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10 AWEMainta Diahuebs, 15 April 2021

Our Financial Statements and Other Highlights

• The MCB Group consists of 15 companies • Our “Provisions” decreased significantly 44% lower than previous year. However pandemic with many people becoming www.mcb-bank.com
operating local and international businesses with 48% or NAF 73 million, mainly due to a we do consider the “Net result after tax” sick and needing care and treatment in our
on the six islands of the Dutch Caribbean release in the provisions for Post-Retirement a commendable performance of NAF 83 hospitals and nursing homes. Unfortunately
with offices and branches based in Curaçao, Medical Benefits, due to a change in the million, for which we sincerely thank all our some also passed away while many of our
Aruba, Sint Maarten, Bonaire, Sint Eustatius medical benefits program. employees and especially our loyal clients. citizens and businesses lost their income or
and with only an ATM on Saba. The • The decrease of NAF 40 million or 27% in had to adjust their lives to much less income.
information contained in these consolidated “Other liabilities” was largely due to the Loans • The needs of our communities increased
highlights represents the total of the payable our Group had at the previous year • Our management together with our manifold and our Bank assisted where
financial statements of all 15 members of the year-end (2019) for the purchase of the Supervisory Board and especially our Board’s possible on all the islands with monetary
MCB Group. minority shares in our banking activities on Credit Committee continuously monitors contributions, expertise, advice and
• The consolidated financial statements are Sint Maarten. the Group’s credit risks and ensured that volunteers to the several Food banks,
prepared in accordance with International • Our “Shareholders’ equity” was NAF 999.9 the loans in our loan portfolio remain well hospitals, schools, churches, sports clubs,
Financial Reporting Standards (‘IFRS’). million at year-end, just shy of NAF 1 billion, diversified by customer, size, maturity and service clubs and Governments.
• We continue to provide more than the growing with NAF 94 million or 10%. The sectors. • For us it was very logical and fitting that the
required disclosures and transparency of our growth in capital was mainly the result of • The unexpected lockdown on our islands in MCB-Prize in December 2020 had to be given
financial statements and we are ready and not distributing dividends in 2020 as March 2020 and the impact on income and to the epidemiologist Dr. Izzy Gerstenbluth
more than willing to discuss and clarify any required by the Centrale Bank van Curaçao revenue across each business, resulted in and his team at the Curaçao Public Health
aspect of these reports or statements. en Sint Maarten (CBCS), coupled with a our Bank being the first financial institution Care department for their tireless work in
small increase in reserves. to offer all our clients a moratorium on combatting the virus as well as educating
Balance Sheet and Equity principal and interest payments for an initial the population on the virus, its dangers, our
• Our MCB Group is represented by a solid Profit & Loss Statement period of 3 months. After the initial period behavior and precautions required during
consolidated balance sheet as well as • The income presented in our financial of three months, we continued with the this time, through numerous television and
strong individual balance sheets of our statements is derived from both local same moratorium on certain islands, while radio presentations and interviews.
subsidiaries with good quality assets and and international activities of the Group. adjusted such for the other islands in order • A very special commendation goes to all the
high liquidity as key strengths to withstand These income streams continue to be well- to better align with the economic realities on doctors, nurses, specialists and other people
the current uncertain and complex business diversified. the ground and the measures and facilities working in the health care sector and the
environment. The economic challenges • In 2020, the Covid-19 pandemic caused offered by the Government on each island. many volunteers protecting and saving the
experienced due to Covid-19 required Governments all over the world including In addition, we worked with clients in lives of many of our citizens. It is in times
adjustments on our part in terms of the Dutch Caribbean to implement stringent restructuring and creating loan agreements of crisis and need that we observe the true
operational changes, customer support measures such as closure of borders and and payment plans in accordance with their character of a population: masha danki!
and community outreach programs. internal lockdown. This resulted in a marked repayment abilities.
Notwithstanding the significant impact of decrease in business volumes and associated • Our “Loans and advances to customers” The Future
Covid-19, the Bank was still able to grow in income in most sectors of our economies. increased a modest NAF 49 million (1%) • You could say that after a year like 2020
key areas relating to capital, solvency and • It goes without saying that the decreased to NAF 4.3 billion. While the quality of our nobody would dare predict the future. Indeed
liquidity. business volumes had a substantial impact on portfolio remains healthy, as can be expected that is probably the case, but we do know
• All stakeholders can count and rely on the our Group’s “Operating income” caused by the pandemic had a large impact on the that the future will be very different from
Group’s Management and the Supervisory reduction in “Net interest income”, “Net fee portfolio and our “Allowance for expected the recent past and it is our responsibility to
Board’s advice and counsel in continuing and commission income” as well as “Income credit loss” increased with NAF 69 million. prepare our MCB Group for any future.
to further strengthen and build the Bank’s from foreign exchange transactions”. Our • In our view, preparing for the future means
balance sheet and capital position. “Operating income” decreased with NAF 60 Taxes to envision how that future could look like,
• In 2016 MCB Group’s total assets exceeded million or 12 %. • MCB Group contributed NAF 124 million to what are the main “ingredients” or factors
the NAF 7 billion mark, while in 2020 the • As indicated, the interest rates in the the public coffers of our countries with the such a future would entail, and equally
Group surpassed the NAF 8 billion mark. international and local markets decreased total of all the taxes, fees and premiums paid important organizing ourselves to be as
• Total assets reached NAF 8.254 million in during 2020 and this resulted in a decline in in 2020. flexible as possible in order to readily adapt
2020, a growth of NAF 391 million or 5% “Net interest income” with 10% or NAF 30 • MCB Group’s profit tax obligation resulting to an even faster pace of change.
especially thanks to the growth in customers’ million. from operations in 2020 was NAF 14 million, • We are sure that digitization of services and
deposits. • The lack of international transactions while our Group also paid NAF 8 million in products will play a key role in the lives of
• The “Customers’ deposits” passed the NAF especially tourism related and other such turnover taxes. our clients and employees, with concepts
7 billion mark for the first time, growing business activities reflected in the “Net • Our employees paid wage taxes amounting that were introduced or accelerated in 2020,
6% or NAF 404 million, resulting from the fee and commission income”, decreased to NAF 26 million, and the social premiums such as remote working or work from home,
trust we received from our corporate, retail with a whopping 24% or NAF 34 million. paid were NAF 22 million. mobile-, online- and video-banking, real-time
and public clients. We are very grateful for Similarly, “Income from foreign exchange • Despite the decrease in international payments, different roles for branches and
the confidence that our customers have in transactions” decreased substantially with transactions, in 2020 the foreign exchange many more.
the MCB Group and as always we remain NAF 11 million (21%). license fee collected on behalf of the Central • We also observed and realized that these
committed to a very responsible use of these • Unfortunately our “Operating expenses” Banks to be remitted to the Governments changes in methods bring new and increased
funds. increased with NAF 15 million (5%), mainly as amounted to NAF 52 million. risks such as many forms of cyber risk and
• Most of the deposits are used for the financial a result of the large increase in “Credit loss that we must find ways to protect our clients
needs of local businesses and individuals and expenses” compensated somewhat by the Employment and ourselves.
despite the challenging year where many decrease in “Salaries and other employee • At an early stage in the initial lockdown in • It is up to us to lead these changes, and
businesses were closed for most of the year, expenses”. March, management decided to actively thereby striking the right balance between
our “Loans and advances to customers” • The decrease with NAF 61 million (30%) in review the internal operations of the MCB digital and personal service and advice to
increased modestly with NAF 49 million (1%) “Salaries and other employee expenses” Group and identify the opportunities for our customers.
to NAF 4.3 billion. Part of this amount came was influenced by three main factors. The efficiencies and improvement in service • We wish to thank our loyal employees for
from the payment moratoriums our Group Salaries and direct benefits decreased with levels to our clients. At the same time we their incredible achievements and support in
offered to our commercial and retail clients NAF 12 million, the Post-retirement medical decided to outsource certain services and 2020, our Board for their continued advice,
for an initial period of 3 months, followed benefits decreased with NAF 64 million, also offered all our employees that qualified, counsel and oversight, our shareholders for
by subsequent moratoriums to assist and which were partly offset by an increase for an early retirement option. All these their understanding and patience, and our
alleviate their decrease in income. an early retirement plan with NAF 20 million. measures created opportunities for younger regulators for their supervision. Lastly, we
• The investment book continues to be The main causes for these movements were colleagues with new and different skillsets. thank our communities that we serve and
managed in a responsible and conservative the mentioned change in medical benefits • As a result of the actions taken, the number care for and our citizens for their resilience
manner, represented by “Cash and due from program and the early retirement of several of employees decreased with 147 during the and perseverance.
banks” for a total of NAF 2.9 billion and employees during 2020. year. As at December 31, 2020, MCB Group • In 2021 our banking Group hopes to celebrate
“Investment securities” NAF 881 million. A • The “Credit loss expenses on financial employed 1,350 compared to 1,497 at the end its 105th anniversary and as we prepare,
large part was deposited with our Regulators assets and contingent liabilities” increased of 2019. adjust and reinvent ourselves for the post-
as statutory reserve requirement, bearing with NAF 79 million to NAF 87 million. • In 2020, MCB Group paid its employees Covid world we feel it only appropriate
no interest. Unfortunately in 2020, interest This substantial increase was caused by NAF 105 million in salaries, not including to renew our unwavering commitment
rates on the international market for USD the current economic condition due to the social benefits, pensions, medical and other to continue providing you with the best
deposits were close to zero, which resulted pandemic, management’s outlook regarding insurances. possible financial products and services in
in interest income on overseas investments the economies of our islands and other the Dutch Caribbean.
such as Treasury Bills and deposits implications related to the pandemic on our Our communities
with Correspondent banks to decrease loan portfolio given current information. • The year 2020 undoubtedly will be
substantially. • In light of the above, the performance was remembered as the year of the Covid