BARBADOS PUBLIC WORKERS’ CO-OPERATIVE CREDIT UNION LIMITED
NON-CONSOLIDATED ANNUAL REPORT 2016
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mostly to concentration and credit quality. However, we
reduced our delinquency ratio to 6.3 percent, down by 0.4
percent from previous year. This was achieved by prudent and
continuous management of our loan portfolio.
We continued to offer payment solutions to our members
through various debt management and consolidation strategies
to improve their financial and economic well-being.
Non-performing loans during the year ending March 31,
2016 increased by $1.8 million or 3.5 percent. However, the
delinquency rate decreased from 6.7 percent at March 31,
2015 to 6.3 percent at March 31, 2016. We will continue
to work with our membership to offer solutions geared at
returning their accounts to a state of normalcy.
Deposit interest rates in the market continued to trend
downward and reached an average of 0.5 percent at March
31, 2016. However, we at the Credit Union are proud to
maintain some of the most competitive rates on deposits. This
resulted in deposit growth for the year of $87.8 million.
REVIEW OF FINANCIAL PERFORMANCE
TOTAL INCOME AND NET INCOME
With asset taxes of $1.9 million incurred during the year, net
income was reported at $13.5 million compared to $9.6 million
in the prior year, an increase of $3.9 million or 41 percent.
Total revenue grew by $8.2 million or 11.4 percent, moving
from $71.7 million in 2015 to $79.9 million during the 2016
financial year.
The Credit Union achieved significant net loan growth when
compared to prior years, as net loans grew by $71.3 million
or 9.6 percent when compared to $62.2 million for the year
ended March 31, 2015.
NET INTEREST INCOME
Net interest income grew by $6 million or 13.5 percent in 2016.
Total interest income grew by $7.2 million or 10.4 percent,
while total interest expense increased by $1.2 million or 4.9
percent. Interest income increased by $7.4 million or 11.3
MANAGEMENT DISCUSSION AND ANALYSIS
This section of the Annual Report provides a discussion and
analysis of the financial condition and performance of the
Barbados Public Workers’ Co-operative Credit Union Limited
(BPWCCUL) for the financial year ended March 31, 2016 as
compared to the prior financial year ended March 31, 2015.
ECONOMIC REVIEW
At the end of 2015, the Barbadian economy was estimated
to grow by 0.5 percent, mainly due to the stellar performance
of the tourism industry. The financial system in Barbados has
demonstrated its resilience and maintained excess liquidity in
2015 despite the challenging local and international economic
environment. It is forecasted that in the 2016/2017 financial
year, the economy is expected to grow by 1.6 percent.
Despite the economic climate as highlighted in the Financial
Stability Report from the Central Bank of Barbados, total
assets of the Credit Union Sector were reported at $1.9 billion
dollars in 2015, representing a 7.0 percent increase over 2014.
The largest contributor to growth was the aggregate loan
portfolio, increasing by 7.0 percent, followed by an increase in
investments of 6.0 percent. From January to September 2015,
total new loans of $208.0 million were concentrated mostly
in consumer loans ($106 million), real estate ($62 million) and
transport ($36 million). Average liquidity in the Credit Union
Sector remained stable.
Non-performing loans relative to the total loan portfolio fell
from 9.1 percent to 8.9 percent at September 2015. However,
the quality of the loan portfolio was relatively skewed where
smaller credit unions were recorded to have had substantially
higher non-performing loan ratios than that of the larger ones.
According to the most recent report published by the
CUNA Mutual Group on Credit Unions in the USA, during
February 2016, Credit Unions picked-up 820.0 thousand in
new membership, loan and savings balances grew at 11.0
percent and 8.1 percent seasonally-adjusted annualized pace,
respectively.
Additionally it was reported that total Credit Union assets rose
by 1.6 percent in February, below the 1.9 percent gain reported
in February of 2015. Assets rose 6.1 percent during the past
year due to a 5.7 percent increase in deposits, a 12.4 percent
increase in borrowings and a 7.6 percent increase in capital.
OVERVIEW
During the year under review, the Credit Union continued to
grow in key aspects of its operations. Membership averaged
447 per month and recorded net growth of 5,363. Deposits
grew by $87.8 million or 11.3 percent, while assets grew by
$90.0 million or 9.7 percent.
The key area of risk faced by the Credit Union sector relates
