ECCB reports $14.5 million decrease in net income

The East Caribbean Central Bank realized a decrease of $14.5 million in net income in the 2010/2011 financial year, compared with the previous year’s income of $37.1 million.{{more}}

As he delivered his annual report on June 29, Governor of the Eastern Caribbean Central Bank (ECCB) Sir K. Dwight Venner said the Bank realized a net income of $22.6 million in 2010/2011.

Sir Dwight said in the ECCU, economic activity declined by 1.8 per cent in 2010, a slower rate, compared with 5.4 per cent in 2009. Weak external demand and a reduction in domestic investment contributed to the decline, which resulted in the continued contraction of activity in the construction and transport and communications sectors. Construction, which is one of the main contributors to growth in the ECCU, contracted by 21.8 per cent due to a decline in inflows of foreign direct investment.

In October 2010, two of the ECCU member countries, Saint Lucia and St Vincent and the Grenadines, suffered severe damage to their economic infrastructure due to the passage of Hurricane Tomas. This has resulted in a further weakening of their economies, Sir Dwight said.

“These international events and natural disasters have brought the vulnerabilities of the region’s economies and financial structures into sharp focus. In response to these prevailing challenges and setbacks, the Bank, guided by its mandate, intensified its efforts to maintain financial and monetary stability and confidence in the ECCU financial system. The international financial downturn has impacted the Bank’s performance for the 2010/2011 financial year. The Bank realized a net income of $22.6m a decrease of $14.5m over the previous year’s income of $37.1m. This was due to the decrease in interest income on the Bank’s investments in a declining interest rate environment,” he said.

The Governor said, as at March 31, 2011, the Bank’s total assets amounted to $2.8 billion, an increase of $256.1million, when compared to the previous year. This was mainly due to inflows of grants and loans to member governments from international institutions.

At the end of the financial year, the foreign reserve backing of the currency was 95.53 percent, well above the legal benchmark of 60.0 per cent and the operational benchmark of 80.0 per cent. The level of foreign exchange reserves measured in months of imports was above the IMF benchmark of 3 months, Sir Dwight said.