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Co-op Bank cushions clients economic fallout due to Covid-19 


by Curlan Campbell, NOW Grenada

  • Super Starter Education Investment Plan expanded and enhanced
  • In response to Covid-19 fallout, Co-op Bank implemented financial support to clients
  • Bank received 741 applications for moratorium on loan payments

 

The fears of cancellation of Grenada Co-operative Bank’s Super Starter Education Investment Plan has been put to rest as the bank introduces new measures to protect those who have made the investment to help fund their pursuit of higher education prior to the Covid-19 pandemic.

As part of relief efforts for those clients, Co-op Bank has ensured that all clients will not feel the economic backlash of not being able to meet their financial commitments due to the coronavirus pandemic which has upended Grenada’s education system and has caused job security issues for many Grenadians.

Understanding this reality, Co-op Bank expanded and enhanced the Super Starter Education Investment Plan as part of its corporate social responsibility programme launched by the bank 10 years ago. Customers will not only have to worry about having their plan cancelled but will also be deemed in good standing and eligible for scholarship draws despite either late payment or non-payment between 31 March 2020, and 31 December 2021. Additional benefits also include an increased from $3 to $5 paid by the bank to students who have achieved Grade A or Grade 1 in final exams as part of Stars Points Reward Scheme under the Super Starter EIP.

As outlined by Co-op Bank’s Customer Care Manager, Roger Duncan, benefits to be rolled out under the 3 components of the Super Starter EIP include:

  • Super Starter Silver Plan scholarship which used to be for 1 year has been extended for the duration of primary education. The number of scholarships under this component has also increased by 7 to 28, with each scholarship valued at $1,200.
  • Super Starter Gold Plan scholarship has also been extended for the duration at the secondary level. The number of scholarships under this component has also increased by 7 to 28, with each scholarship valued at $2,500.
  • Super Starter Platinum Plan scholarship which now has 2 components, will see college students eligible for three 2-year scholarship at the value of $3,000 while students attending university will be eligible to qualify for two 3-years scholarships every 2 years at a value of $45,000.

Meanwhile, Co-op Bank closely monitors the expected economic fallout due to the coronavirus pandemic as they reflect on their Half-Year financial performance for the period October 2019 to March 2020.

Bank Chairman, Darryl Brathwaite, noted that the bank was able to see a $1.3 million (22%) increase in their profits after tax which stands at $7.2 million as compared to$5.9 million in the previous corresponding period. Furthermore, the bank also saw an increase in operating income arising from the better quality loan portfolio. However, there was a $14 million decline in customer deposits from $1.06 billion recorded in 30 September 2009 to $1.05 billion in March 2020. The bank’s total assets now stand at $1.16 billion, a decline half of 1% or $5.3 million over the first 6 months.

“The bank’s capital adequacy, solvency and non-performing loans ratios all remain within regulatory requirements with non-performing loans ratio 0.53% which has been consistently maintained below the prudential benchmark of less than 5%,” Brathwaite added. He said it is important to note that the bank’s financial performance precedes the Covid-19 pandemic which continues to cause financial instability and uncertainty.

“The bank has already implemented risk management strategies to cushion the impact of the pandemic on our customers and to protect the balance sheet. The bank will continue to monitor the situation closely, the board remains committed to ensuring that financial objectives are met at the year-end,” Brathwaite said.

The bank’s Chief Operating Officer, Deon Moses, said that taking the example of the 2008 financial crisis, it can be expected that the financial fallout of the Covid-19 pandemic will be seen in the long term. “If you recall after the crisis of 2008, we didn’t feel the brunt of that crisis until about 3 years later”…“if this crisis is going to be much bigger and that is the anticipation by all the analysts… then we can expect that the real effects of this crisis wouldn’t be felt for at least another 3 years,” he said.

In response to the Covid-19 fallout, the bank implemented financial support to their clients by offering suspensions of interest and principal payments on credit facilities for up to 6 months in the first instance, and a waiver of late payment fees during the moratorium period, among others.

So far, Co-op Bank has received 741 applications for a moratorium on loan payments, with 115 businesses also applying for relief.

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