Bank of St. Vincent & The Grenadines Ltd 2021 Half Year Review SUMMARY OF FINANCIAL PERFORMANCE Dear Shareholders, Over the last 15 months, the Covid-19 pandemic has dominated global issues. As the virus continues to mutate and spread across the world, its fallout, both in terms of the loss of human lives and the devastating economic impact, is deemed as one of the most catastrophic events during the last one hundred years. In St. Vincent and the Grenadines, conditions were further exacerbated by the explosive eruption of the La Soufriere volcano in April 2021. Amidst these crises, the Bank has remained resilient with a focus on supporting its customers, staff and other key stakeholders. The Board and Management continue to evaluate the risks and opportunities arising from the current operating environment and will make appropriate policy decisions accordingly. As we continue to ‘Do More Together’ and execute plans to address the evolving needs of our customers, we are seeking to improve offering of products and services, while enhancing the customer experience through data analytics and technology advancement. During the period under review, the Bank continued with the implementation of a number of key initiatives to position the institution to move forward, post pandemic. The main focus of these initiatives is to ensure that the Bank remains competitive and relevant in the digital era. As such, we are implementing programs to improve our processes and upskill our human resources to enhance the customer experience. To this end, several initiatives were advanced during the period under review. These include: (1) The opening a Mini Branch at ET Joshua Centre with a focus on a suite of new digital services. (2) The strengthening of product offerings by migrating our card services to chip and pin security features. (3) Increasing our marketing drive for our digital transformation initiatives through communicating and educating our target market on the many benefits to be garnered. (4) Enhancing our customer engagement channels with the introduction of the digital back office support center.
The financial performance for the six-month period ended June 30, 2021, reflected the ongoing impact of the COVID-19 Pandemic and the subsequent eruption of the La Soufriere Volcano. Still, there was an improvement in profitability when compared to the corresponding period in 2020. Net profit for the period was $2.3M compared to $0.663 million at June 30, 2020. The provisions for loan impairment declined by $2.9 million or 40.2% from $7.3 million to $4.3 million. There was also a substantial improvement in the loan loss coverage ratio, which moved from 68.6% to 86%. The impact of the Pandemic was also felt by the Bank on its interest income which declined by $0.879 million when compared to June 2020. Interest income continued to be impacted by declining yields. Additionally, there was a marginal increase in interest expense, which was mainly due to a growing deposit base. Despite the uncertain and challenging operating environment, the Bank continues to maintain a strong financial position with total assets of $1.25 billion and total equity amounting to $136 million (June 2020: $119 million). The Bank’s key capital ratios continue to comply with the legal and regulatory requirements. The current Capital Adequacy Ratio (CAR) of 21.8% is well above the minimum requirement of 8%. At June 30, 2021 the Bank’s liquidity position remained healthy, with available cash resources of $332.1 million (June 2020: $300.3 million). This represents an increase of 10.6% over the previous period. In view of the prevailing challenging environment and the resultant prolonged recovery, the Bank will continue to prioritize the maintenance of its capital and liquidity buffers. The Bank will also remain vigilant in ensuring that impacted customers continue to have access to the financial assistance and support they require during the ensuing period. As part of the ongoing risk assessment, the Bank will continue to proactively review and address asset quality issues, while at the same time, mitigate against revenue pressures due to the subdued growth environment and low interest rates in the market.
Maurice Edwards Chairman
2021 - BOSVG Half Year Review 1|P a g e