Citizens Bank records increased profits for 2020

Despite COVID-19, economic slowdown

Citizens Bank branch at Camp Street and South Road, Georgetown

Citizens Bank, one of Guyana’s indigenous banks, recorded increased profits for last year compared to 2019, despite the economic challenges that the COVID-19 pandemic brought to Guyana.
According to the bank’s statement of income for the year ended at September 30, 2020, the bank’s profits before taxation was $1.672 billion, with after-tax profits of $982.1 million. This compares favourably with the 2019 figure, when the bank made $1.599 billion in profits before tax and $955.2 million in profits after tax.
The statement of income also revealed that the bank made $3.201 billion in income from their interest rates, another increase from the $2.814 billion the bank made in 2019. Other income in 2020 came up to $547.4 million, a decrease compared to the $606.8 million in 2019.
The bank’s profits grew even though, according to the statement, they provided support to borrowers impacted by the COVID-19 crisis. According to the statement of income, this support was in the form of a moratorium on loan payments. The bank, according to the statement, has over $40 billion in gross assets.
“The company has gross financial assets subject to impairment amounting to $40.5 billion, or 63.5 per cent of total assets. Against this gross amount, there is a provision for impairment of $1.3 billion at the year-end,” the statement said.
When the COVID-19 pandemic hit in 2020, it forced many local businesses not deemed as “essential” to close their doors. In addition, the former A Partnership for National Unity/Alliance For Change (APNU/AFC) Government failed to provide any stimulus to help them survive the storm, resulting in them receiving no help until after the August 2020 change of Government.
After taking office in 2020, one of President Dr Irfaan Ali’s first acts was to initiate talks with the Bank of Guyana and the Guyana Bankers Association, on measures that would ensure the average Guyanese could remain solvent even if they are unable to pay their bank loans due to the pandemic.
The result was President Ali announcing that his Government had reached agreements with the local banking sector to extend the moratorium on loan payments until 2020 year-end, and to cut interest rates.
This meant that customers with mortgages and other loans were spared the financial burden of servicing these loans during the pandemic. In addition, their loans would not have been classified as non-performing, ensuring that they do not default.
In December of 2020, when the measures were scheduled to expire, it was announced that there would be an extension of the banking measures for another six months.
In a communique sent to the various commercial banks in Guyana – a copy of which was seen by this publication – Governor of the Bank of Guyana, Dr Gobind Ganga, indicated that all COVID-19 measures that were agreed to in August 2020 are now extended until June 30, 2021.
“The Bank of Guyana continues to monitor the developments surrounding the COVID-19 pandemic, its impact on households and the business sector, and is prepared to take all necessary steps to protect the safety and soundness of the finance system,” Dr Ganga had detailed in the missive. (G3)