Despite COVID-19, economic slowdown

Citizens Bank branch at Camp Street and South Road, Georgetown

Citizens Bank, one of Guyana’s indigenous banks, recorded rising profits for last year compared to 2019, despite the economic challenges that brought the COVID-19 pandemic to Guyana.
According to the bank’s income statement for the year ended September 30, 2020, the bank’s profit before taxation was $ 1.672 billion, with an after-tax profit of $ 982.1 million. This compares favorably with the 2019 figure, when the bank made $ 1.599 billion in pre-tax profits and $ 955.2 million in after-tax profits.
The income statement also revealed that the bank made $ 3.201 billion in interest rate income, another increase from the $ 2.814 billion the bank made in 2019. Other income in 2020 rose to $ 547.4 million, a decrease of ‘compared to the $ 606.8 million in 2019.
The bank’s profits grew even though, according to the release, they provided support to borrowers affected by the COVID-19 crisis. According to the income statement, this support took the form of a moratorium on loan payments. The bank, according to the release, has over $ 40 billion in gross assets.
“The company has gross financial assets subject to impairment totaling $ 40.5 billion, or 63.5 per cent of total assets. Against this gross amount, there is provision for $ 1.3 billion of impairment at the year end, ”the statement said.
When the COVID-19 pandemic struck in 2020, it forced many local businesses that were not considered “essential” to close their doors. In addition, the former Government A Partnership for National Unity / Alliance for Change (APNU / AFC) failed to provide any impetus to help them survive the storm, meaning they received no assistance until after the Government’s change in month August 2020.
After taking office in 2020, one of President Dr Irfaan Ali’s first actions was to open negotiations with the Bank of Guyana and the Guyana Bankers Association, on measures that would ensure that the average Guyanese could remain solvent even if not they can pay off their bank loans. because of 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 the end of the year 2020, and to cut interest rates.
This meant that customers with mortgages and other loans had the financial burden of servicing these loans during the pandemic. In addition, their loans would not have been classified as non-performing, ensuring they are not in default.
In December 2020, when the measures were due to end, 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 – copied by this announcement – Guyana Bank Governor Dr Gobind Ganga noted that all COVID-19 measures agreed in August 2020 are now being extended to June 30, 2021.
“The Bank of Guyana continues to monitor the developments around the COVID-19 pandemic, its impact on households and the business sector, and is prepared to take all necessary steps to protect the security and soundness of the finance system,” Dr. Ganga has detailed. in the missive. (G3)

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