Republic Bank hit by US$101M in reduced profits

…as COVID-19 pandemic, economic slowdown bite hard

Republic Bank

Many businesses were hit by the COVID-19 pandemic and Republic Bank, while it was able to turn out a profit, has seen a reduction in that profit of over US$100 million or 42 per cent, compared to last year.
According to a statement from the bank’s Chairman, Vincent Pereira, the total profit of US$134.9 million was recorded for the year ended September 30, 2020. This sum is, however, a 42.8 per cent reduction in the US$235.9 million profit reported last year.
This year’s profit represents a decrease of US$101 million. Pereira cited the effects of the COVID-19 pandemic, which he explained resulted in decreased economic activity, reduced opportunities to charge interest and the fact that the bank would have had to waive fees and commissions under various Government-imposed initiatives.
According to Pereira, the decrease is also attributable to “increased provisioning to cover potential future losses on the loan and investments portfolios, and impairment of the remaining goodwill held in our Barbados subsidiary.”
As of September, the bank’s total asset is US$15.5 billion, which is a 19.2 per cent or US$2.5 billion increase from the previous year. The total dividend is US$65.6 million, which he noted is a 40 per cent decrease.
“The combination of this dividend and the increase in the share price of US$3.01 during the year, equates to a total shareholder return for the year of 18.5%. The final dividend will be paid on December 1, 2020 to all shareholders of record on November 18, 2020.
“While there continues to be uncertainty over the future direction and duration of the COVID 19 pandemic, we are confident that the Group’s strong capital base, diverse geographic footprint and robust governance culture leaves it well-positioned to support the recovery efforts of the economies within which we operate.”
Moreover, the Chairman pledged that the bank would remain responsive to the evolving needs of customers and clients, while providing safe working conditions for its employees and support for the community.
When COVID first arrived in Guyana earlier this year, the former A Partnership for National Unity/Alliance For Change (APNU/AFC) Government had taken steps ranging from closing its borders to mandating that only essential businesses open their doors.
Many have felt the effects of COVID-19 on an economic level, with businesses closing their doors, layoffs and a slowdown in the circulation of money. This was compounded by the political paralysis Guyana found itself in from the elections in March 2020 until Dr Ali was sworn in on August 2, as the previous Government refused to concede defeat.
Guyana’s Government has already taken steps to reopen its economy with a relaxed curfew of 10:30 pm to 4 am and the approval for businesses like restaurants and gyms to operate in a restricted manner. Moreover, the country has reopened its international airports – with a number of scheduled flights weekly.