GFC Annual Report 2015-VER10_

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  • Annual Report 2015

  • CONTENTS

    Mission, Vision and Our History 1

    Financial Highlights 2

    Board of Directors 3

    Senior Management Team 4

    Chairmans Report 5

    Managements Discussion and Analysis 6

    Corporate Governance 8

    Corporate Information 9

    Statement of Managements Responsibility 10

    Independent Auditors Report 11

    Financial Statements 12

  • PG 1 - MASSY FINANCE GFC | ANNUAL REPORT 2015

    MISSION, VISION & OUR HISTORY

    MISSIONTo provide quality financial products with high levels of customer service and employee commitment, whilst increasing shareholder value and building a reputation for integrity and excellence.

    VISIONTo be the premier financial institution within our market segment, with a well-recognised brand and a reputation for excellence and integrity.

    OUR HISTORYMassy Finance GFC Ltd was formed in 1974 as a subsidiary of the Massy Group of Companies to provide loan and deposit taking services in support of the rapidly expanding new vehicle division of Massy Motors Ltd.

    The company has grown since then to accumulate assets of well over $500 million with a staff complement of over 65.

    Massy Finance GFC Ltd operates through its Head Office in Port of Spain with four other offices throughout Trinidad in San Fernando, Chaguanas, Morvant and Richmond Street, as well as an office in Scarborough, Tobago. Massy Finance GFC Ltd enjoys a reputation as one of the leading finance companies in the country in terms of its size and longevity.

    Massy Finance GFC Ltd continues to meet the business needs of Corporate, Commercial and Individual clients with over 5,000 loan customers on record.

    COVER DESIGNUnited by the Groups values, all companies including Massy Finance GFC Ltd now aspire to Uncomplicate customers interactions with the Group, through a unified and seamless interface. The interlocking pieces symbolize the Group coming together with many individual companies woven together under the umbrella of Massy. One key component of this new identity is the inclusion of a comprehensive loyalty system which rewards customers for their use of the Groups goods and services in its customer facing units. This interface of customer and company, united by values and glued together through loyalty, are powerfully represented in our premier Annual Report cover design.

  • MASSY FINANCE GFC | ANNUAL REPORT 2015 - PG 2

    FINANCIAL HIGHLIGHTS (Expressed in Trinidad and Tobago Dollars)

    2015 2014 $000s $000s

    Interest income 42,112 36,131

    Interest expense (10,004) (8,075)

    Net interest income 32,108 28,056

    Other income 3,822 3,320

    Loan loss expense, net of recoveries (347) (1,037)

    Operating expenses (21,707) (18,142)

    Profit before taxation 13,876 12,197

    Taxation (3,637) (3,519)

    Profit after taxation 10,239 8,678

    Loans to customers 468,406 396,251

    Cash 17,588 12,722

    Statutory deposit with Central Bank 32,503 24,490

    Other assets included as part of total assets 8,849 7,335

    Total assets 527,346 440,798

    Customers deposits 349,065 273,372

    Borrowings 80,000 80,000

    Other liabilities 3,511 2,895

    Shareholders equity 94,770 84,531

    Total equity and liabilities 527,346 440,798

  • PG 3 - MASSY FINANCE GFC | ANNUAL REPORT 2015

    BOARD OF DIRECTORS

    DIRECTOR Mr. John Tang NianChairman of Credit Committee Member of Audit Committee

    DIRECTOR Mr. Keith De FreitasChairman of Audit Committee Member of Credit Committee

    CHAIRMAN Mr. Richard P Young

    DIRECTOR Mrs. Paula RajkumarsinghMember of Audit Committee Member of Asset & Liability Committee

    DIRECTOR Ms. Patricia Kong TingChairperson of Asset & Liability Committee

    DIRECTOR Mr. David Jardim

  • MASSY FINANCE GFC | ANNUAL REPORT 2015 - PG 4

    SENIOR MANAGEMENT TEAM

    HEAD OF RISK Ms. Joelle Pauljoelle.paul@massygroup.com

    GENERAL MANAGER Mr Ramesh Lutchmanramesh.lutchman@massygroup.com

    CEO Mr. Curtis Tobalcurtis.tobal@massygroup.com

    HEAD OF FINANCE AND ADMINISTRATION Ms Heather Hackshawheather.hackshaw@massygroup.com

  • PG 5 - MASSY FINANCE GFC | ANNUAL REPORT 2015

    CHAIRMANS REPORT

    Massy Finance GFC Ltd achieved a significant improvement in the year under review. Profits attributable to shareholders was $10.23M an increase of 18% from prior year, a good performance given the highly competitive and challenging economic climate in which we operate. This was driven mainly by growth in interest and other income.

    Over the past year we saw increased momentum at Massy Finance GFC Ltd, with greater synergies between Massy Motors and the Consumer Finance Line of Business (LOB) which resulted in an increased market share of vehicles financed. We continued to execute joint promotions with Massy Motors and Massy United Insurance, which also improved our performance in the vehicle financing business, and enabled us to offer a more complete package to automotive consumers.

    The launch of a new corporate identity for the Group, Massy, enabled us to also successfully roll out our loyalty programme in the company. The loyalty programme, embodied in the Massy Card, now rewards customers by allowing them to earn and redeem points at a number of Massy locations across Trinidad & Tobago.

    We continue to face a robust regulatory and compliance environment with major emphasis on Anti-Money Laundering and Know Your Customer requirements. We are dedicated to maintaining full compliance in all spheres and have been working diligently to improve on our processes to meet the increasing demands.

    We seek to consistently identify and implement initiatives to add value to the customer experience, in consumer finance. We have a presence in the Massy Motors showrooms and plan to expand our presence by adding an additional standalone location in 2016.

    Over the past year we also promoted and recruited talented professionals to strengthen the leadership team. As we continue to deliver on our strategy, we will be recruiting and expanding our human capital to deliver on our goals for the coming year.

    Finally, under our Good For Community thrust, we also continued to partner with Non-Governmental Organizations and other charitable institutions to help to support projects to improve the quality of life for individuals and to facilitate improved service delivery by these important bodies.

    Outlook

    We are proactively implementing initiatives to deliver ongoing strong performance in 2016 in the context of a difficult economic climate.

    CHAIRMAN | Mr. Richard P Young

  • MASSY FINANCE GFC | ANNUAL REPORT 2015 - PG 6

    MANAGEMENTS DISCUSSION & ANALYSIS

    2011 2012 2013 2014 2015

    Net Interest margin 10.0% 8.6% 8.2% 7.7% 7.4%Effi ciency Ratio 50.5% 43.8% 54.4% 48.6% 48.0%Return on Equity 12.9% 10.7% 7.6% 10.8% 11.4%Return on Assets 2.7% 2.5% 1.5% 2.0% 1.9%Capital Adequacy 23.9% 28.0% 22.7% 21.1% 19.9%

    Net Interest margin for 2015 decreased by 0.3%, however our interest expenses continue to be lower in relation to our strong top line growth. This is also refl ected in our effi ciency ratio, which improved from 48.6% to 48.0%.

    From a top line perspective, the company saw a strong increase in core interest income, which is linked to growth in the underlying loan portfolio. Added to this is an improvement in foreign currency trading income.

    Our net interest income increased over the period by $6M mainly driven by the increase in loans to customers, despite the low interest rate environment and competition we face with the bigger companies in the industry.

    Non-interest expenses for the year increased by $2.9M, primarily due to higher staff costs in our effort to improve our talent base and better serve our customers.

    Return on equity is strong at 11.4% coupled with our capital adequacy ratio, which remains well in excess of regulatory requirements at 19.9%.

    Net interest income and profi ts attributable to shareholders achieved a cumulative growth per year of 5.37% and 6.83% respectively over the period 2011 to 2015, whilst the cumulative growth in operating expenses over the same period was 8.60%, which underscores our focus on long term growth and sustainability.

  • PG 7 - MASSY FINANCE GFC | ANNUAL REPORT 2015

    MANAGEMENTS DISCUSSION & ANALYSIS (CONTINUED)

    Loans to customers increased by 14.1% (or $33M) from the prior year driven mainly by our core hire purchase portfolio. The consumer sector continues to account for a signifi cant element of our portfolio as shown in the pie chart.

    Our strong underwriting and collection procedures continue to contribute positively to our loan loss provision being within industry guidelines and to remain within companys targets.

    Our customer deposits saw an increase of 27.7% mainly driven by our commitment to offer competitive interest rates while at the same time ensuring that we maintain

    an acceptable level of capital for future growth. The increase on repo rate over the fi nancial year of 4.50% by the Central Bank of Trinidad and Tobago, coupled with the reduction in oil prices, is likely to impact the banking sector and the economy as a whole in 2016. We have embarked on an ongoing campaign to retain and attract new deposits.

    Cash and cash equivalents continue to remain strong at 3.3% of total assets. We continue to leverage on our strategic relationships within the Massy Group to allow us an optimal funding mix which reduces our sensitivity to short term funding, and thereby enabling us to better manage our liquidity positions.

  • MASSY FINANCE GFC | ANNUAL REPORT 2015 - PG 8

    CORPORATE GOVERNANCE

    Corporate