10 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED There are currently ongoing trade agreements with CARICOM countries to increase trade at more favourable prices aimed at reducing import-driven inflation. However, external international factors such as geo-political conflicts and wars, tensions in the Red Sea and persistent congestion in the Panama Canal pose significant risks to the measures put in place to lower and dampen domestic inflation. The most recently published, “World Economic Outlook”, forecast a more gradual economic slowdown than previously anticipated with an upward revision to the global prospects. The Barbadian tourism sector is expected to experience another productive period due to the ICC Men’s’ World Cup being hosted in June 2024, improved air passenger access and increased private and foreign direct investment. Overview Our focus at the Barbados Public Workers’ Cooperative Credit Union Ltd. continues to be on providing highquality financial products and services and promoting the financial and social well-being of our membership, whilst remaining committed to adding value through our product offerings and providing excellent service and support. During the period, membership grew by 2,663 or 2.4 percent to reach 113,781. Accordingly, there was a new deposit generation of $401.3 thousand and 149 new loans to first-time members totalling $1.5 million. Memberrelated expenditures granted through social outreach increased above the prior year by $30.1 thousand, however, demand for educational and social funds declined below the prior year by $31.9 thousand. Review of Financial Performance Total Income And Net Income Total income comprising of interest from loans and advances and, interest from cash resources and investments was reported at $87.1 million. This, along with non-interest income of $5.6 million, together totalled $92.7 million for the year ended March 31, 2024, compared to $95.1 million in the prior year; a 2.6 percentage decrease. As a result, net income for the year was reported at $8.8 million; a marginal decline of $581 thousand or 6.2 percent when compared to the prior year. Net Interest Income Net interest income comprises of interest earnings on assets, less interest expenses paid on lease liabilities, deposits and wholesale funding (the cost of funds). Net interest income decreased by $200.0 thousand or 0.3 percent at the end of the financial year, March 2024, when compared to the prior financial year, March 2023. This was mainly due to interest expenses declining by $1.6 million or 7.7 percent which was less than the decrease in total interest income of $1.8 million or 2.1 percent when compared to the prior year. Other Income Other income increased by $796.7 thousand or 16.4 percent during the financial year to end at $5.6 million, primarily due to an improvement in fee income which increased by $788.3 thousand or 32.1 percent. The collection of income from charged-off loans increased by $25.5 thousand or 2.2 percent, and rental income also increased by $8.2 thousand or 5.2 percent. These increases were offset by a negative movement in legal income which declined by $184.1 thousand or 17.9 percent. Efficiency And Expense Management The Credit Union’s strategy during the financial year focused heavily on adding valued member services which resulted in operating expenses increasing by $2.6 million or 8.2 percent compared to the prior year. Nonetheless, the organisation’s efficiency ratio reflected an improved position, moving from 88.1 percent at year end 2023 to 87.6 percent at year end 2024. Total Operating Expenses Total operating expenses for the year were reported at $61.6 million (2023 - $59.7 million), representing an increase of $1.9 million or 3.3 percent compared to the prior year. The increase in other operating costs accounted for 55.3 percent of the increase in total operating expenditure. Deposits Net Income 2 Net Interest Income Management Discussion & Analysis (MD&A) (Continued)
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