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Managing Director’s Discussion & Analysis Cont’d

Economic Context

As COVID-19 moved from a pandemic to an endemic phase, several key factors such as, the resumption of tourism activities; expansion of the construction sector for infrastructure development, commercial and residential projects, spurred the uplift in economic activities during the year. Alongside these factors were the release of pent-up demand from prolonged periods of restrictions which resulted in a surge in domestic consumer spending. This spurred growth in the retail and wholesale sectors. Further, the disbursements under the COVID-19 Response Programme, Volcano Eruption Emergency Project (VEEP) and the VEEP Labour Intensive Temporary Employment initiatives injected in excess of $15 million in the local economy during the second half of the year.

2022 At A Glance

OPERATING HIGHLIGHTS

1,112.4

637.3

The reopening of the global economy and the subsequent resumption of normal business activities impacted positively on all of the Bank’s income streams during the latter part of the 2022 financial year. As such, the Group recorded a profit before tax of $5.9 million, representing an increase of $3.2 million or 123.7% over that recorded in the previous financial year. The increase in pre-tax profitability was primarily driven by growth in operating income of $10.2 million or 19.9% and a reduction in credit loss expense of $4.9 million or 64.2%. Notwithstanding the normalization of income streams to pre-pandemic levels, the increased market volatility, and the constant threat of inflation, coupled with geo-political risk resulting from the Russia/ Ukraine conflict, contributed to losses of $7.4 million in the Groups’ investment portfolio.

The Group’s strategy to capitalize on opportunities to invest in high yield instruments even as liquidity tightened globally, resulted in an

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