NBD headquarters on Hillsborough Street, Roseau
NBD headquarters on Hillsborough Street, Roseau

Dominica's top financial institution, the National Bank of Dominica (NBD) did not have a good year last year.

The NBD recorded losses of EC$4.4 million, according the 2015 annual report distributed to shareholders last week.

"The Bank's profitability was adversely impacted by an overall negative return on our externally managed investment portfolio, which wiped out its profit on operations and resulted in the Bank reporting a net loss for the year," said Anthony John, chairman of the NBD's board in his message published in the 2015 report.

"Losses on the externally managed investment portfolio amounted to $6.83M during the year, a decrease of $9.76M over the 2013/2014 financial year," the NBD said in its review of its financial performance. "The losses generated were primarily from one investment management firm and the Bank is currently in the process of liquidating these investments."

That loss was apparently extremely difficult for the bank to swallow since this was only NBD's third loss over the past 15 years, records published in the 2015 report indicate. Making it harder to digest, the loss follows profits of $7 million a year earlier.

But the NBD says it has dusted off its pants, wiped off the red ink from its face, gritted its teeth and it is now staring resolutely straight ahead.

"Not daunted by this result, we continue to put strategies in place to improve profitability," said John. "We are committed to doing everything possible to return the Bank to profitability and preserving shareholder value by our continued focus on serving our customers, supporting our communities, engaging our employees and contributing to our country's growth."

In spite of the loss John said the bank came out of 2015 with a few positives to cheer itself up. For instance NBD registered a return of $8.97million before it deducted the losses on its external loan; there was growth of 3.68% on loans and advances and its share of that part of the local financial market grew by 1.64% to 57.67%. NBD also reduced its cost of operating by 4.44%.

But generally banking in 2015 in Dominica was characterised by slow growth, low interest rates and a decline in asset quality, the NBD report said.

Reviewing its performance, the NBD said the country's banking system was affected by "the constraints of the economic environment characterized by high excess liquidity, declining yields on investments and credit facilities, increased provisioning due to deterioration in the quality of credit and low demand for quality credit".

Adds Ellingworth Edwards, the NBD managing director "The impact of the struggling domestic and regional economies adversely impacted the quality of our credit portfolio as evidenced by an increase in the non-performing loans, and hence the need for an increase in Loans Loss Provisions".

For NBD shareholders probably the unkindest cut of all is that there is no word of the payment of dividends in the 2015 report.