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BUSINESS GUARDIAN guardian.co.tt JULY 13 • 2017
Republic Guyana cleans up loan balances
Republic Bank Guyana Ltd
(RBGL) is Guyana's largest
bank and it remains a 50.97
per cent owned subsidiary of
Trinidad-based Republic Fi-
nancial Holdings Ltd.
During 2016, Hand-in-Hand Mutual Fire
and Life Group of Companies acquired a 5.01
per cent stake in RBGL while Trust Company
(Guyana) Ltd increased its stake from 6.37 to
6.49 per cent.
Higher production of bauxite, rice, sugar and
gold, along with favourable (lower) energy pric-
es, helped keep Guyana's economy on a growth
path. Unlike the TT dollar, over the last two
years, the Guyanese dollar has traded with-
in a narrow range of between G$205.00 and
G$208.00 to US$1.00. It closed at G$205.50
at both the 2015 and 2016 year ends.
A recent conversion shows TT$1.00 was
equal to about G$30.40.
Let us now review RBGL's results to September
30, 2016, updated with its half-year to March
Total assets grew from G$142.4 billion to
G$151.6 billion (nearly $5 billion) or by 6.5
Advances to customers improved to G$58.4
billion from G$52.4 billion, reflecting a gain
of 11.5 per cent. Retail lending experienced a
10 per cent growth, moving from G$6 billion
to G$6.6 billion.
The largest category, corporate and com-
mercial lending, increased by 10.8 per cent to
G$31.2 billion from G$28.1 billion. In addition,
mortgages expanded to G$20.6 billion from
G$18.2 billion, or by 13.2 per cent.
Aside from mortgages, its largest industry
exposures were to other services (G$12.2 bil-
lion), distribution (G$7.4 billion), personal
(G$6.3 billion) and agriculture (G$4.3 billion).
Investment securities rose to G$7.9 billion from
G$6.3 billion. Here, the largest increases were
shown under government securities and cor-
porate bonds; the former climbed to G$1.16
billion from G$141 million while the latter
increased to G$5.6 billion from G$5.0 billion.
Its treasury bills holdings closed at G$45.3
billion from G$43.1 billion. The largest move-
ment was shown under bills maturing between
six months and one year, which value increased
from G$13.8 billion to G$16.8 billion.
Premises and equipment rose to G$6.7 billion
from G$5.8 billion. Most of the increase was
concentrated under capital work in progress.
Other assets declined to G$587.6 million from
G$912.8 million. The "other assets" component
contracted to G$165 million from G$345 million
while items in transit (uncleared cheques) fell
to G$157 million from G$283 million. Finally,
accounts receivable and prepayments closed
at G$266 million from G$286 million.
Sums due from banks contracted to G$13.9
billion from G$15.8 billion. Amounts due from
the bank of Guyana increased to G$8.8 billion
from G$8.5 billion. On the other hand, sums
due from other banks declined to G$5.1 billion
from G$7.3 billion.
Statutory deposits with the Bank of Guy-
ana were slightly greater, moving from G$14.3
billion to G$14.8 billion. Meanwhile, cash bal-
ances were marginally higher, edging up from
G$2.2 billion to G$2.3 billion.
Total liabilities advanced to G$134.9 billion
from G$127.1 billion or by 6.1 per cent.
Deposit balances expanded by 6.1 per cent
to G$131.2 billion from G$123.7 billion. The
most prominent increase was shown under
deposits from state entities, which grew from
G$22.4 billion to G$30.4 billion or by almost
36 per cent.
The largest source of deposits was from in-
dividuals, which was flat at G$81.7 billion for
Funds from the corporate and commercial
sector increased slightly to G$14 billion from
G$13.3 billion. Meanwhile, funds from other
financial institutions and other sources exhib-
ited declines; the former fell to G$2.2 billion
from G$3.3 billion while the latter slipped from
G$3 billion to G$2.9 billion. Almost 60 per cent
of deposits (G$78.4 billion) comprised savings
accounts while demand deposits were G$46.4
billion (35 per cent) with G$6.4 billion in time
deposits accounting for the remaining 5 per
cent of the total.
Other liabilities increased to G$2.47 billion
from G$2.28 billion. The most notable increase
was shown under drafts and settlements, which
rose to G$1.39 billion from G$1.15 billion. In
addition, unearned loan origination fees set-
tled at G$291.4 million from G$259.9 million.
The pension liability increased to G$172.4
million from G$115.3 million. Although the fair
value of the plan's assets improved by 7.7 per
cent to G$1.42 billion, the present value of the
defined benefit obligations increased by a larger
11.1 per cent to G$1.59 billion; consequently, the
difference between these two values widened.
Finally, amounts due to banks fell to G$143.2
million from G$199.5 million.
Total equity improved to G$16.72 billion from
Retained earnings rose to G$13.3 billion
from G$12.4 billion. The opening balance was
boosted by the current year's profit of G$2.7
billion, but reduced by other comprehensive
loss of G$43.4 million; that item related to
the re-measurement of the pension plan. In
addition, a transfer of G$527.4 million to the
general banking risk reserve and dividends
to shareholders of G$1.23 billion lowered the
The net unrealised gain or loss benefitted
from a G$67.1 million credit, which reflected
unrealised gains on available-for-sale invest-
ments; consequently, this balance improved
from negative G$117.2 million to negative
Both the stated capital and the statutory
reserve were unchanged at G$300 million
each. The number of shares outstanding was
stable at 300,000,000 for both periods. The
higher equity position saw the book value of
each share improve to G$55.72 from September
Total revenue edged up to G$9.39 billion
(about TT$309 million) from G$9.25 billion.
Net interest income advanced by 8.1 per cent
to G$7.07 billion from G$6.54 billion. The in-
terest income component rose by 7.6 per cent
to G$7.67 billion from G$7.13 billion.
Within this category and consistent with
larger loan balances, interest on advances in-
creased by 8.5 per cent to G$6.22 billion from
In addition, interest on investment securi-
ties improved to G$434.8 million from G$418.2
million. The last component, interest on liq-
uid assets, rose to G$1.01 billion from G$977.8
Interest on customers' deposits edged up
to G$603.5 million from G$589.8 million or
by 2.3 per cent.
Other income declined to G$2.32 billion from
G$2.71 billion. In 2015, this item was boosted
by a one-off gain of G$436.9 million, which
reflected the profit on the sale of premises and
equipment; no similar benefit was available
Loan recoveries declined to G$196.5 million
from G$239 million.
Finally, the largest component, net exchange
trading income, registered a marginal increase
to G$1.24 billion from G$1.22 billion.
Both deposit and related fees and payments
and transfers recorded improvements; the for-
mer advanced to G$555.5 million from G$513.3
million while the latter rose to G$208.8 million
from G$186.9 million.
Net loan impairment expense increased to
G$786.6 million from 2015's G$574.2 million.
These provisions were concentrated under the
real estate mortgages and agricultural sectors.
Operating expenses declined marginally to
G$4.34 billion from G$4.37 billion. Even so, the
increase in its head count to 662 helped push up
staff costs to G$1.89 billion from G$1.79 billion.
On the other hand, the decline in profit re-
strained the allocation to staff profit sharing
to G$236 million from G$302 million.
Both general administrative expenses and
property related expenses declined; the former
closed at G$735.7 million from G$757.1 million
while the latter fell to G$615.1 million from
Advertising and public relation expenses
also declined to G$177.7 million from G$192.7
On the other hand, communication expens-
es rose to G$100 million from G$86.5 million.
Unlike 2015, the bank experienced a small loss
of G$15.9 million on the disposal of premises
These movements resulted in a pre-tax profit
of G$4.26 billion from 2015's G$4.30 billion.
The effective tax rate increased to 36.6 per
cent from 34.6 per cent; consequently, the
actual tax rose to G$1.56 billion from G1.49
billion. The statutory rate was 40 per cent for
both periods; however, in 2015 there were one-
off credits for the gain on the sale of equipment
and premises (G$64.4 million) and inherent
risk provisions (G$19.2 million).
The net profit declined marginally to G$2.7
billion compared with G$2.8 billion for 2015;
that result translated to EPS of G$9.01 versus
the previous year's G$9.39.
For the half-year ended March 31, 2017, RBGL
recorded a marginal decrease in net interest
income to G$3.42 billion from G$3.45 billion.
However, other income rose to G$1.45 billion
from G$1.26 billion.
The period's pre-tax profit fell to G$2.1
billion from G$2.25 billion. This decline was
largely influenced by an increase of G$109
million in its provision for loan losses. The
net profit weakened to G$1.36 billion from
G$1.42 billion, which result saw EPS fall to
G$4.53 from G$4.75.
Total assets dropped to G$142.9 billion from
G$151.6 billion as at September 2016. This re-
duction was largely influenced by the decline
in cash balances and investments.
More importantly, shareholders' equity im-
proved to G$17.2 billion from G$16.7 billion.
Meanwhile, its interim dividend for fiscal
2017 was unchanged from 2016's G$1.283 per
On the Guyana Stock Exchange, RBGL's
share price closed at G$115.00 on September
28, 2015 and ended at G$106.90 on September
26, 2016. More recently, on June 26, 2017, it
was quoted at G$114.00.
Total dividends increased from G$3.933 for
2015 to G$4.116 for 2016. The final dividend
for both periods was stable at G$2.833. Relat-
ing the total 2016 dividend of G$4.116 to the
recent price of
G$114.00, the yield is 3.61 per cent. That
price also reflects a P/E multiple of 12.65 and
a price to book value of 2.05.
In next week's article, we will review Su-
preme Ventures Ltd's results for 2016.
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