BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED
NON-CONSOLIDATED ANNUAL REPORT 2015
11
MANAGEMENT DISCUSSION AND ANALYSIS
management while at the same time adding valued customer
service. However, growth necessitated an increase in operating
expenses thus operating expenses (inclusive of tax on assets
of $1.4 million) increased by $2.4 million or 7.6 percent above
prior year.
OPERATING LEASES
Rent expenses increased during the year ending March 31,
2015 moving from $286 thousand in 2014 to $753 thousand
in 2015. This increase was directly attributed to expansion of
the Credit Union’s branch operations at the Six Roads location,
installation of two additional offsite ATMs and rental of office
space for staff at the Co-operators General Insurance’s building
on Collymore Rock.
STAFF COST
During the year, the Credit Union increased its staff complement
to strengthen its member services, financial reporting and risk
management functions as well as providing human resources
for its branch expansions.
In addition, incremental salary increases as well as higher
pension plan expenses also contributed to the increase in staff
costs. As a result, staff cost increased by $607 thousand or 5
percent over prior year.
TOTAL OPERATING EXPENSES
Total operating expenses for the year under review amounted
to $33.7 million, an increase of $2.4 million or 7.6 percent
above prior year. This included an amount of $1.4 million
which represented the 0.2 percent Asset Tax expense levied
by government on the assets of the Credit Union during the
financial year.
The effect of this levy largely resulted in the reported net income
being under that which was realized in the last financial year.
NET OPERATING INCOME
Net operating income inclusive of loan impairment expenses
increased by $863 thousand or 1.9 percent, to end the year
at $47.0 million. Loan impairment expense was $3.7 million,
a decline of $697 thousand or 15.8 percent below prior year.
This reduction was mainly due to a change in the ratio of non-
performing unsecured loans to non-performing loans with
security.
ASSETS
At year-end the Credit Union’s asset base amounted to $930.2
million, an increase of $53.6 million or 6.1 percent. During the
financial year ending March 31, 2015 cash resources decreased
by $15.5 million or 14.1 percent. This was mainly due to early
repayment of external debt so as to reduce interest expense.
In addition, financial investments classified as Held-to-maturity
increased by $5.4 million or 26.7 percent.
At the end of the financial year, the net loans and advances
to members rose to $746.5 million, inclusive of impairment
provision of $21.9 million, as compared to $684.3 million and
$21.3 million respectively at the end of the previous year. As it
was in the prior year, consumer loans was the major contributor
to loan growth in the reporting period.
ASSET QUALITY
Amid a climate of uncertainty and high job losses, the Credit
Union recorded an increase of 0.1 percent in its delinquency
ratio which ended the year at 6.7 percent compared to prior
year which was 6.6 percent. However, non-performing loans
increased by $4.2 million in comparison to the decrease of $4.6
million in the prior year.
The Credit Union will continue to work diligently with defaulters
to offer them alternatives and restructuring plans to enable
them to restore their loans to a state of normalcy.
In addition, support systems have been set up to help those
members who recently lost their jobs due to the retrenchment
exercise in the public sector. This has led to the restructuring of
loans to meet the needs of affected members who reached out
to the Credit Union for support.
0
200,000
400,000
600,000
800,000
1,000,000
2011
2012
2013
2014
2015
745,571 791,851
826,845
876,592
930,220
In BD$'000
Total assets
0
2,000
4,000
6,000
8,000
10,000
12,000
2011
2012
2013
2014
2015
6,791
9,939
11,993
10,427
9,606
In BD$'000
Net Income
0
200,000
400,000
600,000
800,000
2011
2012
2013
2014
2015
606,515 642,797 651,868 684,331
746,497
In BD$'000
Loans and advances
