Linton credits team as FHC racks up half-year surplus
First Heritage Co-operative Credit Union (FHC) is reporting a net surplus of $36.3 million at half-year, which erased losses in the same period a year ago, in a positive sign that the community bank is reaping gains from its turnaround plan.
Comparatively, at half-year ending June 2016, the credit union was reporting a loss of $21 million, said new CEO Roxann Linton.
When Linton began running FHC in January, she inherited a loss of $89 million that the credit union had racked up for all of 2016. Amid a whispering campaign that the finances of FHC had been worsening under the new leadership, the Financial Gleaner reached out to Linton for comment. She said the figures showing the surplus at half-year had just been reviewed at the monthly meeting of the board.
The new CEO said that apart from reconnecting with credit union members, one of the first order of business was to get the loans out the door.
"We're seeing a 100 per cent increase in loan disbursements for this period over the same period last year,' Linton told the Financial Gleaner on Tuesday after the board meeting.
She reported that in January of 2017, the credit union had been achieving only 80 per
cent of its loan disbursement target, but that subsequent adjustments to the team and strategy brought in additional business that allowed FHC to hit the target.
"That moved to 90 per cent in February, then on to 95 per cent and by April we were at 97 per cent. By May, we hit 100 per cent," Linton said, noting that the boosted loan business was the catalyst for bottom line growth.
"There was a significant increase in loan disbursements and the revenues generated from that directly affected our numbers positively," she said.
The CEO indicated that in the first six months of the calendar year, FHC also recorded growth in its deposits, up 48 per cent to $5.12 billion, and made headway in dealing with its loan losses.
Provision for loan losses were cut in half from $95.42 million to $42.07, while bad debt recoveries moved up from $17.42 million to $22.45 million, according to information from the unaudited financials up to June 2017.
"The outcome that we're seeing would have been affected by our disbursements, and provisions for loan losses would impact it," said Linton.
"The fact that we are in a surplus position tells you that we are managing those provisions. We are, therefore, seeing a better loan quality of the loan portfolio for the period under review," she said.
Town hall meetings
Linton kicked off her tenure with a series of town hall meetings with FHC members across the island, staging focus groups with members to understand the quality of their experiences with the credit union, the development of new products and services, as well as training and development of team members.
She says despite initial resistance, the FHC workforce was now on-board with the initiatives.
"All credit to the team," Linton declared. "When we started out with the changes in January, there were pockets of resistance, but as soon as the results started showing, then that loosened a bit."
FHC is Jamaica's third-largest credit union with assets of $10.68 billion up to June of this year.