023. Consolidated Financial Statement Highlights Revenues: The Group earned total interest revenue of $101.5 million (2023 - $105.7 million) for the financial year ended March 31, 2024, representing a decrease of $4.2 million or 4.0 percent over the prior year. Deposit cost in the form of interest expense declined by $2.0 million or 7.4 percent to move from $27.0 million in 2023 to $25.0 million in 2024, as deposits continue to reprice at lower rates. Consequently, net interest income moved from $78.8 million in 2023 to $76.5 million in 2024. This represented a decrease of $2.3 million or 2.8 percent over that of the prior year. For the period under review total income was reported at $116.2 million (2023- $113.7 million) representing a $2.5 million (2023- $2.2 million) or 2.2 (2023- 2.0 percent) increase. Net income: The Group’s consolidated net income before levies and taxes was recorded at $11.2 (2023 - $8.6) million at March 31, 2024. Operating Expenses: Total operating expenses inclusive of taxes increased from $76.5 million in 2023 to $78.2 million in 2024 primarily driven by a 10 percent, or $590.1 thousand increase in repairs and maintenance and a 31 percent or $767 thousand increase in legal and professional fees. Staff cost for the year stood at $27.7 million representing a decrease over the prior year of $683 thousand or 2.4 percent. Assets: Total assets of the Group stood at $1.96 billion at March 31, 2024. This represented an increase of $15.4 (2023 - $13.7) million or 0.8 (2023 - 0.7) percent over the previous year. At March 31, 2024, the Group’s consolidated net loans and advances stood at $1.4 billion, a decrease of $30.8 million or 2.2 percent over the prior year. Home ownership remains a significant milestone within the lives of our members as evident in the continued growth noted within the mortgage portfolio of the Net Income Net Income Net Income Loans to members Loans to Members Deposits Total Assets Loans to members 2 Total Assets Management Discussion &Analysis (MD&A) (Continued)
17 CONSOLIDATED FINANCIAL STATEMENTS 2024 Group. Net growth in mortgages stood at $17.6 million or 2.6 percent while net consumer loans and business loans decreased by $49.7 million or 6.7 percent. The Group remained highly liquid with total cash resources of $424.4 million compared to $392.8 million in the prior year, representing an increase of $31.6 million or 8.1 percent. Asset quality: The Group’s non-performing loans increased by $2.4 million in 2024 compared to the prior year increase of $7.4 million despite an overall decline in the loan portfolio of $35.7 million. This resulted in a marginal increase in the Group’s delinquency ratio from 14.0 percent at the end of March 31, 2023 to 14.6 percent at the end of March 31, 2024. In addition to the Group’s continued focus on strengthening the collection efforts and providing enhanced payment solutions catered to the individual needs of our members, it also anticipated that future reductions to the delinquency ratio will be achieved as the overall growth in the loan portfolio aligns with budgeted targets. In this regard we recognize and acknowledge the efforts of staff, in particular the Collections departments, which resulted in an overall decrease in the growth rate of delinquent loans by 68.0 percent. Options available for members 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 the Group’s cash resources and the management of its working capital. Deposit growth remained steady over the period, rising marginally by $2.5 million or 0.1 percent. 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, 2024 the Group’s cash and cash equivalents of $395.4 million was $65.9 million over the liquidity buffer of $329.5 million. The Group’s operations are 99.9 percent 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 $1.2 million. Equity: As at March 31, 2024, the Group’s total equity rose to $195.4 million, representing an increase of $7.4 million or 3.9 percent compared to an increase of $2.5 million or 1.3 percent in the previous year. This increase included the issuance of $431.6 thousand in additional member shares (2023 - $544.1 thousand), and the distribution of $2.8 (2023- $2.8) million 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 continually monitored on an ongoing basis. Delinquency Ratio 1 Delinquency Ratio Delinquency Ratio 1 Cash and Equivalents
18 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Ecomonic Outlook 2023 fiscal The January-March 2024 report of the Central Bank of Barbados’ “Review of Barbados’ Economic Performance”, reported that the economy continued to grow despite global and domestic challenges such as increased interest rates on foreign debt, geopolitical frictions stemming from conflicts in the Middle East, the continued Russian-Ukrainian war along with other global external frictions that placed upward pressure on domestic prices through higher freight, import and transportation costs. Despite these challenges, Real GDP increased by 4.1 percent which was primarily driven by visitor arrivals. The other performing sectors also contributed to the economic growth recorded for 2024, and the current account surplus which increased by $178.2 million during the first quarter of 2024 compared to $71.8 million recorded for the same period in 2023. The debtto-GDP ratio fell from 119.6 percent to 114.3 percent mainly from the strengthened 2023/2024 economic activity and growth. The Way Forward Beyond 2024 As we look ahead to the financial year 2024-2025, our vision for the future of the Group remains cautiously optimistic as the landscape of the financial services sector continues to rapidly evolve. We however remain steadfastly committed to positioning the Group at the forefront of these changes, ensuring that we continue to deliver value to our members. Our foundation of member ownership and focus on member financial well-being remain our strongest assets and driver for change. Here is what we envision for the coming year: Embracing Technological Innovation One of the key areas of focus for the coming year will Management Discussion & Analysis (MD&A) (Continued) be the continued focus on our digital transformation initiative to facilitate the integration of advanced technology into our future service offerings. We recognise that our members expect and deserve seamless, secure, and convenient digital solutions, and to meet these expectations we plan to enhance our current mobile and online banking platforms and introduce new features that improve user experience, increase transaction security, and provide more personalised financial tools. Strengthening Financial Health and Inclusion Our commitment to financial inclusion remains our bedrock and cornerstone. In the upcoming year, we will expand our financial literacy initiatives, and will offer more educational content, workshops and webinars to help our members make informed financial decisions. We will also continue to review our savings and loan products to ensure that wherever possible we meet the diverse needs of our membership through products designed to provide support at every stage of our members’ financial journey. Sustainable Growth and Community Engagement Sustainable growth is essential for the long-term success of the Group. In 2024-2025, through targeted outreach and partnerships, we aim to continue to seek out those who can benefit from membership so we can seek to introduce them to the Credit Union and welcome them into our Credit Union family. Additionally, as our contribution and to play our part in ensuring Barbados delivers on the Sustainable Development Goals (SDGs) 2030 Agenda we will explore opportunities to support environmentally sustainable projects and offer green finance options to our members. SAVE TIME ! Apply Online Save time with our hassle-free online loan application. Apply now and enjoy the convenience of a streamlined process from the comfort of your own home. Don’t waste precious time waiting in line or dealing with paperwork. Experience the power of technology and apply online today!
19 CONSOLIDATED FINANCIAL STATEMENTS 2024 Regulatory Compliance and Risk Management In an ever-changing regulatory environment, maintaining compliance and managing risk are paramount. We are committed to continuously monitoring and adapting to new regulations to ensure that we remain compliant with regulatory requirements while concurrently protecting our members’ interests. By adopting robust risk assessments and risk mitigation strategies, we will continue to safeguard the financial health of members, the Group and the wider financial services sector. Collaboration and Sectoral Development The success of the wider credit union movement is inextricably intertwined with the success of our Credit Union. In the coming year, we will continue to foster strategic partnerships from our position of leadership and, where it does not cause a conflict or negatively impact our operations, will collaborate with other Credit Unions and financial institutions to drive innovation, potentially through shared services, for the benefit of all. We will also become greater advocates for the Group by actively and visibly participating in forums that promote the benefits of the Group to a wider audience. 2024-2025 promises to be a period of growth and positive change. We are excited about the opportunities ahead and are confident that, together, we will continue to build a stronger, more resilient Group that meets the needs of our members and our community – a Group where every member can proudly say, “This is where I belong.” Thank you for your continued trust and support as we embark on this journey forward.
20 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Legacy Foundation’s mission is to inspire people and mobilize resources to strengthen the communities where our Group of Companies operate. We aim to make a significant positive social impact that will leave a lasting impression in areas that align with our impact objectives of Wellness, Empowerment & Learning. Donations can be made at any branch of BPWCCUL. CO-OPERATORS INCORPORATED Affordable access to Best-in-class Assurance Services for small to medium sized entities. At Allied, the goal of our Assurance team is to help small to medium sized regional companies to meet and manage their regulatory obligations so that they imbue trust, maintain integrity and ultimately, promote financial stability and sustainability. www.alliedcoopinc.com (246) 622-9000
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22 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Board of Directors’ Report Overview “Despite facing global and local headwinds, the Barbados economy sustained its growth trajectory, driven by the robust performance of the tourism sector. Amidst challenges such as elevated foreign interest rates, geopolitical tensions, and local climatic events affecting agricultural output and local prices, the Barbadian economy demonstrated resilience…” The above extract from the 31 January 2024 Central Bank of Barbados’ Review of Barbados’ Economy in 2023 appropriately summarises the mixed fortunes of the past year which, while trending in the right direction from a macro-economic perspective, has not been an easy one at the household and individual level. Internationally there has been turbulence across the major economies with economic conditions of our major trading partners being characterised by rising interest rates and inflation – conditions that have in turn impacted our members and employees in various forms, in the management of your day to day affairs. Outside of economic conditions, the credit union as an entity has also been navigating a changing landscape as the sector on a whole was confronted with operational challenges, regulatory changes and technological advancements and threats from bad actors in the space. Some of the most significant factors included: • Risk Management - Heightened risks associated with e-commerce fraud, data protection compliance and other operational risk elements required us to revisit risk management practices, enhance internal controls, and review our contingency plans to safeguard financial stability and protect member interests. • Regulatory Changes - evolving regulatory frameworks and compliance requirements especially in areas such as data protection and governance. • Technological Threats - frequency of attacks on members’ debit cards through fraudulent e-commerce transactions at online merchants. These factors that have necessitated the need to ensure flexibility in our operational model as we adjusted to evolving needs and expectations. The prevailing cost of living, driven by the volatility in the international market, still continues to be a major challenge that has tested the average Barbadian’s resilience and ability to adapt. Despite this, we, the Board of Directors of the Barbados Public Workers’ Co-operative Credit Union Ltd., remain optimistic and believe that your Credit Union remains well “ We are proud of what we have accomplished from an operational, member service and community perspective
23 CONSOLIDATED FINANCIAL STATEMENTS 2024 positioned to help you through these times. History has shown that when uncertainties abound, our commitment to navigating the challenges with our members become stronger and we become even more resolute in contributing to the financial well-being of our members and by extension the Barbadian community. Credit Union Performance As we provide insight into the financial performance of our Credit Union and its subsidiaries over the past year, we do so against the backdrop of dynamic economic conditions in our local market and the wider Caribbean region. The past year brought forth a mix of opportunities and challenges and on each occasion your Credit Union has demonstrated resilience and agility, resulting in a continued positive performance in line with previous years. The Treasurer’s Report and the audited financial statements will provide a detailed narrative of the financial performance during a year when management demonstrated effective control over controllable factors, and exercised prudent financial judgment in the face of revenue projections not being realised due to lower than anticipated credit growth. A snapshot of some key aspects of the financial performance over the previous reporting period is outlined below: Statement of Financial Performance • Total interest income - $87.1 million • Total interest expense - $19.4 million • Total Other income - $5.6 million • Total Operating Expenses - $61. 6 million • Net Profit - $8.7 million Statement of Financial Position • Net Loans and Advances - $1.1 billion • Total Assets - $1.8 billion • Deposits - $1.5 billion • Total Equity - $194.8 million Subsidiary Performance Capita Financial Services Inc. (CFSI) During the reporting period, CFSI continued to make significant strides towards returning to operational normalcy and strengthening its position in the market. Following the severe public scrutiny and adverse publicity experienced, CFSI took proactive measures to enhance its governance structures and processes, resulting in the subsidiary having successfully reestablished its credibility and image, reinforcing its position as a key entity within the Group, and a resilient entity dedicated to serving its customers. One of the key initiatives undertaken by the CFSI Board during the reporting period was the recruitment of a new Chief Executive Officer to lead the subsidiary into the next phase of growth and development. We are pleased to announce that an experienced executive was appointed to lead the subsidiary, bringing with him a wealth of industry knowledge and leadership acumen. Under his guidance, CFSI has formulated action plans to address areas of identified weaknesses and capitalise on opportunities for improvement. It has been a year of corrective action to stabilise the subsidiary and this has come at a cost, as business development and revenue generation was outpaced by stabilisation expenses. CFSI’s revenue and profitability position were marginally impacted by the actions of the past year and it finished the year below the budgeted projections. On the positive side, the work done to date has resulted in strong capital and liquidity build-up, both of which are critical to our long-term goals. Some key financial highlights for the past fiscal period are shown below: Statement of Financial Performance • Total interest income - $15.7 million • Total interest expense - $6.7 million • Total Other income - $8.4 million • Total Expenses - $15.5 million • Net Profit after taxes - $834.5 thousand Statement of Financial Position • Net Loans and Advances - $258.7 million • Total Assets - $335.5 million • Total Deposits - $282.8 million • Total Equity - $29.7 million Additionally, CFSI’s governance practices have been reviewed, and continue to be enhanced across the organisation to ensure compliance with regulatory requirements and best practices. As a Board, we remain committed to supporting CFSI’s growth initiatives and fostering a culture of transparency, accountability and innovation. Looking forward, CFSI is poised for future success that will add incremental value to the Group of Companies and contribute positively to the Group’s long-term
24 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED sustainability. With strong renewed leadership and more focused activities, we are confident that CFSI will achieve this desired objective. We look forward to sharing further successes with you in the coming years. Allied Co-operators Inc. (ACI) ACI was established in response to the Barbados Co-operative & Credit Union League Ltd.’s search for a reliable partner to provide services in light of impending regulatory changes. However, despite our best efforts, ACI has faced considerable challenges in achieving the anticipated uptake from the Credit Union sector. To date, demand for ACI’s services has been limited and well below expected levels. The sector’s interest in ACI’s services has not been widespread, with repeat and new business primarily concentrated among the smallest credit unions, which are the most vulnerable and in need of the support envisioned by Cooperative Principle #6 – Cooperation Among Cooperatives. It is because of this ideological anchor and binding principle amongst Credit Unions that we have continued to persevere to do what is right for the sector through ACI. During the 2023-24 period, ACI’s Board and management maintained their focus on enhancing revenue and revenue-generating potential by promoting the adoption of ACI’s services, including Enterprise Risk Management, Internal Audit, AntiMoney Laundering Managed Services, Anti MoneyLaundering Remediation and Sanctions Services, Independent Anti-Money Laundering Audits, Accounting services, and Anti-Money Laundering staff training. By the end of the reporting period, revenue totalled $217.6 thousand, a decrease of approximately $35.5 thousand or 14% compared to the previous year. The lack of demand and support from the larger and more established players in the sector presents a significant obstacle to ACI’s revenue growth and longterm prospects. The board of the company is actively addressing this challenge as it evaluates ACI’s future options, taking into consideration its current financial situation, market outlook, and demand for its services. Legacy Foundation Legacy Foundation’s mission is to inspire people and mobilize resources to strengthen the communities where our Group of Companies operate. We aim to make a significant positive social impact that will leave a lasting impression in areas that align with our impact objectives of wellness, empowerment and learning. As the Foundation looks to the future we hold steadfast to the Credit Union ideal of people helping people. During the past year Legacy Foundation received five (5) applications, three (3) of which were approved for community-focused projects aimed at making a positive social impact. The approved projects are set to enhance local educational, mental health, and entrepreneurial opportunities within the community. Legacy Foundation will continue to monitor the progress of these projects and provide support as needed to ensure the realisation of the stated objectives. Board of Directors’ Report (Continued) Project Overview Expected Impact Funding Amount New Growth Aquaponics & Farming Project – Ellerton Primary School Aims to educate students about sustainable farming practices while also providing a fresh source of produce for the school and surrounding community. Through hands-on learning and agricultural activities, students will gain valuable knowledge about food production and environmental stewardship This project promotes self-sufficiency and sustainability within the community $40,000 Sheltered Workshop Project – Psychiatric Hospital Provides vocational training and employment opportunities for individuals with mental health The project will offer therapeutic and skillsbuilding activities that can lead to stable employment, reducing stigma and fostering social inclusion for individuals with mental health challenges $48,400 Legacy Foundation / BARP Members – Business Centre Business centre aimed at supporting senior citizens in the transition to a digital economy. The business centre will provide resources, mentoring, and training for senior citizens, empowering them to engage in the digital economy This initiative promotes active aging and self-reliance among the elderly population $75,000
25 CONSOLIDATED FINANCIAL STATEMENTS 2024 Regulatory Environment Review During the 2023-24 fiscal period, the financial services sector experienced intensified regulatory scrutiny and higher privacy standards due to newly introduced (or proposed) legislation and regulatory guidelines. These changes focused on areas such as corporate governance, fitness and propriety, data privacy, whistleblowing, anti-corruption and bribery, and cyber security and technology risks. In response, the Credit Union took proactive steps to enhance existing practices and/or establish new frameworks for these critical areas. Our commitment to maintaining the highest standards of compliance with regulatory requirements remains unwavering. Corporate Governance and Fitness & Propriety Regulatory Guidelines In January 2024, the Financial Services Commission (FSC) issued a notice advising that the Corporate Governance Guidelines became effective on November 20, 2023. Registrants were advised to update their fit and proper frameworks, policies, procedures and practices accordingly. Based on these guidance documents, BPWCCUL is considered a non-banking systemically important financial institution (NB-SIFI) given its size and complexity. Due to its NB-SIFI status, the FSC required BPWCCUL to enhance measures governing the AGM election process to ensure that all persons elected to office are fit and proper as defined in the Guideline and are aware of the new corporate governance standards. Technology & Cyber Risk Management Guideline In June 2023, the FSC issued a consultation paper regarding the draft Technology & Cyber Risk Management Guideline to its registrants for feedback. The draft aligned to requirements seen in the banking sector and international best practices. Hence, BPWCCUL assessed its existing practices to determine any gaps that need to be addressed to enhance its existing technology and cyber security framework. Whistleblowing While it is customary for complaints to be made through various contact channels, it is understood that there is a need to ensure that some concerns are brought to the organization’s attention confidentially. These matters are to be addressed through implementation of the Group Whistleblower Framework. Barbados Revenue Authority (BRA) In November 2023, the BRA issued a guidance note to provide reporting financial institutions (e.g. credit unions, banks and other deposit taking entities) with direction on their obligations for obtaining and reporting Tax Identification Numbers (TIN) of members to satisfy this requirement under the Common Reporting Standard (“CRS”). In November 2023, the BRA also, issued guidance to reporting Barbados financial institutions where an entity opening an account self-certifies as a financial institution to adhere to the requirements under the Common Reporting Standard. It is critical that members provide their TINs to satisfy these requirements. Data Privacy In keeping with data protection legislation, the BPWCCUL has implemented measures to ensure safe and effective collection, processing, usage, storage, distribution of personal data and protection of members’ personal data. There is therefore a legal obligation for BPWCCUL to ensure that all member information is protected from unauthorized access and use, and that information is only used within the confines of regular business activity. There is also a legal obligation for BPWCCUL to ensure that member information is updated as necessary as part of its Know-Your-Member programme. Members are therefore, encouraged to update their information as a requirement. Current business practices rely heavily on technology to facilitate faster, easier and more convenient ways to conduct business activity. This increases the risk of outside forces attempting to gain information through cybercrime. Should such cyber incidents occur, there is a legislative requirement for such matters to be reported to the Data Commissioner and affected individuals. Members should ensure that they employ measures to protect their information. This includes, but is not limited to being mindful of entering information on suspicious websites, not sharing personal identification numbers (PINs) and not sharing personal information. Member Engagement During the 2023-24 reporting period, the Credit Union recorded a steady growth in membership, with total members closing at 113,781 a 2.4 % increase over the prior year. While we acknowledged that there were challenges within our operations,
26 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Board of Directors’ Report (Continued) particularly as it related to the member experience during the reporting period, we made a commitment to work with management to bring about the needed improvements. Coming out of the commitment made to you, enhancing the member service experience across the Credit Union has been a key focus over the past year. To measure our success in this area, we consistently track our member satisfaction scores. As at the end of this reporting period the recorded score for the period was 83 against a benchmark objective of 80. Admittedly even with the benchmark score having been met, we are not yet where we want to be in terms of delivery of a consistent level of exceptional and personalised service and support to you, our valued members, but we are definitely pleased with the improvements made over the past year. We are grateful for the support and involvement of our members and as we continue to work on improving our performance in this area. We remain committed to building on the successes of the past year and to continuing to prioritise your needs so you have a memorable experience each time you interact with us. We commit to continued work with management to realise this mutually desirable objective. Youth Engagement - Thrift Club Membership During the reporting period, we continued our efforts to make our Thrift Club enrolment process easier for our young members. This is in line with the member approved changes to By-laws 2(2) & 21 and 13-1 which removed the age restriction required for Credit Union membership and allowed the implementation of a separate qualifying share for members under 16 years. We anticipate this change will yield significant growth across our general Thrift Club membership and our School Savers programmes. Our educational partnerships expanded during the period as the Bay Primary School was launched on November 6, 2023. The Thrift Club Advisory Committee The members of the outgoing 2021/2023 Thrift Club Advisory Committee continue to serve in their role as advocates for youth services at the Credit Union and liaisons for youth members in our schools and communities. The selection of a new Committee is scheduled for the coming fiscal at which point there will be seven seats available to our 14 to 18 years old members, who can serve for a period of two (2) years with the opportunity for reappointment. Thrift Club Events During the reporting period, the following activities were hosted for our members and children within our community: • December 9, 2024 – Annual Thrift Club Christmas Party • December 21, 2024 – Brunch with Santa Claus Having suspended our annual Thrift Club Summer Camp during the COVID-19 period, we anticipate resuming the hosting of this much anticipated youth camp in the new financial year. Annual Academic Awards, Scholarships & Educational Grants As a Credit Union we believe in empowering our members to achieve their dreams, and that includes supporting the educational aspirations of the next generation. We understand that education is the foundation of success, and are proud to have invested in our communities’ success through the various scholarships, grants, and awards distributed over the past year. This not only showcases our commitment to fostering academic excellence but also creates opportunities for our student members to succeed. The Credit Union remains steadfast in our promise to provide the following opportunities for members’ educational development at all stages. Academic Awards Academic Awards are presented for: • outstanding achievements in the Barbados Secondary Schools’ Entrance Examinations (11+) • outstanding achievements in the Caribbean Secondary Education Certificate Examinations (CSEC) • outstanding achievements in the Caribbean Advanced Proficiency Examinations (CAPE) • attainment of Barbados Government Exhibitions • attainment of Barbados Government Scholarships Fifty-five promising young Credit Union members were recognised for their outstanding achievements during the reporting period and were recognised at the Annual Thrift Club Academic Awards Ceremony in September 2023. These achievements were in the following examination categories:
27 CONSOLIDATED FINANCIAL STATEMENTS 2024 Award Category Awardees Amount Common Entrance Examinations 20 $20,000 Common Entrance Examinations (Special Awards) 5 $2,500 Caribbean Secondary Education Certificate (CSEC) Examinations 15 $18,000 Caribbean Advanced Proficiency Examinations (CAPE) 10 $15,000 Government Exhibition 4 $7,200 Government Scholarship 1 $2,200 TOTAL 55 $64,900 Common Entrance Examination - GIRLS No Name 1 Anya Scott 2 Ashaela Miller 3 Chinue Holder 4 Kendra Hunte 5 Knela Walcott 6 Kylie Roberts 7 Lyneisha Bynoe 8 Remi Johnson 9 Shiloh Springer 10 Tahira Fraser Common Entrance Examination - BOYS No Name 1 Adam Diagne 2 Amir Gittens 3 Ayden Linton 4 Ethan Watson 5 Josiah Rhynd 6 Kemani Hunte 7 Kevaun Cadogan 8 Rajan Griffith-Mapp 9 Scott Johnson 10 Seth Goodridge Common Entrance Examination - SPECIAL AWARDEES No Name 1 Che'Nyah Hinkson 2 Jada Richards 3 Joshua Franklin 4 McKenzie Payne 5 Tayvia Alleyne Qualified CSEC Examinations Awards for 2023 No Name 1 Adaiah Lescott 2 Arielle Barker 3 Charles Wilkie 4 Devari Springer-Lewis 5 Jade Evelyn 6 Kenneth Walcott 7 Kristen Rogers 8 Melora Maloney 9 Messiah Austin 10 Nyela Marshall 11 Riquelme' Fields 12 Shakai Simpson 13 Tristan Nightengale 14 Warren Eversley 15 Woletta-israel Yaicob CAPE Awardees 2023 No Name 1 Alyssa Blades 2 Daija Walker 3 Dmitri Hoyte 4 Karlton Holligan 5 Kiera Holder 6 Keon Brandford 7 Makayla Waterman 8 Sara Drayton 9 Toshiro Benn 10 Zaria Elcock
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