ECCB 2020-2021 Annual Report and Statement of Accounts

FINANCIAL RESULTS

The Bank recorded a net profit of $25.2 million for the year ended 31 March 2021, representing a decrease of $37.9 million or 60.1 per cent from the profit of $63.1 million reported in the prior year. The deterioration in net profit was principally due to a significant reduction in interest income earned on the Bank’s foreign reserves portfolio, consistent with the Federal Reserve lowering its benchmark interest rate to a range of 0 to 0.25 per cent in March 2020, which remained over the reporting period. Operating Income for the financial year ended 31 March 2021 fell by $42.6 million or 29.4 per cent to $102.3 million when compared to the previous financial year. The falloff in operating income was driven largely by decreases of $41.3 million in Net Interest Income, $11.7 million in Gains on Mortgage-Backed Securities and $6.6 million in Commissions Income. The reductions in the aforementioned revenue items were offset by increases of $14.2 million in Gain on Sale of Foreign Investment Securities and $2.0 million in Other Income. Net Interest Income contracted by $41.3 million or 43.3 per cent to $54.1 million for the year ended 31 March 2021 compared to the previous financial year. This decline was driven principally by a reduction of $39.3 million in interest earned on money market instruments and money at call; and $9.1 million in interest on foreign investment securities given the current low interest rate environment compared to the prior financial year.

Chart 10 - Income Mix 2020

Chart 8 - Net Profit (EC$’M)

Chart 9 - Operating Income (EC$’M)

Chart 11 - Income Mix 2021

EASTERN CARIBBEAN CENTRAL BANK ANNUAL REPORT 2020/2021 37