A SHARP rise in special deposits in the Jamaica Public Service Employees' Co-operative Credit Union during the latter part of its last financial year, pushed its asset base beyond the billion dollar mark for the first time in its 45 year history, according to treasurer, Kepton McKenzie.
Total assets grew by just over 59 per cent, moving to $1.14 billion at the end of December 2000 from $716 million at the end of the previous year, Mr. McKenzie said.
In a report to members released ahead of tomorrow's annual general meeting of the Credit Union in Kingston, Mr. McKenzie pointed out that the institution's financial stability was solidified by the phenomenal growth in its asset base, primarily because of a 97.5 per cent growth in special deposits during the past year. The special deposit account actually grew from $365.25 million in 1999 to $721.6 million.
Although he said the increase was an indication of the competitiveness of their investment instruments and the confidence displayed by members, the treasurer also suggested that the capital inflows was largely attributable to employees of the Jamaica Public Service Company (JPSCo), whose positions were made redundant.
While the asset base grew significantly, Mr. McKenzie said the Credit Union's net income and surplus available for distribution remained almost constant at $49.35 million and $39.48 million respectively in 2000, and were achieved in an environment of falling interest rates, the premature repayment of loans by former employees of the JPSCo and increases in operational expenses.
The large growth in assets during the year, Mr. McKenzie said, "is a remarkable achievement, as we have now become the largest Credit Union when measured on a total asset basis, even though we are among the smallest when measured on the basis of number of members."
However, interest rates continued to trend downwards and contributed to a decrease in net earnings from the company's liquid assets investments because they had to pass on most of those earnings to members.
During the year, the treasurer said, they took a number of initiatives to encourage growth in their loan portfolio, and revised the loan policy to make it easier for members to access credit.
Mr. McKenzie said the Credit Union continued to show sound financial performance, with all the major indicators moving in the right direction.
Despite the reduction in interest rates, he said, interest income increased by about 11 per cent, attributable primarily to inflows from former employees of the JPSCo, from whom they attracted $400 million in special deposits, "as a result of decisive strategies applied to attract those funds into the Credit Union."
Income generated during the year increased by just over $18 million or by 12.25 per cent to $163.3 million, down from an 18.42 per cent increase during the corresponding period in 1999. The reduction in interest rates notwithstanding, income from investments was the main source of revenue, accounting for some 70 per cent of total income generated.
The Credit Union's share capital increased to $215.31 million last year, an increase of 3.34 per cent, while the loan portfolio grew by $10.45 million or by 5.56 per cent over the 12 month period.