By Loshaun Dixon
The Eastern Caribbean Central Bank (ECCB) has recorded a profit of $10.8 million dollars for the financial year ending 31 March 2018 and $4.4 million dollar from the previous year.
The ECCB in its annual report late last week stated that as at 31 March 2018, the Bank’s Total Assets stood at $5,088 million, an increase of $116.4 million (2.34 per cent) when compared to the position in the previous year.
According to the report: “The increase in Total Assets, reflected mainly by an expansion of $117.9 million (2.55 per cent) in Foreign Reserve Assets, was primarily due to the purchase of regional and foreign currency notes from commercial banks and the reinvestment of interest received on foreign assets.
“The increase in foreign assets increase was offset by net sale of foreign currency balances to commercial banks in the Eastern Caribbean Currency Union and the depreciation in the market value of the Bank’s foreign investment securities following the unfavourable performance of the US bond market in an increasing interest rate environment.”
It also reported that Domestic Assets decreased by $1.5 million (0.43 per cent) with the decline mainly attributable to reductions in Dues from Local Banks and Accounts receivables and Prepaid Expenses in comparison to the prior year.
Total Liabilities expanded by $123.6 million over the year with the most significant increases in this category were reflected in Currency in Circulation, $95.5 million, Eastern Caribbean Securities Registry account, $60.7 million (381 per cent) and Bankers’ Collateral accounts, $41.5 million (21.51 per cent).
‘These increases were tempered by decreases of $83.6 million (2.74 per cent) in Commercial Banks’ Reserve Balances and $54.0 million (29.32 per cent) in Participating Governments’ Call accounts,” the report stated.
Total Equity decreased by $7.2 million (3.26 per cent), mainly due to an increase of $28.1 million (161.24 per cent) in unrealised holding losses on “available for sale” foreign investment securities, consequent on the unfavourable performance of the US bond market over the period under review. “The effect of this decline was moderated by an increase of $10.4 million (12.7 percent) in Revaluation Reserve due to the revaluation of the Bank’s properties as at 31 March 2018.”
According to the report, the General Reserve rose by $9.4 million (8.42 per cent) due to the allocation from net profit in accordance with the ECCB Agreement Act 1983
Speaking to the profit the ECCB said that the upturn was primarily attributable to an increase in interest income on foreign reserve assets, which was positively impacted by the Federal Reserve hikes in interest rates during the financial year.
“Operating income for the financial year ended 31 March 2018 rose by $6.5 million (8.4 per cent) to $84.0 million when compared to the previous financial year. The growth in operating income was largely driven by increases in net interest income and commission income of $15.0 million and $1.4 million, respectively,” the report indicated.
The value of currency in circulation was $1.1 Billion with banknotes accounting for $1 billion or 90.61 per cent, while coins in circulation amounted to $104 million or 9.39 per cent.
ECCB Governor Timothy Antoine said that despite the challenges of the financial year, the Eastern Caribbean Currency Union (ECCU) and the ECCB have demonstrated resilience.
He explained, “The financial year 2017/2018 will be indelibly etched into the minds of the people of the ECCU because of the devastating toll taken by the unrelenting 2017 Atlantic Hurricane Season. The Season spawned a slew of major hurricanes, including two classified as category 5 – Irma and Maria – which battered five ECCB member countries, especially the Commonwealth of Dominica, Barbuda and Anguilla. Within a span of less than two weeks, those two hurricanes cut a wide swath of destruction across the ECCB member countries, resulting in damage and losses estimated at $5.0 billion.”
He added that the storms emphasised the importance of building resilience in the ECCU. “Even as we mourned with our affected brothers and sisters across the ECCU, we stood firmly in solidarity with them, offering financial, technical and practical support. Simultaneously, we pressed forward with our mission to “advance the good of the people of the currency union.”
He noted that one of the highlights for the year was the launch of the Eastern Caribbean Central Bank Strategic Plan 2017-2021: Transforming the Eastern Caribbean Currency Union Together
“The Strategic Plan codifies our vision for the socio-economic transformation of the currency union and comes at a critical juncture, particularly after the ravages of the 2017 hurricanes. The Plan serves as the overarching framework for the Bank’s work over the short and medium term. It is organised around five key goals that we believe are foundational pillars for the transformation process.”