A resolution to forego a dividend this year was passed at the Annual General Meeting of NBIC on Monday night but not without some shareholders voicing objections and bank Chairman Ashton Chase urging that it be seen as an investment in the future.
When it was time for a show of hands, those in favour exceeded those opposed although the majority decided to abstain. All the other resolutions were passed without debate.
As reported earlier, the National Bank of Industry and Commerce (NBIC) registered a net income after taxation of $129M for 2002 compared to $72M for 2001.
Chairman of the NBIC Board of Directors, Ashton Chase, in the bank’s annual report, said in order for the bank to maintain its leading position in the local banking industry and with the view to ensuring maintenance of a strong operating base, the Board of Directors “reluctantly and regrettably decided not to recommend a dividend for this fiscal year.”
He predicted that this would ensure the bank’s ability to meet the challenges of the foreseeable future and ensure its readiness to take advantage of any advances in the country’s economy. He noted that difficult political, economic and social conditions impacted on revenue costs and provisions and there was need to exercise prudence to ensure the strength of the bank’s balance sheet and the protection of depositors.
But at least four stockholders questioned the bank’s inability to pay a dividend when it had made a significant profit compared to last year’s and at a time when the bank had made a $2.7B bid to acquire Guyana National Co-operative Bank (GNCB). In a statement last month accompanying the bank’s audited annual accounts, Chase had said that it was necessary given the relatively flat macro-economic performance to make a further provision for bad loans of $671M in accordance with the Financial Institutions Act.
A stockholder also made a request for the specifics of the agreement between the government and NBIC to be provided to shareholders.
Chase said specifics would be available at the bank’s headquarters on New Market Street but indicated that a synopsis of the agreements would be sent to stockholders.
Chase did not reply to the suggestion that funds which should have gone to pay dividends would be diverted to pay for the acquisition of the GNCB. Instead, he asked stockholders to see themselves as making a sacrifice on the investment for a year and to see the investment as putting up for a rainy day.
In his review, Managing- director Michael Archibald noted a satisfactory growth in deposits of 6% to $30.9B but said loans and advances had declined by 17% from $15.7B to $13B due to a lack of new lending-opportunities.
This was offset by an increase in Treasury Bills from $6.3B to $8.4B and in other investments from a revised $2.9B in 2001 to $4.7B.
Archibald said NBIC believes that it is best positioned in terms of operational efficiency, management expertise, product range, technology, geographic spread and support from its parent company to add value to the combined business operations of the bank and GNCB.
Archibald said NBIC has been steadily laying the groundwork and improving the technological infrastructure to enhance the electronic delivery system which is designed to provide customers with service alternatives that are convenient, time-saving and cost-effective.
The electronic delivery system now includes 12 Access 24-hour Automated Banking Machines spread through various parts of the country; over 130 Point-of-Sale Machines located at 103 merchants - the majority in Georgetown; a telephone banking service, Tele-direct; and the bank’s internet website, www.nbicgy.com.
NBIC also honoured a number of its employees for academic achievements, long service and other special performance awards.
Receiving letters of accomplishment for outstanding performance as Associates of the Institute of Canadian Bankers (AICA) were Karen Assanah, Hamwantie Barran, Sunil Bianchini, Babita D’Oliveira-Ogle, Adunni Harris-Bourne, Marlene Lovell, Bibi Shaleeza Seepersaud and Adrian Stuart.
Outstanding graduates, Rohini Deokarran and Bjornette Jeune who obtained Diplomas in Banking and Finance and Michael Plummer, who received a Diploma in Marketing, University of Guyana, were also given special awards.