Governor of the Eastern Caribbean Central Bank Timothy Antoine says the Bank is now on the right track after it recorded $10.8 million in profit for the 2017-2018 financial year
.When Antoine was appointed governor of the regulatory body in 2016, the Bank was coming off a $10 million loss for that financial year. That was preceded by a $12 million deficit in 2015, and a loss of $18 million in 2014.
While Antoine had said in 2016 that the central bank is not in the business of making profit, he indicated a need to restore the bank to a state of profitability.
In his first year at the helm, the ECCB recorded a net profit of $6.3 million for the 2016-2017 financial year. Commenting on the excellent performance for the 2017-2018 financial year Governor Antoine spoke to what that means for the institution.
“In terms of profitability, we have focused on this issues from day one. Yes, that we have to restore profitability, and it’s very good – again we were able to record a profit and in fact an increase in profit. We did about $10.8 million this year compared to $6.3 last year. So we’re moving in the right direction as we said we would, and what that does is that it allows us then to replenish our general reserves because what happens is that in the years and in the losses we drew down on our general reserves. And now what we are doing is that we’re not distributing, we’re not paying out dividends or profit sharing to the governments at this stage. What we are doing is actually building back our reserves. Which is, I think, is an important and a sensible thing to do from a financial management perspective.”
Governor Antoine explained why the profits earned over the past two years were not distributed among ECCU member countries’ governments.
“Typically, what we have done for many years is to distribute profits for our governments and there is a simple formula that we use based on the circulation of currency in each country. We know exactly the circulation levels and we are able to use that as a basis for who gets what. Now, that’s all well and good when you are making a profit. In theory, if we make losses we are also supposed to ask the governments to make contributions to cover our losses. Now, as a practical matter, we don’t. So, that is why I think it is appropriate and fair that at this stage certainly – we did this last year, we did again this year. Rather than distribute the profits put it to basically replenish our general reserves. I think the governments are fully supportive of that. Certainly, the board, on our recommendation has approved that approach.”
With respect to the ECCB Strategic Plan 2017-2021, Governor Antoine said he’s satisfied that the Central is meeting the objectives that have been set out.
“I think from the standpoint of strategic management ability, it is important for us to have that strategic plan. The plan really, you know captures our shared vision for how we transform the currency union together and so we have articulated in that plan some clear strategic goals and several strategic initiatives. I think that when you look at annual reports you’ll see that we’ve delivered on most if not all of those strategic initiatives.
So for example, our goal number one is to maintain a strong EC Dollar. Well, we maintain a backing, I think we have it around 97 percent throughout the last year. So we delivered on that goal. This year our strong and resilient financial system we have strengthened the system by taking steps, whether that is the rollout of our risk-based supervisory framework; the addition of on-site inspection of our banks and licensees. I think we’ve taken steps there. Then initiatives like getting our credit bureau going. We launched the RFP for that, and that’s a process we are now entering. We certainly have moved forward with the passage of legislation for our partial credit guarantee scheme. We set up the Eastern Caribbean Asset Management Corp. So, we can point to very specific things in our strategic plan where we have delivered and an annual report is an accountability tool. So people can check the plan; check the report, and see what progress we have made. So on that front, I’m very encouraged and satisfied by what we’ve done this year.”
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