Citizens Bank Guyana (CBG) Inc has recorded an after tax profit of $111M, a 37.6% increase on the 2000 accounts on an annualised basis and chairman, Clifford Reis says the performance can be considered "quite good".

Banks DIH took a controlling interest in CBG Inc last year and the seventh annual general meeting to present the 2001 accounts to shareholders at the Georgetown Club was open to the media on Tuesday afternoon. CBG's accounts at the end of September 2000 had to be annualised to allow for a comparison with the new fiscal year adopted by the bank in keeping with Bank's DIH fiscal year ending September 30th 2001.

Reis, addressing stockholders, said that loans and advances by the bank increased from $3.2 billion at September 30th, 2000 to $3.7 billion at September 30th, 2001, reflecting an increase of 17.7% despite the weak demand for credit by the private sector.

He said CBG's portfolio continues to be relatively sound with provision of $90.6 million or 2.4% of its loan portfolio at the end of the fiscal year. This is an increase of $47.6 million. Non accrual loans totaled $288.1 million or 7.7% of the portfolio. Of its loan and advances portfolio, $1.77 billion is repayable after 5 years, $1.18B between one and four years, $131 M between three months and a year and $564 million within three months.

CBG's investment increased by $455.4 million in 2001 as a result of foreign investments which accounted for the entire amount of the increase, Reis said. The bank has $150 million invested in government of Guyana treasury bills, $358 million in government of Guyana bonds, $35 million in the government of Barbados bonds and $1.3 billion in other debt securities.

The bank's interest income was $784 million in 2001, an improvement of 18.10% when compared with the annualised results of 2000. The average interest rate on loans and advances in 2001 was 15.1% compared with 17.2% the year before and yields on investments remained around 13.5%. Income from loans and advances in 2001 was $564 million; $219 million from investments and $130 million from other sources.

Net interest income was $364M, a 32% increase on the previous annualised year.

Return on the bank's equity, a measure of the efficiency with which the bank has managed shareholder's funds, was 15.35% compared with 12.04% in 2000. Return on average total assets was 1.5%, compared with 1.35% in the previous year.

Deposits at CBG also increased by $1.1B from $5.5B and the average interest rate paid on deposit accounts was 6.8%, down from 7.6% in 2000. CBG said it is the only bank in Guyana which pays interest on current accounts.

Reis said that CBG had fully launched its Remote Banking System and Cash Management products during the last financial year. These products target the bank's corporate customers but can also be used by individuals. The remote banking facility allows for accurate real time information via a personal computer to facilitate the decision making process and to allow customers to complete transactions from the comfort of their homes or offices.

The bank's payroll services offered to clients are now fully computerised and customers can now submit their payroll via a disk or through direct modem connection.

Reis said that the bank would continue to expand its vision and commitment to growth and prosperity by concentrating on strengthening relationships with customers and developing solid relationships with new customers. Technology growth would be continued and the bank will be establishing a new corporate headquarters on Camp street, opposite the Georgetown Club.

CBG declared a total dividend of $29.7 million or five per cent or 50 cents per share.

Reis said that CBG's performance compares well with the rest of the banking system noting that the treasury bill rates declined from 9.06% at September 30th 2000 to 6.43% at September 30th, 2001. He also noted that the weighted average lending rate declined 61 basis points to 16.71% whilst the average saving rates declined by 21 basis points to 7.30%.

Private sector credit declined by 2.8% in the banking system to $50.7 billion at the end of September and Reis said the weak demand for credit and increasing non performing loans resulted in the slowdown in economic activities.

The high level of excess liquidity in the financial system was sterilised by the issue of treasury bills with the treasury bills outstanding increasing to $46.8 billion at the end of September. The commercial banks, Reis said, hold $21.4 billion of these. Total deposits held by the commercial banks also increased to $93 billion or by 8% with the private sector accounting for 80.6% of this.

Banks DIH holds 51% of the shares in CBG whilst Hand in Hand Insurance Company and the Guyana Cooperative Insurance Service hold 17%. Continental Industries hold 15% and the other 64 shareholders including 12 staff members account for the other 17%.