10 BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED Net Operating Income Net operating income increased by $1.2 million or 1.7% percent to end the year at $74.0 million. This was primarily attributed in part to a notable increase in other income of $1.3 million or 23.2 percent. Another significant development was the decline in expected credit losses (ECL), which fell by $1.2 million or 73.8 percent as of March 2026. This improvement was largely driven by the loan portfolios being assessed at discounted market values that exceeded their carrying amounts. This key factor led to a significant reduction in overall impairment losses, thereby strengthening the Credit Union’s credit risk profile. Assets Asset growth of $91.6 million or 5.1 percent was recorded for the year ended March 31, 2026, and was above the prior year’s growth of $50.2 million. The Credit Union’s assets have grown by $229.9 million or 13.7 percent over the last five years to reach $1.9 billion at March 2026. Net loans and advances to members were $1.15 billion, inclusive of the required allocation for expected credit losses, which this year carried an overall ECL allowance of $36.8 million and interest receivable from loans of $10.0 million. This compares to $1.13 billion, inclusive of an expected credit loss allowance of $35.9 million and interest receivables of $10.5 million at the end of the 2025 financial year. Net loans, therefore, increase by $21.9 million or 1.9 percent over the prior year. Further analysis showed that increases in mortgage loans were the primary driver of loan growth, with net mortgages growing by $14.5 million (2025 - $20.8 million) or 2.7 percent (2025 - 4.1 percent). This financial year, consumer loans grew by $8.1 million (2025- a decline by $25.4 million) or 1.4 percent (2025 – a decline by 4.2 percent) while business loans contracted by $236.1 thousand (2025 - $580.9 thousand) or 9.1 percent (2025 – a decline of 18.3 percent). Asset Quality Non-performing (Stage 3) loans increased by $4.4 million or 2.9 percent greater than the prior year, while gross loans grew by $23.3 million, or 2.0%. This contributed to a 0.1 percentage point increase in the delinquency ratio for the financial year. Delinquent loans over 31 days (stages 2 & 3) increased by $6.0 million or 3.3 percent, and delinquent loans less than 31 days (stage 1) increased by $17.3 million or 1.8 percent. Despite an increase in delinquency across all stages, the credit union’s overall credit risk profile improved, as reflected by a $925.5 thousand (3.3 percent) reduction in ECL. This suggests that strong collateral quality and reliable securities helped mitigate potential losses, offsetting the impact of higher delinquency levels. Liabilities The Credit Union’s operations continued to be funded solely by member deposits, which at March 31, 2026, totalled approximately $1.6 billion, representing growth of $83.5 million (2025 - $40.6 million) or 5.3 percent (2025 Loans to members Total Assets 3 Total Assets Management Discussion & Analysis (MD&A) (Continued) Delinquency Ratio Loans to members 1 Loans to members Delinquency Ratio Deposit growth Loans to members Deposit Growth
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