Performance as a Group
It gives me great pleasure to provide the following Annual Report. Despite the economic challenges faced within 2019, Home Mortgage Bank (HMB) continued to operate competitively within the market. HMB’s total assets grew by 2.6% and net interest income increased by 12.1% when compared year on year. Retained earnings increased by 6.1% when compared to the financial year ending December 2018.
HMB’s financial position continues to be sound and highly positioned for solid growth. Our financial sustainability remains a key strategic imperative as we continue to uphold our mandate outlined within the HMB Act. We will continue to focus on risk adjusted net income maximization and further strengthening our financial position.
International and Regional Economies
In December 2019, China alerted the World Health Organization (WHO) to an unidentified virus with pneumonia-like symptoms, detected in Wuhan. In January the WHO identified the virus as the coronavirus (Covid-19) and declared the new disease a public health emergency of international concern. By March 2020, the WHO had declared the Covid-19 a pandemic. The virus had spread to over two hundred (200) counties, affected over a million persons and killed thousands.
In a bid to stop the spread of the virus and ‘flatten the curve’, countries across the world have closed their borders, schools, areas for entertainment and places of worship. In addition to these closures, personal hygiene measures, social distancing and staying indoors were recommended by the officials.
The economic effect of Covid-19 is still being measured, however the base case scenario provided by the International Monetary Fund’s (IMF) April 2020 World Economic Outlook (WEO) shows the global economy declining by 3% in 2020 and recovering by 5.8% in 2021.
The economic impact of Covid-19 is significant as both advanced and developing economies are projected to record negative growth of 6.1% and 1% respectively. The key policy measures to be implemented in support of economic recovery include:-
- Securing adequate resources for the global health system
- Shared economic policy objectives across countries
- Limiting the amplification of the health shock to economic activity
Trinidad and Tobago (T&T) recorded its first case of Covid-19 on March 12. In an immediate response the Government of T&T closed all schools and universities. To date there are over one hundred (100) cases of Covid-19 in T&T. In combating this deadly virus, the Government has implemented a number of containment measures such as the closure of our boarders (international and regional) and non-essential sectors of the economy (construction, hospitality and tourism).
The Ministry of Social Development and Family Services in collaboration with the Ministry of Labour and Small Enterprise Development has provided social support services to assist families during the period of the Covid-19, these include various grants such as salary relief, rental assistance and public assistance. These measures are being facilitated in an environment of low commodity prices where the fall-off in energy prices are projected to reduce Government revenues by $5 billion (approximately).
The Government continues to monitor the development related to Covid-19 (internationally and regionally). Public advisories and updates are provided daily to citizens in a bid to fight the spread of the virus. According to the WEO the containment measures are expected to ease in the second half of 2020; with projected economic growth in 2021.
HMB’s Covid-19 Response
In response to the pandemic HMB has rolled out a number of measures within its Business Continuity Plan (BCP). Management and staff are working remotely (at home), customers and stakeholders are asked to use our digital channels as a means of communication.
Mortgage customers who have been adversely affected by Covid-19 are provided with the option to defer their mortgage payment for three (3) months in the first instance; with the possibility of a further extension. To date one hundred and forty-three (143) customers have requested mortgage deferrals.
HMB will continue to work closely with our customers, providing financial advice and support where necessary. We are complying with the advice given by the Government and continue to monitor closely the developments of Covid-19.
In 2019, the primary bond market saw eighteen (18) bond issues raising a total to $11.3 billion . HMB reintroduced the market to Collateralized Mortgage Obligations (CMOs) with an issue valued at $200 million. CMOs offer HMB the opportunity to raise low-cost, long-term, sustainable financing. Development of this product also sits squarely with its mandate to develop the local capital market.
The local stock market as measured by the Trinidad and Tobago Composite Index (TTCI) advanced by 165.93 points or 12.74% for 2019 . The TTSE continued to be led by cross-listed stocks increasing by 18.88% whilst the All T&T Index advanced by 163.80 points or 9.61%.
2019 and Beyond
HMB’s strategic alliance with the Trinidad and Tobago Mortgage Finance Company Limited (TTMF) has developed further as we continue to leverage on our strengths and to share resources. Our unification has extended beyond the business processes, to include corporate social events.
Looking ahead, the Board of Directors remain committed to ensuring the continued sustainability and profitability of HMB, whilst increasing shareholders’ value. We will continue to expand on our products and increase our competitiveness within the market.
On March 23, 2020, my resignation as Chairman and Director was submitted to the Board of Directors. I thank my fellow Directors, management and staff for their support and commitment throughout my tenure. It was indeed a pleasure being a part of the team and I am extremely proud of what we have accomplished.
In closing, I will like to welcome the newly appointed Directors Mr. Douglas Camacho and Mr. Calvin Bijou whose appointments are effective on March 31, 2020. Mr. Camacho and Mr. Bijou, brings with them a wealth of experience and technical expertise. Special thanks to Ms. Ermine De Bique Meade who served as a Director for approximately eight (8) years. Ms. De Bique Meade tendered her resignation to the Board on December 31st 2019.