Despite moribund local and regional economies and the slowly-recovering American and European financial markets, the National Bank of Dominica (NBD) has scraped profits of EC$5.8 million in 2012, the bank's latest annual report has stated. And shareholders have been told that they will receive nine cents on every share.

"This year was a challenging one in the banking industry," said NBD board chairman Anthony John. "For the past couple of years, we have believed that the "next year" will be the year everything turns around. This has not proven to be the case, as economic issues such as high unemployment in the US and the European financial crisis have shown minimal movement. These events have negatively impacted our market. Also, downward pressures on interest rates and increasing delinquency have negatively impacted profitability."

In his letter to shareholders, who are expected to meet in March to discuss the bank's performance, John said the NBD made $3.4 million more in 2012 than it did in 2011. In fact the bank's statistics show that last year's profit was the highest since 2008 when the NBD took in $10.8 million.

Explaining the reasons for the bank's 2012 profit margin John said: "This was positively impacted by a write-back of previously provided for amounts on the CLICO Trinidad investments, as a result of a negotiated settlement. With the exception of the interest income, which increased by 5%, other areas of the Bank registered declines." Deposits grew by 4.9% and loans and receivables by 12%.

According to the bank's annual report, despite the profit margins, operating in the sluggish economy has not been smooth sailing.

"We emerged from the challenges of the financial year focused on a number of strategic imperatives including, optimizing our balance sheet, driving profitability, enhancing risk management and undertaking measured investments in innovation", said managing director Michael Bird.

Looking towards the 2013/2014 period, NBD officials predict that banking will continue to be tough and management has further tightened their belts to face the difficult period ahead.

"Looking ahead, growth in the region is expected to be slow," the report stated. "Along with higher levels of delinquency, the extremely slow recovery and high levels of unemployment in the developed economies will pose constraints on the performance of the Group in the future."

John said the NBD is "entering the year equipped with our strong fundamentals. We anticipate that this year will be a mixture of some successes and challenges. We will focus on being prudent, improving customer service delivery, bringing value to customers through innovative products and services, managing our costs and doing our part to keep the economy moving forward."

Nevertheless, shareholders will be the ultimate judge of their bank's performance when they meet at the Fort Young Hotel in March, 2012; but John has assured them that given what he describes as "extremely difficult times" and the "uncertainty of the global economy", the NBD has achieved "reasonable results" in the circumstances.

"Therefore, the Board of Directors has decided to declare a dividend of 5 cents per share with a special dividend of 4 cents per share due to the write-back on the CLICO Trinidad investment, totalling 9 cents per share", he stated.