Bank of St. Vincent & The Grenadines Ltd 2020 Half Year Review BANK OF ST. VINCENT AND THE GRENADINES LTD
BANK OF ST. VINCENT AND THE GRENADINES LTD 2020 HALF-YEAR REPORT
Interim Consolidated Statement of Income For the period ended June 30, 2020
SUMMARY OF FINANCIAL PERFORMANCE
(expressed in thousands of Eastern Caribbean dollars)
DEAR SHAREHOLDERS The positive start to the 2020 financial year, was overshadowed by the COVID 19 pandemic and resultant volatility in the global economy and financial markets. The Bank recorded net income of $0.66 million for the half year compared to $5.8 million realized for the corresponding period in 2019. There was a noticeable decline in non-interest income of $1.1 million (12%), which was primarily due to a slow down in business activities as a consequence of the pandemic. Additionally, there was a slight decline in net interest income, which was primarily due to a reduction in interest income on investments and deposit placements, in conjunction with an increase in interest expense. The increase in interest expense was due to the growth in the deposit base. Further actions were taken to curtail operating expenses by deferring some projects during the plan period. While these cost measures mitigated some of the adverse effects, operating expenses increased marginally by $0.07 million in comparison to the similar period in 2019. As expected, the economic effects of the pandemic have been significant. Accordingly, we have increased the provision for expected credit losses to $7.3 million for the half year. The increase in provision for loan losses, particularly those loans under the moratorium program, was the major contributor to the significant reduction in profitability for the period under review. Our balance sheet remains robust with Tier 1 Capital Ratio of 22.7% and adequate levels of liquidity and funding. Total assets grew by $82.4 million or 7.6%, which was reflected mainly in cash and bank balances. Deposit growth maintained a strong trajectory, expanding by $87.9 million or 10.1%, while there was a marginal decline of $5.5 million in loans and advances. Asset quality remained stable at 6%. The Bank continued to invest in infrastructure development particularly in the area of technology in the first half of the year to accelerate its digital transformation. The ongoing development is to create a more efficient and agile Bank with greater growth potential. Despite all the external challenges, the Bank continues to make good progress on a number of key initiatives and is scheduled to launch its digital platform Mobile Earth and the new website in the second half of the financial year. The risk management framework continues to evolve, while the key capital and liquidity fundamentals remain strong. Additionally, the Bank continues to expand its capabilities to stay abreast of evolving threats such as cybersecurity, climate change, financial crime and the outbreak of the novel coronavirus. The outlook remains highly uncertain and we will continue to monitor the implications on our strategy closely, while also undertaking a review of our medium-term financial targets.
Maurice Edwards Chairman
(Unaudited) June 30 2020 $’000
Audited) December 31 2019 $’000
(Unaudited) June 30 2019 $’000
Interest expense
26,187 (8,224)
52,799 (16,151)
26,224 (7,938)
Net interest income
17,963
36,648
18,286
7,839
18,847
8,904
25,802 (7,252) (17,761) 789
55,495 (215) (3,077) (36,038) 16,165
27,190 (1,551) (17,696) 7,943
(126)
(2,072)
(2,145)
Interest income
Other Income Operating Income Impairment losses on property and equipment Allowances for credit losses on financial assets Operating expenses Profit before income tax Provision for Income Tax
Profit for the year
663
14,093
5,798
Earnings per share
0.04
0.94
0.39
(Unaudited) June 30 2020 $’000
(Audited) December 31 2019 $’000
(Unaudited) June 30 2019 $’000
129,719 10,061 233,893 637,341 3,877 85,676 55,586 2,232 2,886 9,540 1,170,811
157,771 10,261 203,657 603,116 4,178 80,663 54,438 2,232 2,886 7,406 1,126,608
132,944 10,046 151,278 642,833 9,923 76,381 53,403 2,232 1,592 7,739 1,088,371
19,845 962,569 126 30,974 38,266
19,274 910,320 1,101 33,578 36,962
21,783 874,672 36,123 38,769
1,051,780
1,001,235
971,347
20,753 20,753 4,543 4 72,978 119,031 1,170,811
20,753 20,753 4,543 (41) 79,365 125,373 1,126,608
20,753 20,753 3,133 (95) 72,480
BANK OF ST. VINCENT AND THE GRENADINES LTD Interim Consolidated Balance Sheet As at June 30, 2020 (expressed in thousands of Eastern Caribbean dollars)
Assets Cash and balances with Central Bank Treasury bills Deposits with other banks Originated Loans - Loans & Advances to customers - Bonds Investment securities - held-to-maturity Property and equipment Investment Properties Deferred tax asset Other assets Total assets Liabilities Deposits from banks Due to customers Corporation tax payable Borrowed funds Other liabilities
BANK OF ST. VINCENT AND THE GRENADINES LTD Interim Consolidated Statement of Cash Flows For the period ended June 30, 2020 (expressed in thousands of Eastern Caribbean dollars)
Total liabilities
(Unaudited) 6mths to June 30 2020 $’000 - Cash flows from operating activities Cash flows used in investing activities Cash flows used in financing activities Net (decrease)/increase in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of the period
15,870
(Audited) (Unaudited) 6mths to 12mths to June 30 December 31 2019 2019 $’000 $’000
(20,913) (9,648) (14,691) 314,994
138,636 21,574 (11,131) 149,079 165,915
60,256 6,623 (8,582) 58,297 165,915
300,303
314,994
224,212
Equity Share capital Statutory Reserves General provision reserve Unrealised gain/loss on investments Retained earnings Total liabilities and equity
117,023 1,088,371
Note 2 The summary financial statements are prepared in accordance with criteria developed by management under management’s established criteria, management discloses the summary statement of financial position, summary statement of income, summary statement of comprehensive income, summary statement of changes in equity and summary statement of cash flows. These summary financial statements are derived from the audited financial statements of Bank of St. Vincent and the Grenadines for the year ended December 31, 2019, which are prepared in accordance with the basis of accounting outlined in Note 2 of the audited financial statements.