COVID-19 eats into Republic’s profits

Republic Limited (RFHL) has reported a decline in profits this year, partly due to the effects of the ongoing COVID-19 pandemic and impairment losses in the Barbados market.

In a media release on Tuesday, Chairman of RFHL Vincent Pereira said that at September 30, 2020, the end of the financial year, RFHL had recorded an end- of-year profit of US$134.93 million, which was 42.8 per cent less than the 2019 profit of US$235.98 million.

However, he said the results were “creditable despite reflecting the negative impact of the novel coronavirus (COVID-19), mainly through decreased economic activity, lower margins due to reduced interest rates, waiver of fees and commissions under the COVID-19 relief initiatives, increased provisioning to cover potential future losses on the loan and investments portfolios, and impairment of the remaining goodwill held in our Barbados subsidiary”.

As the end of the reporting period, total assets for the company stood at US$15.57 billion, an increase of US$2.51 billion or 19.2 per cent over the prior year.

Pereira said this increase was mainly due to the acquisition of Scotiabank’s banking operations in St Maarten and the Eastern Caribbean – Anguilla, Dominica, Grenada, St. Kitts and Nevis, St Lucia, and St Vincent and the Grenadines – on November 1, 2019, which added US$1.90 billion; and the acquisition of Scotiabank’s operations in the British Virgin Islands (BVI) on June 1, 2020, which added a further US$0.46 billion to the Group’s asset base.

“We are very pleased to welcome our new staff members and clients to the Republic family,” he added.

The Board of Directors has declared a final dividend of US$0.31 (2019: US$0.49), which brings the total dividend to US$65.64 million or US$0.40 per share for the fiscal year (2019: US$0.67). This represents a decrease of 40 per cent in total dividend payment, reflective of the decrease in profitability in the current fiscal year.

The combination of this dividend and the increase in the share price of US$3.01 during the year, equates to a total shareholder return for the year of 18.5 per cent. The final dividend will be paid on December 1, 2020 to all shareholders of record on November 18, 2020.

“While there continues to be uncertainty over the future direction and duration of the COVID-19 pandemic, we are confident that the Group’s strong capital base, diverse geographic footprint and robust governance culture leaves it well positioned to support the recovery efforts of the economies within which we operate,” said Pereira.

“We continue to be responsive to the evolving needs of our customers and clients, provide safe working conditions for our employees and support the communities we serve. I thank my fellow directors, committed staff and faithful customers for their dedication over the past year.” (MM/PR)