Managing Director’s Discussion & Analysis

Overview

The overall performance of the Group in the 2022 financial period reflects in part, the near-term recovery from the challenges faced in the previous periods, 2020 and 2021. It also reflects the emergence and immediate impact of the elevation of market risks occasioned by the high inflation and rising interest rates on the international markets.

This recovery is clearly manifested in the increases shown in all income categories, as well as, in the reduction in the allowances for credit losses given the general improvement in the credit risk associated primarily with the COVID moratorium loans. Concomitantly, the impact of the market risk is shown in the unrealized losses and losses on sale of financial assets held in the international portfolio.

During the year, there were increases in some operating expenses, which represent our continued investments in the transformation strategy of the Group. The increase in expenditure relates to the ongoing implementation of several key strategic initiatives, including the expansion of our digital platforms and the preliminary costs for the planning and execution of the acquisition of the banking operations of CIBC First Caribbean International Bank in St. Vincent and the Grenadines. The increases in the operating expenses were mainly driven by transactions.

The Group’s asset base increased marginally during the year with steady growth in the total equity, which continued to bolster the capital adequacy ratios.

Notable Achievements

During the year under review, the Group pursued a number of strategic initiatives across the key areas of activities. Some of the noteworthy achievements include the following:

1.

Following the submission of the Group’s application and business plan to the ECCB in February 2022 for the Regulatory approval to acquire the banking operations of CIBC FCIB in St. Vincent and the Grenadines, approval for the transaction was obtained on July 15, 2022. This was a significant milestone as it was a critical condition in the transfer agreement.

2.

During the same period, we commenced and successfully completed the planning for the integration of the business operations with CIBC FCIB and our consultants, Deloitte. The remainder of the year was focused on executing the various activities in the agreed plans leading to the successful integration on March 24, 2023.

3.

Partnered with the Central Planning Division in the Ministry of Finance on the implementation of the COVID-19 Response Programme, Volcano Eruption Emergency Project (VEEP) and the VEEP Labour Intensive Temporary Employment, funded jointly by the Government of St. Vincent and the Grenadines and the World

Derry Williams Managing Director

Bank. To facilitate the efficient distribution of the payments, over 40,000 debit cards were produced and distributed to beneficiaries of the programs which commenced in June 2022.

4.

Following on the commitment to building a robust and secured information technology infrastructure, the Group obtained the Payment Card Industry Data Security Standard (PCI-DSS) 3.2.1 and the ISO/IEC 27001: 2013 certification during the 2022 financial year. Cognizant of the ever present and increasing cyber and other information security threats, the process of certification involved a comprehensive review of the Group security posture. Over the years, the Group developed and implemented a highly effective information security management program underpinned by a suite of information security policies and procedures aligned to the cybersecurity framework (NIST) and COBIT 2019.

In view of the challenges of the last financial year, the Group continued to maintain a conservative and robust risk management posture. This involved the ongoing review and adoption of appropriate risk management strategies and supporting policies to mitigate the threats in the constantly changing environment.

During the period, we also moved one step closer to shifting the culture of the Group in the right direction. We took account of the feedback received from a customer survey conducted in 2021 and reviewed and updated our service standards with the input of the entire staff. This was accomplished through a series of workshops that saw the active participation of the staff with the guidance of an independent consultant. The next stage in the process will see the execution of the resulting training programs to further entrench the customer centric culture in the periods ahead.

Critical to achieving this objective, is a renewed focus on the development of the entire workforce through a focused recruitment strategy geared to attracting and developing the relevant skills and competencies required in the modern service environment.