Page 11 - MCCU
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MANCHESTER CO-OPERATIVE CREDIT UNION (1977) LTD.
The low interest rates, coupled with the quest by Loans
especially larger institutions to preserve market
share, triggered a fresh round of aggressive The growth in total assets was aided by a 14% or
competition within the financial sector. The $309 million increase in loans after provisions
Manchester Co-operative Credit Union, amidst the were accounted for. This increase was supported
fierce competition, was once again able to by robust growth in motor vehicle and unsecured
produce creditable results in the key areas of loans which rose by 22% and 18% respectively.
operations during the financial year, as outlined in Real estate loans also went up by 12% during the
the report year.
Profitability Investments and Cash Reserves
Total income of $506 million was earned during The cash and investment portfolio closed the year
the 2016 financial year. This was 5% above the at $1.8 billion. This represented an increase of 7%
amount earned in 2015. It cost a total of $429 over 2015 and accounted for 39% of total assets.
million to carry out the operations of the The Credit Union earned an average of 5.8% on
Organization in 2016. This was 3.5% more than investments during the year. This was below the
what was spent during the previous year. 6.5% achieved in 2015.
The surplus for the year was $77 million. This was Savings
14.5% above the amount earned in 2015. The
growth in surplus was due mainly to the 42% Total savings grew by $368 million or by 12%
reduction in provisions for loan loss. Interest from during the year. This was the highest annual
loans contributed $351 million or 69% of total growth over the past five years. Total savings was
income. Income generated from investments was just under $3.4 billion at the end of 2016.
$89 million. This was $4 million or 4% below the
amount earned in 2015. The decrease in Key Financial Indicators
investment income was as a result of the fall in
interest rates during the year. Our Organization exceeded the League’s
standards in most of the key financial indicators.
Income from fees and commissions contributed The loan to asset ratio rose from 54.5% in 2015
$66 million or 13% of total revenues for the year. to 55.9% in 2016. The Credit Union aims to
This was an increase over the $55 million earned achieve the minimum standard of 60% over the
in the previous year. There were no adjustments short term.
to fees and service charges during the year.
Institutional Capital Reserve
Key Profitability Trends
The Credit Union was able to strengthen its capital
The Credit Union achieved an income to asset base during the year. Total institutional capital
ratio of 11.1% in 2016. This was a decline from stood at $789 million at the end of the period.
the 11.8% in the 2015. The decline in the income This represented a $70 million or 10% growth.
to asset ratio was as a result of the reduction in The institutional capital to asset ratio fell slightly
the interest rate on loans and investments during from 17.6% in 2015 to 17.4% at the end of the
the year. The return on assets ratio was 1.7% at 2016 financial year. However, this ratio was well
the end of the financial year. This was a slight above the minimum 8% standard prescribed by
increase over the 1.6% achieved in 2015. the League and surpassed the capital ratio
requirement set by the Bank of Jamaica.
Asset Growth
Delinquency
Total assets ended the year at $4.5 billion. This
represented an increase of 11% over the amount The delinquency rate fell from 6% in 2015 to
for 2015. The accumulated increase over the 5.7% at the end of the 2016 financial year. This
period was $1.8 billion or 65%. welcomed decline was as a result of the
implementation of effective delinquency control
measures during the year.
*
11
“Where Service Exceeds Expectation”
