Chairman of Citizens Bank Limited, Clifford Reis, on Tuesday said that the commercial institution has invested over $600 million into the local agriculture sector and will continue to support small farmers.
His comment was made after a shareholder enquired at the Bank’s Annual General Meeting (AGM) on Tuesday whether provisions are made to finance innovators in the agro-process sector.
In response, Reis disclosed that Citizens Bank has invested some $629 million into the agriculture sector to benefit mostly small farmers.
“The [banking] agro sector, I think is more involved with small people who need work to be done,” he noted.
According to the Chairman, the parent company – Banks DIH Limited – is one of the largest consumers of agro-products within its subsidiaries.
“We’re one of the biggest users of agri-products in Guyana. In the parent company, we’re one of the biggest users of rice. All the wines we make in this company are made from rice,” he noted.
Reis added that the company’s restaurants subsidiaries also use thousands of pounds of chicken from poultry farmers.
However, the Chairman posited that there needs to be more innovation by farmers.
“So we do support the farmers… [But] I think they have to go to the next step now. They just can’t plant something and hope nature gonna make it grow. Otherwise, the yields will be too low and then per acre, they would not get the quantity so required to supply a chain,” he stressed.
According to Regis, “…all of this matter requires putting ourselves together and talking about it. I think there is a possibility to go this route in the future.”
In fact, the Chairman revealed that the Bank and its parent company had a meeting with stakeholders to set up a platform to assist small farmers to find out what is in demand and then produce for those target markets.
“So they don’t go and plant products which the buyers don’t want. I think they finish phase one of this system… And that will become a competitive pricing business. So we have a supply chain rather than having ‘x’ some months and some others you don’t have it,” he posited.
Nevertheless, the Citizens Bank Chairman committed to continue supporting the local agriculture sector, noting that this critical industry should never be abandoned as was done in Guyana’s Caribbean neighbour, Trinidad when it started producing oil.
“I lived through the 70s and the 80s where there were no foreign exchanges, and what saved us was the agriculture. At least we had food to eat, compared to some countries in Africa and what happened to Trinidad. So the agriculture base is a plus for this country, we should never abandon this land. It is the strength of any country. That oil will finish one day,” Reis contended.
Tuesday’s AGM coincides with the Bank’s 25th anniversary and was held at the Citizens Bank Head office on Camp Street and South Road, Georgetown, where the Chairman informed shareholders that the institution had a successful financial year in 2019 (which ended September 30), recording a profit after taxation of $955.2 million. This represents an increase of $352.9 million or 58.6 per cent over the previous year.
“This result is noteworthy given the existing market factors including, but not limited to high liquidity, and intense competition amongst lending institutions with a resultant decline in interest rates. Our results were attained mainly through the growth and improvement of the overall quality of our loan portfolio, and the prudent management of our controllable expenses,” he stated.
Growth of 8.3 per cent, 8.7 per cent and 9.5 per cent were recorded for deposits, assets and revenue, respectively. Net Income for last year was $3.1 billion compared to $2.7 in 2018. The annualised return on average assets was 1.8 per cent, while the return on shareholders’ equity was 10.6 per cent compared to 1.2 and 7.1 per cent respectively in the previous year.
“The bank’s loan portfolio remained sound and performed relatively well during the financial year with the bank working closely with our customers as we sought to minimise any negative impact on our portfolio that may have arisen due to varying challenges some borrowers may have encountered,” the Chairman said.
Non-performing loans at the end of 2019 financial year represented 8.9 per cent of the bank’s total loan portfolio compared to 11 per cent in 2018. The bank’s shares were last traded on the local stock exchange at $146 per share.
Going forward, Reis noted that Guyana’s economy is expected to improve this year with the commencement of oil production. However, he posited that while the growth in the oil and energy sector will bring with it opportunities for financial and other sectors, the local financial environment will continue to be characterised by intense competition amongst commercial banks and other financial institutions for the relatively limited lending and investing opportunities, and the resultant decline in interest rates.
Nevertheless, the Chairman noted that the Bank’s initiatives will focus on utilising those opportunities and on areas that it anticipates will ensure growth and stability as it offers potential and existing clients unmatched products and customer service.