This is my first opportunity to address you as Chairman of the National Bank of Industry and Commerce Limited having been elected to this position during this Financial year and I take the occasion to thank you for being given the opportunity to serve. It is therefore with much pleasure that I report that notwithstanding the challenges faced in 2005, including the severe floods early in the year, the Bank has recorded another successful year, improving on our performance in 2004.
ECONOMIC OVERVIEW
Real GDP in Guyana is estimated by the Government to have increased by 1.6% in 2004 vis-à-vis projections of 2.5%; however, this performance was better than the decline of 0.6% experienced in fiscal 2003. All of the key drivers of the economy reported growth in 2004 and given the ongoing developments in the bauxite and sugar sectors, further improvement can be anticipated into 2005 and beyond. This improvement is tempered by the severe flooding that inundated the City of Georgetown and the Lower East Coast of Demerara during the first quarter of 2005 which negatively affected government's finances, and when combined with the sharp and sustained increases in fuel prices, may have a negative impact on the nascent economic recovery.
FINANCIAL PERFORMANCE
The financial year ended September 30, 2005, was another successful year for the National Bank of Industry and Commerce Limited (NBIC), as further sustained improvements in the Bank's overall financial performance were achieved. Net after tax profit reflected a substantial increase of 47.45% to G$791 vis-à-vis fiscal 2004's performance, and total assets grew by 8.05% to G$59.9 billion. Earnings per Share have improved from G$1.79 to G$2.64 for 2005.
I am pleased to advise that your Board of Directors has approved a final dividend of G$0.80 per stock unit. When added to the interim dividend of G$0.25 per stock unit already paid, this brings the total dividend for the financial year to G$1.05 per stock unit; surpassing the total dividend of G$0.75 paid for last year by 40%.
The above represents a sum of G$315 million and a pay out of 40% of profit after tax compared with the amount of G$225 million paid out for last year; which was, at the time, the largest dividend payout ever made by the bank.
RE-BRANDING
As you will be aware, a Special Resolution to approve the change in the name of your Bank from National Bank of Industry and Commerce Ltd. to Republic Bank (Guyana) Ltd. has been proposed for your approval. This change of name is in keeping with the philosophy of creating a strong regional brand that will redound to the benefit of all stakeholders in the Group.
The creation of one cohesive and strong Caribbean brand, the Republic Bank brand, will bring advantages such as the standardization of products, promotions, corporate communications and advertising. It will ultimately result in a reduction in branding and product development costs over time. We will benefit from increased business opportunities from regional and international organizations already doing business or familiar with the Republic Bank brand. Intangible staff benefits will accrue as a result of being recognized as part of a large, dynamic, regional financial institution.
This process commenced in May 2005 with the re-branding of Banco Mercantil in the Dominican Republic to Republic Bank (DR) S.A. Once approved by shareholders, we expect the rebranding exercise to be completed by the end of March 2006.
FUTURE OUTLOOK
National elections are constitutionally scheduled for August 2006. We urge all parties concerned to focus on the hopes and aspirations of the Guyanese people and the political and social stability needed to attain the consistent level of economic growth necessary for the betterment of the living standards of all. We note and applaud the Government's drive to improve the country's infrastructure including the ongoing upgrading of the road network, bridges and sea defenses: we look forward to the commencement of the construction of the promised bridge over the Berbice River, the much promised and desperately needed restructuring of the moribund legal system, further success in debt cancellation, continued growth in the construction sector and the housing sector and the opening up of the communication sector together with the other initiatives/projects that are being mooted. We remain hopeful that a gradual improvement in economic, social and political climate will be achieved, thereby providing the enabling environment for all the people of Guyana and all sectors of the economy to prosper.
ACKNOWLEDGEMENTS
Our staff remain our most valuable resource. The diligent efforts our Executive Management and Staff have shown throughout the year continue to have the desired positive effects on the Bank's overall financial performance and I wish to commend and thank them for their commitment. I also thank my fellow Directors for their support and our customers and shareholders for their continued loyalty to the Bank. I also take the opportunity to thank our former Chairman, Mr. Ashton Chase and Directors, Mr. Ronald Harford and Ms. Magda Pollard who retired during this year, for their sterling contributions to the Bank and would like to welcome Mr. John Carpenter, Mr. Pierpont Scott and Mr. Derwin Howell to the directorate.
David Dulal-Whiteway Chairman October 17, 2005