Demerara Bank’s net profit rises by 4% to $2.26B
-banking app in the works
Demerara Bank Limited ( DBL) has recorded a net profit of $2.263 billion for the year ending September 30, 2020, representing a 4% increase over the same period last year.
According to Chief Executive Officer Pravinchandra Dave, this performance is “nothing short of remarkable,” in a year which has been very challenging due to the effects of the COVID-19 pandemic and the elections impasse.
In an interview with Stabroek News, Dave said that DBL has become one of the soundest financial institutions in Guyana by growing with the customer. The bank intends to continue this trend in the new year through the opening of its eighth branch, the launch of a banking app and the development of an advanced corporate internet banking platform
“Our product and services are the same. It’s the same money. A dollar is a dollar with us or with any other bank. Machines are the same. The other things are not far off; our fees are better but not by much. The main difference between us and other banks is the human element,” he stated.
Dave added that customers remember and respond to positive interactions.
“How I treat you, how I treat the customers, how I open the account, how much time he or she takes in the bank to complete a transaction, how much time we take to process a loan—these are very important things for customers and that’s where we try to make a difference [and] we try to keep our fees and charges lower than our competitors. We are the lowest,” he noted.
These practices coupled with efficient management of assets and liabilities, wise investment decisions and prudent lending strategies have, he argued, caused the bank’s performance to surpass all preceding years.
Specifically, the bank has achieved a profit before taxation of $3.5 billion, an increase of 2.8% over the previous year, and an after-tax profit of $2.263 billion, an increase of 4%.
Total deposits at the bank have in that same period increased from $68.3 billion to $78.1 billion; an increase of 14.4% over the previous year. Loans and advances moved from $36.7 billion to $40.4 billion, an increase of 10% over the 2019 corresponding period while investments of the bank stood at $33 billion for the year ended September 2020.
Shareholders’ funds have increased by 10% to $15.4 billion and the bank has maintained high returns on Shareholders’ funds over the years, recording a return of 14.6% in 2020.
The bank, Dave said, has paid excellent dividends over the years and this year will be paying the highest dividend yet once approved at the Annual General Meeting. The Board’s recommendation is $1.25 per share in a final dividend. An interim dividend of $0.25 has already been paid.
He proudly noted that the share price, which was $3 in 2003-2004, now stands at $91, a substantial capital appreciation for investors.
Earnings per share have in turn increased from $4.84 to $5.03, while the return on Average Assets as at September 30, 2020 was 2.4%.
The Book Value of the shares has gone
up from $31.25 per share in 2019 to $34.33 per share in 2020, representing a rise of 9.9% over the previous year.
In its 26th year, he noted, DBL currently has the highest return on assets - averaging 2.6% and the lowest cost-income ratio of 40%.
“Our Capital Adequacy Ratio over the years remained in the vicinity of 30% which is far above the 8.0% regulatory norm in Guyana,” he shared.
Dave noted that this performance has allowed for the continued expansion of DBL which is scheduled to open it newest branch in Mahaica next month.
This branch which will be the eighth, is seen as integral to bridging the banking needs for residents in the area and environs as customers are currently required to travel to either Le Ressouvenir, Rosignol or Rose Hall to conduct banking business which is an inconvenience and a security risk.
The bank has also built a strategic relationship with the Inter- American Development Bank which has led to the approval of a revolving line of credit for trade financing purposes and other concessions.
While Dave has committed the bank to the continued promotion of a green and sustainable environment he noted that they are also reviewing strategies to benefit from opportunities that exist in the Oil and Gas industry which could have tremendous advantage for all local businesses.
These strategies include the development of an advanced corporate internet banking platform which will vastly improve the convenience and services to corporate customers.
The platform will include advanced features such as customizable authorization instructions, ability to view cheque images and the ability to make requests for wire transfers.
“On the retail side, we are finalising the testing of a mobile banking application which will also improve the delivery of our services… we are already in the testing phase when that is complete in three months’ time we will offer it to our customers”, the CEO said.
Through this application customers would be able to transfer funds to any local account active on the application.