COVID-19 clips bank’s profits . . . Republic Bank reports US$36M decline

Republic Bank Holdings Group has admitted to taking a big hit from the COVID-19 pandemic in the Caribbean.

The Trinidad & Tobago-headquartered commercial bank’s president Nigel Baptiste disclosed recently that the financial institution suffered a US$36 million decline in profits attributable to shareholders of the parent company, for the six-months reporting period ending March 31, 2020.

Republic Bank group, which recently concluded the acquisition of several Bank of Nova Scotia operations across the Caribbean, said the 30 per cent decline was linked to the effects of the respiratory illness which is creating social and economic havoc across the globe.

Baptiste told shareholders: “These results reflect preliminary estimates of the financial impact of the novel coronavirus (COVID-19) pandemic on the group, as a result of increased operating expenses during the latter half of March 2020, and the setting aside of additional provisions of US$55.3 million for the first half of fiscal to cover potential and future losses.”

The Republic Bank president revealed that the US$55.3 million the bank set aside for potential and future losses was US$35 million more than it had provisioned for this area last year.

“Cognizant of our responsibility to help our clients, staff and communities navigate these unique challenges, the Group instituted several measures including loan payment moratoriums, waiver of fees and charges, and interest rate reductions on loans and advances including credit cards,” the Republic Bank head explained.

He also pointed to the US$2 million the financial institution gave to support COVID-19 initiatives across the territories in which it operates.

Baptiste warned, however, there was still great uncertainty about “the intensity and duration of this crisis” and so it was difficult to predict the “social, economic and market conditions” that will exist once the pandemic is over.

According to the Republic Bank president: “Prudence requires, therefore, that financial institutions adopt a defensive posture to preserve that stability of individual institutions and the integrity of the overall financial system.”

In this connection, he disclosed that Republic Bank shareholders will receive significantly reduced earnings on their shares which will see the interim dividend fall from US$0.19 per share last year, to US$0.09 this year. (IMC)