The Guyana National Cooperative bank (GNCB) is reporting losses totalling some G$515M for the year 2001 when its audited accounts were released yesterday at the bank’s shareholders meeting.
The primary reason identified for the loss was a reduction in operating income to $10.5M as opposed to operating costs which totalled $556M for the year. This, however, showed a marked reduction from the previous year’s figure of $601M.
The bank which will be taken over by the National Bank of Industry and Commerce (NBIC) next year, was declared to have total assets of $16.2B, with $13.2B or 81.5% of this comprising cash and bank balances, treasury bills and government debentures.
The bank’s income diminished from $778.3M in 2000 to $688.1M in 2001 as a result of reductions in interest on loans and advances, securities and deposits.
A reduction in the entity’s operating income from $98.4M in 2000 to $10.5M in 2001 forced it to draw on its reserves to meet expenses.
In the statement of changes in equity it was revealed that GNCB’s earnings as at January 1, 2001, remained at $117.2M on December 31, 2001 while its reserves were down from $2.39B to $1.93B by the end of the fiscal year.
According to the balance sheet, there was a contraction under the heads of cash and balances with banks, as well as items in course of collection from other banks. However, there was an improvement in the areas of treasury bills, government debentures and loans and advances.
The total value of the company’s assets was $1.37B.
GNCB received no assistance via the consolidated fund as opposed to 2000 when it obtained $111,754M from that source.
Also the balance sheet indicated that liabilities showed an increase while there was a decline in the bank’s capital and reserves.
The statement also showed that staffing levels had been reduced from 411 at the end of 2000 to 366 by 2001.
The Chairman’s report indicated that the present state of the bank’s loan portfolio was a result of a combination of decisions made in the mid-nineties along with the impact of the dramatic fall in world prices for rice and the effects of natural disasters on the sector.
Some 43% of the total loan portfolio was dedicated to the rice sector, specifically to paddy growers and millers who took out large loans to finance their operations.