Bank reporting strong loan performance
One commercial bank is reporting a stellar performance for 2014 despite the economic problems in the country.
Managing Director and Chief Executive Officer of Republic Bank (Barbados) Limited Ian De Souza said the bank continued to exceed its loan targets, which was a good sign that confidence was returning.
Speaking to journalists following a New Year celebration at Royal Westmoreland last evening, De Souza said he expected the economy to begin experiencing measurable growth by the end of this year, given the improved performance in the United Kingdom.
He said the bank was able to surpass its 2013 target by 47 per cent.
“That is phenomenal. For 2014, of course, [it was] a little bit of a reflection of the economy, but we did 118 per cent of the target . . . . It was conservative because of concerns and it is not to say that we are making crazy loans outside there; we have very tight lending criteria but the bank continues to perform well,” the CEO said.
“ . . . I feel very comfortable and we are very happy with the way the bank is performing . . . . There is a lot of doom and gloom in the market but the way the bank is performing is not reflective of that.”
De Souza credited the bank’s performance to a combination of intellect, energy and good attitude of the staff, as well as support from the media.
He said apart from Christmas loans, the bank continued to experience favourable performances as it related to mortgages.
However, he acknowledged that there was a “spike” in delinquency during the year due to the “few large loans” that were primarily related to the tourism and real estate sectors.
“What we are experiencing is not an across-the-board increase in nonperforming loans at the retail level. The nonperforming [loans] are coming about as a result of some large – mainly tourism and real estate – loans and those loans need some work. But once you get them restructured you find that you could pull them out,” said De Souza.
In relation to the recent downgrade of the island’s sovereign rating by Standard & Poor’s, the banker expressed concern, saying that it would affect
“At the bitter end of the day what we have to do, all of us in this economy, is to do what is necessary to get the economy turned around and performing at a level where you have an improvement in confidence in the country and in the market. So that is the work that has to be done. There is concern, yes, but it has to be brought back around and we have to do the work,” he explained.
In spite of the downgrade, De Souza said he believed there would be some growth in the economy given the good performance of the tourism sector, which he said should lead to increased investment in construction.
“Once that gets going you will find that you will see a massive change in the performance of the Barbados economy. So if the numbers were to hold right, and there is nothing to suggest that history will not prove out going forward, then . . . the likelihood is that we should start seeing a turn towards the end of 2015,” he added.