The MCB is expecting more economic growth in 2008
The MCB Group in the Netherlands Antilles and Aruba, of which Windward Islands Bank (WIB) is part, is expecting more economic growth in 2008, say President Lionel "Chicu" Capriles and Managing Director Ron Gomes Casseres in the group's annual report. In last year's annual report, MCB said it was confident of seeing continued and probably even stronger economic growth in 2007. That turned out to be the case, with the Netherlands Antilles Gross National Product (GNP) showing real growth of 2.4 per cent in 2007.
The expectations for 2008 are even better, MCB stated, with the GNP projected to grow 2.6 per cent in 2008. Inflation is expected to remain in the 3 to 3.5 per cent range of the past two years in Curacao and the Netherlands Antilles. "The recent steep climb in the price of crude oil will surely impact the rate of inflation in 2008 for all islands of the Netherlands Antilles and become a burden, especially on the less fortunate in our societies," MCB expects. It therefore urged government to initiate an energy policy that should include emphasis on alternative energy sources and the stimulation of the generation of alternative energy.
The change in growth has come about mainly due to two factors, according to the Bank. The clearly outlined path to the new constitutional structure, which includes very significant domestic debt relief by the Netherlands and has created new confidence with local and especially Dutch investors, has led to many new projects, particularly in tourism and real estate developments being initiated. The second factor that has led to the change in economic growth is tourism. Particularly in Curacao, tourism has increased strongly, with all hotels showing record-high occupancy rates. This is the case in Bonaire and St. Maarten as well, while Aruba's tourism is recovering after a temporary dip, now that several hotels are again fully open following renovations and new construction. In both St. Maarten and Curacao cruise tourism remains strong and will grow further in the coming year.
All this has led to the construction of new hotels and other resort facilities, which has further contributed to economic growth. With the US and perhaps the world's economies appearing to be headed into a recessionary period, there is concern as well how this will affect tourism in the Antilles in 2008, according to MCB.
In its annual report, the bank cited "well-diversified" income sources. In 2006, the 90th year of the bank, it was proud to break the NAf. 90 million profit mark. In 2007, the bank's profit after tax exceeded NAf. 100 million. In 2007, before the transfer to the Reserve for General Banking Risks, MCB Group made a profit after tax of NAf. 106.8 million, a 14.4 per cent increase compared to 2006. All islands contributed to this increase in profits.
The net result after tax in Curacao in 2007 was up 13.6 per cent, Aruba 20.5 per cent, Bonaire 3.1 per cent, and St. Maarten was up 7.8 per cent. MCB Group's consolidated assets had increased NAf. 559 million or 12.7 per cent since December 2006 and it ended the year just short of the five billion guilder mark at NAf. 4,948 million. Net loans and advances to clients increased by 8.4 per cent, and closed 2007 at NAf. 2,816 million.
In the past year, net loans and advances grew especially in Curacao and in St. Maarten - each by 11 per cent. In Aruba loan growth continues to be restricted by the Central Bank there as part of its monetary measures. Loans and deposit market shares remained virtually unchanged in Curacao and Aruba, and increased in St. Maarten and Bonaire.
The bank's share of outgoing foreign exchange transactions increased on all islands. At the end of 2007, the book value of shareholders' equity in the MCB Group was NAf. 341 million. This represents a very strong 10.1 per cent increase over 2006. This solid capital base, which shareholders agreed to increase by not less than a record NAf. 31 million this year, continues to represent a key strength of the Banking Group.
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