The bank made an operational profit before provisioning and taxes of $483M, a 55% increase on the previous year. But it had to put aside $252M in loan loss provisioning during the year.

The return on the bank's average asset was 1.09% and the earnings per share were 0.34, an increase of 17%.

Pravin Dave, DBL's chief executive officer, said the bank's results for 2003 were "very encouraging" under "highly challenging" circumstances. Chairman, Yesu Persaud, described the results as satisfactory.

The bank holds its annual general meeting today.

Dave reports that the bank's cost of deposits moved down from 6.71% ($672M) in 2002 to 4.98% ($520M) in 2003 while the deposit base increased by 6.5% to reach $12.4B. Dave said the bank is canvassing savings deposits from salaried and self-employed segments of the market to improve its deposit mix.

Investments by the bank increased by 62% from $3.1B to $5B and interest income from securities increased by 58%. The bank held $1B in corporate bonds in 2003 as against $370M the year before, a 186% increase. Dave said the bank's interest income from advances decreased by $93M last year because of a rationalisation of the rate of interest on advance accounts and the financing of "certain good corporate borrowers via bonds."

"However, on account of an amendment (of the Income Tax Act), the avenue for providing low-cost financing to highly credit-worthy customers is closed," Dave said, confirming his bank's use of this loophole. Income from bonds had been taxed at 15% but the government blocked this last September and increased the rate to 45%.

Investment in government securities for the bank moved up from $2.2B to $3B, a 37% increase. Investments in regional government bonds also increased by 77% to reach $503M while other investments moved to $461M, an increase of 83%.

Loans and advances by the bank declined marginally from $6.4B in 2002 to $6.3B while loan income reached $804M, a decline of $93M. However, provisions for loan losses increased by 44% to reach $824M. The bank's total non-accrual loans stood at $1.8B at the end of 2003, up from $1.6B the year before.

Dave said recovery in major sectors of the economy was slow and recovery from delinquent borrowing was also slow because of the lengthy and expensive legal system. He argues that early establishment of the commercial court will allow for quicker recoveries.

Dave feels Guyana has a proliferation of laws and regulations that are institutional rather than functionally focused and says this has caused a fragmented legal environment.

"We need to improve our system and processes as per the changing economic needs of the country," Dave said.

Dave expects the banking sector to be operating in a competitive environment this year given the $16.5B excess liquidity and falling interest rates.The bank's asset base increase by $1B.

Below is the concentration of the bank's assets and liabilities.