Republic Bank Limited is reporting US $194 million in profits for the year ended September 30 3015.
According to a statement from the bank this represents an increase of US $4.8 million or 2.5% over the same period last year, with total group assets increasing by US $1.1 billion or 11.2% over the prior period to US $10.5 billion as at September 30, 2015.
In announcing the results, Republic Bank’s Chairman, Ronald F. deC. Harford, said the 2.5% growth in profits was driven by a US $37.3 million or 10.6% increase in net interest income, arising from a US $0.9 billion or 21.8% growth in the loan portfolio and the recovery of US $19.6 million after tax on a non-performing facility.
“This was offset by an increase in operating expenses of US $33.7 million and impairment expenses of US$17.3 million. The increase in operating expenses is attributable mainly to the consolidation of HFC Bank (Ghana) Limited and Republic Bank (Suriname) N.V, which amounted to US $14.2 million,” Harford said.
He noted that impairment expenses of US $8.3 million was recorded by HFC to bring its loan provisions in line with the Group’s policy and US $9 million was booked by Republic Bank (Cayman) Limited in relation to loans and goodwill impairment.
During the financial year, Republic Bank completed two acquisitions as part of its overall strategy to expand the Group.
In May, the Bank increased its shareholding in HFC to 57.11% and on July, 31, the Bank acquired a 100% shareholding in RBC Royal Bank ( Suriname) N. V, which was renamed Republic Bank ( Suriname) N.V.
These two purchases added a further US $9 billion to the Bank’s asset base and will be accretive to shareholders from 2016.
Harford added that approval to create Republic Financial Holdings Limited, the umbrella company under which all the Bank’s main subsidiaries will be held, was obtained by shareholders on June 22, 2015.
“Shareholder’s approval had been secured to commence the holding company from October 1, but due to a delay in obtaining all of the requisite approvals a new date will be agreed with the Minister of Finance,” he said.
He added that the holding company structure will better enable the Group to segregate and isolate the risk among the various group companies. This in turn, will allow for more efficient deployment of capital and bring the Group in line with the international best practice.
The Board of Directors has declared a final dividend of US $0.49 for the year ended September 30, 2015 payable to all shareholders on December 1, 2015.
This brings the total dividend for the fiscal year to US $0.69.
Harford noted that while economic challenges are likely to feature through 2016, it is expected that the Group will continue to perform satisfactory through prudent management and strong balance sheet.