Annual Report 2020

JPS & PARTNERS CO-OPERATIVE CREDIT UNION LIMITED
Treasurer’s Report (Continued)
2. Increase in liquid investments. This allowed the Credit
Union to invest more in short term instruments at
attractive negotiable rates.
3. Continued redundancies within the energy and
telecommunications sectors. These sectors account
for a large chunk of our borrowing membership.
4. Reduction in the returns received on the financial
investment portfolio. This decline was due mainly to
the general reduction in interest rates in the financial
arena, consistent with the government’s inflationary
and economic growth targets.
Despite this limitation, prudent management and
aggressive bargaining with our investors for rates higher
than that which was offered, also contributed to the
performance of the investment portfolio.
The Credit Union continues to maintain its investment
portfolio in government instruments, the Credit Union Fund
Management Company (CUFMC), equities market and
other investment houses considered to be safe and sound.
SOURCES OF REVENUE
Loan interest income remains our principal source of
revenue and accounted for 78.07% of total revenue. This
performance is an indication of our continued focus to
provide loan products to meet the needs of our members,
9.78% was derived from investment income, 5.39% from
fees and 6.76% from other sources.
REVENUE SOURCES 2020
OTHER
4.74%
RENTAL
2.01%
FEES
5.39%
INVESTMENTS
9.78%
LOAN
INTEREST
LOAN
INTEREST
78.07%
INVESTMENTS FEES RENTAL OTHER
Our decision to grant waivers on fees charged given the
impact of the COVID-19 pandemic on members’ income
saw the Credit Union recording a decline of 10% in noninterest
Income when compared with prior year.
EXPENSES
The social and economic effect of the pandemic on our
members and our proactive response in the form of cost
containment resulted in the ratio of expenses as a
percentage of gross income being reduced from 87% in the
previous year to 82% in 2020.
• Interest Expense decreased by $9.72M or 11.36%.
The Interest expense on Voluntary shares increased in
tandem with the growth of the portfolio. The decline in
the Partner Plan portfolio, contributed to the reduction
in interest expense paid to members.
• Operating Expenses decreased by $13.49M or by
4.40% from $306.79M in 2019 to $293.29M in 2020.
Cost containment measures, which were successfully,
implemented accounts for this achievement. The main
contributing factors accounting for the decrease are as
follows:
• Administrative Expenses decreased by $2.77M or
from $114.60M to $111.83M. The contributing factors
were:
1. Telecommunications which experienced a decline
of 35%;
2. Professional and Consulting fees reflected a
decrease of 69%;
3. Costs associated with the procurement of
Members refreshment decreased by 72%.
4. Overall, cost containment measures implemented
in other general administrative areas of expenditure.
• Marketing & Promotion Expenses decreased by
$4.92M or from $9.82M to $4.90M. Planned face to
face marketing and promotional activities were
instead undertaken virtually and electronically at
significantly lower costs. This was instituted in line
with our COVID-19 Business Continuity Plan
implemented in the month of March which sought to
Your Financial Partner for Life 37 2020 Annual Report