Business
JM | Nov 16, 2020

C&WJCCU delivers strong nine-month performance despite COVID-19 challenges

/ Our Today

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Surplus increased to $262 million while assets grew by 8 per cent

Carlton Barclay, CEO of Community & Workers of Jamaica Co-operative Credit Union. (Photo: Facebook @cwjcu)

Jamaica’s lone publicly listed credit union, Community & Workers of Jamaica Co-operative Credit Union (C&WJCCU) has delivered substantial growth and profitability for its shareholders in the nine-month period ended September 2020.

This, in spite of the many challenges encountered by the credit union by COVID-19, which severely impacted the company negatively as did the Jamaican and global economy. Even with the challenges, C&WJCCU experienced growth in all areas of its operations.

The credit union was able to generate surplus of over $262 million for the nine-month period, representing a significant increase of over 32 per cent when compared to the corresponding period in 2019 when the surplus generated was $197.17 million. The September 2020 quarter was also a successful one with surplus moving up by 13 per cent above the corresponding quarter for 2019.

The surplus out-turn for the quarter amounted to $88.9 million coming from $77.3 million for the same period last year. The strong performance by C&WJCCU is as a result of our deliberate strategy and proactive management practices during this time of crisis.

“This we will continue to pursue as we build a resilient Credit Union,” the company stated in its quarterly report to shareholders.

INTEREST INCOME

Interest income recorded a 15 per cent growth for the period under review with earnings of $1.48 billion compared to $1.285 billion for the corresponded period in 2019. This performance was driven mainly by interest on loans to members totaling $1.38 billion, interest of liquid assets of $36.95 million and interest on investments totalling $62 million.

Interest expenses declined by five per cent when compared to the same period in 2019. Based on the judicious management of the cost of funds, C&WJCCU was able to achieve an overall reduction in the total cost of funds, moving from $268.99 million in 2019 to $256.4 million in 2020.

C&WJCCU reports that its non-interest income showed a significant decline for the period under review from$343.7 million in 2019 to $248 million earned. This came about because of the fall-off in fees from lower loan disbursements.

This negative effect was countered by a decline in bad debts recovered as well as one-off items in the 2019 income category such as the sale of properties, which were not repeated in the 2020 financial year.

CONTAINING OPERATING EXPENSES

The growth in operating expenses was contained to a five per cent increase in 2020 when compared to the corresponding nine-month period of 2019. This is a result of deliberate management of expenses during the period.

Expenses grew from $1.09 billion in 2019 to $1.14 billion over the corresponding period in 2020. During 2020 the Credit Union supported several operational initiatives aimed at improving and digitising the service delivery to members and ensuring that the company builds a COVID-19 resilient organisation.

Total assets grew by 8.9 per cent during the nine months to September 30, 2020, moving from $17.76 billion to $19.34 billion, an increase of over $1.58 billion for the nine months.

C&WJCCU REMAINS BIGGEST CREDIT UNION IN JAMAICA

C&WJCCU at the end of June 2020 remained the largest credit union in Jamaica based on total assets, with market share of over 14 per cent. As at June 30, 2020 C&WJCCU maintained just over 14 per cent of the market share of the credit union movement.

The growth in loans to members was subdued for the period to September 30, 2020, as a result of the negative impact from the COVID-19 pandemic. C&WJCCU achieved an increase of three per cent in the portfolio balance, moving from $12.84 billion in December 2019 to $13.24 billion at September 30, 2020.

Despite the significant decline in personal disposable income in Jamaica, C&WJCCUL continued to support its members by providing innovative products which are designed to improve their wellbeing.

C&WJCCU savings portfolio saw strong performance for the period under review, growing by 9.75 per cent for the nine months to September 30, 2020. This represents an increase of $1.309 billion, moving from $13.42 billion in December 2019 to $14.73 billion for the period under review.

This was as a result of organic growth which supports the liquidity position of the credit union. Liquidity as at September 30, 2020 was $3.2 billion which represented a liquidity ratio of 21 per cent. This was an improved position compared to the 2019 position of $2.18 billion, which represented a liquidity ratio of 15.5 per cent.

The strong liquidity position is a deliberate strategy that was pursued by management to provide an effective buffer for the credit union in the event of a crisis. 

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