LOOKING FORWARD ANNUAL REPORT 2019 WITH PURPOSE

ANNUAL REPORT 2019 1 REPUBLIC BANK (GUYANA) LIMITED 2 LOOKING FORWARD WITH PURPOSE lives forthebetter. intransforming in playing ourpart shareholders more, takingpride of drivingbusinessandgivingour profits usall. We are ontheleadingedge better lifestyles andanoutcomethat We are contributingtobetterlivelihoods, Our purposeisfulfilled. communities. Andourvisionisachieved. towider to newhorizons inservice we bringtheRepublicBankbrand As weexpandthroughout theregion, and technology. experiences facilitatedby innovation to provide betterandcustomer With allhandsondeck,weare working to achieve ourgoals. to uniteourexperienceandinsight Every memberofourteamisonboard the current financialtimes. It hastaken strategytonavigate while maintainingaprofitable outlook. to allourcustomersandcommunities isdelivering valueOur truenorth we have always stayed thecourse. In ourtwocenturiesofoperation,

ANNUAL REPORT 2019 1 REPUBLIC BANK (GUYANA) LIMITED 2 Results Orientation Professionalism Respect fortheIndividual Integrity Customer Focus OUR COREVALUES and theCommunitiesweserve. of ourCustomers,Staff,Shareholders which willredound tothebenefit and toimplementSoundPolicies Financial Services Efficient andCompetitively-priced Our missionistoprovide Personalised, OUR MISSION while buildingsuccessfulsocieties. and Shareholder Value, Social Responsibility Employee Engagement, in CustomerSatisfaction, We settheStandard ofExcellence and Shareholders. for ourStaff,Customers Institution ofChoice the CaribbeanFinancial Republic Bank, OUR VISION

ANNUAL REPORT 2019 3 REPUBLIC BANK (GUYANA) LIMITED 4 TOTAL ASSETS NETWORK THE 100 150 200 ABOUT US 50 0

12 655 employees ‘19 branches 180.2

BANK 168.2 ‘18 a recognised leader in the provision of financial services. Over the past year, the Bank has concentrated on concentrated has Bank the year, past the Over services. financial of provision the in leader recognised a Republic Established Bank(Guyana)in 1836, one LimitedisofGuyana’s institutions and is longest-serving philosophy ofsocialinvestment inGuyana. a maintaining to and services, financial priced competitively and efficient providingcustomised, to committed and medium enterprises. emphasisonsmall The Bank remainsgrowing withparticular lending its portfolio, 146.2

‘17

($BILLION) AT A

151.6 ‘16

142.4 ‘15 GLANCE 1,000 2,000 3,000 4,000 5,000 6,000 PROFIT BEFORE TAX 0 32 & services financial products ‘19 5,974.3 49 ATMs

4,664.6 ‘18 4,228.8 ‘17

4,260.9 ‘16 4,302.4 ($MILLION) ‘15 PE RATIO EPS DIVIDEND YIELD SHARE PRICE 2018 2019 2018 2019 2018 2019 2018 2019

27.3 $ 1.15 $ 19.9 $ 2.06 $ 12.82 450 10.45 208 RESPONSIBILITY % %

CORPORATE SOCIAL New Amsterdam Diamond 15 11 Lethem Linden comprehensive staffvolunteerism programme. and raise the community investmentbar for through a wide-reaching, their truest potential througheducation, culture sport, and the arts; awareness initiatives; provide for young opportunities people to realise have worked healthcare together to; support programmes and disability Organisations and (NGOs)Community Based Organisations we (CBOs), For more than a decade, through relationships with Non-Governmental ensuring thesustainablesuccessofthisbeautifulnation. with communities the we aim ofsafeguardingserve the welfare and we have connections across formed powerful Guyana within the Through our socialinvestment initiative,the Power toMakeDifference, A Business Foreign Other % % OPERATING BRANCHES SOURCES OFREVENUE Rose Hall Anna Regina Vreed-en-Hoop Loans &Advances Water Street D’Edward 64 Camp Street Investments Corriverton 10 Triumph % %

ANNUAL REPORT 2019 5 REPUBLIC BANK (GUYANA) LIMITED 6 TABLE OF CORPORATE SOCIAL RESPONSIBILITY & MANAGEMENT INFORMATION STATEMENTS CORPORATE DIRECTORS FINANCIAL BOARD OF CONTENTS Financial Highlights Financial Summary Bank Profile Corporate Information Notice ofMeeting Notes totheFinancialStatements Statement ofCashFlows Statement ofChangesInEquity Statement ofComprehensive Income Statement ofIncome Statement ofFinancialPosition Independent Auditors’ Report Requirements Financial Reporting Statement ofCorporateGovernance Practices Management Senior Management Managing Director’s DiscussionandAnalysis Chairman’s Review Directors’ Report Board ofDirectors Power to Make ADifference 64 62 61 60 59 58 54 52 13 12 10 46 42 37 36 25 22 20 16 9 8

INFORMATION CORPORATE ahead inchangingfinancialtimes. across theregion. We are poisedtopush a coursefordelivering value tostakeholders Our teamisfullyonboard withcharting

ANNUAL REPORT 2019 7 REPUBLIC BANK (GUYANA) LIMITED 8 October 21,2019 Corporate Secretary CHRISTINE A.MCGOWAN By order oftheBoard 6 5 And thefollowingspecialbusinessnamely: 4 3 2 1 (3:00 p.m.)forthefollowingpurposes: Guyana, Seawall Road,Monday, December9,2019at 15.00hours of RepublicBank(Guyana) LimitedwillbeheldatPegasus Hotel NOTICE is hereby given that the Thirty-fifth Annual General Meeting ANNUAL MEETING NOTICE

Annual GeneralMeeting. To consider any other business that may be conducted at an c b a Dividends; To consider andifthoughtfit,pass resolutions relating to: To reappoint theAuditors, Messrs.Ram&McRae. a casual fill vacancy asDirector inaccordance withtheBy-Laws. to appointed was who Khan F. Amral elect To namely: Yolande M.Foo, Roy E.CheongandRichard M.Lewis. from theBoard by rotation inaccordance withtheBy-Laws To re-elect three Directors to fill offices vacated by those retiring September 30,2019. and toapprove theauditedaccountsforyear ended To receive oftheDirectors theReport andtheAuditors Remuneration oftheauditors. remuneration; and Directors’ agreements service providing fortheir OFMEETING • • • • Georgetown, Guyana CummingsburgNorth 155-156 NewMarket Street REGISTERED OFFICE meeting (By-Law86). the at representative its as act to fit thinks it as person such resolution of itsDirectors or other governing body, authorise Any Corporation which is a member of the Company may, by than 48hoursbefore thetimeforholdingmeeting. notless Company the of Office Registered the at deposited appointing a proxy revenue mustbear a G$10 stamp and be proxyA need not be amemberofthe Company. The instrument a proxy toattendandvote insteadofhim/her. Any memberentitled to attend and tovote is entitled to appoint Only stockholdersmay attend Christine A.McGowan, Corporate Secretary Richard I.Vasconcellos Richard M.Lewis, Shameer Hoosein, Dip.(BusinessMgmt.), Anna-María García-Brooks, Yolande M.Foo, Roy E.Cheong, John G.Carpenter, Non-Executive Directors Amral F. Khan, Managing Director Nigel M.Baptiste, Republic FinancialHoldingsLimited President andChiefExecutive Officer, Chairman DIRECTORS CORPORATE Dip. (BusinessMgmt.)BSc(IndustrialMgmt),MBA AA, FCII,FLMI,CLU AICB BSc (Hons.)(Econ.), MSc(Econ.), ACIB HBA EMBA FCCA AA, BSc(Food Sciences) LLM(M Dip. (MassMediaandComm.), erit ), LLB(D ist .), LEC(H INFORMATION ons .), AMLCA, CPAML South America Georgetown, Guyana CummingsburgNorth 157 ‘C’Waterloo Street Chartered Accountants Messrs. Ram&McRae AUDITORS South America Georgetown, Guyana Robbstown 2 Avenue oftheRepublic Messrs. Cameron &Shepherd ATTORNEYS-AT-LAW Website: www.republicguyana.com Email: [email protected] Fax: (592)233-5007 Tel: (592)223-7938-49 South America Georgetown, Guyana CummingsburgNorth 155-156 NewMarket Street Promenade Court REGISTERED OFFICE

ANNUAL REPORT 2019 9 REPUBLIC BANK (GUYANA) LIMITED 10 Joann Williams, Assistant Manager, HumanResources Shrimanie Mendonca, Manager, HumanResources Ndidi Jones, Senior Manager, HeadOffice Vanessa Thompson, Manager, FinanceandPlanning Michael Ram, Manager, EnterpriseRiskManagement Denys Benjamin, Manager, CorporateOperations Diane Yhun Credit Manager, CorporateBusiness Centre Carla Roberts, Corporate Manager, CorporateBusinessCentre Sasenarain Jagnanan, Regional CorporateManager, CorporateBusinessCentre Erica Jeffrey, Manager, Services BranchSupport Gail Harding, Assistant Manager, BranchOperations Jadoonauth Persaud, Manager, BranchOperations HEAD OFFICEDEPARTMENTS Denise Hobbs, General Manager, Operations Parbatie Khan, General Manager, Credit Amral F. Khan, Managing Director SENIOR MANAGEMENT BANK Dip. (Sociology),LLB,LEC,LLM(Merit),CPAML AICB ICB -LetterofAccomplishment AICB BSc (Acct.) Dip. (BusinessMgmt.),BSc.(IndustrialMBA Dip. (BusinessMgmt.) Dip. (BusinessMgmt.),MBA,ACIB BA (English) AICB

PROFILE B SocSc(Mgmt.),FCCA,MBA Dip. (Bkg. andFin.) BSc (Biology),PGDip.(Edu.), MEd AICB, Dip.(Bkg. andFin.)

, MBA

Nadia Khedaroo, Officer-in-Charge LETHEM BRANCH Allison McLean-King, Manager BRANCH DIAMOND Joel Singh, Manager D’EDWARD BRANCH Sasenarine Bindranath, Officer-in-Charge CORRIVERTON BRANCH Professional DassGhaness, Harry Manager CAMP STREETBRANCH Guitree Ramsamooj, Manager BRANCH REGINA ANNA BRANCH NETWORK Credit Professional Karen Assanah, Manager, SpecialUnit Michelle Johnson, Manager, Marketing andCommunications Christine McGowan, Manager, LegalServices Oral Rose, Manager, InternalAudit Yugisther Mohabir, Assistant Manager, InformationTechnology Yonnette Greaves, Manager, InformationTechnology Dip.(Marketing), BSocSc(Dist.)(Mgmt.),AMLCA AICB AAT, AICB,BSocSc(Mgmt.)(Dist.),MSc(Fin.Mgmt.),Certified Dip. (PublicMgmt.),BSocSc(Mgmt.),AICB MCIPR, MACC (Dist.),PGDip.CIPR,BSocScMgmt.(Credit)MCIPR, MACC Dip. (Mgmt.Info.Systems)LIMIS MCSA LLM(Merit),LLB(Dist.),LEC(Hons.),AMLCA, CPAML CAT, Credit Certified Professional ICB- Letter of Accomplishment, Certified CreditICB- LetterofAccomplishment,Certified

AICB, Certified CreditAICB, Certified Professional Dip. (BusinessLaw)(ICM),AICB

of BankingDiploma,MCIM,MBA Professional, LeadershipProgramme ABAStonierGraduateSchool Wharton Certificate, Randulph Sears, Manager WATER STREETBRANCH Eon Grant, Manager VREED-EN-HOOP BRANCH Bibi ShalizaHussain, Officer-in-Charge TRIUMPH BRANCH Doodmattee Bhollaram, Manager BRANCH ROSE HALL Imran Saccoor, Manager NEW AMSTERDAM BRANCH Jannis London, Manager LINDEN BRANCH BComm.,AICB

Dip. (Marketing), MBA Dip. (Bkg.), BSocSc(Mgmt.),AICB,MBA Business Group (ICM),Dip.(Marketing), Credit Cert. Certified AICB, Certified CreditAICB, Certified Professional, MBA AICB, Certified CreditAICB, Certified Professional

ANNUAL REPORT 2019 11 REPUBLIC BANK (GUYANA) LIMITED 12 Return onaverage equity(%) Return onaverage assets(%) Earnings perstockunitindollars($) Total comprehensive income Net profit aftertaxation Stockholders’ equity Total deposits Total assets Loans andadvances Investment securities Cash resources FINANCIAL Expressed inthousandsofGuyana dollars($’000) SUMMARY 153,605,091 180,161,425 22,623,702 78,793,633 14,835,914 43,875,653 3,839,421 3,845,781 2019 17.97 12.82 2.24

144,654,913 168,183,290 20,164,281 69,747,950 15,694,193 40,078,184 2018 3,206,844 3,134,004 16.48 10.45 2.02 124,879,378 146,229,495 18,300,481 60,791,257 27,829,221 2017 2,820,087 2,738,939 7,440,987 15.69 1.83 9.13 131,186,957 151,574,139 16,715,394 58,417,974 30,963,960 2,726,690 2,703,041 7,882,243 2016 16.88 1.82 9.01 123,701,186 142,362,955 15,223,604 52,362,418 32,271,117 2,690,083 2,815,938 6,318,344 2015 19.78 2.03 9.39

FINANCIAL Expressed inthousandsofGuyana dollars($’000) Banking offices Employees Active savings, chequingand depositaccounts Common stockoutstanding(inthousands) Stockholders Number of GENERAL Stock units(inthousands) Dividend fortheyear (inthousands) Earnings indollarsperstockunit COMMON STOCK Average outstandingequity Equity (capitalandreserves) Deposits Average assets Total assets Loans andadvances STATEMENT POSITION OFFINANCIAL Net incomeaftertaxation Taxation charge Net incomebefore taxation Interest andnon-interest expenses Interest andotherincome STATEMENT OFINCOME

HIGHLIGHTS

153,605,091 172,034,526 180,161,425 21,401,004 22,623,702 78,793,633 12,235,513 (2,128,470) (6,261,262) 1,555,000 3,845,781 5,974,251 2019 171,146 300,000 300,000 12.82 1,397 655 13

1,285,000 11,127,806

144,654,913 155,412,880 168,183,290 20,164,281 19,019,725 69,747,950 (1,530,593) (6,463,209) 3,134,004 4,664,597 2018 153,826 300,000 300,000 10.45 1,371 681 12

16,621,646 11,978,135 Change 2,381,279 2,459,421 8,950,178 9,045,683 1,309,654 1,107,707 (597,877) 711,777 270,000 201,947 17,320 2.37 (26) 26 – – 1 (3.8) (39.1) 12.2 6.2 % Change 22.7 22.7 11.3 12.5 13.0 28.1 10.0 21.0 10.7 8.3 1.9 7.1 3.1 – –

ANNUAL REPORT 2019 13 REPUBLIC BANK (GUYANA) LIMITED 14 Group and the financial system in Trinidad and Tobago is and Tobago in Trinidad system financial the and Group Ron Harford’s contribution to the development of the Republic Group. the of Chairman remained and Director Managing of role his from retired he 2005, In Director. Managing and Chairman of roles dual the held so Barsotti, and Chairman Frankappointed was Ron Chairman, the of In 2003, retirement the institution. following financial global truly a to institution domestic primarily a from Bank the of transformation the led and Limited Bank Republic of Director Managing appointed was Ron 1997, levelIn senior numerouspositions. other and Network Branch the as Foreign well as units, and Operations Exchange Resources Human Technology, Ron’s Tobago, Information and the for Trinidad responsibility overall assume In him see would career presence. a had Bank Barclays which in countries Caribbean several in to career, his points various at assigned, be would Caribbean Ron professional, truly A Square. Independence at desk post the on 1963, then in Overseas and the Colonial Dominion joined Bank Barclays known, affectionately most is he as Ron, 31, 2019. December on Limited Holdings Financial Republic and will retire from the Board of Directors of Republic Bank Limited Harford deCreeft Frederick Ronald organisation, the of helm After 57 years of service, the last 23 of which have been at the f akn o Tiia ad oao ad h Caribbean the and Tobago, Association ofBanking andFinance. and Trinidad of Banking of Institute the Bankers, of Institute Chartered UK the of Fellow and Commerce’s Business Hall of Fame, both in 2012. He is a Industry of Chamber Tobago and Trinidad the into and inducted Indies West the of University the by LLD Honorary an conferred was He community. business the and banking to contribution meritorious his for Gold of Medal Chaconia the awarded was he 2010 31, August On Tobago. and Trinidad of Association Bankers the and (CariCRIS), Limited the Services system), Rating Credit and payments Information Caribbean the Bureau, domestic Credit the facilitates which system Linx the as known commonly (now Info-Link Limited Services of establishment in the were system Tobago and financial Trinidad the for accomplishments Milestone whose careers hementored. legacy will be found in the many generations of stellar bankers greatest Ron’s 2019, in $120 to 1997 in $29 from Group the of price share the in increase the in evident as stakeholders, of his success at the organisation is the value created forall measure one While Scotiabank. from territories nine the of and theCayman Islands, as purchasewell as the intended Ghana, Suriname, Group’sBarbados, Guyana, Grenada, in the operations of acquisitions the and 1997 in Limited Republic Bank with Limited Tobago and Trinidad Bank Commerce of of merger the led successfully Ron immeasurable.

RETIRES! A CMT, FCIB,FIBAF, FCABFI,LLD F.RONALD DEC.HARFORD

CHAMPION

& EXECUTIVES DIRECTORS BOARD OF insight take thantherest. usfurther our combinedknowledge,experienceand economic climate.Facing allchallenges We are strategicallynavigating thecurrent

ANNUAL REPORT 2019 15 REPUBLIC BANK (GUYANA) LIMITED 16 BOARD Chartered Insurer AA, FCII,FLMI,CLU ROY E.CHEONG Managing Director, RepublicBankLimited Republic FinancialHoldingsLimited President andChiefExecutive Officer, Chairman, RepublicBank(Guyana) Limited BSc (Hons.)(Econ.), MSc(Econ.), ACIB NIGEL M.BAPTISTE OFDIRECTORS Republic Bank(Guyana) Limited Retired Senior BankingExecutive, AICB YOLANDE M.FOO Republic Bank(Guyana) Limited Managing Director, Dip. (BusinessMgmt.),BSc(IndustrialMBA AMRAL F. KHAN Republic BankLimited General Manager, Group Human Resources, Mgmt.), EMBA Dip. (MassMediaandComm.),(Business GARCÍA-BROOKS ANNA-MARÍA Hand-in-Hand Group ofCompanies Chairman, AA, BSc(Food Sciences) JOHN G.CARPENTER Massy (Guyana) Ltd. Strategic AdvisortotheChairman, FCCA HOOSEIN SHAMEER Label HouseGroup Limited Executive Chairman, HBA M.LEWIS RICHARD Chairman, A.N.K.EnterprisesInc. I.VASCONCELLOSRICHARD

ANNUAL REPORT 2019 17 REPUBLIC BANK (GUYANA) LIMITED 18 in Anti-Money Laundering. Entrepreneurship from UWI. Mr. Khan is also a certified professional in Business Administration with specialisation in Innovation and from the UWI Institute of Business and an International Master of the West Indies (UWI), a Diploma in Business Management of Science Degree inIndustrial Management from the University Internal Audit Management.and Risk Mr. Khan holds a Bachelor Commercial and Corporate Banking within-depth experience in 34 years ofexperience and has extensive knowledge in Retail, (Guyana) Limited inAugustHea career is 2019. banker withover F.Amral Khan was appointed Managing Director, Republic Bank Managing Director, RepublicBank(Guyana) Limited Dip. (BusinessMgmt.),BSc(IndustrialMgmt.)MBA AMRAL F. KHAN the Cayman NationalCorporation. Mr.a Director Baptiste also is ofRepublic Bank (Ghana) Ltd. and Associate oftheChartered InstituteofBankinginEngland. a graduateis of the Stonier Graduate School of Banking and an Harvard BusinessSchool’sAdvanced Management Program. He Science Degree inEconomics and hassuccessfully completed the Director of Republic Bank (Guyana) Limited. He holds a Masterof Bank Limited. Mr. Baptiste previously as Managing served Financial HoldingsLimited and Managing Director of Republic (Guyana) Limited in 2013. He is currently the President of Republic Nigel M. Baptiste was appointed Chairman of the Republic Bank Managing Director, RepublicBankLimited Republic FinancialHoldingsLimited President andChiefExecutive Officer, Chairman, RepublicBank(Guyana) Limited Bsc (Hons.),(Econ.), Msc(Econ.) ACIB NIGEL M.BAPTISTE BOARD OFDIRECTORS Group ofCompaniesandBanksDIHLimited. Mr. on a Cheong number of boards,serves including the GTM Arrow ofAchievement. Institute, a Chartered Life Underwriter,and a recipient of the Golden of Companies inGuyana. a FellowHe is ofthe Life Management Guyana before retiring asManagingDirector Group oftheGTM Association of the Caribbean and the Insurance Association of in the Insurance Industry, as President serving of the Insurance financial matters expertise. Mr. Cheong has worked for many years Roy E.Cheong is aChartered Insurer with vast management and Chartered Insurer AA, FCII,FLMI,CLU ROY E.CHEONG Equipment Inc. Inc.,andCellsmart Bank Suriname N.V., Wieting and Richter Limited,Industrial Safety Insurance Group of Companies and alsoaDirectoris of Republic Mr.the ChairmanofHand-in-Hand Carpenter is Fire and Life Mr. Carpenterisarecipient oftheGoldenArrow ofAchievement. interest inthesustainabledevelopment ofbusinessinGuyana. Science Degree in Food Sciences Cornell University and has a keen successful businessesover the years.He holds a Bachelor of been involved inthe management and directorship of several knowledge of the local and regional commercialhaving industry John G. Carpenter has extensive leadership experience and Chairman, Hand-in-HandGroup ofCompanies AA.,BSc (Food Sciences) JOHN G.CARPENTER Gas Products (Guyana) Ltd. (formerly Demerara Oxygen Company Massy of Officer Executive Chief the as served previously having theis Strategic (Guyana)to the Chairman of Massy Advisor Ltd., with moreyears than 20 experience in management. Mr. Hoosein (Guyana) Limited and in 2015 is an accomplished business leader Shameer Hoosein was appointed to the Board ofRepublic Bank Strategic AdvisortotheChairman,Massy(Guyana) Ltd. FCCA HOOSEIN SHAMEER Distinguished Alumni. School. InMrs. García-Brooks 2014, was named as one of UWI’s School at the Universityof Pennsylvania, and Harvard Business University Business of Michigan Business School, the Wharton and has completed executive management programmes at the post-graduate Diploma in Business Management from the UWI, from Lok JackGraduate School of Business(UWI),a the Arthur Business of Master an holds She Place. First Proficiency, General Communications) and winner of the Pro-Vice Chancellor’s Prize for is a graduate of the University ofthe West Indies (UWI) (Mass Resources,Human García-BrooksMrs. Limited. Bank Republic Bank (Guyana) Limitedin2016andistheGeneralManager, Group Anna-María García-Brooks wasappointedtotheBoard ofRepublic Republic BankLimited General Manager, Group HumanResources, Dip. (MassMediaandComm.),(BusinessMgmt.),EMBA GARCÍA-BROOKS ANNA-MARÍA charitable ventures. to be actively involved and in a number ofhumanitarian efforts Trusteethe Guyana of FooGuides Association. Mrs. Girl continues on HIV/AIDS Workplace– Education Programme, and a former member ofthe National Tripartite Committee’s sub-committee Demerara, former Hospital, apastpresidentClub of of theRotary and governance. DirectorShe a former is of the St. Joseph Mercy training, management, resource human banking, of fields the in Yolande Foo is a retired career banker and has 45 years experience Republic Bank(Guyana) Limited Retired SeniorBankingExecutive, AICB YOLANDE FOO of Cellsmart Inc.andSanta Feof Cellsmart (Guyana) Limited. Carib Hibiscus Development (USA). Locally, onthe Boardhe serves in Miami,Florida, and is ashareholder and of Managing Partner Mr. Vasconcellos the Chairman is of A.N.K. incorporated Enterprises, Association. including that of Senior Vice President ofCommerce Bank National during which period he held many seniormanagement positions been involved ininternational bankingmore for years; than 15 having banking, in expertise significant has Vasconcellos Richard Chairman, A.N.K.EnterprisesInc. I.VASCONCELLOSRICHARD Director ofPar 3Ltd.aholdingcompanyforGiscadTrinidad Ltd. Mr. Lewis isthe Chairman of the Beacon Insurance Company and Limited andaDirector ofRepublicSecuritiesLimited. of Technology. He is also a Director of Republic Bank (Grenada) School of Businessand is agraduate of the Newcastle Institute Honours from the University ofWestern Ontario Richard Ivey printer in the Caribbean. Mr. with Lewisholds a Bachelor of Arts House Group Limited; the largest specialist label and packaging (Guyana) Limited and in 2014 is the Executive Chairman of Label Richard M.Lewiswasappointed to the Board ofRepublic Bank Executive Chairman,LabelHouseGroup Limited HBA M.LEWIS RICHARD Guyana. the Management Committee of ThePensionMassy Fund Plan for Companies in Guyana and Jamaica also the and Chairman of is Mr. Hooseinholdsseveral directorshipsGroup intheMassy of Accountants. Association ofChartered Certified the Executive Development Programand is aFellowin 2005, of the Limited. Heisagraduate of the Ivey School of Business,completing Limited) and as theFinance Director ofAssociated Industries

ANNUAL REPORT 2019 19 REPUBLIC BANK (GUYANA) LIMITED 20 proposing theirre-appointment andauthorisingtheDirectors tofixtheir remuneration willbe submitted totheAnnualGeneral Meeting. resolution A auditors. as office in continue to willingness their of Bank the informed have Accountants Chartered McRae, & Ram Messrs. AUDITORS eligible, offer themselves forre-election. In accordance with the Bank’s By-Laws, Yolande M. Foo, Roy E.Cheong and Richard M. Lewis retire from the Board by rotation and being DIRECTORS Group ofCompanies Hand-in-Hand MutualFire &Life Trust Company(Guyana) Limited andLife Group ofCompanies Guyana andTrinidad MutualFire AssuranceSocietyLimited Demerara MutualLife Republic FinancialHoldingsLimited power ataGeneralMeeting.Thefollowingare thesubstantialstockholders oftheBank: voting the of more or percent five controls who one is 73:04 Cap. Act Industry Securities the of purposes the for stockholder substantial A SUBSTANTIAL STOCKHOLDING (UNITS OFSTOCK) causes fortheyear were $6.8million(2018-$7.2million),emphasisingtheBank’s strong socialinvestment policy. In addition tothe Bank’sPower to Make ADifference investment initiativesgeneral (see pages donations to 49), 45 to charitable or public DONATIONS transferred from theStatementofincomefor2019. million $3,845.8 and million), $480 - 2019 interim million, $1,075 - 2019 (final dividends as out paid million $1,555 Reserve, Risk Banking Retained earnings areat September 2019 30, million) afteratransfer- $18,768.9 million (2018 $21,179.1 million tothe General of$49.2 Capital andreserves otherthanretained earningstotaled $1,444.6millionasshownintheStatementofChangesequity. CAPITAL ANDRESERVES for theyear endedSeptember30,2019isrecommended. This,ifapproved, willbringthetotalpayout fortheyear to$1,555million. An interim dividend of $1.60 per stock unit ($480 million) was paid during the year and a final dividend of $3.58 per stock unit ($1,075 million) DIVIDENDS Final dividendproposed Retained earnings Interim dividendpaid Net incomeaftertaxation RESULTSFINANCIAL The Bankprovides acomprehensive locationsthroughout rangeofcommercial atthirteen Guyana. bankingservices PRINCIPAL ACTIVITIES The Directors have pleasure andAudited insubmittingtheirReport FinancialStatementsfortheyear endedSeptember30,2019. DIRECTORS’ Numberofstockunits

(in thousandsofGuyana dollars)

REPORT

152,898,395 17,845,703 20,116,853 15,798,760 16,306,080 2019

% held 6.71 5.94

5.44 50.97 5.27

Numberofstockunits

1,075,000 152,898,395 19,617,755 16,524,875 15,798,760 16,306,080 3,365,781 3,845,781

2019 2018 480,000

% held 2,749,004 3,134,004 2018 900,000 385,000 6.54 5.01 50.97 5.27 5.44 Bank’s netinterest andother income. the provision of management, credit Technical analysis, internal audit and other services. fees service are determined with reference to the The Bank expended million) under a Technicalmillion (2018-$105.6 the sum of$116.5 Agreement Services with Republic Bank Limited for CONTRACT OFSIGNIFICANCE WITH STOCKHOLDER ORITS SUBSIDIARY were materiallyinterested. Other than normal banking and employment contracts, there were no contracts between the Bank and its directors or inwhich the directors CONTRACTS WITH DIRECTORS which are notdeterminablewithinoneyear withoutpayment ofcompensation. There are contracts with the directors no service proposed Annual General Meeting, or with any other directors,for election at the forthcoming DIRECTORS’ SERVICE CONTRACTS Anna-María García-Brooks Yolande M.Foo Richard M.Lewis Richard I.Vasconcellos Shameer Hoosein Roy E.Cheong John G.Carpenter Nigel M.Baptiste DIRECTORS’ FEES($) Shameer Hoosein Richard M.Lewis Richard I.Vasconcellos (held jointlywithassociates) Yolande M.Foo (75,000 heldjointlywithanassociate,and12,000by anassociate) Roy E.Cheong (held jointlywithanassociate) John G.Carpenter Of thesecategoriesonlythefollowingpersonsheldstocksincompany INTEREST OFDIRECTORS ANDCHIEFEXECUTIVETHEIRASSOCIATES earned duringtheyear. Pleaserefer information. tonote23ofthefinancialstatementsforfurther The Bank operates only in Guyana but several investments are held overseas for which income million) was million (2018 -$134.8 of $123.5 GEOGRAPHIC ANALYSIS OFTURNOVER ANDCONTRIBUTION TO RESULTS deposit taking.Thecontributionorcostfrom theseactivitiestooperatingprofit isdisclosedintheStatementofincome. ‘Banking operations’ is considered as one single business operation which includes lending, investments, foreign exchange trading and CONTRIBUTION OFEACH ACTIVITY TO OPERATING PROFIT

, allofwhichwere heldbeneficially:

1,560,000 1,560,000 1,350,000 1,440,000 1,500,000 1,770,000 1,500,000 2,550,000 Number ofstockunits 2019 2018 2019 15,000 315,000 150,000 17,850 87,000 5,000

1,500,000 1,560,000 1,380,000 1,350,000 1,470,000 1,710,000 2,550,000 315,000

150,000 87,000 17,850 15,000 2018 1,530,000 _

ANNUAL REPORT 2019 21 REPUBLIC BANK (GUYANA) LIMITED 22 CHAIRMAN’S REVIEW NIGEL M.BAPTISTE

of allGuyanese. enabling environment fortheprosperity in theeconomy, thereby providing an about continuedimprovement of Guyana andremains optimistic is committedtothefuture development “ Republic Bank(Guyana) Limited ” weather and road conditions as welllowerdomestic demand. poor of result a as declined fishing and gold rice, sugar, of output activities. In contrast,the construction, manufacturing and service livestock,and forestry other crops aswellnotable increases in growth due of 4.1%toimproved inbauxite, performances At the Real Grossend of 2018, Domestic Product saw strong period. in the worldwith a projected growth rate overof 16.3% afour-year Guyanese economywas ranked asthefastestgrowing economy In June of thisyear, NASDAQ released statistics inferred that the (GDP) setat0.6%for2019. ‘sluggish’ with a projected growth rate of Gross Domestic Product In Latin America and the Caribbean, economic activity remains bills. factors, tighterfinancialconditionsandhigheroilimport country-specific from arising economies developing and markets geopolitical tensions,weaker outlooksome key for emerging downwardsreflectiveand for 2020, 3.5% to3.2%for2019 of Fund The International Monetary (IMF) revised global growth ECONOMICREVIEW CHAIRMAN’S million (2018-$1,285million). General Meeting, will bring the total dividend for the year to $1,555 approved(per stockunit),which,if $3.58 dividend of attheAnnual $10.45 in 2018. Your Directors have recommended therefore a final Earnings perstock unit amounted an increaseto $12.82, from recorded. million representing increasea 22.7% over prioryear results was $3,845.8 of tax after Profit growth. environment economic of expectations and financial competitive sector, business expanding The Bank recorded buoyed performance a satisfactory byGuyana’s PERFORMANCE FINANCIAL Bank willcontinueitsexemplary record ofperformance. governance. We are confident that under Mr. Khan’s leadership, the commitment to continued strong financial performance, and astute testament is to the Group’sstrong management structure and retail and corporate banking experience. His seamlesstransition Mr. Amral F. Khan – a seasoned banker with over 34years of I am also pleased to welcome the Bank’s new Managing Director, the year endedSeptember30,2019. of Republic Bank (Guyana)on the annual performance Limited for Fellow Directors and Stockholders, pleasureagain it is my toreport INTRODUCTION half-year position. public debt increased marginally by1.5% compared with the 2018 4.9% ofthe GDP. At the end of June Guyana’s2019, stock of total The overall deficit in 2019isprojected to decrease by 0.1%point to showeddecline ratio the compared tothelasttwoyears. at half-year, As of 2019. quarter first at the loansstood end at 12:3 of the The ratio ofnon-performing considerably by 48.7%,halfyear onhalfyear. On theotherhand, netPublic Sector Credit also increased recorded arobust growth of13.5%year onyear. exceptto allsectors theagriculture sector. Lending to households and advances tothe private sector expanded bydirectly 5.7% linked both loansand advances in theprivate and public sectors. Loans half year14.1%, on half year. This was asaresult of increases in Overall, the net domestic credit of the banking system grew by driver continuingtoberisingfoodprices. (CPI) continued to increase year overyear bywith the major 6.3% overall implementation rate The of 35.4%. Consumer Price Index Programme (PSIP) over the same period last year,a commendable 29.3% increase a in the execution of the Government’sPublic Sector Investment was There activities. insurance and financial manufacturing, construction, wholesale and retail trade and was buoyed by favourable in rice, forestry, performances gold, economy the Guyanese grewof 2019, by 4.0%compared to 4.5% forthe prior-year period. This half first the during Notably, below the2017level formoney transfer transactions. significantly there while 19.6% by marginal a was decrease 0.9% of The total volume of foreign exchange transactions increased December 31,2018,withdomesticdebtat22.6%. public debt accounted for 77.4%ofthe total public debt stock as at External 44.4%. of figure 2019 Budget the from 44.2% to 0.2% by For the total 2018, public debt-to-GDP ratio decreased marginally the “other” oftheprivate category sector. exceptions being manufacturing, construction and engineering and Notably, there were increases in mostsectors of the economy, with sector growth was recorded at 4.2% compared to December, 2017. to increased credit to both the public and private sectors. Private The banking system’s net domestic credit increased bydue 15.7% increases inthepricesoffoodandfuel. The Urban Inflation Rate remained despite moderate stable at1.6%

ANNUAL REPORT 2019 23 REPUBLIC BANK (GUYANA) LIMITED 24 in thevarious territoriestowards successfulclosure. RFHL continues to work with the related bodies and stakeholders approvalsregulatory and other customary and conditions, and Completion of the approved transactions remains subject to sector. financial the to contribution continued its and landscape financial Republic Bank’s long-standing role in the development of Guyana’s Guyana. The Bank of Guyana however, acknowledged the value of in presence dominant already the Bank’s given system financial citing concerns about over-concentration and competition in the The Bank ofGuyana did not approve the application for acquisition of CuracaoandSt.Maarten. Tobago (CBTT) and letter of “NoObjection” from the Central Bank Approval wasalsoreceived from theCentralBankofTrinidad and from thetransaction. Grenadines. The operations in Antigua and Barbuda were excluded Grenada, St. Kitts and Nevis,Saint Lucia, St. Vincent and the operations of the Bank of Nova Scotia in Anguilla,Dominica, the application for the transfer ofthe assets and liabilities and Guyana, the Eastern Caribbean Central Bank (ECCB) approved the Bank of Nova Scotia’s operations in nine territories, including Financial Holdings Limited had entered an agreement to acquire Further,since the Novemberannouncement 2018 that the Republic Limited (CNC). majority interestin the – Cayman –75.0% National Corporation successful closing ofthe transaction for the acquisition of a were achieved inthe past year.among First these, wasthe milestones significant and severalmarkets,strategic new entering In keeping with our people-centered focus and philosophy for our successandstrengthen financialperformance. growth presented opportunities acrossour territorieswillenable challenges, taking advantage of the combined business and respective subsidiaries and while each market experiences unique of performance the upon contingent is profitability Group’s The Financial Standards (IFS). technological capabilities and full compliance with International forward focused outstanding customer experience/service, top priorities, strengthening its human resource capacity, ensuring Republic Financial Holdings Limited (RFHL) maintained among its GROUP DEVELOPMENTS CHAIRMAN’S REVIEW Directors fortheirconfidenceandsupport. stockholders fellow and my to ourcustomers,businesspartners, extended is also Gratitude fiscal. the throughout efforts diligent Managing Director and the management and staff fortheir the led successfully organisation. Appreciation isalsoextendedtoMr. and AmralF. Khan, proficiently 2019 July to up and years Managing Director Mr. Richard S. Sammy, whoover thelastfour I take toextendsincere thisopportunity thanks to our former ACKNOWLEDGEMENTS environment fortheprosperity ofallGuyanese. improvement in the economy, thereby providing an enabling development of Guyana and remains optimistic about continued Republic Bank (Guyana) Limited is committed to the future smoothly. the country’s impending general and regional elections will unfold social and political climate. To thisend,weremain hopeful that of Guyana, however thismustbecomplemented bya stable people and sectors business the for well augurs 2020, in oil first The anticipated positive economic outcome from the planned companies are saidtobefeverishly exploringtheirallottedbasins. oil discoveries in the Oriniduik basin, and a number of other During August and September Tullow2019, Oil Plc also announced of oilequivalent resource estimation. Haimara, Tilapia and Yellowtail will add to the – 5.5 billion barrels threethe last discoveries intheStabroek Blockoffshore Guyana – Phase 1 development in early 2020. ExxonMobil has confirmed that see production barrelsof up to 120,000 ofoilper day from the Liza ExxonMobil’sdiscoveries 14 inGuyanaare since 2015 projected to FUTURE OUTLOOK operations throughout theGroup. translate to newandenhanced client offerings and streamlined operating on a common IT platform. This significant milestone will transition, in keeping with the Group’svision ofallterritories IT activities continued with Republic Bank (Guyana) Limited’s ofGroup consolidation year, the During efficiencies. operational for global operations and enhancing the Bank’s capabilities and paving the way forthe Group’s Information Technology (IT) hub new,A Data Centrestate of the art wascommissioned in Trinidad DISCUSSION & ANALYSIS DIRECTOR’S MANAGING AMRAL F. KHAN

unwavering loyalty. for their customers and business partners and our valued for their guidanceand support for their commitment, our Board ofDirectors therefore, tothankourmanagement and staff work of our employees. I take this opportunity without the continued dedication and hard this year wouldnot have been possible “ The highly satisfactory results again achieved resultsThe highly satisfactory again achieved ”

ANNUAL REPORT 2019 25 REPUBLIC BANK (GUYANA) LIMITED 26 improve overall efficiency, whilemaximisingourhuman resources. (SSS) structure and Support the Group, atourbranches. the This new new structureSales, Service and aimed at supporting expected is to The IT Consolidation activities also entailed a Human Resources analysis which sought to align job positions, where feasible, with that of requisite trainingtoensure readiness andminimumnegative levels impact toourinternalandexternalservice duringtransition. the to exposed employees being end, are 2020. this fiscal To in implemented be to expected system new the with 2019, fiscal of half latter Activities associated with the impending change of the core banking information technology system (IT Consolidation) intensified during the continue andwere bolstered roll-out by further ofthenewPerformance Management Systemand360Degree Feedback mechanism. ensure a relationship of trust and mutual respect between management and employees. To this end, our employee engagement initiatives The Bank continues to focus on the development of itshuman resources. In addition to training and development, are efforts ongoing to RESOURCES HUMAN position inthebankingsectorandouraimfor2020beyond istocontinuedistinguishingourselves inthisarea. the In results2019, ofourCustomer Satisfaction Survey ofthe banking sector, endorsed Republic Bank (Guyana) Limited’s competitive Care Excellence –Service StarInitiative, aimedatrecognising employees whoreceive above normalpositive customerfeedback. categories in recognition of ouremployees’ inachieving individual and ourobjectives.team efforts Alsointroduced, was an ongoing Customer Over the past year, we increased our initiatives aimed at fostering customer obsession, with the introduction of additional annual award valuable toaddress insightintotheirneeds,highlightingopportunities delivery. gapsinourservice We continue toengage customers withoursuiteofofferings viavarious digital and traditional communication channels which afford us initiatives andmarketing techniques. Meeting our customers’ needs remains paramount, as thisfostersloyalty which requires by customer-focused supported specialised service and exceeding expectation. service understand and empathise, while presenting solutions to challenges as theyall with a viewtodelivering arise – satisfaction; and meeting Customers remain our most valued stakeholders, and our priority ofstrengthening relations has been demonstrated through to our efforts CUSTOMER SERVICE in lowermargins. investment impacted the demand for credit; opportunities an increasingly competitive market placed downward pressure on rates resulting limited and liquidity high activity, financing business tentative uncertainty, political from borne environment, external challenging more A with prudentriskmanagementprinciples. coupled care, and service customer supportive and helpful growth, credit were well, as fiscal the during focus of areas Key transition. the of support in strategies Management Change with training, and resources human optimising on emphasis significant with transition, post year, the Bank advanced its preparations for transition to a new Core Banking Platform and focused on reorganising for improved efficiencies Return onincreased Assets and Earnings perstockunit Return onequity to 2.24% increasedto 17.97%. from During the to $12.82. $10.45 planning, effective implementation,costcontainmentandsingularfocusonkey strategicinitiatives. over last year’s 22.71% as the Bank experienced growth performance fromof 14.73% core is the result banking operations. This performance of careful of increase noted a was There 2018. in million $3,134 to compared million, $3,845.8 of tax after Profit a achieved Bank The performance. 2019 fiscal satisfactory a returned Limited (Guyana) Bank Republic that report to pleased Director, am Managing I as report first my this In MANAGING DIRECTOR’SDISCUSSION&ANALYSIS

a smooth transition to learning the pursuits. work environment Meanwhile, the Bank’s and embark on their tertiary to increase effort autism Through the Bank’s Youth Link Apprenticeship Programme and the University ofGuyana Scholarship, students are given the tools to make Band Competition. the youngthe annual for and Republic school-aged Bank Mashramani Panoramawhile building national pride and fostering support Steel steelpan for continue to positively and support Our interventions impact the fraternity creating heightened interest across and participation andculture,preserving andcelebratinglocalarts andcare andconservation oftheenvironment. institutions to reach critical needs, deepening our workwith our nation’s youth for education empowerment, advancing autism awareness, Non-Governmental and Governmental of range a across partnership our progressed Four, we Phase of year first year,the past the During challenges. Through our socialinvestment initiative, the Power toMakeDifference A we continued our focuson alleviating (PMAD), socio-economic and Visiontohelp“buildsuccessfulsocieties”. Making a difference in the is not communities just our we corporate serve social responsibility, but a focus ingrained in the Bank’s Mission EMPOWERING COMMUNITIES clients. APrivate Bankingfacilitywasalsolaunched,cateringforthegrowing needsofasegmentourcustomers. Lending Unit ofourVreed-en-Hoop Branch was completed as planned, providing amore environment comfortable for the Branch’sloan Retail the of expansion efficiency. The and service customer improve to facilities its of several upgrading on focus its continued Bank The PREMISES with technologicalinnovation inorder toprovide reliable, convenient andsecure bankingforcustomers. Moving forward, our commitment remains that of deriving maximum benefit from the Bank’s investment in technology, while keeping abreast customers; ourplansincludeadditionalinstallationsinkeeping withdemand. Our ATM locations and POS installations were increased in keeping with our commitment to provide convenient and easy access to our Automated Teller Machine(ATM) andPoint ofSale(POS)networkscountrywide. persons desirous ofacard forlocal use and like the Republic Visa To afford customers an additional option for non-cash banking, we shallsoon reintroduce the Republic enhancethesecurityofthisproduct tofurther ongoing customereducationandefforts willhelpreinforce customerconfidence. The use ofourRepublic Visa overall digitalexperience. We are excited particularly about the new/improved which would undoubtedly redound digital services to customers’satisfaction with their earlier mentioned,significantprogress isbeingmadeasit relates toourcore functionalityanddeployment ofnewtechnologies. banking The faceof continues to evolve,and the Bankcontinues to place emphasis onimprovementtechnological ofits infrastructure. As INFORMATION TECHNOLOGY employed by theBankonacontractualbasis. to various aspects of theBank’soperations throughYouth our 2019/2020 Link Apprenticeship Programme. Mostofthese apprentices were In keeping with our ongoing commitment to youth development, 15 students from several regions benefited from seven months of exposure

One

Card, though not without challenges, continues to afford customersconvenience and we expect that our

One Card, enables access to customers’ accounts via ourextensive

One Card. Thiscard caters for those

ANNUAL REPORT 2019 27 REPUBLIC BANK (GUYANA) LIMITED 28 million in2018. decision making and debt recovery will continue in the new fiscal. Corporation Tax paid amounted to $1,663.2 million compared with $1,423.7 assessment, improving credit on Focus assets. financial on expense loss credit Expected of reduction the from resulted largely profitability in increase This 2018. with compared 22.71% or million $711.8 of profitability in increase an represents million $3,845.8 of profit tax After Financial summary STATEMENT OFINCOME REVIEW Euro Canadian dollars Pounds Sterling United Statesdollars September 30,foreachfinancial year. Thefollowingare themid-ratesformajorcurrencies asatSeptember30,2019: These statements are published in Guyana dollars. Foreign amounts have been to converted Guyana dollars at the prevailing mid-rate on 126 to 58 pages and 21 respectively. to 20 pages on presented statements financial audited and report Directors’ the with conjunction in read be to 2019 30, September ended year the for Bank the of performance and position financial the of analysis and discussion a below present We empower stafftoeffectively engage customers inkeeping withtheBank’s culture ofcompliance. best practices. Training continues for all staff and members ofthe Board of Directors to increase awareness of the relevant issues, and Republic Bank (Guyana) Limited continues to strengthen its policies and procedures to ensure they are reflective oflocal law and international issues ofProliferation ofFinancing. were amendments to the AML/CFT Actduring which 2018 included provisions further forthe establishment of acommittee to deal with capacity in the area ofAnti-Money Laundering and Countering the Financing of Terrorism(AML/CFT) and Proliferation of Financing. There Over the last year there wascontinued focus on strengthening the regulatory frameworkand providing training for key stakeholders to build REGULATORY COMPLIANCE through conservation awareness. Guyana green a supporting and financing; beyond (SMEs) Enterprise Small-to-Medium empowering and engaging further entrepreneurs; site, afree online learning and developmental tool. The coming year willseeusplacing greater emphasis on building and developing With a strong and development forward focus on nurturing of smallbusinesses,the Bank this year reintroduced the Republic SME Toolkit its Power toMake ADifference initiative. in recognition of the Bank’s demonstration of ethical leadership, good corporate governance and community throughinvestment; particularly garneredThese efforts Republic Bank (Guyana) Limited the Georgetown Chamber of Commerce Corporate Citizenship and Industry Award, The preservation andmaintenanceofoneGuyana’s heritagesites,thePromenade Gardens remains ourflagshipenvironmental project. Bank (Guyana) withintheRFHLtohostfixtures. Limitedwastheloneterritory of the series.The tournament aimed to create a global movement that recognises but in allwalksoflife. women, not only insport Republic The first ever standalone ICC Women’s World Twenty 20 was hosted in the Caribbean with Republic Bank named the Official Banking Partner of theStepby StepFoundation andthere were fortheadolescentmothersofWomen boostedopportunities Across Differences. awareness and ongoing advocacy. hasattracted wider support Notable strides were alsomade in improving capabilities among the students MANAGING DIRECTOR’SDISCUSSION&ANALYSIS

2019 226.50 146.50 241.50 210.00

2018 234.50 156.50 261.50 210.00

1,000 2,000 3,000 4,000 5,000 6,000 ASSETS RETURN ONAVERAGE Earnings perstockunitmoved from $10.45in2018to$12.822019. The Bank’s return on average assets (2.24%)increased year on year, and its return on average stockholders’ equity also increased (17.97%). PROFIT BEFORE TAX 0.50 1.00 1.50 2.00 2.50 0 0 ‘19 ‘19 5,974.3 2.24

(%) 4,664.6 2.02 ‘18 ‘18 4,228.8 1.83 ‘17 ‘17

4,260.9 ‘16 1.82 ‘16 4,302.4 ($MILLION) 2.03 ‘15 ‘15

10.00 15.00 20.00 OUTSTANDING EQUITY RETURN ONAVERAGE PROFIT AFTERTAX 1,000 2,000 3,000 4,000 5.00 0 0 ‘19 ‘19 3,845.8 17.97

3,134.0 16.48 ‘18 ‘18 2,738.9 15.69 ‘17 ‘17

2703.0 16.88 ‘16 ‘16

($MILLION) 2,815.9 19.78 ‘15 ‘15 (%)

ANNUAL REPORT 2019 29 REPUBLIC BANK (GUYANA) LIMITED 30 10,000 to existingandpotentialcustomers. a range of products and the Bank strives to ensure that rates (deposit and lending) are competitive with the rest and attractive of the industry assets and liabilities in an environment of inadequate investment It is recognised, opportunities. however, that customers simultaneously use Interest paid on million, wasmarginallydeposits at $588.1 for 2019 abovemillion), asthe that ($570 Bank of 2018 continued to manage its relatively scarce. At September30,2019,27.43%oftheBank’s reflects the Bank’s policy of managing customers’deposits in achallenging environment where investments are and lending opportunities The ratio ofthe Bank’s There were nounusualnon-operationalitems. Refer toStatementoffinancialpositionandnote16 Net interest income/Total average assets Net interest income/Total average interest earningassets Net interest margin portfolio. Net interest income increased by millionand to isattributed $8,495.4 million or14.73% primarily to $1,090.9 the increase in the loan in 2018,whichisattributedmainlytotheincrease andthereduction intheloanportfolio inExpectedcredit lossexpense. Net interest and other income grew bycomparedmillion in2019 to $11,647.4 million or 10.32% $1,089.6 million generated to the $10,557.8 Net interest andotherincome MANAGING DIRECTOR’SDISCUSSION&ANALYSIS INTEREST INCOME 2,000 4,000 6,000 8,000 0 9,083.5 ‘19

7,974.5 ‘18 average Interest earning assets to average Customer deposits

7,705.1 ‘17

7,671.4 ‘16 ($MILLION) 7,130.6 ‘15 Interest earningassets

200 400 600 800 INTEREST EXPENSES 0 ‘19 588.1 consisted ofGovernment ofGuyana Treasury Bills.

, increased fromto 89.29%, in 2018.This 87.39% 570.0 ‘18 575.0 ‘17

2019 603.5 4.72% 6.17% ‘16

589.8 ‘15 ($MILLION) 2018

4.55% 6.08%

11 business Foreign specific provision loans,from forloanlossestonon-performing 12.26%atSeptember 30,2018to9.86%atSeptember 30,2019. The Bank’s loans as at September declined 2019 30, fromto 4.69% to performing and its ratio ratio in 2018, of of non-performing 5.77% previously written-offamountedto $241.5millionin2019(2018-$206.9million). continues to strive prudent policy especially tomaintain on itsunsecureda very Recoveries consumer lending portfolio. onloans which were over2018. million of$125 decrease a Overallexpenses related in2019, to Expected credit loss amounted million against to $86.7 The an million in2018. expense Bank of $885.4 million, to$357.6 amounted loans non-performing on provision specific 2019, 30, September At The financialstatementsincludeExpectedcredit lossprovision of$380.5millionatSeptember30,2019. portfolio, made on itsperforming 12 monthsunlessthere hasbeenasignificantincrease incredit risksinceorigination. next the in default of probability the with associated ECLs the on based is allowance The contracts. guarantee financial and commitments loan with together (FVPL), Loss or Profit through Value Fair at held not assets financial debt other and loans all for ECLs for allowance an Standard39’s (IAS) incurred approach loss with a forward-looking Expected Credit Loss (ECL)approach. requiresIFRS 9 the Bank to record adoption of IFRS 9 has fundamentally changed the Bank’s accounting for financial asset impairments by replacing International Accounting Standardspermitted, theBank adopted As International Financial Reporting Financial – (IFRS) Instruments, which 9 replacesThe 39. IAS 47.43% in2018. from 47.97% to increased income, other and income interest net to expenses non-interest is which ratio, Bank’sproductivity/efficiency The closely monitorcredit riskandincrease inthearea efforts ofrecoveries. There 2018. Insurance Actsignificantdecreasea was credit Expected in of net losses recoveries continuesto Bank the as million, $833.8 of an increase in other expenses which increased bymillion, attributable $374.9 to premium paid, as a result of the introduction of the Deposit overmainly asa result 2018, of provision for Expected credit losses, which decreased to million. $86.3 This was achieved notwithstanding Non-interest expenditure, which operating comprises expenses and provisionExpected for creditdecreased losses, bymillion or3.73% $220 Non-interest expense (2018 -44.38%)ofthetotal. a decreasemillion or2.09%over of $29.2 2018.Exchange earnings continue to be the major source of Other income, contributing 43.47% Despite continued 0.04%. emphasis, foreign exchange trading resulted in exchangemillion, which represented of$1,370.2 2019 gains for Other income, which amounted million and to contributed $3,152 to total 25.76% income, was below the amount 2018 bymillion, or $1.3 % SOURCES OFREVENUE 15 Other %

Loans andadvances 64 Investments 10 % %

10 equipment Premises and 20 REVENUE OFDISTRIBUTION retained earnings and Reserve % % 11 Dividends

5 expense Interest % %

Salaries/staff cost non-interest expenses 16 17 Taxation 21 Other % % %

ANNUAL REPORT 2019 31 REPUBLIC BANK (GUYANA) LIMITED 32 the Bankcontinuestoseekandattract newandremunerative investments, even asithonoursitsobligationtoprotect depositors’funds. advances grew by $2.7billion,$8.9billionand$9respectively. In achallengingandcompetitive environment forsoundeconomicprojects, resources andloansadvances, whichaccountedforanincrease of$9billion.Over thepastthree years, netinvestment inLoansand The Bank’s totalassetsof$180.2billionrepresent anincrease of$12billionor7.12%above 2018.Thisincrease isattributedmainlytocash Total assets As apercentage oftotalassets,loansandadvances accountedfor43.74%. home ownershipthrust. sub-sector recordedincrease a 11.63% frombillion; the Bankcontinues billion to$28.7 to aggressively $25.7 the Government’s support Mortgages The however, billion. Significantly $42.9 to billion from $37.9 increasevalue in 13.10% sub-sector recorded a Loans Demand the remained ataminimumasitcontinuestoreassess thepositionascircumstances change. function of the Bank’s CreditManagement Risk process, remained constant fairly during the year. The Bank’s investment in agriculture Advances grew by $9billion to billion, $78.8 an increase of 12.97%.The concentration by sector in the Loans and advances a portfolio, Advances evenopportunities asthere iscontinuousgrowth intheliquidityofcountry’s financialhouses, relative tothoseinvestments. also adecrease inTreasurybyBills, billion. The Bank aggressivelyto $32.9 million, or0.48%, $160.5 competes the limited investmentfor mainly inthe Bank’s investment in other investments which moved fromor 5.47%.Therebillion billion to in 2019 $14.8 in 2018 $15.7 was Investment securities, including Government of Guyana Treasurydecreased Bills, byduring 2.09% the year ($1billion). The decrease arose Investment securities banks, whichgrew by $5.4 billionover thesameperiod. excess deposit increased ofthe statutory bybillion $3.1 year on year. This increase was mainlyinour deposits held with correspondent Cash and cash equivalents, which include Cash-on-hand, deposits held with correspondent banks, claimson other banks and balances in Cash andcashequivalents STATEMENT POSITION OFFINANCIAL REVIEW MANAGING DIRECTOR’SDISCUSSION&ANALYSIS TOTAL ASSETS 100 150 200 50 0 ‘19 180.2

168.2 ‘18

146.2 ‘17 ($BILLION)

151.6 ‘16 142.4 ‘15

120 160 TOTAL DEPOSITS 40 80 0 ‘19 153.6

144.7 ‘18 124.9 ‘17

131.2 ‘16 ($BILLION)

123.7 ‘15

Act Cap.85:03. Practice (the Basel Committee), asimplemented bythe Bank of GuyanaBanking Regulationsand Supervisory under the Financial Institutions Capital adequacy monitoredis by the Bank on a monthly basis and computed based on guidelines developed by the Basel Committee on capital Regulatory a priceof$350gives aprice/bookratioof4.64:1(2018-3.09:1). Bank’s stock,the price/earnings ratio increased to 27.3 from 19.9in2018.The net asset value of one which, unit with (2018 -$67.2) is $75.4 were doneUsing theMarket ataunit priceof$271. Weighted Averagefrom Price of$350 the thelasttrade for date (September 2019) 30, highest price and of $450 lowest price with of $215.1 an average weighted price per stock of $362.4 unit. In terms ofvolume, most trades There wasan increase in the price atwhich the Bank’sstock traded on the Guyana Stock Exchange with aspreadbetween of 109.2% the 40.66% (2018- of ratio payout dividend toa andequates 42.92%). million to$1,555 amount 2019 fiscal for proposed and paid dividends Total stockholders’ equity. At September30,2019thebookvalue ofstockholders’equityamountedto$22.6billion. to income of Statement the from transferred million $2,290.8 and dividends as proposed being is million $1,555 million, $3,845.8 of profits tax after the From base. capital Bank’s the of percentages defined to loan borrower group or single a restricts 85:03 Cap. Act Institutions The Bank’sto maintain policyis capital adequacy,ensure capital growth capital and minimise impairment. The governing Financial CAPITAL STRUCTURE ANDRESOURCES 33.08%. decreaseddeposits ofthe deposit at 64.70% portfolio, increasedbybillion The or 3.06%. Demand $3.1 Deposits portfolio bybillion or $11.9 of category stable most the deposits, Savings services. and products quality providing on focus to continues it as Bank, the in confident Our depositsincreased, movingbillion from to$153.6 an billion increasein 2018; $144.7 Our depositors billion or 6.19%.remainof $8.9 Deposits 10,000 15,000 20,000 25,000 STOCKHOLDERS’ EQUITY 5,000 0

‘19 22,623.7

20,164.3 ‘18 18,300.5 ‘17

16,715.4 ‘16 15,223.6 ‘15 ($MILLION)

10.00 15.00 20.00 25.00 30.00 CAPITAL ADEQUACY 5.00 0 ‘19 25.51

26.10 ‘18 25.53 ‘17

24.07 ‘16

(%) 23.54 ‘15

ANNUAL REPORT 2019 33 REPUBLIC BANK (GUYANA) LIMITED 34 underperforming sectors oftheeconomy.underperforming traditional the of some diversify to initiatives government-led support to willing remains Bank the 2020, in oil first for prepares Guyana As significance during August andSeptember2019. Tilapia and Yellowtailwill add – to the 5.5 billion barrels ofoilequivalent resource estimation. Tullow also made two oil discoveries of Haimara, – Guyana offshore Block Stabroek the in discoveries three last the that confirmed has ExxonMobil 2020. early in development 1 ExxonMobil Guyana discoverieshas made14 and will begin since2015 producingbarrels up to120,000 ofoil per dayfrom the Liza Phase growth rate projected for2019. Given trends in government spend and international investments, weanticipate the continuation of thistrend for the realisation of the 4.6% rate recorded was4%,compared with4.5%forthesameperiodinprevious year. The economic indicators for the first half of 2019 reflect generally positive developments in critical growth areas. As at half year, GDP growth FUTURE OUTLOOK understands andmonitorsitsriskenvironment andtakingproactive measures tomanageriskswithinitsriskappetite. Republic Bank (Guyana) Limited remains committed to maintaining a robust enterprise management risk framework, ensuring that it risk appetiteandtheBank’s philosophyonrisktaking. of astrong internal control environment across the Bank. They approve and enforce the management risk framework, inclusive ofthe overall The Board ofDirectors oversees theBank’sstrategic direction, implementation of aneffectivemanagement risk culture and implementation that theintegrityofBank’s operationsismaintained. procedures to mitigate risk. These Departments, through random examinations and internal verification processes, are tasked with ensuring The oftheInternal Bankand parent Audit Departments company are alsointegrally involved inreviewing and implementing and systems Unit. throughout the organisation. The Bank also benefits from continuous guidance of the and parent services company’s Group Enterprise Risk The Bank manages theseat all levelsrisks ofitscorporate structure applying quantitative and qualitative criteria and strict levels ofauthority forgrowth.of potentialopportunities 2017 assisted the Bank in achieving its objectives of identifying, prioritising and mitigating key risks that could erode value and identification procedurespractices and Management (ERM) Risk Enterprise The fiscal in Unit Risk Enterprise the establishment of the implemented since riskculture are criticalprecursors toitssuccess. spear-headed framework andactive riskmanagement.TheBankacknowledgesthatbothRiskManagementandastrong SeniorManagement Republic Bank (Guyana) Limited recognises that the achievement of itsstrategic objectives iscontingent upon a cohesive implementation Banking isaboutrisksandtheirmanagement.Theseare discussedextensively onpages102to117ofthisAnnualReport. Overview RISK MANAGEMENT assets. risk-weighted total in decreased, moving to25.51%atSeptember 30,2019from 26.10%atSeptember 30,2018.Thisdecrease isattributabletoanincrease strengthenedfurther theBank,withitscapitalbase growing from $20.2billionto$22.6year-on-year. Thecapitaladequacyratio The risk-basedcapitalguidelinesrequire a minimumratioofcapitaltorisk-weightedassets of8%.Theresults forthisyear have MANAGING DIRECTOR’SDISCUSSION&ANALYSIS

andourvalued fortheirunwaveringguidance andsupport customersandbusinesspartners loyalty. our employees. I take therefore, thisopportunity to thank our management and staff fortheir commitment, our Board ofDirectors for their resultsThe highly satisfactory again achieved this year would not have been possible without the continued dedication and hard workof exceptional leadershipatRepublicBank(Guyana) Limitedandhassinceassumedanewrole withintheRepublicGroup. I acknowledge with gratitude, the valuable contribution of formerManaging Director, Richard S. Sammy, who over the past four years provided ACKNOWLEDGEMENTS

ANNUAL REPORT 2019 35 REPUBLIC BANK (GUYANA) LIMITED 36 SENIOR Republic Bank(Guyana) Limited Managing Director, AMRAL F. KHAN MANAGEMENT General Manager, Operations DENISE HOBBS PARBATIE KHAN General Manager, Credit MANAGEMENT Manager, CampStreet Branch HARRY DASS GHANESS Manager, SpecialUnit KAREN ASSANAH Manager, Vreed-En-Hoop Branch EON GRANT Manager, CorporateOperations DENYS BENJAMIN Manager, InformationTechnology YONNETTE GREAVES Manager, RoseHallBranch DOODMATEE BHOLLARAM

ANNUAL REPORT 2019 37 REPUBLIC BANK (GUYANA) LIMITED 38 MANAGEMENT Manager, Marketing andCommunications MICHELLE JOHNSON Assistant Manager, BranchOperations GAIL HARDING Senior Manager, HeadOffice NDIDI JONES Corporate BusinessCentre Regional CorporateManager, JAGNANAN SASENARAIN Manager, Services BranchSupport ERICA JEFFREY Manager, LindenBranch JANNIS LONDON Information Technology Assistant Manager, YUGISTHER MOHABIR Manager, LegalServices CHRISTINE MCGOWAN Manager, BranchOperations JADOONAUTH PERSAUD Manager, DiamondBranch ALLISON MCLEAN-KING Manager, EnterpriseRiskManagement RAM MICHAEL Manager, HumanResources MENDONCA SHRIMANIE

ANNUAL REPORT 2019 39 REPUBLIC BANK (GUYANA) LIMITED 40 MANAGEMENT Manager, NewAmsterdam Branch IMRAN SACCOOR Manager, AnnaReginaBranch GUITREE RAMSAMOOJ Manager, Water Street Branch RANDULPH SEARS Corporate BusinessCentre Corporate Manager, ROBERTSCARLA Manager, InternalAudit ORAL ROSE Manager, D’Edward Branch JOEL SINGH Manager, FinanceandPlanning VANESSA THOMPSON Assistant Manager, HumanResources JOANN WILLIAMS Corporate BusinessCentre Credit Manager, YHUN DIANE

ANNUAL REPORT 2019 41 REPUBLIC BANK (GUYANA) LIMITED 42 good corporate governance can assist in balancing conflicting From the perspective ofacompany,the adoption and practice of to whether companies have good corporate governance principles. shareholders and stakeholders of companies pay greater attention to withstand the challenges of doing business. For thisreason, result of itscorrelation with the strength of an entity and its ability fairness. Corporate governance as a continues to be of importance controlled in order to achieve accountability, transparency and and practices systems by which companies are directed and rules, of framework the as defined be can governance Corporate GOVERNANCE PRACTICES STATEMENT OFCORPORATE Board of Directors isthe responsibility to approve and review the accountability and responsibility. to the critical importance Of guided by aphilosophy based on good governance, transparency, is not compromised and allapplicable laws adhered to. The Board is position financial sound Bank’s the that ensure to steps appropriate taking while profitability greater of path a along Bank In keeping with its mandate to lead the Bank, the Board directs the leadership to promote and protect the interests ofallstakeholders. Directors to make informeddecisions and provide the necessary to membersofthe Board ofDirectors. This allowsthe Board of information relevantpertinent to the Bank’s operations is provided culture of broad disclosure the Executive Director ensures that all of prudent and effective controls. In keeping with the Bank’s members provide entrepreneurial leadership within a framework from their varied and distinct backgrounds. Together the Board at meetings through their personal values and standards arising input invaluable provide and finance, and management business, are independent, comprise personswithextensive experience in executive director. The non-executive directors,of whom six The Board ofDirectors comprisesnine directors including one Guideline 10onthePublicDisclosure ofInformation. Number 8. In addition, the Bank is compliant with Supervision is made pursuant to the abovementioned Guideline Supervision the recommendations contained in that Guideline. This statement the Financial Institutions Act Cap. 85:03. The Bank has adopted Governance issued by the Bank of Guyana under the authority of Guideline No. 8 on Corporate Securities Council, and Supervision for aCode of Corporate Governance Governance. The Bank is alsoguided by the the best practice as determined by the principles of Corporate and procedures toensure that all standards are inkeeping with commitment, Republic Bank continuously monitors itssystems governance at the highest standards. In keeping with this Directors is committed to consistently maintaining corporate recognised by Republic Bank (Guyana) Limited and its Board of The value of good corporate governance and importance is stakeholder interests. issuedby the Guyana Recommendations Governance: commitment to maintaining the highest standards ofCorporate The following Board committees exist toensure the Bank’s Bank’s AnnualGeneralMeeting. the Boardannually and mayoffer themselvesre-election for at the In accordance with the Bank’s By-Laws, three directors retire from remaining months. Cheong, comprising seven Boardthe meets monthlyfor members, Executive Sub-Committee of the Board, chaired by Mr. Roy E. of Directors basiswhile the meets,on aquarterly at a minimum, the interests ofthe various stakeholders are considered the Board that ensure to mandate the to Pursuant limit. specified a above responsibility for reviewing and approving credit applications Budgets, including capital expenditure. The Board retains the Bank’sStrategic Plan and within this context, to approve Annual are adequateandare compliedwith. systems accounting and statement financial the of fairness and operations to ensure that management’scontrols the integrity for conducts periodic examinations of allaspects of the Bank’s directly to the Audit Committee. The Internal Audit Department of right. The head of the Bank’s Internal reportsAudit Department, notice of every meeting of the Audit Committee and may attend as of theinternal system controls. The External Auditors receive adequacy the and Bank’s the accounting and of reporting financial integrity the to as findings and audit their discuss to Committee full and free access to, and meet, when necessary, with the Audit have Auditors External The Auditors. External the of qualifications responsible reviewingfor the independence, competence and and regulatory laws. When necessary, the Audit Committee is audit and examination process, and compliance with statutory process, reporting financial control, internal of system Bank’s the The Audit Committee of the Board to review meetsat least quarterly Mr. John G.Carpenter Alternate Member Mrs. Yolande M.Foo Mr. Richard I.Vasconcellos, Mr. Richard M.Lewis Mr. Shameer Hoosein Members Mr. Roy E.Cheong Chairman The membersoftheAudit Committeeare: AUDIT COMMITTEE

good corporate governance principles the Managing Director is with keeping In authorities. Director’s Managing the in specifically credit dispensation, capital and operating expenditure are stated documented and approved by the Board of Directors. Limits on The Managing Director’s responsibilities and authorities are outlined andadherence totheBank’s core values ismandatory. functions as outlined therein. Key areas of responsibility are Officer has a written mandate and is required to execute the stated team are appointed by the Board of Directors. Each Management and effective controls. The Managing Director and management for the Bank which ensures a reporting structure with prudent The Board ofDirectors hasapproved an organisational structure and detectattemptstolaundermoney and/orfinanceterrorism. that adequate and proceduressystems are implemented to prevent and Countering the Financing of Terrorism Program and ensuring overseeing the management of the Bank’sAnti-Money Laundering also responsibleCommittee is The Enterprise Risk those risks. for and identified are activities adequate havesystems been implemented in order to mitigate Bank’s the of spectrum wide the policies and procedures and ensuringarising across that all risks This committee, which meets quarterly, isresponsible for reviewing Mr. Richard M.Lewis Alternate Member Mrs. Anna-MaríaGarcía-Brooks Mr. Roy E.Cheong Members Mr. John G.Carpenter Chairman The membersoftheEnterpriseRisksCommitteeare: ENTERPRISE RISKCOMMITTEE responsible for formalisingthe Bank’s remuneration policy for staff. This Committee,which meets atminimumonce per year,is Mrs. Yolande M.Foo Alternate Member Mr. Roy E.Cheong Mr. ShameerHoosein Members Mrs. Anna-MaríaGarcía-Brooks Chairperson The membersoftheCompensationCommitteeare: COMPENSATION COMMITTEE discrimination amongothers. privacy,proprietary bank information, insiderinformation,and non- to honesty and integrity,rules pertain integrity of records, client to ensure the highest ethical standards inthis regard. These rules established has and confidential, as clients and customers The Bank regards itsbusiness and the banking affairs ofits with theBank’s Policy. RelatedParty report on related transactions in order party to ensure compliance Directors. On an annual basis the Board of Directors reviews a related transactions must be approved party bythe Board of approving transactions in which they have an interest. Allmaterial transactions and to recuse themselves from considering or Directors are required to disclose their interest inrelated party on the same termsand conditions as with a non-related party. be done to affiliates and parties related with done transactions The Bank’s PolicyRelated Party underscores the need for all with therequirements oftheFinancialInstitutionsActCap85:03. the bankhasapproved arelatedconsistent policy which is party Cognisant of the need to monitor transactions with related parties, of Directors onanannualbasis. Board the by reviewed is Officers Management all of performance Areas which among other things may include financial targets. The Management Officer isalso assessed against all Key Performance the expectation of the Board of Directors of each the performance on individual and collective criteria. In keeping performance with each of staff member,The performance evaluatedis annually based the core ofeachemployee. basisforthebasic salary responsibilities attached to the position are assessed. Thisforms be paid to officers of the Bank, including Management Officers, the based incentives.performance to In determining the basic salary for staffiscompetitive. and The package consists of basic salary The Board of Directors ensures that the compensation package qualified tooffer leadershiptothemanagementteam. extremely team the making Management Business in qualified is have aMastersDegree inBusinessAdministration while the other and general operations. Two membersofSenior Management has general oversight ofthe Bank’s credit branch network portfolio, banking experience ofmore than one hundred years, and fourteen Managing Director. Senior Management, which has combined team. The Bank’s two General Managers report directly to the and ablyassisted byis a competent and experienced management charged with the day to day management of the Bank’s business

ANNUAL REPORT 2019 43 REPUBLIC BANK (GUYANA) LIMITED 44 Chairman NIGEL M.BAPTISTE Signed onbehalfoftheBoard addressed inaprompt andefficientmanner by Management. of concern orally orinwriting. Allstockholder concerns are The Bank encourages its stockholders to communicate all issues STATEMENT OFCORPORATE GOVERNANCE PRACTICES RESPONSIBILITY CORPORATE SOCIAL Power To Make ADifference for themselves –thisisour helping themrealise abettervision empowering themtoseeknewhorizons, to reach theirtruepotential, thosewhoneedit Supporting programme.

ANNUAL REPORT 2019 45 REPUBLICREPUBLIC FINANCIAL BANK HOLDINGS (GUYANA) LIMITED 46 LEARN a betterqualityoflife with theknow-howtomake We empowerthoseinneed

area oftheirlives to keep themsteadyinevery We championthoseinneed CARE

and literacy. places a high premium on youth development through education responsibility within today’s young achievers,the Power toLearn With a focus attuned to inculcating a greater sense of urgency and THE POWERTO LEARN build more sustainableandsuccessfulsocieties. greater and alignment as, together, partnerships we continue to from thiscommitment have engendered the hope of forging even The inspiring stories ofsuccess and acts of kindness resulting futures formany. impetus and confirmation in the pursuit of safeguarding alternative underway,the past year’s projects provided and partnerships both With a new phase on the horizon, and a new leg of the journey towards itseventual success. Differenceand why theteamworkmustcontinue why itexists – of the PowerThis commitment has to become Makethe “why” A continue investing inthewellbeingandfutures ofmany. is a covenant, an ongoing and heavily subscribed commitment to has become more than a flagship social investment programme. It Difference A Make to Power the years, fifteen of course the Over a definiteimpact. that stand the testoftime and sponsorships that havepartnerships Organisations to promote(CBOs) sustainable development through Governmental Organisations and (NGOs) Community-Based represents an earnest promise made together with Non- approachesAdopting varying in different markets, the programme ingenuity, strive toaddress theproblems wefacetoday. inthe and and minds ofmanywho, throughhearts teamwork, dedication, and in communities footing firm taken has programme Power to Make ADifference continued to gain momentum. The become more of the norm than the exception, so too has the societies continue to gather voice, and social investment initiatives As the calls for stronger, more resilient, caring, and compassionate individuals andgroups create alternative futures. pillars ofthePower as the very toMakeDifference A as ithelps Caribbean, South America and Ghana, these words have stood out Across manyborders and within diverse communities in the The Power toSucceed. The Power toLearn.ThePower toCare. ThePower toHelp. CREATING ALTERNATIVE FUTURES THE POWER TO MAKEADIFFERENCE The episode highlighted the need for more sustainable fishing by fishing sustainable more for Fishing. need the highlighted onRupununi episode The fixed firmly was spotlight the prospects, on Guyana’s“Inside the Reel”, aminidocumentary eco-tourism and a “Green Guyana” intensify. episode of Duringone particular gear, sotoo did the focus on advocating greater eco-awareness As the drive to care and protect Mother Nature stepped into a higher training andvocational skills-building. reproductive health,planning family education, self-development in becoming proud and emboldened advocates sexual for mothers. In so doing, they willcontinue to make giant strides from comprehensive empowerment programmes for adolescent benefitted nation the in girls and women young more even that forWomenContinued support Across Differences (WAD)meant sisters whomwehave promised toprotect. with disabilities, the ailing and brothersthe elderly –our very and rights and standardsof livingofthesociallymarginalised, people is the focus on investment in programmes that champion the the most fundamental aspects of the Power to Make A Difference, deeds that make the world ofdifference for others in need. One of The Power to Care transforms that basic compassion within us into THE POWERTO CARE increasingRegion, further their vocational and career opportunities. CARICOM the within jobs for eligible be will they qualification, this Training Agencies (CANTA)in Banking Operations Level One. With ofNational Association Caribbean the from (CVQ) Qualification All Youth Link graduates received the Caribbean Vocational BaracaraFalls,Bartica, SaxacalliBeachandtheAruwaiResort. excursion along the Essequibo River, with stops at Fort Island, The Apprentices also enjoyed adayof funand relaxation with an session onFirstAidfacilitatedby theGuyana RedCross Society. ReidRehabilitation CentrePtolemy and featured an interactive a community outreach initiative that tookthe Apprentices to the on-the-job adds tothis education with theCare-A-Van project, ofthe work environment.the tools tobecome part The programme which sevenruns for months,trainsand provides teenagers with the academic halls. Now in its11thyear, the Youth Link programme, commitment to do more to prepare young achievers forlife beyond Programme likewise signalled to the nation the continuation of a In the same vein, the Republic Bank Youth Link Apprenticeship initiatives, includingtheirwell-received scholarshipprogramme. continued to bestrengthened through ofanumbertheir support The longstanding relationship with the University ofGuyana

ANNUAL REPORT 2019 47 REPUBLICREPUBLIC FINANCIAL BANK HOLDINGS (GUYANA) LIMITED 48 a coursetotheirdreams for thosewhoare following We helpshapethefuture HELP

SUCCEED lead otherstodothesame to achieve theirgoals and who wantsuccess,inspiringthem We worktogetherwiththose pan art form, thereby form, pan art learning how to read simple pieces from a steel the in training practical and theoretical both from benefitted students the 4, Region in held camps training five At Programme. of the 10th Annual Republic Bank Pan Minors MusicLiteracy develop seized tofurther as part their skills the opportunity During the period,young 92 musicians from around the nation success. longstanding and new were– continued and advanced to great news ways to inspire young and minds, initiatives hearts –both to explore and pursue these avenues to the fullest. In seeking with giving young starts achievers and sport art the encouragement The focus on youth empowerment through cultural development, THE POWERTO SUCCEED of thatbeloved nationaltreasure. benefit and beauty the facilitate to continued Gardens Promenade preservation at thefore,the ongoing maintenance of the Additionally,with communitydevelopment and environmental both inspirationandfundingfortheStepby StepFoundation. individuals and company representatives,has become a source of and students, Republic Bank seniormanagement and and staff, more thanpersons,including 300 Step by Step Foundation staff of Guyana, Mrs.Sandra Granger. The annual walk, which attracted the Step by Step Foundation, under the patronage of the First Lady the annual for Autism Awarenesssupport Walk with inpartnership Autism and their families stepped into a higher gear with continued During the period, the fight to raise greater awareness for those with even more thaninvesting financial resources. addition to outreach programmes that reflect an approach to doing Power to Help is championed through in staff volunteerism efforts there are those who can and are willing to help. the At heart, its very and hope, and that basicunderstanding that both opportunity show tremendous promise inassistingpersons in need by giving The Power programmes toHelp isembodied most insupport that THE POWERTO HELP development. Power toMake ADifference as ameansoffacilitating sustainable within remote communities and an overall pursuittousethe between the growing need for effective resource management alignment closer a saw programme the in investment Significant and provided awareness on the livelihood of the communities. indigenous communities, showcased Guyana’stourism potential, THE POWER TOMAKEADIFFERENCE and to use – new,with our partners long-time and future – remains the same; Even as the landscapes around us change, the aim, aswe work alternative futures. comes with helping build strong communities and creating to follow suit;afullembrace of the responsibilitypartners that comes a similar promise to work together to inspire even more development, sustainable towards resources human and financial everygoals. With every commitment to wisely invest partnership, means to help communities achieveteamwork as the primary their more sustainable future, wecontinue to promote advocacy and and the pursuit ofabrighter,Closely aligned with ourpartners CREATING ALTERNATIVE FUTURES Youth Bands,andLarge Bands. categories such as:JuniorSolo,Senior Solo, Pan Duet,Pan Jazz, formoverthe art the course of two days oftop-tier competition in and appreciationenthusiasts to demonstrate their support, skill, for This event has continued to create an ideal avenue for steelpan Republic Bank Mashramani Panorama Steel Band Competition. culture wasmaintained with thesponsorship ofthe11thAnnual Similarly, foryouth a steady course of support development through sharing aninvaluable experienceandmakinglifelong friendships. signatures ofup to two sharps. This, ofcourse, was in addition to single playstaff, beginner level pieces, and play scales with key thePower toSucceed the Power to Learn, the Power to Care, the Power to Help, to Power the Care, to Power the Learn, to Power the to make adifference thattrulymatters.

ANNUAL REPORT 2019 49 REPUBLIC BANK (GUYANA) LIMITED 50 STATEMENTS FINANCIAL and stakeholder. a profitable outlookfor customer every we have onegoalinmind:todeliver Anchored tothestrength ofourresources,

ANNUAL REPORT 2019 51 REPUBLIC BANK (GUYANA) LIMITED 52 of the Bank. In this regard, the Directors have developed and dissemination of statements presenting fairly the financial condition of conduct in allofitsactions, including the preparation and Bank maintaining and reinforcing the highest possible standards The Directors have alwaysrecognised of the the importance the Bank. of position financial the accuracy reasonable with disclose which responsibility for ensuring that the Bank keeps accounting records is consistent with that in the financial statements. Directors have a The financial information appearing throughout this Annual Report • • • General responsibilities include: represent thebestestimateandjudgmentofDirectors. Where amounts are based on estimates and judgments, these company. the of affairs financial the of view fair and true presenta Standardsconformity with International Financial Reporting and in prepared been have statements financial accompanying The Report. Annual inthis contained information financial other and for the preparation and fair presentation of the financial statements The Directors ofRepublic Bank (Guyana) Limitedare responsible FINANCIAL REPORTING prevention anddetectionoffraudotherirregularities. safeguarding ofassets;and procedures forfinancial reporting; establishing and maintaining effective internal controls and REQUIREMENTS Managing Director AMRAL F. KHAN Signed onbehalfoftheBoard of internalcontrols. accounting and financial reporting and the adequacy of the system Bank’s the of integrity the to as findings and audit their discuss to and free access to,and meet periodically with, the Audit Committee of allaspects of the Bank’s operations. ExternalAuditors have full professionalof Internal staff Auditors who conduct periodic audits byThe of internal system control a supported isfurther policies andguidelinesofbusinessconductthroughout theBank. of communication the and responsibility, of division well-defined of an organisational structure that provides an appropriate and establishment the staff, qualified of training and selection careful The system isaugmented by written policies and procedures, the unauthorised use ordisposition and liabilities are recognised. properly authorised and recorded, assets are safeguarded against internal controlsthe necessary to ensure that transactions are maintained a systemofaccounting and reporting which provides Corporate Secretary CHRISTINE A.MCGOWAN 2 1 Notes totheFinancialStatements Statement ofCashFlows Statement ofChangesinEquity Statement ofComprehensive Income Statement ofIncome Statement ofFinancialPosition Independent Auditors’ Report TABLE OF z y x w v u t s r Taxation q p Goodwill o n m l k j i h g f e d c b a Significant Accounting Policies Corporate Information Assets classified asheld-for-sale ofcredit guarantees,indemnitiesandletters Customers’ liabilityunderacceptances, Segment reporting Fee andcommissionincome Revenue recognition Foreign currency translation Earnings perstockunit reserves Statutory Employee benefits Intangibleassets Premises andequipment Leases Write-offs Collateral repossessed Collateral valuation Impairment offinancialassets andliabilities Derecognition offinancialassets andliabilities Reclassification offinancialassets Financial assetsandliabilities Financial instruments–initialrecognition depositwithBankof Guyana Statutory Cash andcashequivalents Changes inaccountingpolicies Basis ofpreparation CONTENTS 81 81 81 81 80 80 80 80 79 79 78 78 78 78 77 77 77 74 72 72 71 70 70 70 64 64 64 64 64 62 61 60 59 58 54 27 26 25 24 23 22 21 20 19 18 17 16 15 14 13 12 11 10 9 8 7 6 5 4 3 ab aa External Payment DepositScheme Contingent Liabilities Dividends Paid andProposed Maturity AnalysisofAssetsandLiabilities Segmental Information Fair Value Capital Management Risk Management Related Parties Taxation Expense Credit LossExpense Operating Profit Other Reserves Stated Capital Other Liabilities DepositAccounts Customers’ Chequing,Savings and Other Assets Deferred Tax AssetsandLiabilities Employee Benefits Goodwill Premises andEquipment Investment Securities g n i t n u o Advances c c a s ’ k n a B e h t Due from Banks g n i y l p p a n i s e policies t a m i t s e Significant accountingjudgementsand Equity reserves Comparatives 126 125 124 123 122 118 117 102 100 100 100 99 98 98 98 97 97 96 93 93 91 89 83 83 82 81 81

ANNUAL REPORT 2019 53 REPUBLIC BANK (GUYANA) LIMITED 54 valuations. financial the of statements given and sensitivity ofthe the estimation uncertainty users to important considered are provisions The disclosures relating to these assets and related credit loss estimates ofcredit lossprovisions. different significantly produce could assumptions and techniques and expected net sellingprices.The use ofdifferent modelling of the condition financial counterparty,expected future marketobservable cash flows, prices default, of probability the including processesuncertain involving various assumptionsand factors impairment of and the determination of the recoverable amount are inherently identification The management. for judgement The appropriateness of creditprovisions loss a keyis area of refer tonote6. creditprovisions, loss of the Bank’scomprise 8% total assets– total referassets – to note 5; while Investment securities, net of Advances, net of credit loss provisions,of the comprise 44% Bank’s Credit lossprovisions forming ouropinionthereon, andwedonot provide aseparateopiniononthesematters. the year ended September 30, 2019. These matters were addressed in the context of our audit of the financial statements as a whole, and in Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements for KEY AUDIT MATTERS appropriate toprovide abasisforouropinion. the with responsibilities other our fulfilled have we and in accordance with the International Ethics Standards Board forAccountants’ Code of EthicsforProfessional Accountants (IESBA Code), described in the We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further BASIS FOROPINION ActCap.73:04. the SecuritiesIndustry Bankasat StandardsReporting (IFRSs), theFinancial Institutions and guidelines Act Cap.85:03 issued thereunder, Financial the and the Companies Act Cap.89:01 International with of accordance in ended then position year the for flows cash thefinancial its and performance financial respects, its and all material 2019, 30, in September fairly, present statements financial accompanying the opinion, our In ofsignificantaccountingpolicies. and notestothefinancialstatements,includingasummary as at Septemberand the 30, 2019, statements of income, comprehensive income, changes in equity and cash flows forthe year then ended, position We financial of statement the comprise which (Guyana)have Bank), Bank (the Republic Limited of statements financial the audited OPINION INDEPENDENT

Auditor’s Responsibilities forthe Audit of the Financial Statements

KEY AUDIT MATTERS

AUDITORS’ REPORT

IESBA Code. We believe that the audit evidence we have obtained is sufficient and sufficient is obtained have we evidence audit the that believe We Code. accuracy; reviewed for inconsistencies in data and formulas checked for The models used to compute Stages 1 and 2 provisions were thefollowing: performed For credit loss provisions calculated on a collective basis, we completeness oftheloanbookassessedforimpairment. We and considered alsotested the aging of the loan portfolios the risk ratingsandcompliancewithmanagement’s ratingpolicy;and commercial loan files to assess accurate and timely assignment of We an independent assessment ofasample performed underlying collateralandestimatesofrecovery ondefault; quantification including forecasts of and future cash flows, valuation of identification impairment the underlying factors the tested For credit lossprovisions calculated on an individual basis we policy forcredit lossprovisions. We evaluated and tested the Bank’sprocess and documented

HOW OURAUDIT ADDRESSEDTHEKEYAUDIT MATTERS section of ourreport. We are independent of the Bank

curve. maximum use of market inputs, such asthe market freerisk yield substantially the same and discounted cash flow analysismaking arm’s length transactions, reference to other instruments that are For Levelthese 2assets, techniques include the use ofrecent . applied inwhichunobservable inputsare used. the determination offairvalue where valuation techniques are includes focus of area specific A data. quality high on dependent factors. Associated management risk disclosure is complex and in nature and involve various assumptions regarding pricing Valuation techniques for these investments can be subjective Level 2intheIFRSfairvalue hierarchy. as classified been have which and available are markets active million relates to investments for which no published prices in values have been disclosed in note 22. Ofthese assets, $13,196 Investment securities are costwhilefair carriedatamortised note 6. Treasury Billscomprise 27%ofthe Bank’s total assets –refer to Investment securities, related interest receivable and Government Fair value disclosures forinvestment securities

KEY AUDIT MATTERS valuation risk. instrument financial to exposure Bank’s the reflect appropriately including sensitivity tokey inputs and the IFRS fair value hierarchy, disclosures, statement financial the whether assessed we Finally, An assessment of management’s impairment analysis; and estimation; and risk higher as classified were that securities priced internally The re-performance of valuation calculations on a sample basis of such ascredit spreads; An evaluation of the reasonableness of other assumptions applied based data; Testing of the inputs used, including cash flows and other market practiceandvaluationassumptions againstindustry guidelines; An assessmentofthe pricing model methodologies and models usedby theBank.Thisincluded: used valuation specialists to assess the appropriateness of pricing We independently tested the pricing on quoted securities, and securities andtherelated credit lossprovisions. financial Bank’s the of adequacy statement disclosures regarding advances and investment the on focused we Finally, compared tothemanagementaccountsensure accuracy;and Total loans and investment securities asperthe models were the ECLmodels)were compared forconsistency; Information loads (worksheet in the in model loads and portfolio Manual governing themodelsandIFRS9; The models prepared were reviewed to ensure compliance with the ratings; ratings wereCustomers’ risk reviewed to ensure accuracy of

HOW OURAUDIT ADDRESSEDTHEKEYAUDIT MATTERS

ANNUAL REPORT 2019 55 REPUBLIC BANK (GUYANA) LIMITED 56 Those charged withgovernance are responsible foroverseeing theBank’s financial process.reporting liquidate theBankortoceaseoperations, orhasnorealistic alternative buttodoso. as applicable, matters related to going concern and using the going concern basis ofaccounting unless management either intends to In preparing the financial statements, management is responsible for assessing the Bank’s ability to continue as a going concern, disclosing, frommaterial free are that statements financial misstatement, whetherduetofraudorerror. of preparation the enable to necessary is determines management as control internal such for and IFRSs, with accordance in statements financial the of presentation fair and preparation the for responsible is Management RESPONSIBILITIES OFMANAGEMENT WITH ANDTHOSECHARGED STATEMENTS GOVERNANCE FORTHEFINANCIAL information, weare required toreport thatfact.We have nothingtoreport inthisregard. appears to be materially misstated. If, based on the work we have we conclude that there performed, is a material misstatement of thisother whether the other information is materially inconsistent with the financial statements or our knowledge obtained during the audit, or otherwise consider so, doing in and, information other the read to is responsibility our statements, Bank’sfinancial the of audit our with connection In conclusion assurance of thereon. form any express not do we and information other the cover not does statements financial the on opinion Our does notincludethefinancialstatementsincludingnotesther Management is responsible for the other information. The other information comprisesallthe information disclosed in the annual report but OTHER INFORMATION INTHEANNUAL REPORT with theBank’s establishedpolicies. The Bank’s alsoreviews Internal Audit Department compliance AML/CFT compliance. throughout its network and established various controls to ensure officers to AML/CFT of responsibility the assigned has Bank The Act Cap.10:11,couldresult orotherpenalties. inseriousmonetary Laundering and Countering the Financing of Terrorism(AML/CFT) compliance with laws and regulations, the Anti-Moneyparticularly The Bank operates in ahighlyregulated environment and non- environment Regulatory INDEPENDENT AUDITORS’ REPORT KEY AUDIT MATTERS

eon andourauditor’s report. the Securities Industry ActCap.73:04. the SecuritiesIndustry legislation including theFinancial Institutions and Act Cap.85:03 Finally,we reviewed compliance with relevant provisions ofother . Review oftheBank’s compliancewithreporting requirements Testing ofcustomerdocumentationandtransactions; charged withgovernance; A review oftraining completed by Bank personnel including those of thosepoliciesby thosecharged withgovernance; reviewA the policies of and procedures inplace including approval emphasis oncompliancewithAML/CFTpolicies.Thisincluded: We evaluated and tested the Bank’s internal controls with a specific

HOW OURAUDIT ADDRESSEDTHEKEYAUDIT MATTERS

October 21,2019 157 ‘C’Waterloo Street, Georgetown Professional Firm Services Chartered Accountants RAM &MCRAE responsibleThe engagementpartner fortheauditresulting inthisauditor’s report isChristopher Ram. expected tooutweighthepublicinterest benefitsofsuchcommunication. determine that a matter should not be communicated in ourreport because the adverse consequences of doing so would reasonably be in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we matters these describe We matters. audit key therefore the are and 2019 30, September ended year the of statements financial the of audit the in significance most of were that matters those determine we governance, with charged those with communicated matters the From and where applicable,related safeguards. independence, and to communicate with themallrelationships and other matters that mayreasonably be thought to bearonourindependence, We also provide those charged with governance with astatement that we have complied with relevant ethical requirements regarding significant auditfindings,includinganydeficienciesininternalcontr We communicate with thosecharged withgovernance regarding, amongthe planned othermatters, scope and theaudit timing of and · · · · · We also: ofan audit in accordancepart As with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. the economicdecisionsofuserstaken onthebasisofthesefinancialstatements. can arise from fraudorerror and are considered individually material or inthe if, aggregate, they could reasonably be expected to influence not aguarantee is that an audit conducted in accordance alwayswith ISAswill detect a materialmisstatement Misstatements when it exists. whether due to fraudorerror,and to issueanauditor’s report that includes our opinion. Reasonable a high assurance levelis ofassurance,but misstatement, material from free are whole a as statements financial the whether about assurance reasonable obtain to areobjectives Our AUDITOR’S RESPONSIBILITIES FORTHEAUDIT STATEMENTS OFTHEFINANCIAL statements represent theunderlyingtransactionsandevents inamannerthatachieves fairpresentation. financial the whether and disclosures, the including statements, financial the of content overallEvaluateand structurepresentation,the cease tocontinueasagoingconcern. based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Bank to are conclusions Our opinion. our modify to inadequate, are disclosures such or, if statements financial the in disclosures related the to continue as a going concern. If we we exists, areconclude that a material uncertainty required to draw attention in our auditor’s report to ability Bank’s the on doubt significant cast may that conditions or evidence events to audit related exists the uncertainty material on a whether obtained, based and accounting of basis concern going the of use management’s of appropriateness the on Conclude by management. the in appropriate are Evaluate the appropriateness that of accounting policies used and proceduresthe reasonableness of accounting estimates audit and related disclosures made design to order in audit circumstances, butnotforthepurposeofexpressing anopinionontheeffectiveness oftheBank’s internalcontrol. the to relevant control internal of understanding an Obtain collusion, forgery, intentionalomissions,misrepresentations, ortheoverride ofinternalcontrol. The risk ofnot detecting a material misstatement resulting from fraud is higher than for one resulting from error, asfraud may involve audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis perform for our opinion. and error, design or fraud to due whether statements, financial the of misstatement material of risks the assess and Identify

ol thatweidentifyduringouraudit.

ANNUAL REPORT 2019 57 REPUBLIC BANK (GUYANA) LIMITED 58 STATEMENT OF These financialstatementswere approved by theBoard ofDirectors onOctober21,2019andsigneditsbehalf by: ofthesefinancialstatements. The accompanyingnotesonpages64to126formanintegralpart TOTAL LIABILITIES ANDEQUITY TOTAL EQUITY Retained earnings General bankingriskreserve reserves Statutory Stated capital EQUITY TOTAL LIABILITIES Other liabilities Accrued interest payable Deferred taxliabilities Taxation payable Customers’ chequing,savings anddepositaccounts Due tobanks LIABILITIES LIABILITIES ANDEQUITY TOTAL ASSETS assets Other Deferred taxassets Pension asset Goodwill Intangible assets Premises andequipment Investment securities Advances Investment interest receivable Treasury Bills Due from banks depositwithBankofGuyana Statutory Cash ASSETS As atSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)

AMRAL F. KHAN Managing Director

FINANCIALPOSITION CHRISTINE MCGOWAN Corporate Secretary

ROY E.CHEONG Director, Chairman of Audit Committee 15 b 10 b 15 a 12 a 10 a Notes 7 b 2 d 9 a 7 a 6 a 6 c 14 13 11 8 5 4

153,605,091 180,161,425 157,537,723 180,161,425 21,179,121 14,835,914 78,793,633 32,935,836 24,128,166 16,871,143 22,623,702 1,228,222 7,175,942 2,876,344 2,327,196 1,061,407 844,581 300,000 300,000 386,382 138,207 630,750 367,056 213,228 2019 31,700 73,491 19,440

168,183,290 148,019,009 168,183,290 144,654,913 20,164,281 18,768,892 15,694,193 69,747,950 33,096,297 21,238,204 16,178,382 2,197,682 1,228,222 7,070,772 2,661,598 2018 795,389 300,000 300,000 378,906 651,621 117,037 505,848 428,118 225,236 18,850 13,700 94,770

STATEMENT OF For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000) ofthesefinancialstatements. The accompanyingnotesonpages64to126formanintegralpart Earnings perstockunit($) Net profit aftertaxation Total taxationexpense Taxation -deferred Taxation -current Profit before taxation Operating expenses Credit lossexpenseonfinancialassets Other income Net interest income Interest expense Interest income

18

INCOME

16 d 16 b 16 a 16 c Notes 17

11,647,437 (2,055,691) (5,586,916) (2,128,470) 5,974,251 3,152,038 8,495,399 9,083,475 3,845,781 (588,076) 2019 (72,779) (86,270) 12.82

10,557,791 (1,530,593) (1,585,314) (5,007,796) 3,134,004 4,664,597 3,153,298 7,404,493 7,974,508 2018 (885,398) (570,015) 54,721 10.45

ANNUAL REPORT 2019 59 REPUBLIC BANK (GUYANA) LIMITED 60 STATEMENT OF ofthesefinancialstatements. The accompanyingnotesonpages64to126formanintegralpart Total comprehensive incomefortheyear, netoftax Other comprehensive incomefortheyear, netoftax Total itemsthatwillnotbereclassified totheincomestatementinsubsequentperiods: Income taxrelated toabove Remeasurement (loss)/gainondefinedbenefitplans ofincomeinsubsequentperiods(nettax): Items ofothercomprehensive incomethatwillnotbereclassified tothestatement Other comprehensive income: Net profit aftertaxation For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)

COMPREHENSIVEINCOME

3,839,421 3,845,781 2019 (10,600) (6,360) (6,360) 4,240

3,206,844 3,134,004 2018 121,400 (48,560) 72,840 72,840

STATEMENT OF For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000) Balance atSeptember30,2019 Dividends riskreserve (Note2b) Transfer togeneralbanking fortheyear Total comprehensive income Other comprehensive loss Profit forthe year Balance atSeptember30,2018 Dividends riskreserve (Note2b) Transfer from generalbanking fortheyear Total comprehensive income Other comprehensive income Profit forthe year IFRS9 Restated openingbalanceunder (Note2b) Net impactofadoptingIFRS9 Balance atSeptember30,2017

CHANGESINEQUITY capital Stated 300,000 300,000 300,000 300,000

– – – – – – – – – – –

Statutory reserve 300,000 300,000 300,000 300,000

– – – – – – – – – – –

unrealised (losses) gains/ Net (17,730) 17,730 – – – – – – – – – – – – –

reserves banking (2,717,143) General 3,512,532 3,512,532 risk 844,581 795,389 49,192 – – – – – – – – – 21,179,121 18,768,892 14,079,905 14,170,219 Retained earnings (1,380,000) (1,235,000) 3,839,421 3,845,781 2,717,143 3,206,844 3,134,004 (49,192) (90,314) 72,840 (6,360)

18,192,437 18,300,481 22,623,702 20,164,281 (1,380,000) (1,235,000) 3,839,421 3,134,004 3,206,844

equity 3,845,781 Total (108,044) 72,840 (6,360) – –

ANNUAL REPORT 2019 61 REPUBLIC BANK (GUYANA) LIMITED 62 Due from banks Cash onhand Cash andcashequivalents atSeptember30are represented by: Cash andcashequivalents atendofyear Cash andcashequivalents atbeginningofyear Net increase incashandequivalents Cash usedinfinancingactivities Dividends paid Increase/(decrease) inbalances duetootherbanks Financing activities Cash provided by/(used in)investing activities Proceeds from saleofpremises andequipment Additions topremises andequipment Redemption ofTreasury Bills Purchase ofTreasury Bills Redemption ofinvestment securities Purchase ofinvestment securities Investing activities Cash provided by operatingactivities Taxes paid Net cashprovided by operatingactivitiesbefore tax Increase inotherliabilitiesandaccruedinterest payable (Increase)/decrease inotherassetsandinvestment interest receivable depositwithBankofGuyanaIncrease instatutory Increase incustomers’deposits Increase inadvances Increase inpensionasset Adjustments for: Profit before taxation Operating activities STATEMENT OF For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000) Loss/(gain) onsaleofpremises andequipment Credit lossexpenseonfinancialassets Depreciation andamortisation

CASH FLOWS

Notes 4

(33,080,650) 27,004,510 24,128,166 (1,663,249) (9,257,826) (1,358,830) 27,004,510 23,899,802 33,282,750 (1,380,000) (1,063,492) 3,104,708 5,532,895 2,876,344 2,020,539 3,869,646 8,950,178 5,974,251 (571,778) (110,075) (692,761) 2019 (28,600) 593,892 130,104 473,445 86,270 21,170 7,909 6,523

(38,382,700) (10,395,000) 23,899,802 21,238,204 23,899,802 13,861,736 10,038,066 45,408,200 13,665,028 15,088,774 19,775,535 (2,381,011) (1,423,746) (2,210,897) (9,024,400) (1,245,951) (1,235,000) 2,661,598 1,094,215 4,664,597 2018 (194,013) (325,129) 219,403 885,398 511,487 609,053 (10,951) (27,500) 99,514 ofthesefinancialstatements. The accompanyingnotesonpages64to126formanintegralpart Dividends received Interest paidduringtheyear Interest received duringtheyear Supplemental information: For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000) STATEMENT OFCASH FLOWS

Notes

8,970,904 2019 587,486 2,485

7,810,406 2018 568,937 9,704

ANNUAL REPORT 2019 63 REPUBLIC BANK (GUYANA) LIMITED 64 2 1 NOTES TOTHE For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise b a The principalaccountingpoliciesappliedinthepreparation ofthesefinancialstatementsare setoutbelow. SIGNIFICANT ACCOUNTING POLICIES Islands. region, (CARICOM) Community Caribbean the in activities related and financial banking, of range wide a in engaged is Group The companies. associated and several subsidiaries comprising group services financial ‘Group’)a (theGroup is Republic The on theTrinidad andTobago Stock Exchange. Tobago and its registered office is located at Republic House, 9-17 Park Street, Port of Spain. Republic Financial Holdings Limited is listed Republic Financial Holdings Limited, the financial holding company for the Republic Group, is incorporated in the Republic of Trinidad and Limited andRepublicBankwasrenamed RepublicFinancialHoldingsLimited. MerchantFinance and (FINCOR)Limited Bank save shareholdingsthe for in several renamed FINCOR was subsidiaries. RepublicBank On December16,2015by LegalNotice No. 215of2015,thebusinessRepublicBankLimitedwastransferred andvested intoRepublic September 30,2019thestockholdingsofRepublicFinancialHoldingsLimitedinBankwere 50.97%. Republic FinancialHoldingsLimitedandsubsequentlychangeditsnametoBank(Guyana) LimitedonJune5,2006.Asat ofRepublicBankLimitedTrinidadLimited onDecember1,1984.In October1997,theBank becameasubsidiary andTobago, now Canada were acquired by theGovernment ofGuyana onNovember andCommerce 29,1984andvested intheNational BankofIndustry November 17,1913operationswere soldtotheRoyal BankofCanada.AssetsandliabilitiestheGuyana operationoftheRoyal Bankof Banking operationsbeganonFebruary 16,1837by theBritishGuianaBankwhichhadbeenincorporatedonNovember 11,1836.On Cap. 81:01. Act Tax Income the of 15 section under 2003 2, September on Finance of Minister the by company finance mortgage approved The Bankwasregistered ActCap.73:04onApril7,2003.It wasdesignated asan asareporting issuerundertheSecurities Industry under theCompaniesActCap.89:01onMay 16,1997andislicensedasBankers undertheFinancialInstitutions ActCap.85:03. The BankwasincorporatedintheCo-operative RepublicofGuyana onNovember 20,1984asalimitedliabilitycompanyandcontinued CORPORATE INFORMATION i Changes inaccountingpolicies Basis ofpreparation accounting judgementsandestimatesinapplyingtheBank’s accounting policieshave beendescribedinNote3. Standards requires management to make estimates and assumptions. Actual results could differ from those estimates. Significant Reporting Financial International with conformity in statements financial of preparation The instruments. financial derivative and loss or profit through value fair at and available-for-sale as classified securities investment of value fair at measurement the for except basis, cost historical have prepared a statements been on financial These Guyanadollars. in arestated and 73:04. Cap. Act (IFRS),the Standards Reporting Financial Financial Institutions ActCap.85:03andguidelinesissuedthereunder, theCompaniesActCap.89:01andSecurities Industry withInternational in accordance are prepared Bank the of statements financial The New accounting standards/improvements adopted standards andinterpretations below. inthe new followed of adoption the those for except 2018 with 30, September consistent ended year the are for statements financial statements annual Bank’s the financial of preparation the of preparation the in adopted policies accounting The

FINANCIALSTATEMENTS

Ghana and Cayman

2 b SIGNIFICANT ACCOUNTING POLICIES i Changes inaccountingpolicies - - The transactions. - payment of share-based measurement and classification the to relation in are amendments These IFRS 2 Classification and measurement of share-based payment transactions – amendments to IFRS 2 (effective January 1, If an entity applies those amendments for an earlier period,itmustdisclosethat fact.The adoption and amendment to this - - profit through value fair at investees measuring that Clarification Ventures– Joint and Associates in Investments – 28 IAS first- for exemptions short-term of Deletion – Standards Reporting Financial International of Adoption First-time – 1 IFRS New accountingstandards/improvements adopted transferring toacustomer. goodsorservices will recognise revenue at an amount that reflects the consideration to which the entity expects to be entitled in exchange for The standard outlines the principles an entity must apply to measure and recognise revenue. The core principle is that an entity property, equipmentandintangibleassets. customers. It also provides a model for the recognition and measurement of disposal of non-financialcertain assets including and SIC 31 Revenue Transactions – Barter and Involvingapplies to all revenue Services) Advertising arising from contracts with Loyalty Programmes, IFRIC 15 Agreements for the Construction of Real Estate, IFRIC 18 Transfers ofAssetsfrom Customers replaces IFRS 15 all existingrevenue requirementsRevenue, 18 Construction 11 Contracts, IAS Customer IFRIC 13 inIFRS(IAS IFRS 15Revenue from contracts withcustomers(effective 1,2018) January The adoptionandamendmenttothisstandard hadnoimpacton theBank. amendments address three mainareas: 2018) standard hadnoimpact ontheBank. The amendmentsclarifythat: or lossisaninvestment-by-investment choice(effective 1,2018) January purpose. Theadoptionandamendmenttothisstandard hadnoimpactontheBank. exemptionsThe amendment deletes short-term because of IFRS 1 in paragraphs theyE3–E7 have theirintended nowserved time adopters(effective 1,2018) January The accounting where a modification to the terms and conditions of a share-based payment transaction changesits payment transaction of a share-based classification from cash-settledtoequity-settled. andconditions terms the to modification a where accounting The The classificationofashare-based payment transactionwithnetsettlement features forwithholdingtaxobligations The effects ofvesting conditionsonthemeasurement ofacash-settledshare-based payment transaction (c) theinvestment entityassociateorjointventure firstbecomesaparent. entity associate or joint venture isinitiallyrecognised; (b) the associate or joint venture becomes an investment entity; and is made separately foreach investment entity associate orjoint venture, at the later of the date on which (a) the investment entity associate or joint venture to the investment entity associate’s orjoint venture’s interests insubsidiaries. This election the entity may, when applying the equity method, elect to retain the fair value measurement applied by that investment an investmentIf anentitythatnot itself is entityhasaninterestjoint venture inanassociate or an investment that is entity, by-investment basis,tomeasure itsinvestments inassociatesandjointventures atFair value through profit orloss. a ventureAn entitythat is capital organisation, other qualifying or entity,may elect, atinitialrecognition on aninvestment- ( continued) ( continued)

( continued)

ANNUAL REPORT 2019 65 REPUBLIC BANK (GUYANA) LIMITED 66 NOTES TOTHEFINANCIALSTATEMENTS 2 For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise b SIGNIFICANT ACCOUNTING POLICIES i Changes inaccountingpolicies ii OR i Entities may apply the amendments on a fully retrospective basis. Alternatively, an entity may apply the interpretation IFRIC Interpretation 22foreign currency transactionsandadvance consideration(effective 1,2018) January (effective 1,2018) January a resultAs oftheadoption of thisstandard,credit card fees and commissions arebeing recorded net ofamounts paid, the to related directly costs the and contract a obtaining of costs incremental the for account to how specifies also standard The The standard requires entities to exercise judgement, taking into consideration all ofthe relevant facts and circumstances when New accountingstandards/improvements adopted prospectively toallassets,expenses andincomeinitsscopethatare initiallyrecognised onorafter: had noimpactontheBank. date of the transactions for each payment orreceipt of advance consideration.The adoption and amendment to thisstandard arising fromthe advance consideration. Ifthere are multiplepayments orreceipts in advance, then the entitymustdetermine a the date of the transaction liability the dateis on which an entity initially recognisesasset ornon-monetary the non-monetary ofit)on the derecognition liability relatingincome (or asset part or non-monetary to advanceof anon-monetary consideration, The interpretation clarifies that in determining the spot exchange rate to use on initial recognition of the related asset, expense or impact ontheBank. for the use ofthe property does not provide evidence of achange in use.The adoption and amendment to thisstandard had no intentions management’s in change mere A use. in change the of evidence is there and property investment of definition the out of investment property. The amendments state that a change in use occurs when the property meets,orceases to meet, The amendments clarify when an entity should transfer property, including property under construction or development into, or 40Investment property:IAS transfers 40(effective ofinvestment 1,2018) –amendmentstoIAS properties January adoption andamendmenttothisstandard hadnoimpactontheBank. exemptiontwo options forentities issuinginsurance contracts: a temporary from applying IFRS 9 and an overlay approach.The 9, before IFRS standard, instruments financial implementing the new insurance contracts standard that the Boarddeveloping is to replace IFRS 4. The amendments introduce new the implementing from arising concerns addresses amendment The IFRS 4Insurancecontracts:applying9withinsurancecontracts–amendmentsto expenses forthedirect obligationisnettedagainsttherevenues cost ofsatisfyingtheperformance received. changes toanentity’s current accounting,systemsandprocesses. potential with entities most for undertaking significant standarda The affectbe will will across Adoption entities industries. all fulfilling acontract. applying eachstepofthemodeltocontractswiththeircustomers. IFRS 15Revenue from contractswithcustomers(effective 1,2018) January period inwhichtheentityfirstapplies theinterpretation. The beginning of a prior reporting period presented as comparative information in the financial statements of the reporting The beginningofthereporting periodinwhichtheentityfirstappliesinterpretation

( continued) ( continued)

( continued)

( continued)

2 b SIGNIFICANT ACCOUNTING POLICIES ii Changes inaccountingpolicies The amendments clarifythat an entity applies IFRS 9 to long-term interests in an associate or joint venture to which the equity 28Investments inassociates andjointventuresIAS 28(effective 1,2019) –amendments toIAS January The amendments are intended to applywhere theprepayment amount approximates tounpaid amounts of principal and The amendments must be applied retrospectively; earlier application is permitted. The amendment provides specific transition criterion (SPPI) Interest and Principal of Payments Solely the passes asset financial a that clarify 9 IFRS to amendments The IFRS 9Financialinstruments–amendmentsto(effective 1,2019) January An entity has to determine taxtreatmentwhether to consider each uncertain separately or together with one or more other • • • • The interpretation addressesthe accounting income for taxes when taxtreatments involve that affects uncertainty the leases finance to way similar a in model sheet on-balance single a under leases all for account to lessees requires 16 IFRS The following is a list of standards and interpretations that are not yet effective up to the date of issuance of the Bank’s financial Standards inissuenotyet effective term long- such to applies 9 IFRS in model loss credit expected the that implies it because relevant is clarification This interests). method ofthe is not net applied investmentbut that, in substance, form part in the associate or joint venture (long-term totheswap,willmeetthisrequirement.the parties Most likely, the costs to terminate a ‘plain vanilla’ interest rate swap that is collateralised, so asto minimise the creditfor risks satisfy the SPPI criterion only if other elements of the change in fair value, such as the effects of credit risk orliquidity, are small. fair value or atanamount that includes the fair value of the cost toterminate an associated hedging instrument, willnormally interest plus orminusanamount that reflects thechange in abenchmark interest rate.Thisimpliesthat prepayments atcurrent provisions ifitisonlyappliedin2019ratherthan2018withtherest ofIFRS9. or receives reasonable compensationfortheearlyterminationofcontract. regardless ofthe event or circumstance that causes the early termination ofthe contract and irrespective pays ofwhich party taxtreatments.uncertain Theapproach thatbetterpredicts theresolution shouldbefollowed. oftheuncertainty 12.Theinterpretationapplication ofIAS specificallyaddresses thefollowing: over IFRIC Interpretation 23uncertainty income taxtreatments (effective 1, 2019) January right-of-use asset. Lessees willberequired toseparately recognise the interest expense on the lease liability and the depreciation expense on the underlying assetduringtheleaseterm(i.e.,right-of-useasset). a lessee will recognise a liability to make lease payments (i.e., the lease liability) and an asset representing the right to use the Atmonths orless). leases(i.e., leaseswithaleasetermof12 thecommencement computers) and short-term date of alease, 17.The standardunder IAS includes two recognition exemptions for lessees–leases of ‘low-value’ assets(e.g., personal IFRS 16Leases(effective 1,2019) January become effective. TheBankiscurrently assessingtheimpactofadoptingthesestandards andinterpretations. statements. These standards and interpretations will be applicable to the Bank at a future date and will be adopted when they How anentityconsiderschangesinfactsandcircumstances How anentitydeterminestaxableprofit (taxloss),taxbases,unusedlosses,credits andtaxrates The assumptionsanentitymakes abouttheexaminationoftaxtreatments by taxationauthorities taxtreatmentsWhether anentityconsidersuncertain separately interests. ( continued) ( continued)

ANNUAL REPORT 2019 67 REPUBLIC BANK (GUYANA) LIMITED 68 2 NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise b SIGNIFICANT ACCOUNTING POLICIES ii Changes inaccountingpolicies Although the amendments to the definition of material is not expected to have a significant impact on an entity’s financial entity’s an on impact significant a have to expected not is material of definition the to amendments the Although The amendmentsmustbeapplied prospectively. Earlyapplicationispermittedandmustbedisclosed. The amendments clarify that materiality willdepend on the nature and magnitude of information,orboth. An entity will need expected be reasonably could it obscuring or misstating omitting, if material is information that, states definition new The (effective 1,2020) January 1Presentation 8accountingpolicies,changesinestimates IAS ofFinancialstatementsandIAS This clarification provides that entities might have to recognise a past service cost, or a gain or loss on settlement, that reduces The amendments clarify that an entity first determines any past service cost, or a gain or loss on settlement, without considering • • The amendmentsor settlement specifythat when occurs during a plan the amendment, annual curtailment reporting period, an 19EmployeeIAS 19(effectiveIAS 1,2019) benefits–amendmentsto January Entities mustapplytheamendmentsretrospectively, exceptions. withcertain In applyingan entitydoesnottake IFRS 9, account of theassociate of anylosses or jointventure,on oranyimpairmentlosses 28Investments inassociatesandjointventuresIAS 28(effective 1,2019) -amendmentstoIAS January Standards inissuenotyet effective financial statements. howmateriality impact potentially judgements are madeinpractice, byelevating of how communicated information is and organised the importance could in the definition the in information’ ‘obscuring term the of introduction the statements, financial statements. to assess whether the information, either individually or incombination with other information, is material in the context of the financial statements, whichprovide financialinformationaboutaspecific entity. reporting those of basis the on make statements financial purpose general of users primary the that decisions influence to a surplusthatwasnotrecognised before. Changesintheeffect oftheassetceilingare notnetted withsuchamounts. is recognised inothercomprehensive income. orsettlement. Any change in that effect,after the plan amendment, curtailment excluding amounts included in the net interest, the effect of the asset ceiling. This amount is recognised in profit or loss. An entity then determines the effect of the asset ceiling entity isrequired to: occurs duringareporting period. settlement or curtailment amendment, plan a when accounting the address benefits Employee 19 IAS to amendments The 28Investments inassociates andjointventures.IAS the net investment,recognised as adjustments to the net investment in the associate or jointventure that arise from applying

discount rateusedtoremeasure thatnetdefinedbenefitliability(asset). the and event; that after assets plan the and plan the under offered benefits the reflecting (asset) liability benefit defined Determine net interest for the remainder of the or settlement period after using: the the plan net amendment, curtailment plan andtheassetsafterthatevent the actuarial assumptions used to remeasure the net defined benefit liability (asset) reflecting the benefits offered under the Determine current cost for the remainder service of the or settlement, period using after the plan amendment, curtailment ( continued) ( continued)

( continued)

( continued)

2 b SIGNIFICANT ACCOUNTING POLICIES iii ii Changes inaccountingpolicies The annual improvements processof theInternational Accounting Standards Board dealswithnon-urgent but necessary Improvements standards toInternationalfinancial reporting • • • • • • • The mainfeatures ofthenewaccountingmodelforinsurancecontractsare asfollows: IFRS 17 applies to all typesofinsurance contracts (i.e., life, non-life, direct insurance and reinsurance), regardless ofthe type of IFRS 17Insurancecontracts(effective 1,2022) January application, first of date the after or on occur that events other or transactions to prospectively apply amendments the Since The amendments must be applied to transactions that are either business combinations or asset acquisitions for which entitiesdetermine to help combinations 3Business inIFRS abusiness of definition the to amendments issued IASB The IFRS 3Businesscombinations–amendmentsto(effective 1,2020) January Standards inissuenotyet effective after 1,2019: January or on beginning periods annual to applicable are amendments following The IFRS. to amendments and clarifications few scopeexceptions will apply. A features. participation discretionary with instruments financial and guarantees certain to as well as them, issue that entities set ofactivitiesandassetsafterfirstapplyingtheamendmentsshouldupdatetheiraccountingpoliciesinatimelymanner likelymost entities will not beaffected bythese amendments on transition. However,entities considering the acquisition a of must bedisclosed. 2020. 1, January after or on Consequently, entities do not have to revisit beginning such transactions that occurred in prior periods. Earlier application is permitted and period reporting annual first the of beginning the after or on is date acquisition the an optionalfairvalue concentrationtest. entities assess whether an acquired process is substantive, narrow the definitions of a business and of outputs, and introduce remove theassessmentofwhether market are participants capable of replacing elements, add any missingguidance to help whether an acquireda businessornot. setofactivitiesand Theyassets is requirementsthe minimum clarify a business, for

extent ofrisksarisingfrom thesecontracts Extensive disclosures toprovideinformation ontherecognised amounts from insurance contracts and the nature and finance insurance the fromincome orexpense separately presented are claims) incurred less revenue (earned results services Insurance components) are notpresented intheincomestatement,but are recognised directly ontheStatementoffinancialposition Amounts that the policyholder will alwaysreceive, regardless ofwhether an insured event happens (non-distinct investment providedon theconceptofservices duringtheperiod The presentation ofinsurance revenue expenses in the statement of comprehensive and insurance service income based by anaccountingpolicychoice determined income, comprehensive other or loss or profit either in reported be will rates discount in changes of effect The period (i.e.,coverage period) service the over loss or profit in recognised be to contracts insurance the of profit unearned the representing contracts, of group a of flows cash fulfilment the in gain one day any to opposite and equal is that (CSM) Margin Service Contractual A reporting period (thefulfilmentcashflows) The measurement of the Present value of futureincorporating adjustment, cashflows, remeasuredan explicitrisk every ( continued) ( continued)

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.

ANNUAL REPORT 2019 69 REPUBLIC BANK (GUYANA) LIMITED 70 2 NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise e d c b SIGNIFICANT ACCOUNTING POLICIES iii ii i Financial instruments–initialrecognition balance inrelation tothedepositliabilitiesofinstitution. Pursuant to the Financial Institutions the Act Cap.Bankrequired85:03, is tomaintain with the Bank of Guyana reserve a statutory depositwithBankofGuyana Statutory less. cash on hand and at bank, Treasury Bills,billsdiscounted and bankers’ acceptances with original maturities of three months or Forthe purposepresentation of in theStatement cash and cash equivalentscash flows, of consist ofhighlyliquidinvestments, Cash andcashequivalents iii Changes inaccountingpolicies Financial liabilities,otherthanloan commitmentsandfinancialguaranteesar held-to-maturity or FVPL, available-for-sale cost), and receivables(amortised loans as assets financial its classified Bank The • • The Bank classifies all of its financial assets based on the business model for managing the assets and the assets’ contractual Measurement categoriesoffinancialassetsandliabilities Initial measurement offinancialinstruments Date ofrecognition 23 IAS 12 IAS IFRS 11 IFRS 3 IFRS Improvements standards toInternationalfinancial reporting (vi). (v)and2(f) (i),2(f) cost),asexplainedin Notes2(f) (amortised terms, measured ateither: added to,orsubtractedfrom, this amount. are costs transaction (FVPL), or Loss Through Profit Fair at Value recorded liabilities financial and assets financial of case the (i). Financial instruments aremanaging the instruments, asdescribed in Note (f) 2 initiallymeasuredvalue, attheirfair except in The classification of financial instruments at initial recognition depends on their contractual terms and the business model for to theBank. funds aretransferred tothecustomers’accounts. The Bank recognises balances due to customerswhen funds are transferred generally established by regulation or convention in the market place. Loans and advances to customers are recognised when frame time the within assets of delivery require that assets financial of sales or purchases trades: way regular includes This initially recognised on the trade date, i.e., the to date the that contractual the Bank provisionsbecomes a party ofthe instrument. Financial assets andliabilities,withtheexception of loans and advances tocustomersand balances due to customers,are (ii) FVPL, asexplainedinNote2(f) (i) cost,asexplainedinNote 2(f) Amortised – – – –

Borrowing costs–Borrowing costseligibleforcapitalisation(effective 1,2019) January (effective 1,2019) January Income taxes –Incometaxconsequencesofpayments onfinancialinstrumentsclassifiedasequity Joint arrangements–Previously heldInterests inajointoperation(effective 1,2019) January Business combinations–Previously heldInterests inajointoperation(effective 1,2019) January Subject ofamendment ( continued) ( continued)

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e measured cost. atamortised

2 f SIGNIFICANT ACCOUNTING POLICIES i Under IFRS9 Financial assetsandliabilities The business model assessment isbased on reasonably case’expected scenarios without taking ‘worst or ‘stress case’ • • • The Bank’s businessnot model is assessedon an instrument-by-instrument basis, but at ahigher level ofaggregated portfolios Business modelassessment In contrast, contractual terms that introduce a more than exposurede minimis or volatility torisks in the contractual cash flows of value time the for consideration the typically are arrangement lending a within interest of elements significant most The ‘Principal’ for the purpose of this test is defined as the fair value of the financial asset at initial recognition and may change over they meettheSPPItest. For thefirststepofitsclassification process, theBankassessescontractualtermsoffinancialassetstoidentifywhether The SPPItest The detailsoftheseconditionsare outlinedbelow. • • The Bank only measures Due from banks,TreasuryAdvances Bills, to customers and Investment cost securities at amortised Due from banks,Treasury Bills,advances andinvestment securities incorporates suchinformationwhen assessingnewlyoriginatedorpur but model, business that in held assets financial remaining the of classification the change not does Bank the expectations, scenarios into account. If cash flows after initial recognition are realised in a way that is different from the Bank’s original and isbasedonobservable factorssuchas: business The Bank determines its business model at the level that best reflects how it manages groups of financial assets to achieve its Through OtherComprehensive Income (FVOCI) withoutrecycling. Value Fair or FVPL at measured be to required is asset financial the cases, such In outstanding. amount the on interest and that are unrelated to abasiclending arrangement do not giveto contractual rise cash flowsthat are solelypayments ofprincipal currency inwhichthefinancialassetisdenominated,andperiodforinterest rateisset. money and credit Torisk. make the SPPI assessment, the Bank applies judgement and considers relevant factors such as the the life of thefinancialasset(forexample,ifthere are repayments ofthepremium/discount). ofprincipaloramortisation if bothofthefollowingconditionsare met: The expectedfrequency, value andtimingofsalesare aspectsoftheBank’s alsoimportant assessment in particular, theway thoserisks are managed The risks that affect the performance of the business model (and the financial assets held within that business model) and, reported totheentity’s key managementpersonnel and evaluated are model business that within held assets financial the and model business the of performance the How outstanding. The contractual terms of the financial asset give rise on specified dates to cash flows that are SPPI on the principal amount cash flowsand The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual objective.

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chased financialassetsgoingforward.

ANNUAL REPORT 2019 71 REPUBLIC BANK (GUYANA) LIMITED 72 2 NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise h g f SIGNIFICANT ACCOUNTING POLICIES recorded. impaired financial assets), the Bank records a modification gain or loss, to the extent that an impairment loss has not already been Based on thechangediscounted incashflows at theoriginal rate (orcredit adjusted affective interestpurchased ratefor or credit derecognition. in result not does modification different, the substantially are that flows cash in result not does modification the If • • • When assessingwhetherornottoderecognise aloantocustomer, amongstothers,theBankconsidersfollowing factors: an impairmentloss.Thenewlyrecognised loansare classifiedasStage2forECLmeasurement purposes. and conditions have been restructured tothe extent that, substantially,it becomes a new loan, with the difference recognised as terms and arranged as debt the of non-repayment and/or position financial borrower’s the in weaknesses to due arrangement or agreement loan original the to changes facilitate to customer, a to loan a as such asset, financial a derecognises Bank The Derecognition duetosubstantialmodificationoftermsandconditions Derecognition offinancialassetsandliabilities classified itsfinancialassetsandliabilitiesinaccordance withitsexistingbusinessmodels. reclassify any of its financial assets or liabilities in 2018, except on the initial adoption of IFRS 9 as required. On adoption, the Bank areliabilities Financial line. neverbusiness a terminates not reclassified.acquires,or did Bank of, Bank the disposes The which in The Bank does not reclassify itsfinancial assets subsequent to their initial fromrecognition, apart the exceptional circumstances Reclassification offinancialassetsandliabilities iv iii ii Under IFRS9 Financial assetsandliabilities Change incounterparty Change incurrency oftheloan Debt securitiesandotherfundraisinginstruments Undrawn loancommitments on or incurred earned Interest value. at fair position financial of statement the in recorded are FVPL at assets Financial The designation eliminates, or significantly reduces, the inconsistent treatment that would arise otherwise from measuring the areFinancial assets inthiscategory those that are designated by management upon initial recognition or are mandatorily Financial assetsatfairvalue through profit orloss If themodificationissuchthat instrumentwouldnolongermeettheSPPIcriterion measured costusingtheeffective atamortised interest ratemethod. to deliverthe obligation. cashtosatisfy These are initiallyrecognised valueat fair net of transaction costs, and subsequently Other fund raising instruments,where the substance of the contractual arrangement results inthe Bank having an obligation Financial liabilities issued by the Bank that are designated at FVPL, are classified as liabilities under Debt securities in issue and Loss (ECL)requirements butnoECLwasdeterminedbasedonhistoricalobservation ofdefaults. customer. the required to pre-specifiedis provide terms with to Creditloan Expected a the of scope the are in contracts These Undrawn loan commitments and letters ofcredit are commitments under which, over the duration of the commitment, the Bank instruments measured at FVPL is recorded in profit or loss as other income when the right to the payment has been established. any discount/ premium ofinstrument. Dividend and income qualifying fromtransaction costs being an integral part equity instruments designated accrued at FVPLis in interest income,usingtheEffective Interesttaking into account Rate(EIR), assets orrecognising gainsor losses onthemadifferent basis. required tobemeasuredvalue atfair under IFRS 9.Management maydesignate an instrument at FVPLupon initial recognition.

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2 h SIGNIFICANT ACCOUNTING POLICIES in profit orloss. is recognised paid consideration the and liability financial liability.original new the a of value differencecarrying The the between substantially modified, such an exchange or modification is treated as a derecognition of the original liability and the recognition of financial liability is replaced by another from the same lender on substantially different existing terms, an or Where the expired. terms of or an cancelled existing discharged, liability is are liability the under obligation the when derecognised is liability financial A Financial liabilities amountof theassetandmaximumamountofconsiderationBankcouldberequiredcarrying topay. Continuing involvement that takes the of aguarantee form over the transferredmeasured asset is at the lower ofthe original obligations thattheBankhasretained. an associated liability. The transferred assetand the associated liability are measured on a basisthat reflects the rights and asset continues to berecognised only totheextent of theBank’scontinuing involvement, inwhich case, theBankalsorecognises When theBank hasneither transferred norretained and rewardssubstantially all therisks and has retained controlthe oftheasset, unrelated third andisabletoexercise party thatabilityunilaterallyandwithoutimposingadditionalrestrictions onthetransfer. The Bank considers control tobetransferredthe and transferee if only if, hasthe practical ability tosellthe asset initsentirety toan • • A transfer onlyqualifiesforderecognition ifeither: • • • ‘eventual recipients’), whenallofthefollowingthree conditionsare met: (the entities more or one to flows cash those pay to obligation contractual a assumes but asset’), ‘original (the asset financial Pass-through arrangements are transactions whereby the Bank retains the contractual rights to receive the cash flows ofa • • The Bankhastransferred thefinancialassetif,andonlyeither: transferred thefinancialassetandtransfer qualifies forderecognition. the rights to receive cash flows from the financial asset have expired. The Bank also derecognises the financial asset if it has both A financial asset (or, where applicable, a part of a financial asset or part of a group of similar financial assets) is derecognised when Financial assets Derecognition otherthanforsubstantialmodification Derecognition offinancialassets andliabilities

The Bank has neither transferred nor retained substantially and all the risks rewards ofthe asset, but has transferred control of The Bankhastransferred substantiallyalltherisksandrewards oftheasset,or The Bank has to remit any cash flows itcollects on behalf of the eventual recipients without material delay. In addition, the Bank The Bankcannotsellorpledgetheoriginalassetotherthanassecuritytoeventual recipients The Bank hasnoobligation to pay amounts to the eventual recipients unlessithascollected equivalent amounts from the It retainsbut hasassumedanobligation therightstocashflows, to paythe received without in full material delay cashflows The Bankhastransferred itscontractualrightstoreceive cashflowsfrom thefinancialasset,or the asset the periodbetweencollectiondateandofrequired remittance totheeventual recipients. is not entitled to reinvest such cash flows, except for investments in cash or cash equivalents including interest earned, during rates original asset, excluding advances short-term with the right tofullrecovery ofthe amount lent plus accrued interest atmarket to athird undera‘pass-through’ party arrangement. ( continued)

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ANNUAL REPORT 2019 73 REPUBLIC BANK (GUYANA) LIMITED 74 2 NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise i SIGNIFICANT ACCOUNTING POLICIES POCI 1 Stage i Impairment offinancialassets Stage 2 described as 3, Stage and 2 Stage 1, Stage into investments and loans its classifies Bank the process, above the on Based financial a whether of period, reporting each of end the at assessment, an perform to policy a established has Bank The Where, the financial asset meets the definition of purchased or originated credit impaired (POCI), the allowance is based on the Both LTECLsandare 12mECLs calculated on either an individual basis oracollective basis,depending on the size and nature of LTECLsof portion the is 12mECL The representthat resultthat ECLs from arethe events that default instrument financial a on The Bank usesthe general probability of default approach when calculating allowance The ECL ECLs. based on the is credit oftheECLprinciples Overview adjusted areEIR. ECLs only recognised or released to the extent that there isasubsequent change in the expected credit losses. assets are recorded valueat fair at original recognition and interest incomesubsequently is recognised based on acredit- POCI recognition. initial on impaired credit are that assets financial are assets (POCI) ImpairedCredit Originated or Purchased Loans andinvestments considered credit-impaired (asoutlinedinNote20.2).The Bankrecords anallowancefor theLTECLs. Stage 3 has beenreclassified from Stage3. the LTECLs. Stage 2 loans and investments also include facilities, where the credithas improved risk and the loan or investment for allowance an records Bank the origination, since risk credit in increase significant a shown has investment or loan a When investments alsoincludefacilitieswhere thecredit riskhasimproved andtheloanhasbeenreclassified from Stage2. and loans 1 Stage 12mECLs. on based allowance an recognises Bank the recognised, first are investments and loans When below: default occurring over theremaining life ofthefinancialinstrument. of risk the in change the considering by recognition, initial since significantly increased has risk credit instrument’s change intheECLsover thelife oftheasset. is explainedinNote20.2.7. the underlying portfolio of financial instruments. The Bank’s policy for grouping financial assets measured on a collective basis possible withinthe12monthsafterreporting date. are setoutinNote20.2 risk credit in increase significant a been has there if determining for policies Bank’s The 20.2.7. Note in outlined as (12mECL) significant increase in credit risk since origination, in which case, the allowance is based on the 12 months’ expected credit loss expected losses to ariseover the life ofthe asset (the Lifetime Expected Credit Loss (LTECL)),unless there hasbeen no not subjecttoimpairmentunderIFRS9. loan with together FVPL, at held commitments and financial not guarantee contracts, in this section assets all referred to asfinancial ‘financial instruments’. Equity instrumentsdebt are other and loans all for ECLs for allowance an records Bank The

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2 i SIGNIFICANT ACCOUNTING POLICIES ii Impairment offinancialassets When a loan or investment has shown a significant increase in credit risk since origination, the Bank records an allowance an records Bank the origination, since risk credit in increase significant a shown has investment or loan a When Stage 2 financial a on events default from result that ECLs the represent LTECLs that of portion the as calculated is 12mECL The Stage 1 The mechanicsoftheECLmethodare summarisedbelow: Impairment lossesandrecoveries are accountedforanddisclosedseparately. asset. financial the of aging and category rating risk the factors other among considers Bank the ECLs, the estimating When LGD EAD PD The mechanicsoftheECLcalculationsare outlinedbelowandthekey elementsare, asfollows: The Bank calculates ECLs based on the historical measure discounted at the instrument’s ofcash shortfalls, coupon rate. A The calculationofECLs or amount, outstanding entire the either recovering of expectations reasonable no has Bank the which for assets financial For investments andmodifiedwithmanagement overlays whennottraded. the instrument. The LGDs are derived as explained under Stage 3 forloans and using Global credit loss tables for traded for the LTECLs. The mechanics areto those similarexplained above, but PDsand LGDsare estimated over the lifetime of loans andusingGlobalcredit losstablesfortradedinvestments andmodifiedwithmanagement overlays when nottraded. probabilities are applied to aforecast and EAD multiplied by the expected LGDwhich are derived asexplained under Stage 3 for on the expectation ofa default occurring in the 12 months following the reporting date. These expected 12-month default instrument that are possiblewithin months the after the 12 reporting date. The Bank calculates allowance the 12mECL based period forwhichthecredit lossesare determinedisthecontractuallife ofafinancialinstrument. With the exception ofcredit cards and other revolvingwhich the facilities,for treatment separately is set out,the maximum asset. investments are expected to berecovered, including the value of collateral or theamount that might bereceivedselling the for associated Each ofthese is with differentand LGDs.EADs PDs, When relevant, italsoincorporates how defaulted loans and flows thattheentityexpectstoreceive. the difference is cash shortfall between the cash flowsthat are due to an entityinaccordance with the contract and the cash the financialasset. a proportion thereof, the gross amount carrying of the financial asset is reduced. This is considered a (partial) derecognition of

from therealisation ofanycollateral.Itisusuallyexpressed asapercentage oftheEAD. on the difference between the contractual cash flows due and those that the lender would expect to receive, including The Loss Given Default is an estimate of the loss arisinginthe case where adefault occurs at a given time. It is based expecteddrawdownsoncommittedfacilities,andaccruedinterestotherwise, from missedpayments. the exposure afterthe reporting date, including repayments ofprincipal and interest, whether scheduled by contract or explainedinNote20.2.5. TheconceptofPDsisfurther portfolio. timeoverhappen at a certain the assessed period, if the facility has not been previously derecognised and is stillinthe The Probability of Default is an estimate of the likelihood of default over agiven period of time. A default may only The Exposure at Default is an estimate of the exposure at a future default date, taking into account expected changes in ( continued) ( continued)

ANNUAL REPORT 2019 75 REPUBLIC BANK (GUYANA) LIMITED 76 2 NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise i SIGNIFICANT ACCOUNTING POLICIES v iv iii POCI ii Impairment offinancialassets Financial guarantees, letters of credit and loan commitments are off-balance sheet instruments and have ofdefault. no history The Bankissuesfinancialguarantees,lettersofcredit andloancommitments. Financial guarantees,lettersofcredit andundrawnloancommitments Treasury deposits withCentralBanksandDuefrom Bills,Statutory banks other to similar is facilities revolving for occurred has risk credit in increase significant a whether of assessment ongoing The The Bank’s product offering includes avariety ofcorporate and retail overdraft facilities,inwhich the Bank has the right tocancel Revolving facilities In limited circumstances within the Bank, where were portfolios and small the productsof homogenous with minimalhistory In mostinstances,LGDs are determined on anindividual loan or investmentincluding basis, discounting the expected cash the cumulative recognises Bank only The initial recognition. on impaired are credit that assets financial are assets POCI For loans and investments considered credit-impaired (as setout the in Note Bank 20.2.8), recognises the lifetime expected Stage 3 The calculationofECLs As a result,As low and the the ECLs onthese Bankinstruments wereconsiders ofdefault the risk to bevery determined to bezero. exception oftheBank’s exposure totheGovernment ofBarbados. Bank therefore considers the of default low.risk to be very The ECL on these instruments were determined to be zero, with the the and banks correspondent and activities financial and banking of range full the in engaged is Bank the where countries the Treasury deposits with Central Banks and Due from Bills,Statutory banks are funds placed with Central Banks in short-term and are consequentlycharged nointerest. expected period of exposure to the facilities. This estimation takes into account that many facilities are repaid in fulleach month The interest rate usedtodiscount creditfor the ECLs cardsbased is on the interest ratethat expected is to becharged over the also given toqualitative factorssuchaschangesinusageandrepayment patterns. lending products. This isbased on shifts inthe customer’s internal credit grade, as explained in Note but 20.2.5, emphasis is and/or reduce thefacilities.TheBanklimitsitsexposure tocredit lossesonoverdraft facilitiestotheoutstandingbalance. residence oftheloan. the of rating sovereign the on based staged and rates loss historical using applied was approach ECL simplified a defaults, and Stage2loans. flows atthe original EIR.Stage 3 LGDs are grouped bytypes toprovide similar percentage averages to be applied for Stage 1 credit adjustedEIR. changes in lifetime ECLssince initial recognition, based on a probability-weighting of the four scenarios, discounted by the credit lossesfortheseloansandinvestments. ThemethodissimilartothatforStage2assets,withthePDsetat100%.

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2 l k j i SIGNIFICANT ACCOUNTING POLICIES amount.Anysubsequentrecoveriescarrying are credited toother income. the accumulated loss allowance, the difference is first treated as an addition to the allowance that is then applied against the gross orintheir entiretypartially onlywhen the Bank has stopped pursuing the recovery. Ifthe amount to be written off isgreater than The Bank’saccounting policy under remainsIFRS 9 Financial 39. assets are the same asitwasunder IAS writteneither off Write-offs on thestatementoffinancialposition. customers/obligors. a resultAs ofthispractice, the residential properties under legal repossession processes are not recorded engages external agents to assistinthe sale ofthese assets tosettle outstanding debt. Any surplusfundsare returned to the In its normal course of business,should the Bank repossess properties orother assets initsretail itsometimes portfolio, sell fornon-financialassetsatthe repossession date,inlinewiththe Bank’s policy. to be sold. Assets to be sold are transferred to assets held for sale at their fair value (if financial assets) and fair value less cost to The Bank’s accounting policy under IFRS 9 remains 39.The Bank’s the same asitwasunder IAS policy is forarepossessed asset Collateral repossessed based onindependentvaluations andotherdataprovided by third parties. valued is estate, real as such collateral, Non-financial models. using valued are values market determinable readily have not do To the extent possible, the Bank uses active market data for valuing financial assets held as collateral. Other financial assets which of collateralaffects thecalculationofECLs.Itisgenerallyassessedatinceptionandre-assessed onaperiodicbasis. under IAS 39. Collateral, unless repossessed, is not recorded on the Bank’s statement of financial position. However, the fair value The Bank’s accounting policy for collateral assigned to it through its lending arrangements under IFRS 9 isthe same asitwas assets. non-financial other and inventories receivables, estate, real credit/guarantees, of letters securities, cash, as such forms, various in comes collateral The possible. where collateral, use to seeks Bank the assets, financial on risks credit its mitigate To Collateral valuation vi Impairment offinancialassets The Bank however recognised that theinputs and calculatingmodels usedfor mayECLs not always capture allcharacteristics Within thecountriesin which the Bankoperates, there waslittlecorrelation between the overall ofthe economies performance • • • • • • Forward lookinginformation occasionally made based on judgements as temporary adjustmentswhensuchdifferencesoccasionally madebasedonjudgementsastemporary are significantly material. and expectations of the market at the date of the financial statements. To reflect this, management adjustments or overlays are the ECLmodels. and historic loss trends. It was therefore not possible to directly correlate macroeconomic expectations to adjustments within In itsECLmodels,theBankconsidersabroad rangeofforward lookinginformationaseconomicinputs,suchas: Commodity priceinflationrates Real estatepricetrends risk Industry Unemployment rates GDP growth Currency rates

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ANNUAL REPORT 2019 77 REPUBLIC BANK (GUYANA) LIMITED 78 NOTES TOTHEFINANCIALSTATEMENTS 2 For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise p Goodwill o n m SIGNIFICANT ACCOUNTING POLICIES business combination, thisgainisrecognised immediatelyin theStatementofincomeasacredit tootherincome. Where the Bank’s interest in the net fair value of the identifiable assets, liabilities and contingent liabilities exceeds the cost of the is goodwill relates. Where the recoverable amount amount, of the an cash-generating impairment loss unit islessthan the carrying the from benefit to expected units cash-generating combination’ssynergies. the Impairmentdetermined is byassessing the recoverable amount of the cash-generating unit, towhich of each to allocated is acquired goodwill any date, acquisition at As events orchanges incircumstances value indicatethatthecarrying may beimpaired. measured at costlessanyaccumulated impairment reviewedlosses. Goodwillis for impairment,annually or more frequently if is goodwill recognition, initial Following liabilities. contingent and liabilities assets, identifiable the of value fair net the in interest Goodwill on acquisition is initially measured at cost being the excess ofthe cost of the business combination over the Bank’s iscalculatedusingthe reducingAmortisation balancemethodover theirestimatedusefullives ofthree tofive years. any accumulatedamortisation. Intangible assets are measured oninitialrecognition at cost.Following initial recognition, intangible assets are carriedatcostless Bank. the to flow will it to are attributable that benefits futureeconomic expected the probablethat is it measuredreliablyand be The Bank’sintangible assetscompriseofthevalue of computer software. Anintangible recognisedasset is only when its costcan Land andwork-in-progress are notdepreciated. Furniture, fixtures andotherequipment Computer equipment Security equipment Buildings assets over theirestimatedusefullives asfollows: buildings and leased equipment is computed on the declining balance the method cost of the at rates expected to apportion Leasehold buildings and leased equipment are depreciated over the period of the lease. Depreciation other than on leasehold disposals are determinedby comparingproceeds amounts.Theseare withcarrying includedintheStatementofincome. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. Gains and losses on incurred. are they which in period financial the during income of Statement the to charged are maintenance and repairs other reliably.All measured be can item the of cost the and Bank the to flow will item the with associated benefits economic future that probable Subsequent costs are included in theasset’s amount recognisedor carrying as aseparate asset, asappropriate, onlywhen it is Premises andequipmentare statedatcostlessaccumulateddepreciation. the Statementofincomeonastraightlinebasisover theleaseterm. The leases entered into bythe Bank aslesseeare alloperating leases. Operating lease payments are recognised as anexpense in Intangible assets Premises andequipment Leases recognised.

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30 to75years 4 to15years 4 to10years 6 to15years

r 2 q SIGNIFICANT ACCOUNTING POLICIES profits willbe available againstwhichtheselosses canbeutilised. The tax effects of income tax losses available forward are for carry recognised as an asset when it isprobable that future taxable arise. profits which in period the in expense an as recognised law, is tax applicable the on based profits, on payable tax Income differences canbeutilised. temporary the which against available be will profit taxable future that probable is it where recognised are assets tax Deferred tax assetisrealised orthedeferred incometaxliabilityissettled. that have been enacted or substantially enacted by the reporting date and are expected to apply when the related deferred income and liabilities and their carrying amounts in the financial statements. Deferred income tax is determined using tax rates (and laws) Deferred income tax is provided differences in full, using the liability method, on temporary arising between the tax bases of assets Taxation ii i Employee benefits Profit sharingscheme The fullresults ofthevaluation exercise are disclosedinNote9tothesefinancialstatements. The above accounting requirement in nowayaffects the pension plan which continues to begoverned bythe approved Trust The definedbenefitplansmainlyexposetheBanktoriskssuchasinv The pension obligation is measured as the present value of the estimated future cash outflows using interest rates of The defined benefit obligation is calculated annually by the independent actuaries using the projected unit credit method. Under The asset recognised in the Statement of financial position in respect of the defined benefit pension plan is the present value of Pension obligations Employees are paid profit share in cash. The Bank accounts for the profit share as an expense through theStatementof through an expense as share income. profit the for Bank accounts The in cash. share profit paid are Employees Resource Policy Human inthe Guidelines. terms outlined The profitwith share to be distributed to in accordance employees each year is based on scheme a specific formula sharing outlined in these profit guidelines. employee an operates Bank The Deed andRulesremain underthefullcontrol oftheappointedTrustees. are recognised immediatelythrough Othercomprehensive income. interest) (excluding assets plan on return and losses and gains actuarial comprise which asset, benefit defined net the government securities which have termsto maturity approximating the terms ofthe related liability. Remeasurements of lives ofemployees inaccordance withtheadviceofactuaries. this method, the cost ofproviding pensionschargedis to theStatement of income so astospread regular costs over theservice costs. actuarial gainsandlossespastservice the defined benefit obligation at the reporting date less the fair value of plan assets together with adjustments for unrecognised the effect oftheemployee benefitplan. determined by the independent actuaries. Annually, the Bank’s independent actuaries conduct a valuation exercise to measure is contribution Bank’s the and funded is plan The employees. qualifying for plan pension benefit defined a operates Bank The

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estment risk,interest rateriskandlongevity risk.

ANNUAL REPORT 2019 79 REPUBLIC BANK (GUYANA) LIMITED 80 2 NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise v u t s SIGNIFICANT ACCOUNTING POLICIES assets cures andisnolongercredit-impaired, theBank reverts tocalculating interest incomeonagross basis. financial the If asset. financial the of cost amortised net the to Bank rate interest the effective the 3’, applying by ‘Stage income interest as calculates regarded therefore, is, and (i)) (i) 2 Note in out set (as credit-impaired becomes asset financial a When costofthefinancialasset. rate isappliedtotheamortised other than credit-impaired assets. For purchased or originated credit-impaired financial assets, a credit-adjusted effective interest The Bank calculates interest income and expense by applying the EIR to the gross carrying amount of financial assets and liabilities Interest incomeandexpense and interest rates charged atvarious stages,and other characteristics of the product life cycle (including prepayments,penalty interest best estimate of aconstant rate ofreturn over the expected life ofthe loan. Hence, it recognises the effect of potentially different fees and costs that are ofthe EIR. The Bank recognises an integral part interest income using a rate of return that represents the The EIR (and therefore, cost of the asset) iscalculated by the amortised taking into account any discount or premium on acquisition, instrument or, amountofthefinancialasset. whenappropriate, period,tothenetcarrying ashorter cost. amortised The EIR is the rate that exactly discounts estimated future cash receipts through the expected life of the financial at measured instruments financial all for method (EIR) Rate EffectiveInterest the recordedusing is expense and income Interest The effective interest ratemethod The specific recognition criteriadescribedbelowmustalsobemetbefore revenue is recognised. has pricinglatitudeandisalsoexposedtocredit risks. concluded that it isthe principal in all ofitsrevenue obligor in all the revenuearrangements since it is the primary arrangements, has Bank The duty. or taxes excluding and payment of terms defined contractually account into taking receivable, or received reliably measured, regardless ofwhen the paymentbeing is made. Revenue measuredis atthe valuefair of the consideration be can revenue the and Bank the to flow will benefits economic the that probable is it that extent the to recognised is Revenue Revenue recognition resulting profits andlossesonexchange from thesetradingactivitiesare dealtwithintheStatementofincome. rates. Allrevenue and expenditure transactions denominated in foreign currencies are translated at mid-exchange rates and the ruling assetsand at the liabilities reportingdenominated date. in foreign Non-monetary currencies are translated at historic assetsand liabilities which areMonetary denominated in foreign currencies are expressed inGuyana dollars at rates ofexchange Bank operates(itsfunctionalcurrency). The financial statements are presented in Guyana dollars which is the currency of the primary economic environment in which the Foreign currency translation average numberofordinary stocksinissueduringtheyear. TheBankhasnodilutive ordinary stocks. Data on Earnings per stock unit has been computed by dividing the net profit attributable to ordinary stockholders, by the weighted Earnings perstockunit distributable. be must profit net year’s current the of 15.00% of transferred Fund tothe Reserve until the amount in the Fundequal is to the paid up Capital of the Bank. This reservenon- is minimum a 85:03, Cap. Act Institutions Financial the with accordance In reserves Statutory

charges).

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2 ab aa Comparatives z y x w v SIGNIFICANT ACCOUNTING POLICIES reserves thatqualifyfortreatmentOther statutory asequityare discussedinNote2(s). 1, 2017thebalanceonthisreserve represents thedifference betweenIFRS9provision andregulatory requirement. appropriation of retained earnings for the difference between specific provisions and the non-performing advances. From October General contingency reserves/Other reservesthe GeneralContingency 2017 prior toOctober reserve – 1, wasusedasan by theBankatdatereceived. consideration the of fair receivedvalue the is at and recognised equity within classified is capital stated Ordinary – capital Stated The reserves recorded inequityontheBank’s statementoffinancialpositioninclude: Equity reserves results, profit aftertaxorearningsperstockunit oftheBankforprevious year. operating the on effect no had changes These statements. financial these in made been have presentation in changes Certain value lesscosttosell. fair and amount carrying the of lower the at carried are and amortised or depreciated not are held-for-sale as classified Assets rather than through continuing use; the asset is available for immediate sale in its present condition; and its sale is highly probable. A non-current asset is classified as held-for-sale when: its carrying amount will be recovered principally through a sale transaction Assets classifiedasheld-for-sale (b) ofthesefinancialstatements. call on these commitments. These amounts are not recorded on the Bank’s Statement of financial position but set out in Note 26 These represent the Bank’s potential liability,for which there are equal and offsetting claims against its customer in the event of a Customers’ liabilityunderacceptances,guarantees,indemnitiesandlettersofcredit investment activities. of certain Management considers its banking operation to be a single business unit. Allbusiness is conducted in Guyana with the exception Segment reporting transaction from athird are party recognised oncompletionoftheunderlyingtransaction. provided. Fees and commissionsnot integral to effective interest arising from in the negotiation negotiating, of a or participating Unless included in the effective interest calculation, fees and commissions are recognised is on an accruals basis asthe service Fee andcommission income Dividend incomeisrecognised whentherighttoreceive thepayment isestablished. Dividends respectively. loss, or profit through value fair at using assets financial FVPLon isrecognised gains/(losses) Net and income trading at net in rate interest contractual the be measured to required mandatorily assets financial and assets trading all on income Interest Interest incomeandexpense Revenue recognition

( continued)

( continued) ( continued)

ANNUAL REPORT 2019 81 REPUBLIC BANK (GUYANA) LIMITED 82 NOTES TOTHEFINANCIALSTATEMENTS 3 For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise of all capital items to determine any necessary adjustments to carrying value. adjustmentstocarrying of allcapitalitemstodetermineany necessary enable the value to be treated as a capital expense. Further judgement is used upon annual review ofthe residual values and useful lives Management exercises judgement in determining whether costs incurred can accrue sufficient future economic benefits to the Bank to Premises andequipmentIntangibleAssets(note 7) will beavailable taxdifferences tofacilitateutilisationoftemporary which may arise. profits taxable future that probability the determine to judgement uses management taxation, deferred for provision the calculating In Deferred taxes (note10) cash flowsexpectedtoarisefrom eachcash-generatingunitandanappropriate discountratetocalculatepresent value. was reviewedfor goodwill IFRS3, using the ‘valueimpairment asatSeptember 2019 30, in use’ method. This requiresdetermination the use ofestimatesfor with of Future In accordance fromacquisitions. arising goodwill include statements financial Bank’s The Goodwill (note8) assets ofthePlan. increases, and assumptions indetermining discount salary NIS rates, ceiling increases, pension increases and the rateofreturn onthe In conductingvaluation exercisesmeasureto the effect the employee of theBank’sbenefit plan, independent judgement actuariesuse Net pensionasset/liability(note9) It hasbeentheBank’s policytoregularly review itsmodelsinthecontextofactuallossexperienceandadjustwhennecessary. objective evidence ofimpairment.Therecoverable amountisthePresent value ofthefuture cashflows. is there and amount recoverable the than greater is value carrying the when impaired determined are assets financial 39, IAS Under Impairment lossesandinvestment valuation (Policy 39) applicableunderIAS • • • • • • inputs andtheirinterdependencies. ElementsoftheECLmodelsthatare considered accountingjudgementsandestimatesinclude: The Bank’scalculations ECL are outputs of complexmodelswith anumberofunderlying assumptions regarding the choice of variable driven by anumberoffactors,changesinwhichcanresult indifferent levels ofallowances. The measurement of impairment losses under IFRS 9 across all categories of financial assets requires judgement. These estimates are Impairment lossesonfinancialassets(Policy applicableunderIFRS9) effect ontheamountsreported inthefinancialstatements: significant most the have which policies accounting Bank’s the of application its in judgements following the made has Management SIGNIFICANT ACCOUNTING JUDGEMENTS ANDESTIMATES INAPPLYING THEBANK’SACCOUNTING POLICIES The inclusionofoverlay adjustmentsbasedonjudgementandfuture expectations levels andcollateralvalues, andtheeffect onPDs,EADsandLGDs Determination oftheexistenceassociationsbetweenmacroeconomic scenariosand,economicinputs, suchasunemployment Development ofECLmodels,includingthevarious formulasandthechoiceofinputs should The Bank’s criteriaforassessingifthere hasbeenasignificantincrease incredit riskandsoallowancesforfinancialassets The Bank’s internalcredit gradingmodel,whichassignsPDstotheindividualgradesforcorporatefacilities The estimationoftheamountandtimingfuture cashflowsandcollateralvalues whendeterminingimpairmentlosses

be measured onaLTECL basisandthequalitative assessment

5 ADVANCES 4 a Advances Other banks Bank ofGuyana –excess deposit ofstatutory DUE FROMBANKS

Net advances Unearned loanoriginationfees Allowance forECLs–Note5(c) Unearned interest advances Non-performing advancesPerforming

(1,950,169) 7,561,991 lending 7,811,461 9,824,454 9,801,175 Retail (249,470) (62,824) 23,279

2019

and corporate Commercial 34,861,551 lending 34,931,306 34,863,409 32,563,457 2,299,952 (373,556) (69,755) –

Mortgages Mortgages 28,335,583 28,458,239 28,655,417 27,351,969 1,303,448 (258,837) (122,656) –

Overdrafts 24,128,166 17,067,537 8,034,508 7,060,629 8,034,508 8,077,430 8,077,430 2019 (42,922)

– – –

78,793,633 79,235,514 81,420,710 77,794,031 21,238,204 19,490,715 (1,950,169) 3,626,679 1,747,489 2018 (441,881) (738,139) Total

ANNUAL REPORT 2019 83 REPUBLIC BANK (GUYANA) LIMITED 84 5 ADVANCES NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise

b a Advances More thanfive years Between onetofive years Between sixmonthsandoneyear Between three andsixmonths Within three months Loans by remaining termtomaturity Net advances Unearned loanoriginationfees Allowance forECLs–Note5(c) Accrued interest Unearned interest advances Non-performing advancesPerforming

( continued)

( continued)

(1,614,317) 6,942,542 6,669,859 lending 6,878,749 8,556,859 8,535,703 (208,890) Retail (63,793) 21,156

– 2018

and corporate Commercial 29,954,460 30,500,599 30,081,347 30,218,053 27,783,480 lending 2,434,573 (126,887) (419,252) 282,546 –

Mortgages Mortgages 25,437,740 25,764,848 25,509,719 25,668,861 24,367,138 1,301,723 (255,129) (71,979) 95,987 –

Overdrafts 78,793,633 56,183,194 12,502,726 8,794,495 7,685,891 7,749,886 7,685,891 7,749,886 7,569,118 536,622 776,596 2019 180,768 (63,995)

– – –

69,747,950 70,155,706 70,957,875 68,255,439 70,155,706

48,271,948 12,414,072 (1,614,317) 72,193,659 3,938,220 8,293,798 2018 (407,756) (802,169) Total 378,533 649,481 526,407

5 ADVANCES c At September30,2019 repayments etc. Other credit lossmovements, duringtheyear ECL onnewinstrumentsissued underIFRS9 ECL allowanceasatOctober1,2018 Stage 2:Lifetime ECL At September30,2019 repayments etc. Other credit lossmovements, duringtheyear ECL onnewinstrumentsissued underIFRS9 ECL allowanceasatOctober1,2018 Stage 1:12MonthECL –Lifetime ECL Stage 3:Credit impaired financialassets Stage 2:Lifetime ECL Stage 1:12monthECL Gross Loans policies onwhetherECLallowancesare calculatedonanindividualorcollective basisare setoutinNote20.2.6. The table below shows the staging of advances and the related ECLs based on the Bank’s criteria as explained in Note 20.2.4 and Impairment allowanceforadvances tocustomers

( continued)

lending 7,811,461 7,874,285 Retail (34,337) (54,856) 54,856 33,515 55,678

(6,524) (1,444) 1,444 1,869 (846) 421 2019 and corporate Commercial 34,931,306 lending 35,304,862 (187,526) (170,692) 170,692 141,951 (46,192) (15,338) 15,338 74,933 5,528 9,129 681 Mortgages Mortgages 28,458,239 28,717,076 (162,914) (87,553) 87,553 27,677 10,594 59,116 (2,462) (8,370) 8,370 238 760 Overdrafts 8,034,508 8,077,430 (41,896) 41,896 40,071

1,109 1,825 (755) (672) (354) 354 – –

79,973,653 79,235,514 (354,997) (357,636) Total 354,997 109,208 296,816 (25,506) (51,027) 25,506 22,701 (3,382) 6,187

ANNUAL REPORT 2019 85 REPUBLIC BANK (GUYANA) LIMITED 86 NOTES TOTHEFINANCIALSTATEMENTS 5 ADVANCES For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise c At September30,2018 repayments etc. Other credit lossmovements, duringtheyear ECL onnewinstrumentsissued underIFRS9 ECL allowanceasatOctober1,2017 Stage 1:12MonthECL –Lifetime ECL Stage 3:Credit impaired financialassets Stage 2:Lifetime ECL Stage 1:12monthECL Gross Loans Of theTotal ECLof$738.1million,51.5%wasonacollective basisand48.5%wasonanindividualbasis. Total At September30,2019 Recoveries Credit lossexpense Charge-offs andwrite-offs underIFRS9 ECL allowanceasatOctober1,2018 –Lifetime ECL Stage 3:Credit impaired financialassets Impairment allowanceforadvances tocustomers

( continued)

lending lending 6,942,542 6,878,749 Retail Retail (131,937) 155,722 (19,103) (55,678) (23,507) 55,678 32,343 42,438 62,824

(6,246) (1,869) 6,524 6,246 ( continued) 2018 2019 and corporate and corporate Commercial Commercial 30,081,347 30,500,599 lending lending (268,172) (141,951) (187,000) 141,951 373,556 187,526 113,554 268,172 (53,834) 82,231 33,459 72,895 (9,129) Mortgages Mortgages Mortgages 25,509,719 25,764,848 (185,419) 258,837 162,914 185,419 (10,594) (59,116) (31,772) (43,081) 59,116 53,725 52,348 4,887 504 Overdrafts Overdrafts 7,685,891 7,749,886 (22,815) (40,071) (21,720) 40,071 42,922 36,056 22,815 (1,109)

4,015 (423) 672 – –

70,155,706 70,957,875 (482,652) (296,816) (362,441) Total Total 296,816 115,078 245,773 241,529 482,652 738,139 357,636 (64,035) (22,701) (4,104)

5 ADVANCES c Of theTotal ECLof$802.2million,39.8%wasonacollective basisand60.2%wasonanindividualbasis. Total At September30,2018 Recoveries Credit lossexpense Charge-offs andwrite-offs underIFRS9 ECL allowanceasatOctober1,2017 –Lifetime ECL Stage 3:Credit Impaired FinancialAssets At September30,2018 repayments etc. Other credit lossmovements, duringtheyear ECL onnewinstrumentsissued underIFRS9 ECL allowanceasatOctober1,2017 Stage 2:Lifetime ECL Impairment allowanceforadvances tocustomers

( continued)

lending Retail (189,497) 142,668 41,932 63,793

11,143 (1,385) 6,246 1,869 2,586 ( 668 continued) 2018 and corporate Commercial lending (126,577) 419,252 268,172 390,420 (59,885) 64,214 11,277 (7,639) 9,129 5,491 Mortgages Mortgages (531,505) 255,129 185,419 529,758 187,166 10,594 16,576 (6,622) 640 – Overdrafts (49,145) 63,995 22,815 71,288

1,109 1,438 (329) 672 – –

(830,032) Total 802,169 482,652 206,882 516,401 589,401 (15,975) 22,701 31,877 6,799

ANNUAL REPORT 2019 87 REPUBLIC BANK (GUYANA) LIMITED 88 5 ADVANCES NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise d Other services Non-residents Personal Hotel andrestaurant Construction Manufacturing Real estatemortgages Distribution Transport, storageandcommunication Electricity andwater Agriculture Energy andmining Financial sector Government andgovernment bodies Other services Non-residents Personal Hotel andrestaurant Construction Manufacturing Real estatemortgages Distribution Transport, storageandcommunication Electricity andwater Agriculture Energy andmining Financial sector Government andgovernment bodies Provision forloanlossesby economicsectors ( continued)

15,426,537 24,463,125 10,103,591 17,905,461 27,413,628 13,226,320 67,019,655 76,346,974 amount 6,747,893 1,131,404 4,050,273 3,131,837 7,702,332 1,269,318 2,534,929 3,404,027 Gross 1,345,720 1,930,019 173,493 215,839 148,674 124,466 345,474 235,361 109,382 47,507 72,489 31,147

75,818 565

2018 performing 3,938,220 3,626,679 1,301,723 1,326,335 1,303,448 1,205,605 Non- 253,661 364,413 156,744 178,669 437,089 108,998 101,943 143,853 222,620 103,639 153,845 157,879 21,156 23,279

- – – – – – – – – –

provisions Specific (482,652) (357,636) (185,419) (162,914) 2019 (64,147) (38,787) (98,992) (35,223) (35,163) (48,306) (40,047) (57,461) (56,704) (6,247) (6,524) (4,354)

– – - – – – – – – – – – – –

credit loss Expected (319,517) (380,503) (83,081) (99,318) (57,547) (21,812) (16,867) (56,300) (14,061) (18,881) (69,711) (54,414) (95,923) (73,364) (10,705) (1,162) (1,916) (6,093) (1,306) (7,247) (7,041)

(934) (390) (173) (690) (256) (825) (3) – –

15,532,970 25,509,718 11,318,051 18,131,769 14,301,857 70,155,706 79,235,514

advances 28,458,239 6,705,255 1,282,055 1,492,318 3,516,836 7,662,787 1,364,220 2,616,415 2,077,193 4,108,138 3,603,412 407,150 172,559 288,512 109,382 147,849 123,776 234,055 Net 47,251 72,099 30,974

75,818

562

6 5 ADVANCES a INVESTMENT SECURITIES h g f e

Total investment securities Equity Designated atfairvalue through profit orloss Corporate bonds State-owned companysecurities Government securities cost Debt instrumentsatamortised Other services Manufacturing Distribution Government related customers). During theyear, theBankrealised collateralamountingto$32.1million(2018:$28.4million). Collateral realised 30, 2019amounts million). The million to (2018: $7,073.4 collateral $6,728.3 consists of cash, securities and properties. September The undiscountedfair value ofcollateralthattheBankholdsrelating toloansindividuallydeterminedbeimpaired at 3. Theseamountedto$373.8millionasatSeptember30,2019withacorresponding ECLof$5million. Restructured loans are carefully monitored. Restructured large commercial and corporate loans are classified as Stages 1, 2 and terms. of modification the before calculated as EIR original the using measured is impairment any renegotiated, been have terms the Once Department. Risk Credit the by raised concerns significant or payments overdue covenants, on defaults include difficulties financial of Indicators conditions. and terms modified the meet to likely is borrower the believes Bank the when only made are borrower’s financial difficulties, rather than taking possession or to otherwise enforce collection of collateral. These modifications the to response a as loans corporate and commercial large of terms original the to modifications makes occasionally Bank The case ofdifficulties by theborrower. Thesemodificationsrarely resultinanimpairmentlossandifthey do,itisnotmaterial. Within the retail management will in the normal course of business modify the portfolio, terms and conditions of facilities in the Restructured/Modified Loans Credit concentration by economic sector (facilities totaling 10% and above of Capital base for any one customer or group of closely

(

continued)

12,510,012 14,835,914 13,014,540 24,036,539 14,811,714 1,797,174 4,204,912 2,448,901 4,872,714 2019 2019 24,200 –

22,456,073 15,694,193 15,674,193 12,911,496 12,618,390 1,517,452 1,245,245 4,593,327 2,683,053 2,561,303 2018 2018 20,000

ANNUAL REPORT 2019 89 REPUBLIC BANK (GUYANA) LIMITED 90 6 NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise d c b INVESTMENT SECURITIES At September30,2019 Other credit lossmovements, repayments and maturities ECL onnewinstrumentsissuedduring theyear ECL allowanceasatOctober1,2018underIFRS9 Net exposure ECL Gross exposure and year-end stageclassification. The table below shows the credit quality and the maximum exposure to credit based risk on the Bank’s credit rating aging system, Debt instrumentsmeasured cost atamortised Financial investment securitiessubjecttoimpairmentassessment Between sixmonthsandoneyear Between three andsixmonths Within three months Treasury Billsby remaining termtomaturity More thanfive years Between oneandfive years Between sixmonthsandoneyear Within three months Investment securitiesby remaining termtomaturity

( continued)

12 month 1,066,724 Stage 1 1,067,304 ECL

(580)

580

580 – –

13,738,096 13,643,419 Lifetime Stage 2 2019 (248,347) ECL 343,024 (94,677) 94,677

–

financial assets Credit impaired – Lifetime ECL 32,935,836 14,319,725 11,447,475 14,835,914 8,621,113 9,994,998 3,262,668 Stage 3 2019 2019 137,197 101,571 125,771 (35,626) 35,626 35,626

– – –

154,578

14,942,597 33,096,297 14,811,714 15,694,193 15,115,981 14,194,574 3,785,742 3,469,807 9,775,786 2,294,022 2018 2018 (212,721) (130,883) Total 130,883 343,024

580

7 6

Cost a e d INVESTMENT SECURITIES Net bookvalue Disposal ofassets Charge fortheyear At beginningofyear Accumulated depreciation Transfer of assets Disposal ofassets Additions atcost At beginningofyear to measure fairvalue. valueinsufficient is available information since appropriatefair recent by the of determined estimate is cost Forsecurities, equity Designated atfairvalue through profit orloss At September30,2018 Other credit lossmovements, repayments andmaturities ECL onnewinstrumentsissuedduringtheyear ECL allowanceasatOctober1,2017underIFRS9 Net exposure ECL Gross exposure Financial investment securitiessubjecttoimpairmentassessment PREMISES ANDEQUIPMENT

( continued)

12 month progress Stage 1 works in Capital ECL 337,360 337,360 330,298 (8,522) 15,584

(2,033) 2,033

( continued) – – – – – – – – - –

16,017,217 15,674,193 premises Freehold 5,345,102 6,323,984

Lifetime 6,279,925 Stage 2 2019 (105,065) (343,024) 2018 343,024 978,882 893,306 227,346 220,743 ECL 42,958 85,576

1,101

– –

financial assets Credit impaired – Lifetime ECL andfittings Equipment, 1,493,480 4,296,824 4,213,065 2,803,344 2,544,496 Stage 3 furniture (113,970) 190,308 358,386 (99,538) 7,421 – – – – – – –

10,958,168 10,508,574 16,017,217

15,674,193 7,175,942 3,782,226 3,437,802 Total (113,970) (107,098) (343,024) Total

563,564 343,024 227,346 222,776 (99,538) 443,962

–

ANNUAL REPORT 2019 91 REPUBLIC BANK (GUYANA) LIMITED 92 7 NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise

Cost b a Net bookvalue Disposal ofassets Charge fortheyear At beginningofyear Accumulated depreciation Transfer ofassets Disposal ofassets Additions atcost At beginningofyear Cost Net bookvalue Disposal Charge fortheyear At beginningofyear Accumulated depreciation Disposal Additions atcost At beginningofyear Intangible assets PREMISES ANDEQUIPMENT

( continued)

2018

progress (116,387) works in Capital 116,970 15,584 15,584 15,001 – – – – –

6,279,925 5,386,619 6,217,980 premises Freehold 893,306 100,636 785,087 (20,307) 80,091 7,583 2,161

602,028 8,214 andfittings Equipment, furniture 4,213,065 1,668,569 3,980,642 2,544,496 2,283,674 (108,220) (105,460) 223,657 369,042 114,226 2019 573,636 675,519 668,406 (1,101) (1,101) 73,491 29,493 6,380

10,508,574 10,315,592 7,070,772 3,437,802 3,068,761 2018 Total (100,637) (125,767) 573,636 469,678 318,749 668,406 671,830 541,623 94,770

41,809 (9,796) (9,804)

–

9 8 GOODWILL 7

b a EMPLOYEE BENEFITS at September30,2019usingthe‘value inuse’ method.Basedontheresults ofthisreview, noimpairmentexpensewasrequired. of theGuyana National Cooperative Bank. In accordancethat allassetsgavewith IFRS3, to goodwill risewere reviewedimpairment for The residual balance of goodwill arising from business combinations was generated from assets and liabilities the acquisition of certain Impairment testingofgoodwill Total unimpaired goodwillonacquisition c PREMISES ANDEQUIPMENT

Closing definedbenefitobligation Benefits paid – Experienceadjustments Remeasurements Members’ contributions Interest cost cost Current service Opening definedbenefitobligation Changes inthepresent valueare asfollows: ofthedefinedbenefitobligation Net (asset)/liabilityrecognised intheStatementoffinancialposition Fair value ofplanassets Present value ofdefinedbenefitobligation The amountsrecognised asfollows: intheStatementoffinancialpositionare Contracts foroutstandingcapitalexpenditure notprovided forinthefinancialstatements Capital commitments

( continued)

(2,155,700)

2,124,000 1,943,300 2,124,000 1,228,222 2019 2019 2019 105,600 250,002 (48,100) (31,700) 38,000 77,600 7,600

(1,957,000) 1,228,222 1,943,300 2018 2018 2018 1,731,300 1,943,300 450,715 (13,700) (45,400)

55,800 94,000 71,400 36,200

ANNUAL REPORT 2019 93 REPUBLIC BANK (GUYANA) LIMITED 94 9 NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise f e d c EMPLOYEE BENEFITS 61% ofthebenefitsforactive membersare vested 52% ofthedefinedbenefitobligationforactive membersisconditionalonfuture increases salary yearend The weighteddurationofthedefinedbenefitobligationat – – – The definedbenefitobligationisallocatedbetweenthePlan’s membersasfollows: Liability profile Closing definedbenefitasset Premiums paidby theBank Remeasurements recognised inothercomprehensive income Net pensioncost Opening definedbenefitobligation Unrecognised gain/(loss)charged toretained earnings Defined benefitobligationatprior yearend Reconciliation ofopeningandclosingStatementfinancialpositionentries: Net pensioncost The amountsrecognised intheStatementofincomeare asfollows: Actual return onplanassets Closing fairvalue ofplanassets Expense allowance Benefits paid Members’ contributions Bank contributions Return onplanassets,excluding interest income Interest income Opening fairvalue ofplanassets Changes inthefairvalue ofplanassetsare asfollows: Pensioners Deferred members Active members

( continued)

(13,700)

1,957,000 2,155,700 20.0 years (107,200) 2019 107,200 110,100 107,100 (31,700) (48,100) (13,700) 38,000 10,600 78,600 78,600 (5,500) (3,000) 22% 76% 2% –

20.0years 1,957,000 2018 1,596,100 (121,400) (107,700) (13,700) 267,500 107,700 177,200 135,200 135,200 (45,400) 80,200 80,200 36,200 90,300 (5,100) 22% 76% 2% –

9 i h g EMPLOYEE BENEFITS - Female - Male Life expectancyatage65forcurrent membersage 40 inyears: - Female - Male Life expectancyatage65forcurrent pensionerinyears: defined benefitobligationasatSeptember30,2019 are asfollows: Assumptions regarding future are rates. The mortality life based on published mortality expectancies underlying the value of the NIS ceilingrates increaseRate ofsalary Discount rate ofprincipalactuarialassumptionsasat September30 Summary September 30,2019by $55.0million. An increase of1year intheassumedlife expectanciesshownabove would increase thedefinedbenefitobligationat – Future increases salary – Discountrate defined benefitobligationasatSeptember30,2019would have changedasa resultofachangeintheassumptionsused. the how summarises table following The used. assumptions the to sensitive is obligation benefit defined the of calculation The Sensitivity analysis Total includedinOthercomprehensive income Experience loss/(gain) Remeasurements recognised inOthercomprehensive income These sensitivitieswere calculatedby re-calculating thedefinedbenefitobligationsusing revised assumptions.

(

continued)

%

1% perannum decrease (244,000) 462,000 $’000 2019 2019 10,600 10,600

18.4 14.6 18.4

14.6 5.00 5.50 5.50

1% perannum increase $’000 2018 (121,400) 2018 (353,000) (121,400) 309,000 % 14.6 18.4 14.6 18.4 5.00 5.50 5.50

ANNUAL REPORT 2019 95 REPUBLIC BANK (GUYANA) LIMITED 96 10 9 NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise

b a Components ofdeferred taxassetsandliabilities DEFERRED TAX ASSETS ANDLIABILITIES k Funding j EMPLOYEE BENEFITS ECL onloansandinvestments Fee andcommissionincome above. TheBankexpectstopay $118.0milliontothePension Schemeduring2019/2020. actuarial valuations ofthe Scheme and the assumptions used to determine the funding required may differ from those set out years) 3 every least (at regular on based are requirements funding The fixed. are which members, by paid those to equal least at contributions pay must Bank the and Scheme Pension benefit defined the funding of cost the of balance the meets Bank The Fair value ofschemeassetsatendyear Mortgages Cash andcashequivalents Overseas equities Local equities Plan assetallocationasatSeptember30 Premises and equipment Pension asset Deferred taxliabilities Deferred taxassets

( continued)

Opening Opening balance balance 2018 2018 373,426 265,016 163,102 428,118 378,906

5,480

of IFRS9 of IFRS9 Impact Impact

(Charge)/credit Credit/(charge) – – – – – –

Statement of Statement of income income (61,062) (74,712) 11,716 11,440 13,650

276

comprehensive comprehensive 1,361,500 2,155,700 income income 171,300 164,000 458,900 Other Other 2019 (4,240) (4,240)

– – – –

1,957,000 balance balance Closing Closing 1,228,700 2019 2019 2018 190,304 386,382 373,702 367,056 176,752 181,200 168,600 378,500 12,680

12 11 b a CUSTOMERS’ CHEQUING, SAVINGS ANDDEPOSIT ACCOUNTS Other assets Items intransit Accounts receivable andprepayments OTHER ASSETS Between sixmonthsandoneyear Between three and sixmonths Within three months Other Other financialinstitutions Personal Corporate andcommercial State 2018 Other Other financialinstitutions Personal Corporate andcommercial State 2019 Time depositsby remaining termtomaturity Concentration ofcustomers’chequing,savingsanddepositaccounts

35,914,979 47,794,589 Demand 13,053,098 10,828,333 21,586,758 13,257,207 6,156,546 4,791,619 1,085,383 5,966,265 1,563,202 5,421,157

102,525,558 99,386,948 Savings 75,235,351 21,232,940 78,539,444 12,417,727 3,263,375 4,163,114 2,295,737 1,053,910 3,212,753 498,155 262,542 1,320,840 6,423,554 6,214,376 6,423,554 4,987,084 5,161,589 2,953,354 2,149,360 Time 630,750 274,355 349,222 293,675 300,920 415,812 226,269 385,554 243,450 2019 2019 305,125 63,083

144,654,913 153,605,091 32,354,948 26,099,094 25,975,854

86,378,981 16,590,828 89,122,190 6,214,376 5,533,224 7,246,444 5,161,509 3,796,932 2,749,076 1,186,364 2,278,936 Total 2018 2018 505,848 208,569 260,748 36,531

ANNUAL REPORT 2019 97 REPUBLIC BANK (GUYANA) LIMITED 98 NOTES TOTHEFINANCIALSTATEMENTS 15 14 13 For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise a OTHER RESERVES stockunitsofnoparvalue300 millionordinary Issued andfullypaid stockunitsofnoparvalue300 millionordinary Authorised STATED CAPITAL Other Dividends payable Deferred income liabilities Statutory Accrued expenses Drafts andsettlements OTHER LIABILITIES b

General bankingriskreserve/Other reserves be must profit net year’s current the of 15.00% of minimum a 85:03, Cap. Act Institutions Financial the with accordance In reserves Statutory The remaining balancerepresents thedifference betweenIFRS9provision andregulatory reserve requirement. ofthese reserves to retainedof aportion earnings in theStatement of changes inequity,under “Net Impact of Adopting IFRS 9”. provisioning levels, the Bank has opted to reduce the level ofGeneral held, Contingency and has included Reserves the transfer enhanced the and 9 IFRS of adoption the With advances. non-performing and provision specific the between difference the for wascreatedPrior totheadoption a GeneralContingency of IFRS9, Reserve appropriation as avoluntary of retained earnings, distributable. transferred Fund to the Reserve until the amount in the Fund is equal to the paid up Capital of the Bank. This reserve isnon-

123,140

2,327,196 1,388,212 300,000 426,543 2019 2019 231,659 146,030 11,612

2,197,682 1,470,792 2018 2018 300,000 278,285 107,422 212,554 116,259 12,370

16 OPERATING PROFIT d c b a Operating expenses Other income Interest expense Advances Interest income Auditors’ fees Directors’ fees andpublicrelations Advertising expenses Communication Depreciation expense Loss onsaleofpremises andequipment Property tax Property related expenses Lease rental expenses General administrative expenses Staff profit share Staff costs Other operatingincome Gains from saleofpremises andequipment Payments andtransfers Deposit andrelated fees Dividends Loan recoveries Net exchange tradingincome Credit andrelated fees Customers’ chequing,savings anddepositaccounts Liquid assets Investment securities

2,193,404 3,152,038 1,370,193 9,083,475 7,869,609 5,586,916 1,077,616

1,241,181 473,445 401,043 342,366 199,089 125,721 194,299 695,913 241,530 113,683 424,319 789,547 2019 588,076 19,845 15,390 19,677 4,165 2,485 7,909 –

3,153,298 7,974,508 5,007,796 2,113,314 1,399,435 6,931,329 2018 570,015 228,046 511,487 176,393 845,417 301,881 194,013 252,995 974,673 206,882 112,813 497,616 545,563 119,538 658,755 19,845 15,210 17,910 2,783 9,704 –

ANNUAL REPORT 2019 99 REPUBLIC BANK (GUYANA) LIMITED 100 19 18 17 NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise market rates. course ofbusiness. These transactions are both secured and unsecured and were carriedoutoncommercialand conditions, terms at normal the in parties related with into entered are transactions banking of number A decisions. operating or financial making in party other the over influence exercisesignificant or party other the control to ability the has party one if related be to consideredare Parties RELATED PARTIES Total taxation Deferred tax Current tax Deferred fee income Defined benefitobligation Loss/(Gain) onsaleofpremises andequipment Expected credit loss(Stages1&2) Wear andtearallowance Property tax Donations Depreciation Tax exempt income Tax effect ofitemsthatare adjustableindeterminingtaxableprofit: Tax taxrates(40%) atapplicablestatutory Accounting profit reasons: Income taxesfrom intheStatement income vary of amounts the following that tax ratefor would be computed byapplying the statutory Reconciliation TAXATION EXPENSE cost Debt instrumentsmeasured atamortised Advances CREDIT LOSS EXPENSE

2,055,691 1,311 189,378 2,389,700 2,128,470 5,974,251 (155,164) (378,172) (212,141) 298,411 2019 2019 (11,440) (74,712) 77,720 86,270 72,779 13,650 3,420

1,530,593 1,585,314 1,865,839 4,664,597 2018 2018 (198,836) (365,754) 885,398 204,595 765,150 120,248 (54,721) (77,055) (11,000) 70,557 30,821 64,847 1,300 19 Proportion ofrelated exposure tototalcustomerexposure parties Other related parties Directors andkey managementpersonnel Fellow subsidiaries Interest andotherexpense Other related parties Directors andkey managementpersonnel Interest andotherincome Other related parties Directors andkey managementpersonnel Fellow subsidiaries Deposits andotherliabilities 1.68%) oftheBank’s capitalbase. Amounts due from the five parties with the highest exposures totalled $501.4 million (2018: $337.9 million) and represents 2.22% (2018: No provisions have beenmadeagainstamountsduefrom related parties. Other related parties Directors andkey managementpersonnel Fellow subsidiaries Loans, investments andotherassets Outstanding balances RELATED PARTIES

( continued)

(excluding key managementcompensation)

133,444 4,909,794 5,506,714 1,037,663 146,569 266,487 2019 2019 330,433 467,714 486,990 14,771 82,959 11,544 5,433 3,227 0.72% 7,692

3,360,860 2,979,660 2018 2018 498,790 122,098 106,510 163,715 217,485 289,828 132,410 76,552 7,770 7,818 6,156 3,286 2,870 0.53%

ANNUAL REPORT 2019 101 REPUBLIC BANK (GUYANA) LIMITED 102 20 19 NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise

20.1 RISK MANAGEMENT Other related parties 2018 Other related parties Loans benefits Short-term Key managementcompensation of theBank. Key management personnel are those persons having authority and responsibility for planning, directing and controlling the activities RELATED PARTIES 2019

the Board, theAudit, AssetandLiabilityOtherRisksCommittees, review specific riskareas. The Board ofDirectors has ultimate responsibility for the management within the of risk Bank. Acting with authority delegated by - and - - - - The basicprinciplesofriskmanagementfollowedby theBankinclude: Bank’s businessactivitieschangeinresponse tomarket, credit, product andotherdevelopments. environment, theBankhasestablished a comprehensivecontinually which is managing evolvingfor risks, framework asthe The Bank’s prudent banking practices are to keepfounded on management. solid risk In an effort apace with its dynamic Introduction

monitoring, segregation, authorisationandapproval, recording, safeguarding, reconciliation andvaluation. activitiesinaccordanceUndertaking withfundamental control standards. These controls includethedisciplines ofplanning, Applying highandconsistentethicalstandards toourrelationships withallcustomers,employees andotherstakeholders; Abiding by allapplicable laws,regulations andgovernance standards inwhichwedobusiness; inevery country Assessing riskinitiallyandthenconsistentlymonitoringthoserisks through theirlife cycle; Managing riskwithinparametersapproved by theBoard ofDirectors andExecutives; ( continued)

the beginning Balance at of year 86,504 86,504 90,066 90,066

theyear during Loans 20,759 20,759 20,342 20,342

Repayments 2019 (17,197) (17,197) (19,913) (19,913) 99,929

end ofyear Balance at Total 2018 90,066 90,066 90,495 90,495 89,752

20 20.2 20.1 RISK MANAGEMENT of that entity to service thedebt. of thatentitytoservice individual security is assessed based on the financial strength, reputation and market position of the issuing entity and the ability exposuregrading country or withpreset exposureas approved limits bythe Board of Directors. The credit quality of each The debt securities within the Bank’s areinvestment security portfolio exposed to creditand are risk managed byinvestment evaluation oftheriskandtrend informthecredit decisionanddeterminestheintensityofmonitoringprocess. categories of loans including credit cards. Trend indicators are alsoused to evaluate as improving,risk static or deteriorating. The are managed by product type. Preset management risk criteria is in place at all branches to facilitate decision-making for all and retailfacilitate the basis.Retaillending, management mortgages on both of risk an individual overdraftsaccount and portfolio which The rating groupsBanksystem usesarisk commercial/corporate accounts and overdrafts intovariouscategories riskto development aspectoftheoperations. general policy ofthe Board ofDirectors.management The risk function keptis separate from and independent of the business that lendings are made in accordance with current legislation, sound banking practice and in accordance with theapplicable Managementaccountable The Risk Unitis the general for management and administration the Bank’sof credit ensuring portfolio, final authorityonallriskmanagementdecisions. The Bank’s creditmanagement risk process operates on the basis ofahierarchy ofdiscretionary authorities. The Board hasthe approach toriskmanagementandisconsidered essentialtothelong-termsuccessofBank. credit exposure risk within acceptable parameters. The effective management of creditis akey risk element of acomprehensive The objective of the Bank’s credit risk management function is to maximise the Bank’s risk-adjusted rate of return by maintaining Credit isthe risk potential that a borrower willfailto meet its stated obligations in accordance or counterparty with agreed terms. Credit risk follows: currencyThe Bank reviewsrisk. operational and country risk, risk and agrees policiesmanaging for each as of these risks foreign risk, liquidity risk, market and rate interest risk, credit are instruments financial Bank’s the from arising risks main The liquidity tomeetallclaimsthatmightfalldue. equity investments and seeks to increase these margins by lending for longer periods at higher rates, while maintaining sufficient to earn above average interest margins by investing in high quality assets such as government and corporate securities as well The Bank’s activities are primarily related to the use of financial instruments. The Bank accepts funds from customers and seeks management andreports itsfindingsand recommendations tothe Audit Committee. procedures and the Bank’s compliance with these procedures. Internal Audit discusses the results ofallassessmentswith The Internal Audit function management audits risk processes throughout the Bank by examining both the adequacy of the risks. strategies for the management of the non-credit of the risks Bank, including interest rate, foreign exchange, liquidity and market ofthemanagement risk processand liability management is avitalpart ofthe Bank. The mandate of the Committee is to approve The Asset/Liability Committee of the Bank reviews on a monthly basis the non-credit and non-operational of the Bank. risks Asset Introduction

( continued) ( continued)

ANNUAL REPORT 2019 103 REPUBLIC BANK (GUYANA) LIMITED 104 20 NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise 20.2 RISK MANAGEMENT 20.2.1 status. from tonon-performing performing where it isconsidered that recovery ofthe outstanding balance may be doubtful or unduly delayed, such accounts are transferred The Bank’s credit control processes emphasise early detection of deterioration and prompt implementation of remedial action and on thelevel ofcredit riskby product, sector, industry clientandgeographyare approved by theBoard ofDirectors. conditions. Such arerisks controlled and monitored on a revolving basis and subject to an annual or more frequent review. Limits that would cause their ability to meet contractual obligations to affectedbe similarly by changes in economic, political or other borrowers engaged in similarbusiness activities, or activities in the same geographic region or with similar economic features The Bank avoids exposure toundue concentrations byof risk placing on limits the amount accepted of risk from anumber of Credit risk

loans from parent companies,owners/stockholders,directors orotherparties. receivables over and mortgages residential properties and chattels. The Bank also obtains appropriate guarantees for The main typesofcollateral obtained are cash or securities,charges over real estate properties, inventories and trade Guidelines are implemented regarding theacceptabilityoftypes ofcollateralandvaluation parameters. tool. The amount and type of collateral required depends on an assessment of the credit risk ofthe counterparty. The Bank maintains creditexposure risk within acceptable parameters through the use ofcollateral as arisk-mitigation Collateral andothercredit enhancements creditrisk current the represent above shown exposure butnotthemaximumriskexposure thatcouldariseinthefuture asaresult ofchangesinvalues. theamounts value atfair recorded are instruments financial Where Total credit riskexposure Total Letters ofcredit Guarantees andindemnities Undrawn commitments Total Loans andadvances tocustomers Investment securities Investment interest receivable Treasury Bills Duefrom banks depositswithBankof Guyana Statutory The tablebelowshowstheBank’s maximumexposure tocredit risk: Maximum exposure tocredit riskwithouttakingaccountofanycollateralandothercredit enhancements

( continued) ( continued)

Gross maximumexposure 1,940,716 213,228 179,376,957 167,753,720 14,811,714 32,935,836 24,128,166 16,871,143 11,623,237 78,793,633 9,417,819 264,702 2019

168,804,799 156,160,262 12,644,537 10,540,301 69,747,950 15,674,193 33,096,297 21,238,204 16,178,382

1,908,611 2018 195,625 225,236

20 20.2 RISK MANAGEMENT 20.2.2 20.2.1 Credit risk a following tables: Concentration is managed of risk by client/counterparty,by geographical region sector as detailed and byin the industry Risk concentrationsofthemaximumexposure tocredit risk disposed of. million) inrepossessedmillion (2018:$39.5 $10.2 properties are stillinthe process ofbeing 2019, 30, September at repay theoutstandingclaim.In general,theBankdoesnotoccupy repossessed properties forbusinessuse.As It istheBank’s policytodisposeofrepossessed properties inanorderly fashion.Theproceeds are usedto impairment losses. agreement, and monitors the market value of collateral obtained during its review ofthe adequacy of the allowance for Management monitors the market value of collateral, requests additional collateral in accordance with the underlying Maximum exposure tocredit enhancements riskwithouttakingaccountofanycollateralandothercredit

( continued) Other countries United States Suriname Eastern Caribbean Barbados Trinidad andTobago Guyana ofdomicileourcounterparties: based onthecountry into account any collateral held or other credit enhancements, can be analysed bythe following geographical regions The Bank’screditmaximum exposure, aftertaking account of credit loss provisionsestablished but before taking Geographical sectors ( continued)

179,376,957 169,893,928 1,005,815 7,202,636 1,211,755 2019 58,383 4,440 –

168,804,799 163,657,824 1,678,883 2,718,539

( 2018 continued) 635,764 109,503 1,334 2,952

ANNUAL REPORT 2019 105 REPUBLIC BANK (GUYANA) LIMITED 106 20 NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise 20.2 RISK MANAGEMENT 20.2.3 20.2.2 Credit risk and measurement approach issetoutbelow. also reviewed annually and action taken in accordance with prescribed guidelines. The Bank’s impairment assessment this reviewarising outof are submitted totheBoardapproval. for debtsrecommendedNon-performing write-off arefor Financial asset provisions are reviewed inaccordance quarterly with established guidelines and recommended provisions Impairment assessment c b Risk concentrationsofthemaximumexposure tocredit risk

( continued) Counterparty 5 Counterparty 4 Counterparty 3 Counterparty Central Bank Government Top five concentration (asa%ofcapitalbase) Other services Non-residents Personal Hotel andrestaurant Construction Manufacturing Real estatemortgages Distribution Transport, storageandcommunication Electricity andwater Agriculture Energy andmining Financial sector Government andgovernment bodies counterparties: The following table breaks down the Bank’s maximumcredit exposure ascategorised sectorsofour by the industry sectors Industry Included above is$126.8million(2018:$4.9million)representing Publicnon-financialinstitutions. ( continued)

( continued)

179,376,957 18,401,359 26,139,020 63,942,408 15,733,986 14,703,207 29,289,911 2,604,670 3,407,668 1,674,078 2,664,075 254,356 289,079 148,674 124,466 2019 2019 150.01 145.58 10.82 18.59 55.30

168,804,799 11,156,136 18,297,779 25,734,599 12,408,877 21,329,308 66,136,583 1,301,942 6,528,347 1,773,294 3,600,246 2018 2018 173,493 349,130 14,500 176.89 164.13 12.70 13.31 62.58 565

20 20.2 RISK MANAGEMENT Overdrafts 20.2.5 20.2.4 Credit risk

the present value offuture cashflows.EADequals theloanbalanceoutstandingplusaccruedinterest. based on historical loss trends loans which are for non-performing assessedonan individual level including estimating applied judgmental overlaysbased on expectations. previouslyAs mentioned, LGD percentage estimates were developed developed and there being no correlation between macroeconomic trends and historical default rates, management retrospective approach was applied looking at the movements ofratingsover aperiod of time.Historical PDs were The Bank has an independent internal credit ratings Risk were forPD analysis. department. A risk selected as cohort Commercial andcorporatelendingmortgages The Bank’s internalratingandPDestimationprocess when theborrower becomes90days past-dueonitscontractualpayments. The Bank considers a financial instrument defaulted and therefore Stage 3 (credit-impaired) for ECL calculations in cases Default andcure instruments. EAD equals the amortised securitybalanceplusaccruedinterest.instruments. EADequalstheamortised is issuedoron company ratings where they existed. Management applied judgmental overlaysbased on local debt for non-traded instruments were based on one notch below the credit rating of the sovereign in which the instrument PDs and LGDstraded for instruments were based on theglobal credit ratingsassigned to the instrument. PDsand LGDs Investment securities trends andhistoricaldefaultrates. Management judgmentally applied overlays as required as there was no noted correlation between macroeconomic historical trends inutilisation of overdraftECL percentages limits. were the for Retailportfolio retail utilised for overdrafts. were extended. LGDs were forthe Corporate portfolio also utilised for overdrafts. EADswere developed based on PDs were developed and were for the Corporate portfolio applied to corporate customers to whom overdraft facilities assessed on both an individual and collective level. EADequals the loan balance outstanding plus accrued interest. LGD percentage estimates were developed based on historical loss trends loans which are for non-performing being no correlation between macroeconomic trends, management applied judgmental overlays based on expectations. applied looking at the number of defaults by segment over a period of time. Historical PDs were developed and there Product types were forPD analysis forretail selected as cohort lending and retail Avintage approach mortgages. was Retail lendingandmortgages there hasbeenasignificantincrease incredit riskcompared toinitial recognition. Stage 2 orStage 1 once cured depends on the updated credit grade, at the time of the cure, and whether this indicates of the default criteria have been presentconsecutiveat leastsix for months. The decision whether an assetas to classify none 3 when Stage of out therefore re-classified and as ‘cured’ instrument financial a consider to policy Bank’sthe is It appropriate. result intreating the borrower asdefaulted and therefore assessedasStage 3 forECLcalculations or whether Stage 2 is that may indicate unlikeliness to pay. When such events occur, the Bank carefully considers whether the event should ofa qualitativeAs a part assessment of whether a borrower is in default, the Bank also considers a variety of instances

( continued) ( continued)

ANNUAL REPORT 2019 107 REPUBLIC BANK (GUYANA) LIMITED 108 20 NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise 20.2 RISK MANAGEMENT 20.2.7 20.2.6 Rating 20.2.5 Credit risk • • • • basis. Assetclasseswhere theBankcalculatesECLonanindividualbasisinclude: explainedAs inNote (i) dependent 2 on thefactorsbelow,the Bank calculates either onacollectiveECLs oranindividual Grouping financialassetsmeasured onacollective basis risk sinceinitialrecognition. credit in increase significant a been has there whether assesses LTECL,Bank or the 12mECL to subject is instruments The Bank continuously monitors all assetssubject to ECLs. In order of to determine whether an instrument or a portfolio Significant increase incredit risk The Bank’s internalratingandPDestimationprocess • • • Asset classeswhere theBankcalculatesECLonacollective basisinclude: same principlesforassessingwhetherthere hasbeenasignificantincrease in credit risksinceinitial recognition. When estimating on a collectiveECLs basisforabank assets (assetout with the similar in Note Bank 20.2.7), applies the deemed tohave increased significantlysinceinitial recognition. asset. an Regardless ofthe change in credit contractual grades, if payments are more than days30 past-due, the creditis risk for risk credit in increase significant a triggering for method qualitative secondary a applies also Bank The Credit Impaired/ loans: non-performing Watch list: Superior/Desirable: A descriptionoftheinternalcredit ratingsisnotedbelow: Credit loans>90days impaired/ non-performing Watch list31>90days Superior/desirable <30days The Bank’s internalcredit ratingsare correlated tostagesasfollows: Internal rating

( continued) Past-due notyet relegated credit facilities Subsidiaries withsmall,homogeneous retail portfolios The retail overdraft portfolio The Retaillendingportfolio portfolio The Mortgage The Commercial andcorporatelendingoverdraft portfolio All Stage3assets,regardless oftheclassfinancialassets ( continued)

Past-due orindividuallyimpaired. levels ofsecurity. may besubject to moreor industry volatility and facilities typicallyhave lower These counterparties are of average risk with a fair financial position. Business well. secured orreasonably wellsecured andunderlyingbusinessisperforming These have counterparties a good financial position. Facilities are well

( continued)

Stage 3 2 1

20

20.2 RISK MANAGEMENT 20.2.8 Credit risk

between stagesasaresult ofincreases incredit risk. The increase wasdriven by inECLsofStage1portfolios a47.8%increase inthegross movements size oftheportfolio, Percentage (%)ofECL/Gross loans ECL Gross loans Stage 1 Percentage (%)ofECL/Gross loans ECL Gross loans Stage 1 Stage 3 Stage 2 Stage 1 Advances Analysis ofGross amountandcorresponding ECLsisas follows: carrying

( continued) (

continued)

lending Retail 302,380 246,702 742,398 797,254 (55,678) (54,856)

18.4 6.9

and corporate and Commercial lending 1,106,587 1,076,969 935,895 (170,692) 935,018 (141,951)

13.2 15.4

Mortgages Mortgages

1,930,471 2,875,784 2,963,337 1,989,587 2019 (59,116) (87,553) 2018

3.0 3.0

Overdrafts 409,430 2019 188,766 451,326 228,837 (41,896) (40,071) % 88.81 4.54 6.65 17.5 9.3

3,300,957 3,597,773 4,963,507 5,318,504 Total 2018 (296,816) (354,997) 89.38 5.55 5.07 8.2 6.7

ANNUAL REPORT 2019 109 REPUBLIC BANK (GUYANA) LIMITED 110 NOTES TOTHEFINANCIALSTATEMENTS 20 For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise

20.2 RISK MANAGEMENT 20.2.8 Credit risk

Percentage (%)ofECL/Gross loans ECL Gross loans Stage 3 between stagesasaresult ofincreases incredit risk. The increase wasdriven by inECLsofStage2portfolios a12%increase inthegross movements size oftheportfolio, Percentage (%)ofECL/Gross loans ECL Gross loans Stage 2 Percentage (%)ofECL/Gross loans ECL Gross loans Stage 2 Analysis ofGross amountandcorresponding ECLsisas follows: carrying

( continued) (

continued)

lending lending 6,617,137 Retail Retail 7,052,308 6,619,006 7,053,752

23,279 16,755 (6,524) (1,444) (1,869) 28.0 0.02 0.03

and corporate and corporate and Commercial Commercial 26,979,928 31,882,985 26,989,057 lending lending 31,898,323 2,112,426 2,299,952 (187,526) (15,338) (9,129)

0.03 0.05 8.2

Mortgages Mortgages Mortgages Mortgages 24,441,921 22,462,944 22,473,538 24,450,291 1,140,534

1,303,448 2019 2019 (162,914) (10,594)

(8,370) 2018 ( continued) 12.5 0.05 0.03

Overdrafts Overdrafts 7,625,750 7,339,172 7,340,281 7,626,104 (1,109) (354) 0.02 0.00 0.0 – – –

63,399,181 63,421,882 71,002,964

71,028,470 3,626,679 3,269,715 Total Total (356,964) (22,701) (25,506) 0.04 0.04 9.8 20

20.2 RISK MANAGEMENT 20.2.8 Credit risk

Percentage (%)ofECL/Gross loans Percentage (%)ofECL/Gross loans ECL Gross loans Stage 3 Analysis ofGross amountandcorresponding ECLsisas follows: carrying ECL Gross balance Stage 3 Stage 2 Stage 1 Investment securities between stagesasaresult ofincreases inwrite-offs. The decrease wasdriven byof Stage inECLsportfolios 3 decreasea 7.9% in the grosssize movements ofthe portfolio,

( continued) (

continued)

lending Retail 14,910

21,156 (6,246) 29.5

and corporate and Commercial lending Stage 1 2,165,729 2,434,573 1,066,724 1,067,304 (268,844)

(580) 0.05 11.0

Mortgages Mortgages 13,643,419 13,738,096 1,116,304 1,301,723 Stage 2 (185,419) 2018 2019 (94,677)

(

continued) 0.69 14.2 91.94

Overdrafts Stage 3 101,571 2019 137,197 158,625 180,768 (35,626) (22,143) % 25.97 0.92 7.14 12.2

14,811,714 14,942,597 3,455,568 3,938,220 Total Total (130,883) (482,652) 2018 100.00 0.88 12.3 0.00 0.00

ANNUAL REPORT 2019 111 REPUBLIC BANK (GUYANA) LIMITED 112 20 NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise 20.3 20.2 RISK MANAGEMENT Liquidity risk 20.2.8 Credit risk assets, whichhave loweryields,withtheneedforhigherassetreturns. in other Government The Bank continually securities, which can balances be used the for liquidity need support. for short-term While the primary asset used for short-term liquidity management is the Treasury Bill, the Bank also holds significant investments The Bank’s ALCO sets targets for daily float, allowable liquid assets and funding diversification in line with system liquidity trends. demand. liquidity needs. Facilities are alsoestablished with correspondent which banks, can provide additional liquidity asconditions funded the Bank is with “core deposits”. The Bank maintains a core base of retail funds, which can be drawn on tomeetongoing Two sources primary offundsare used to provide liquidity – retail deposits and excess of at Central Bank. A substantial portion Periodic stress testingisconducted by theregulator andcorrective actiontaken by theBank,ifdeemednecessary. Bank hassufficientfundstomeetallofitsobligations. (ALCO) and are subject to review by Management prior to disbursement. Liquidity management focuses on ensuring that the additional borrowings or tomeetundrawn commitments. Undrawn commitments are reviewed by the Asset/Liability Committee including be met, the replacement of existing fundsastheymature orarethe demands withdrawn, of customersfor to satisfy The Bank’s liquidity management policy is formulated by the Board and Management to ensure that funding requirements can tomeetallits available resources financial sufficient not have obligations andcommitmentsasthey falldue,orcanaccesstheseonlyatexcessive cost. does either Bank the that risk the as defined is risk Liquidity The decrease inECLswasdriven by a6.7%decrease in the gross –maturities. size oftheportfolio Percentage (%)ofECL/Gross loans Analysis ofGross amountandcorresponding ECLsisas follows: carrying ECL Gross balance Investment securities

( continued)

( continued)

( continued)

Stage 1 – – – –

15,674,193 16,017,218 Stage 2 2018 (343,025)

( continued) 2.14%

Stage 3 – – – –

15,674,193 16,017,218 Total (343,025) 2.14%

20 20.3 RISK MANAGEMENT 20.3.1 Liquidity risk Total Letters ofcredit Guarantees andindemnities 2019 position Statement offinancial Financial liabilities–off liabilities Total undiscountedfinancial Other liabilities Due tobanks anddepositaccounts Customers’ chequing,savings As atSeptember30,2018 position Statement offinancial Financial liabilities–on liabilities Total undiscountedfinancial Other liabilities Due tobanks anddepositaccounts Customers’ chequing,savings As atSeptember30,2019 position Statement offinancial Financial liabilities–on financial of Statement the on position. amounts carrying the than greater be therefore will and liabilities the of life remaining repayment obligations, over the remaining life ofthose liabilities. These balances include interest tobepaid over the undiscounted contractual on based liabilities financial Bank’s the of profile maturity the summarises below table The Analysis offinancialliabilities by remaining contractualmaturities

( continued) ( continued)

140,755,256 149,646,940 138,440,537 147,181,537 demand demand demand 2,197,682 2,327,196 On On On 117,037 138,207

– – –

Up toone Up toone Up toone 6,214,376 6,423,554 6,214,376 6,423,554 year year year 956,403 264,702 691,701

– – – –

1 to5 1 to5 1 to5 years years years 310,849 310,849

– – – – – – – – –

Over 5 Over 5 Over 5 years years years 938,166 938,166

– – – – – – – – –

146,969,632 156,070,494

144,654,913 153,605,091 2,197,682 2,327,196 2,205,418 1,940,716 Total Total Total 138,207

264,702 117,037

ANNUAL REPORT 2019 113 REPUBLIC BANK (GUYANA) LIMITED 114 NOTES TOTHEFINANCIALSTATEMENTS 20 For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise 20.4 20.3 RISK MANAGEMENT 20.4.1 20.3.1 Market risk Liquidity risk market in changes to variables suchasinterest rates,foreign exchange rates,andequityprices. due fluctuate will instruments financial of flows cash future or value fair the that risk the is risk Market Other currency instruments US$ Instruments G$ Instruments assets. Thisimpactisillustratedinthetable. The impact on net unrealised gains is the effect of changes in interest rates on the fair value of available-for-sale financial impact on net profit is the effect of changes in interest rates on the floating interest rates of financial assets and liabilities. reasonable a of equity and possible change in the interest ratesprevailing withallother variablesas atSeptember 2019, 30, held constant. The profit net on impact the determine to performed was analysis sensitivity rate interest An interest onfinancial year while one than less of instruments classifiedas“fixed” is fixed untilthematurityofinstrument. at intervals isrepriced asfloating classified on instruments Interest financial position. financial of Statement Bank’s the of exposure interest-rate the summarises table following The is Bank committed torefining anddefiningthesetoolstobeinlinewithinternationalbestpractice. The country. and depositor issuer, term, amount, of terms in defined are limits The instruments. financial for tools currently The primary in useby the Bank are gap analysis, interest rate sensitivity analysisand exposure limits competitiveness andmaximisereturns. ensure to Management and Board the by designed primarily is management risk rate Interest instruments. financial of Interestfromarises raterisk the possibility that changes in interest rateswillaffect future cash flows orthe fair values The Bank expects that not all ofthe contingent liabilities or commitments will be drawn before ofthe commitments. expiry Total Letters ofcredit Guarantees andindemnities 2018 position Statement offinancial Financial liabilities–off Interest raterisk Analysis offinancialliabilities by remaining contractualmaturities

( continued) ( continued)

basis points decrease in Increase/ demand +/- 50 +/- 50 +/- 50 On

–

– –

basispoints Increase in Up toone year 879,984 684,359 195,625

2019 -/+496,935 -/+59,210

-/+2,090

( continued) basis points

Decrease in 1 to5 years 259,124 259,124 Impact onnetprofit

–

basis points Increase in Over 5 years 965,128 965,128

-/+ 512,628

-/+ 36,347 – 2018 -/+ 4,332

basis points Decrease in

1,908,611 2,104,236 Total

195,625

20 20.4 RISK MANAGEMENT 20.4.2 Market risk RISKEXPOSURE NET CURRENCY LIABILITIES TOTAL FINANCIAL Interest payable accounts savings anddeposit Customers’ chequing, Due tobanks LIABILITIES FINANCIAL ASSETS TOTAL FINANCIAL Interest receivable Investment securities Advances Treasury Bills Due from banks withBankofGuyana deposit Statutory Cash ASSETS FINANCIAL 2019 reasonably possiblemovement ofeachcurrency rateagainsttheGuyana dollar, withallothervariables heldconstant. on 2019, 30, assetsand liabilities and forecast non-trading monetary cash flows. The analysis alsocalculates the effectits of a September at exposure significant had Bank the which to currencies the indicate tables following The The principalcurrencies oftheBank’s investments are UnitedStatesandGuyana dollars. assetsandliabilitiestoGuyanamonetary dollars.Suchgainsorlossesare recognised intheStatementofincome. Changes in foreign exchange rates affect the Bank’s earnings and equity through differences on the re-translation of based onlimitssetby theBoard. Centralised Payments Unit also monitor the Bank’s foreign currency position for both overnight and intra-day transactions The Bank’s policyistomatch the initial net foreign currency investment with funding in the same currency. The ALCO and The Bank’s exposure tothe effects offluctuations in foreign currency exchange rates arisesmainlyfrom itsinvestments. rates. exchange foreign in changes to due fluctuate will instrument financial a of value the that risk the is risk Currency Currency risk

( continued)

( continued)

157,170,155 141,412,749 141,345,122 15,757,406 10,281,298 76,656,242 32,935,836 17,427,546 16,871,143 2,835,134 162,956 GYD 19,440 48,187

TTD 7,820 7,786 7,725

34 95 34 – – – – – – –

13,030,863 11,927,997 11,841,941 1,102,866 6,255,728 4,554,616 2,137,391 USD 50,272 32,856 86,056 – – –

41,441 39,942 STG 37,910 37,502 1,499 3,939 2,032 – – – – – –

OTHER Total 403,985 382,016 380,118 399,665 21,969 4,320 1,898 – – – – – –

170,654,264 153,605,091 153,762,738 32,935,836 16,871,143 14,835,914 78,793,633 16,891,526

24,128,166 2,876,344 138,207 213,228 19,440

ANNUAL REPORT 2019 115 REPUBLIC BANK (GUYANA) LIMITED 116 20 NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise 20.4 RISK MANAGEMENT 20.4.2 Market risk Effect onprofit before tax changeincurrency rate(%) Reasonably possible RISKEXPOSURE NET CURRENCY LIABILITIES TOTAL FINANCIAL Interest payable accounts savings anddeposit Customers’ chequing, Due tobanks LIABILITIES FINANCIAL ASSETS TOTAL FINANCIAL Interest receivable Investment securities Advances Treasury Bills Due from banks withBankofGuyana deposit Statutory Cash ASSETS FINANCIAL 2018 Effect onprofit before tax changeincurrency rate(%) Reasonably possible 2019 Currency risk

( continued)

( continued)

( continued)

136,569,889 150,779,357 136,519,076 14,209,468 10,187,179 68,656,549 33,096,297 19,928,783 16,178,382 2,563,858

168,309 GYD GYD 18,850 31,963

– – – –

TTD TTD 1,767 1,618 1,436

149 331 149 16 78 – – – – – – – 1 1

7,343,756 7,167,825 7,269,334 5,507,014 1,091,401 (175,931) 424,032 11,029 USD USD 56,927 88,451 74,422 (1,759) – – – 1 1

59,203 63,074 STG STG 56,901 59,443 3,871 3,631 2,302 39 15 – – – – – – 1 1

OTHER Total OTHER Total 817,803 829,837 809,602 824,510 12,034 5,327 8,201 120 220 – – – – – – 1 1

144,790,800 158,841,860

144,654,913 16,178,382 15,694,193 69,747,950 14,051,060

33,096,297 21,238,204 2,661,598 117,037 225,236 11,342 18,850 (1,584) – –

21 20 CAPITAL MANAGEMENT 20.6 20.5 RISK MANAGEMENT (2018 -26.10%).At September30,2019 the Bankexceeded theminimumlevels required. The Bank’s Tier1capital and at (2018 -25.17%) Septemberits capital is 25.09% 2019 adequacy 30, ratio (Tier 1 and Tier 2) is25.51% total qualifyingcapital(Tier2)ratioof8%.Core capital(Tier1)comprisesmainlystockholders’equity. The Basel risk-basedcapital guidelines require aminimumratioofcore capitalwith aminimum to risk-weighted (Tier 1) assets of4%, purposes. Practice (the Basel Committee),asimplemented bythe BankofGuyana Banking supervisory Regulations for and Supervisory Capital adequacy is monitored by the Bank, employing techniques based on the guidelines developed by the Basel Committee on of $1,555.0millionrepresents 40.7%ofcore operatingprofit. 2019 year Totalfinancial the performance. resultsfor coreoperating the on on based based proposedwas distribution distribution the The Bank’sof net earnings dividendto 50% to stockholders. to distribute policyis40% Similar tothe criteria applied in previous years, year underreview. between capital resources and the ofitsunderlying risk business. Equity increased bymillion during the million to$22,623.7 $2,459.4 The Bank’s policy is to diversify its sources of capital, to allocate capital within the Bank efficiently and to maintain a prudent relationship measures ofriskratingandtheBoard forinvestments. setlimitsby country through an obligor’sability tomeetitsobligation to the Bank. The parent’smanagement risk byunit monitors thisrisk using the riskisthe risk that an occurrence could Country have within a country an adverse effect on the Bank directly by impairing the value risk Country Independent checksonoperationalriskissuesare alsoundertaken by the internalauditfunction. The Bank hasdeveloped contingency operations in the arrangements eventand established facilities to support of disasters. placement ofadequateinsurancecoverage. training on and makes recommendations forthe enhancement of internal controls. Where appropriate,transferredis risk bythe procedures tomonitor and document transactions. The Bank’s overseesDepartment Risk Enterprise theoperation conducts of, The Bank recognises that can such neverrisk be entirely eliminated and manages the throughrisk a combination and of systems such asfraud. controls,operational processes them. Itincludes errors,that orthesupport systems disasters and deliberate omissions, acts internal failed or inadequate from arising loss reputational or financial for potential the is and activities business all inherentto is risk Operational complex. more profile risk operational Bank’s the made has industry banking the of sophistication growing The Operational risk

( continued)

ANNUAL REPORT 2019 117 REPUBLIC BANK (GUYANA) LIMITED 118 22 21 NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise FAIR VALUE CAPITAL MANAGEMENT yieldcurve current a based on are advances of appropriate fortheremaining termtomaturity.values fair The for impairment. provisions other and specific of net are Advances equal fairvalue. the Bank of Guyana, reserve balances statutory in relation value to deposit liabilities and the of these carrying reserves isassumed to customers’ deposit accounts, other fund raising instruments,other assets and other liabilities. The Bank requiredis tomaintain with instruments is assumed to approximate their fair values. These include cash and cash equivalents, investment interest receivable, Financial instruments where carrying value is equal to fair value: owing to their short-term maturity, the carrying value of certain financial reference tothemarket priceatyear endoronthelasttradedatepriortoyear end. by determined is value fair and markets organised in traded actively are loss” or profit through value fair “at as classified Investments Management isnotaware ofanyfactorsthatwouldsignificantlyaffect theestimatedfair value amounts. valuefair available-for-sale information for investmentsbased on information is available to management as atthedates presented. The use ofdifferent assumptions and/or estimation methodologies mayhave amaterialeffect on the estimated values.fair The estimates contained herein are not necessarily indicative ofthe amountsthat the Bank could realise inacurrent market exchange. discounted cash flow analysis,which requires considerable judgement in interpreting market data and developing estimates. Accordingly using determined is value fair and markets, financial organised in traded actively not are investments available-for-sale Bank’s The at thereporting dateandseparately disclosesthisinformationwhere thesefairvalues are different from netbookvalues. In accordance with IFRS 7 “Financial Instruments: Disclosures”, the Bank calculates the estimated fair value of all financial instruments Total requirementGeneral bankingriskreserves –statutory Tier 2 Total Goodwill Retained earnings General bankingriskreserves inexcess requirement ofstatutory fund Reserve Stated capital Tier 1 The Bank’s regulatory capitalisasfollows:

( continued)

20,104,121 19,811,056 (1,228,222) 2019 335,157 300,000 300,000 509,424 509,424

157,527 300,000

17,398,197 17,868,892 (1,228,222) 2018 637,862 637,862 300,000

22 FAIR VALUE Total unrecognised changeinunrealised fairvalue Accrued interest payable Customers’ chequing,savings anddepositaccounts Due toBanks Financial liabilities Investment interest receivable Advances Investment securities depositwithBankofGuyana Statutory Cash, duefrom banksandTreasury Bills Financial assets 2018 Total unrecognised changeinunrealised fairvalue Accrued interest payable Customers’ chequing,savings anddepositaccounts Due toBanks Financial liabilities Investment interest receivable Advances Investment securities depositwithBankof Guyana Statutory Cash, duefrom banksandTreasury Bills Financial assets amountsandthefairvalues The followingtablesummarisesthecarrying oftheBank’s financialassetsandliabilities: is basedondiscountedcashflowsusingprevailing money market interest ratesforfacilitieswithsimilarcredit riskandmaturity. recognised with current market rates offered for similar financial instruments. The estimated fair value of fixed interest-bearing deposits The fair value of fixed rate debt securities carried at amortised cost is estimated by comparing market interest rates when they were first equal fairvalues. floating primarily rate instruments,the interest ratesofwhich reset withmarket ratestherefore values are the carrying assumedto is lessthan one year, the fair value value. is assumed to equal carrying Where the maturity period is in excess of one year, these are are based on acurrent appropriate yieldcurve the remaining for term tomaturity. For balances due to banks,where thematurityperiod The fair values of the floating rate debt securities inissueare based on quoted market priceswhere available and where not available ( continued)

2019 144,654,913 153,605,091 78,793,633 Carrying Carrying 69,747,950 15,694,193 16,178,382 56,996,099 14,835,914 16,871,143 59,940,346 value value 213,228 117,037 225,236 138,207 18,850 19,440

144,610,259 153,560,086 70,246,400 15,952,648 16,178,382 56,996,099 15,075,064 16,871,143 59,940,346 79,382,406 value gain/(loss) value gain/(loss) 117,037 225,236 138,207 213,228 Fair Unrecognised Fair Unrecognised 18,850 19,440

712,251 498,450 258,455 239,150 588,773 782,918 (44,654) (45,005) – – – – – – – – – –

ANNUAL REPORT 2019 119 REPUBLIC BANK (GUYANA) LIMITED 120 22 NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise 22.1 FAIR VALUE 22.1.1 Fair value andfairvalue hierarchies ( continued) 2018 2019 Customers’ current, savings anddepositaccounts Financial liabilitiesforwhichfairvalue isdisclosed 2018 2019 Advances Financial assetsforwhichfairvalue isdisclosed 2018 2019 Investment securities Financial assetsmeasured atfairvalue September 30,2019. The followingtableshowsthefairvalue measurement hierarchy oftheBank’s assetsand liabilitiesasat acquisition oftheinvestment, andare regularly assessedforimpairment. the for paid consideration the of value fair the being cost, at held are instruments financial These price. a markets determine to active no are there as quoted not are that liabilities and assets financial are category 3 Level the in Included Level 3 assets thatare valued usingtheBank’s ownmodelswhereby themajorityofassumptionsare market observable. fair values based on broker quotes, investments in private equity funds with fair values obtained via fund managers and with assets financial includes This market. active an in determined been not have prices where but services, pricing via assumptions that are byprices from supported current observable market transactions which obtained and pricing for is Included in the Level 2 category are financial assets and liabilities that are measured using a valuation technique based on Level 2 those pricesrepresent actualandregularly occurringmarket transactionsonanarm’s lengthbasis. readily and regularly available from an exchange, dealer,broker, group, orregulatory agency and industry pricing service published quotes in an active market. A financial instrument is regarded as quoted in an active market if quoted prices are to reference by part in or whole in measured are that liabilities and assets financial are category 1 Level the in Included Level 1 techniques: instruments by financial valuation valueof fair the disclosing and hierarchydetermining following for the uses Bank The Determination offairvalue andfairvalue hierarchies

Level 1 1,721,328 1,741,492

– – – –

14,231,320 13,196,375 Level 2 – – – –

144,654,913 153,605,091 69,747,950 78,793,633 Level 3 137,197 –

144,654,913

153,605,091 15,075,064 15,952,648

69,747,950 78,793,633 Total

22 22.1 FAIR VALUE 22.1.3 22.1.2 22.1.1 Fair value andfairvalue hierarchies

( continued) For theyear endedSeptember30,2019,noassetsvalued were transferred betweenLevel 1andLevel 2. depositaccounts Customers’ current, savings and Advances value fair the hierarchy asatSeptember30,2019are asshownbelow: of 3 Level within categorised measurements value fair the in used inputs unobservable significant The inputsto Description ofsignificantunobservable valuation cost Debt Intrumentsatamortised fairvalue through profit orloss Financial assetsdesignatedat 2018 cost Debt Intrumentsatamortised fairvalue through profit orloss Financial assetsdesignatedat 2019 The followingtableshowsananalysisoffinancialinstruments recorded atfair value categorised by hierarchy level. For theyear endedSeptember30,2019,there were noLevel 3financialinstrumentsmeasured at fair value. Reconciliation ofmovements inLevel 3financialinstruments measured atfair value. Transfers betweenLevel 1and2 Determination offairvalue andfairvalue hierarchies

( continued)

Discounted Discounted

Level 1 technique Valuation 1,721,328 cash flow cash flow 1,741,492 ( 1,721,328 1,741,492 continued) method method

–

–

rate forcash rate forcash unobservable subsequent subsequent 14,251,320 Significant 14,231,320 13,172,175 13,196,375 Level 2 inputs flows for flows for Growth Growth 20,000 24,200 years years

0.6% -2.36% (weighted average) 10%-14.5% Level 3 Range 2019 137,197 137,197 (0.86%) (12.1%) – – – –

0.6% -2.36% 15,050,864 15,075,064 15,972,648 15,952,648 (weighted average) 10%-14.5% Range 2018 Total 20,000 24,200 (0.86%) (12.1%)

ANNUAL REPORT 2019 121 REPUBLIC BANK (GUYANA) LIMITED 122 23 NOTES TOTHEFINANCIALSTATEMENTS For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise 23.2 23.1 SEGMENTAL INFORMATION on thelocationofcustomersandassetsrespectively: following tables show the distribution of the Bank’s revenues, interest expenses, total assets and total liabilities allocated based The Bank operates only inGuyana but conducts investment and other correspondent banking business inother countries. The Geographical information Operating segments Cash flowfrom/(used in) financing activities Cash flowfrom/(used in) investing activities Cash flowfrom operatingactivities Total liabilities Total assets Net interest andotherincome Other income Net interest income Interest expense Interest income 2018 Cash flowfrom/(used in)financingactivities Cash flowfrom/(used in)investing activities Cash flowfrom operatingactivities Total liabilities Total assets Net interest andotherincome Other income Net interest income Interest expense Interest income 2019 investment activities. of certain Management considers itsbanking operation conducted to beasinglebusinessunit. business is All in Guyana with the exception the operatingsegmentsofentity. TheBankhasdeterminedtheManagingDirector asitschiefoperatingdecision-maker. maker. The chief operating decision-maker isthe person or group that allocates resources of to and assesses the performance Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision-

147,692,973 163,930,466 157,085,081 171,335,968 13,665,028 Guyana Guyana (1,212,392) (1,485,584) 10,422,950 11,523,948 (2,286,110) 7,269,652 7,839,667 3,152,038 3,153,298 3,869,646 8,371,910 8,959,986 (224,675) (570,015) (588,076)

andTobago andTobago Trinidad Trinidad 2,627,177 1,852,840 1,131,015 (170,620) 111,590 111,590 105,458 209,179 111,590 314,489 (25,309) 98,416 98,416 98,416 – – – – – –

countries countries (1,034,273) 1,625,647 7,694,442 Other Other 116,857 138,153 23,251 23,251 21,296 75,719 25,073 25,073 23,251 25,073 (8,250) – – – – – –

180,161,425 148,019,009 168,183,290 157,537,723 10,557,791 11,647,437 13,665,028 (1,245,951) (1,358,830) (2,381,011) 3,152,038 3,153,298 7,404,493 7,974,508 9,083,475 8,495,399

3,869,646 (570,015) (588,076) Total Total 593,892

24 23 SEGMENTAL INFORMATION Other liabilities Accrued interest payable Deferred taxliabilities Taxation payable Customers’ chequing,savings anddepositaccounts Due tobanks LIABILITIES Other assets Deferred taxassets Goodwill Net pensionasset Intangible assets Premises andequipment Investment securities Advances Investment interest receivable Treasury Bills Due from banks depositwithBankof Guyana Statutory Cash ASSETS 2019 MATURITY ANALYSIS OFASSETS ANDLIABILITIES 23.3 obligations. maturity date. See Note 20.3 – “Liquidity risk” - for an analysis of the financial liabilities based on contractual undiscounted repayment The table below and analyses the assets liabilities ofthe Bank based onthe remaining period at September to the contractual 30

or more oftheBank’s revenues. There were norevenues derived from transactions with asingleexternal customer orgroup of customersthat amounted to 10% Major customers

( continued)

157,151,341 153,605,091 12months 10,107,713 32,935,836 24,128,166 16,871,143 90,211,780 2,327,196 1,061,407 2,448,600 Within 2,876,344 138,207 630,750 213,228 19,440 – – – – – –

12months 89,949,645 12,387,314 68,685,920 1,228,222 7,175,942 After 386,382 386,382 367,056 31,700 73,491 – – – – – – – – – – –

153,605,091 157,537,723 180,161,425 78,793,633 24,128,166 16,871,143 14,835,914 32,935,836 2,327,196 1,061,407 7,175,942 2,876,344

1,228,222 Total 386,382 138,207 630,750 367,056 213,228 19,440 31,700 73,491

ANNUAL REPORT 2019 123 REPUBLIC BANK (GUYANA) LIMITED 124 NOTES TOTHEFINANCIALSTATEMENTS 25 24 For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise Total dividendspaid Equity stockunits: dividendsonordinary Declared and paidduringtheyear DIVIDENDS PAID ANDPROPOSED Other liabilities Accrued interest payable Deferred taxliabilities Taxation payable Net pensionliability Customers’ chequing,savings anddepositaccounts Due tobanks LIABILITIES Other assets Deferred taxassets Goodwill Net pensionasset Intangible assets Premises andequipment Investment securities Advances Investment interest receivable Treasury Bills Due from banks depositwithBankofGuyana Statutory Cash ASSETS 2018 MATURITY ANALYSIS OFASSETS ANDLIABILITIES

First dividendfor2019:$1.60(2018:$1.283) Final dividendfor2018:$3.00(2017:$2.833)

( continued)

144,654,913 147,640,103 12months 85,823,851 33,096,297 21,238,204 16,178,382 2,197,682 2,448,600 9,469,686 2,661,598 Within 651,621 117,037 505,848 225,236 18,850 – – – – – –

–

12months 82,359,439 13,245,593 60,278,264 1,380,000 1,228,222 7,070,772 After 2019 378,906 480,000 900,000 378,906 428,118 94,770 13,700 – – – – – – – – – – – –

148,019,009 144,654,913 168,183,290 15,694,193 69,747,950 33,096,297 21,238,204 16,178,382 2,197,682 1,228,222 2,661,598 7,070,772 1,235,000 2018 Total 225,236 651,621 117,037 505,848 428,118

378,906 385,000 850,000 18,850 94,770 13,700

–

26 25 d c b a CONTINGENT LIABILITIES Equity stockunits: dividendsonordinary (notrecognised asaliabilityatSeptember30) Proposed forapproval atAnnual GeneralMeeting DIVIDENDS PAID ANDPROPOSED Cap. 85:03. deposit is providedThe statutory to the Bank of Guyana as a percentage of deposit liabilities under the Financial Institutions Act, deposit Statutory Below illustratesthedistributionofpledgedassetsinBank’s StatementofFinancialPosition: Pledged assets Corporate andcommercial State Sectoral information Letters ofcredit Guarantees andindemnities Customers’ liabilityunderacceptances,guarantees,indemnitiesandlettersofcredit action todeterminethateventuality. professional advice indicates that it is unlikely that any significant loss will arise or that it would be premature at this stage of the As at September there2019 30, were legal proceedings certain outstanding against the Bank. No provision has been made as Litigation Final dividendfor2019:$3.58(2018:$3.00)

( continued)

amount Carrying 16,871,143 2019

16,178,382 2018 Relatedliability 153,605,091 2,205,418 1,940,716 1,075,000 1,358,908 2,205,418 2019 2019 846,510 264,702 2019

144,654,913 2,104,236 2,104,236 1,272,775 1,908,611 2018 2018 2018 900,000 831,461 195,625

ANNUAL REPORT 2019 125 REPUBLIC BANK (GUYANA) LIMITED 126 27 26 For theyear endedSeptember30,2019.Expressed inthousandsofGuyana dollars($’000)except stated where otherwise NOTES TOTHEFINANCIALSTATEMENTS

any from Bank the exclude liability. specifically which customer each with signed agreements of terms the with accordance in Guyana, of This represents monies received on behalf of customers and deposited in the External Payment Deposit Scheme with the Bank ` PAYMENTEXTERNAL DEPOSIT SCHEME e CONTINGENT LIABILITIES

More thanfive years Between onetofive years Less thanoneyear Non-cancellable operatingleasecommitments

( continued)

2019 2019 47,400 50,480 19,677 28,016 2,787

2018 2018 47,400 11,110 2,867 7,603 640 *If desired theChairmanofmeetingmay beappointedasproxy. 2 1 NOTES Initials andsurnameofanyjointstockholder(s) Address Full name Please give thefollowinginformationinblockcapitals: given, theproxy willexercise his/herdiscretion astohowhe/shevotes orwhetherhe/sheabstainsfrom voting. Please indicatewithan“X”inthespacesbelowhowyou wishyour proxy tovote ontheResolutionsreferred to.Ifnosuchindicationis Name Dated this and atanyadjournmentthereof. as my/ourproxy tovote forme/us onmy/ourbehalfattheannualgeneralmeetingofcompany tobeheldonMonday, December9,2019 of or failinghim/her of being amember/membersoftheabove namedcompany, hereby appoint* of intheCounty I/We This formisforuseby stockholdersonly. OFCOMPANYNAME FORM OF 6 5 4 3 2 1 IT ISRESOLVED THAT: RESOLUTION Votes by Proxy may begiven onapoll. instructed,theproxyUnless otherwise will,athis/herdiscretion, vote as he/shethinksfitorabstainfrom voting. To approve Directors’ agreements service providing fortheirremuneration. To declare dividends. To reappoint auditorsandauthorisetheDirectors tofixtheir remuneration. with theBy-Laws. To elect AmralF. Khanwhowasappointedtofillacasual vacancy asDirector inaccordance accordance withtheBy-Law, namelyYolande M.Foo, Roy E.CheongandRichard M.Lewis. To re-elect three Directors to fill offices vacated by those retiring from the Board by rotation in for theyear endedSeptember30,2019. To receive oftheDirectors theReport andtheAuditors andtoapprove theAudited Accounts Signature Signature RepublicBank(Guyana) Limited of day PROXY (BLOCK LETTERS) 2019 FOR revenue stamp Affix $10 AGAINST

ANNUALREPUBLIC REPORT BANK 2019 (GUYANA)127 LIMITED REPUBLIC BANK (GUYANA) LIMITED 128 republicguyana.com