Republic Bank’s profits soar in first quarter

The Barbados economy may be in recession with the last quarter registering the worst contraction in the last 12 months, however, one of the country’s leading commercial banks is registering a significant jump in its group profits.

Republic Bank, which entered the Barbados market more than a decade ago by acquiring the former state-owned Barbados National Bank, says its takeover of a banking operation in the British Virgin Islands (BVI) was the main driver of the approximately 25 per cent increase in profits.

Republic Bank Group announced in just published unaudited financials for the quarter ending March 31, that its after-tax profit advanced from US$29.30 million for the same period last year to almost US$50 million this year.

Profit attributable to shareholders jumped from US $25.36 million for the first three months in 2020 to US$44.33 million for the corresponding period this year.

For the last six months, after-tax profit moved to US$113.11 million, compared to US$91 million last year.

Recently appointed chairman Vincent Pereira, in comments accompanying the filings, said Republic Financial Holdings’ profit attributable to shareholders represented an increase of US$21.6 million on 26.5 per cent increase.

According to Pereira: “The improved results reflected the positive impact of the Group’s acquisition of the British Virgin Islands (BVI) operations in June 2020 and the stabilization of the credit portfolio resulting in lower provisions for loan losses.

“The positive developments were partially offset by a reduction in net interest margins, fees and commission income across the Group.”

The Republic Bank chairman remarked that the lower interest rates, fees, and commissions reflected the Group’s decision to maintain many of the concessions
it offered to customers when the COVID-19 pandemic hit last year.

Reflecting on the BVI acquisition, Pereira said total assets of the Republic Group stood at US$16 billion as at March 31, an increase of US$1.3 billion or almost nine per cent over the same period in 2020.

“This increase was mainly due to the BVI acquisition and the growth in customer deposits across most subsidiaries,” the chairman noted.

And while Pereira acknowledged that the regional economic environment remained unstable due to the COVID-19 pandemic, he was confident that the Trinidad and Tobago-headquartered bank was well positioned

to “continue to generate positive results while supporting the recovery efforts of the economies” in which the bank operated.

The bank announced it will pay an interim dividend to shareholders of US$0.15 on May 31. (IMC1)