INTRODUCTION
National Bank of Industry and Commerce Limited had a successful 2004 delivering strong returns to our shareholders while continuing to invest in our staff, customer service and products and contributing to the communities in which we serve. Our priorities were to: drive profitable revenue growth, maintain tight cost controls, and retain our prudent and considered approach to risk management. These priorities were all met.
FINANCIAL PERFORMANCE
Financial performance was strong. We achieved a 43.7% increase in profits after tax of $536 million compared to $373 million in 2003. Return on Assets was 0.97%; Return on Equity was 15.65% and our earnings per share increased by 44.4% to $1.79. Capital remained strong with a Tier 1 ratio of 8.36%. Based on our improved performance, the Board of Directors approved an increase of our total dividend by 200% to $225 million.
Deposits grew satisfactorily by 4.5% from $48.6 billion to $50.8 billion. Although constrained by scarce lending opportunities, advances grew by 9.9% to $14.5 billion. In the absence of bankable loans, we continued to invest our surplus funds in the highest yielding investment vehicles. As a result, our Treasury Bills and Other Investments increased by 13.21% from $17.6 billion to $20 billion. It is noteworthy that we maintained our market share of 40% in all of the key segments.
CUSTOMER SERVICE
The independent customer service survey conducted in 2004 confirmed that following the merger exercise in 2003, significant improvement has been made in our customer service. We remain committed to ensuring further improvements in the quality of the service to our customers. During the year, we expanded our electronic delivery capability to provide more efficient, convenient and cost effective service channels to our customers. Our Automatic Banking Machine network has now been expanded to twenty-two (22) machines and further expansion is scheduled for 2005. We continue to encourage the use of our telephone banking service and our network of Point-of-Sale terminals strategically placed at popular businesses throughout the country.
HUMAN RESOURCES
Over the last year, we completed the integration of the Guyana National Co-operative Bank (GNCB). Given the high level of migration and turnover of staff, we are pleased that we were able to offer employment to a number of former GNCB employees who were not initially retained during the integration process. I would like to acknowledge the contribution of these employees to the seamless absorption of our new business.
Our training programs and efforts are comprehensive and continuous and are provided through our Education Centre, as well as via on-the-job training at the various departments and branches.
During the year we awarded scholarships to a number of employees. Two Officers completed diploma programmes at the University of Guyana under the Stan Affonso Scholarship Plan. Nine (9) Officers, sponsored for the Associate of the Institute of Canadian Bankers (AICB) Diploma programme, completed their studies. Two Officers are currently in their 3rd year of study for a Masters programme.
TECHNOLOGY
The growth of electronic commerce, the globalization of business and the rapid pace of change present exciting IT challenges for the Bank. During the year, the Bank commenced the upgrade of its network infrastructure by implementing enhanced anti-virus systems and firewalls to ensure reliability and optimum security at all times.
The bank solidified its position as the market leader in electronic banking services by installing two additional ABMs and one cash dispenser, increasing our ABM network complement to 20 ABMs and 2 cash dispensers in 14 locations. NBIC now accounts for approximately 40% of the ABMs in the country. By December 2004, two more cash dispensers will be added to existing locations to cater for increased usage.
Thirty-eight (38) point-of-sale machines were installed during this fiscal year increasing our compliment to 199 at 161 merchants. Our point-of-sale network is currently being upgraded to reduce the transaction time at the point-of-sales terminals across the country. Since the upgrade of our telephone banking service in 2003, the number of persons signed-up to use this service increased by approximately 50%. We expect continued growth in this area.
EXPANSION
In keeping with our commitment to provide the highest level of service to our customers, the construction of new premises in West Demerara, to accommodate the operations of the Vreed-en-Hoop branch, commenced in January 2004 and was completed in September 2004. This attractive and spacious building improves the working and business environment for our staff and customers and will contribute towards enhancing the general appearance and environment of Vreed-en-Hoop. It reflects our confidence in the people and stability of the community.
OPERATIONS
The routine maintenance of the Bank's properties continued so as to maintain our high standards with some branch premises receiving needed painting, general facelifts and/ or minor renovations including the addition of Automatic Banking Machines. The first floor of our Head Office at Promenade Court now accommodates the Regional Operations and Finance and Planning departments that were transferred from Water Street Branch. In due course, we will be re-organizing our layout at Water Street Branch to be able to provide a more comfortable banking environment for our customers.
Much focus this year was placed on improving the operations of our new branches with satisfactory results, and this effort will continue during the first half of the next financial year with special attention being paid to our Camp Street Branch. Several departments of the Bank were also reengineered/ reorganized and this effort will also continue throughout the next year. Amendments and adjustments were made to existing services and products to increase their attractiveness and efficiency.
FUTURE OUTLOOK
Our belief is that customer service, integrity, innovation, staff development, asset quality and the use of appropriate available technology are the bases on which the bank will continue to prosper. Our Executives and loyal staff are competent and committed with many of them pursuing academic qualifications. I thank them for their support and co-operation and the Board of Directors for their invaluable guidance during the past year.
We remain hopeful of a gradual improvement in the political climate and therefore in the general investment and economic conditions to provide the proper environment for the people of Guyana to prosper. We expect 2005 to reflect a continuation of the steady improvements in the Bank's performance over the past few years.
Michael Archibald Managing Director