BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED
CONSOLIDATED ANNUAL REPORT 2016
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The Group’s net loan impairment provision decreased by $992
thousand in 2016. Consequently, the ratio of loan provisioning
to impaired loans moved from 42.6 percent in 2015 to 39.0
percent in 2016.
Overall the Group recorded significant growth in its core
businesses. Loan growth moved from 9.8 percent in 2015
to 10.5 percent in 2016. Deposit growth climbed from 9.1
percent in 2015 to 13.3 percent in 2016.
During the financial year, the Central Bank of Barbados relaxed
its control over interest rates in the market. This allowed
financial institutions to lower their interest rates on various
savings and deposit products.
The interest rate on deposits at some leading financial
institutions average 0.5 percent at March 31, 2016. The
minimum interest rate on deposits within the Group at March
31, 2016 stood at 2.0 percent.
Net interest margin increased from 4.7 percent in 2015 to 4.9
percent in 2016 as various pricing strategies were employed to
drive loan and deposit volumes.
These results are credited to the performance of outstanding
and dedicated employees who were encouraged to have
a deep and broad knowledge of our products, services and
systems. They are trained to be professional, accurate, efficient
and compliant. We foster an environment of outstanding
service delivery to our members and customers with every
single interaction.
Outlook
Undeniably, the Group continues to operate in a challenging
economic environment that is already impacting on the
sustainability and future growth of key players in the financial
services sector, especially the smaller Credit Unions. Faced with
continuing deterioration in credit quality, there is a constant
need to reassess capital levels, identify stress points and
manage risk exposures.
The Group will continue to respond to the current and future
challenges through iterative processing of its vision goals as it
seeks to maintain positive growth trends.
MANAGEMENT DISCUSSION AND ANALYSIS
This section of the Group’s 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, 2016.
The Group includes the parent, Barbados Public Workers’ Co-
operative Credit Union Limited, its subsidiary BPW Financial
Holdings Inc. and its subsidiaries CAPITA Financial Services Inc.
(“CAPITA”) and Capita Insurance Brokers Limited (“CIB”).
Overview
At March 31, 2016 the total consolidated assets of the Group
reached $1.2 billion, reflecting an average growth of $10.5
million per month during the year ending March 31, 2016.
This growth signals the confidence, loyalty and support in
which members and customers have placed in the respective
boards, management and staff of the financial institutions
within the Group.
Snapshot of CAPITA’s Performance
CAPITA continued to realize steady growth since its acquisition
in August 2010, recording asset growth of $35.2 million or
17.5 percent for the year to reach $236.7 million at March 31,
2016. Its pre-tax net income was $1.0 million while net income
after tax was $658.8 thousand for the year.
Additionally, CAPITA continued to expand by offering a wide
diversity of other income opportunities for the Group. One such
opportunity is through the establishment of CAPITA Insurance
Brokers Limited (CIB) which provided brokerage services to the
Group under the CAPITA brand.
As a measure of the confidence in its future growth and
profitability, CAPITA commenced the payment of a dividend
to its sole shareholder in 2015 and has declared a dividend of
$400 thousand for 2016.
Through CIB, the Credit Union’s membership has been provided
with one of the best health benefit plans in the market.
Group Performance Summary
The Group’s consolidated net income before tax for the year
under review was $15.8 million compared to $11.4 million for
the previous year. It is worthy to note however, that the tax
levied on the assets of the Group for the year ending March
31, 2016 amounted to $2.3 million together with Corporation
Tax of $268.8 thousand. This resulted in net income after tax
of $13.2 million for the Group.
The Group continued working with members and customers
who have been experiencing challenges in meeting loan
commitments. As a consequence, the percentage rate of non-
performing loans decreased by $2.4 million across the Group.
The delinquency rate decreased from 6.7 percent at the end of
the previous year to 6.3 percent at the end of March 31, 2016.
