Oct 2009 Financial News

BNB sees 20 per cent drop in profit

Oct 12, 2009

A REDUCTION of non-interest income from capital market transactions and foreign exchange trading has been identified as one of the reasons for the decline in profitability experienced by the Barbados National Bank Inc. Group for the first three quarters of the current financial year.

According to the company’s financial report for the nine-month period ending June 30, 2009, consolidated net profit after taxation was Bds$35.8 million, representing a decline of 20.5 per cent when compared to the $45 million earned for the same period in 2008.

It was stated in the Chairman’s review, that apart from the reason given above, this decline was also attributable to increased loan provisions and increased operating costs. However, the point was made that the Bank’s balance sheet remains stable, and that the core business of the Group as reflected in net interest income continues to be strong.
Non-interest income declined from $41.3 million at the end of June in 2008, to $30.1 million at June 30 of this year.

Although this was slightly offset by an increase in net interest income from $77.8 million at the end of June last year, to $82.6 million this year, it still resulted in total income declining by a little under $7 million, from $119.2 million in 2008 to $112.7 million this year.

Total expenses increased from $62.5 million to $67.9 million at the current point of review, and basic and diluted earnings per share dropped from 46.91 cents last year to 37.27 cents at the end of June this year.

The Group’s consolidated balance sheet showed that total assets at the end of the period stood at $2.4 billion, down from the $2.6 billion seen at the end of June last year.

Total liabilities were recorded at $2.1 billion, also down from the $2.3 billion seen in the previous year.

Chairman, Ronald Harford, stated that the Group’s focus in the coming months will be on maintaining their quality portfolio and introducing a state-of-the-art computer system to improve customer service and operating efficiency.

Looking ahead to the final quarter of the financial year, Harford argued that the challenges of the prevailing difficult economic conditions are expected to continue to be a factor.


Source:
Randy Howard
Barbados Advocate
Monday October 12, 2009

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