NBS hogs residential mortgages
Stabroek News
April 16, 2004
The New Building Society (NBS) issued $2.13 billion in new mortgages last year, down eight per cent from the year before. But its residential mortgage portfolio grew to $10.92 billion with 4,984 mortgage accounts, 478 more than the year before.
Thirty-seven mortgages were issued between $7M-$8M; 11 between $6M-$7M and another 11 between $5M-$6M; 31 between $3M-$4M; 62 between $2.5M-$3M; 51 between $2M-$2.5M; 87 between $1.5M-$2M; 186 between $1M-$1.5M; 26 between $750,000-$1M; 13 between $500000-$750,000 and 14 between $250,000-$500 000. Mortgages are granted from $1,000 to in excess of $8 million and from the start of this year, the society lowered its mortgage rates by one percentage point. Mortgages under $1.5M will now attract 7% interest and those above, 8.95% per annum.
The society, which operates on the principle of profit sufficiency and not profit maximisation, recorded an after-tax profit of $255M in 2003, a reduction of 19% from 2002.
"Our business performance has been exceptionally strong, with significant growth in the mortgage and savings markets. Consequently, we have substantially increased our market share while restoring some rationality to pricing in the mortgage market. We are of the opinion that price does remain a key factor although the mortgage market has expanded significantly, particularly as a result of new technology, new distribution channels and new entrants," NBS Director/Secretary Maurice Arjoon says in the 2003 annual report in circulation in advance of the annual meeting on Monday.
Income from loan assets increased to $1 billion from $944M, while investment income fell from $621M to $435M. Return on cash resources declined from $169M to $112M. NBS is precluded from investing in consumer/commercial loans and in equities and can only invest its excess funds in government securities and bank accounts.
Total assets of NBS grew by 10% to reach $23.6B and its liquid assets were $11.26B or 54% of total savings. Deposits increased by 10% as well to reach $20.7 billion. Loan provision stood at $52 million or 0.47% of its loan portfolio.
NBS Chairman, Ramdial Bookmohan says in his report that while there are no immediate signs of strong economic recovery in Guyana, despite some improvement in the crime situation and the political environment, new challenges will emerge and NBS is preparing to meet these challenges.
He announced plans to relocate the head office to Lot 1&2 North Road and Avenue of the Republic as a result of the need for space.
Bookmohan says the society plans to construct a modern, state-of-the-art building starting next year to be able to provide the most efficient service to its members.