It is with great pleasure that I present to you the Chairman’s Report and Financial Statements of the Society for the year ended December 31, 2009. The period started with cautious optimism for the banking sector following the economic meltdown around the globe. It would be recalled that several major financial institutions in the developed world either collapsed or had to be given special bail-out concessions by their governments in order to ensure their survival.

The financial sector in Guyana however, remains solid with the New Building Society readjusting its marketing strategy to cope with the high demands for housing loans from the Guyanese public. This increased demand for loans in 2009 was as a result of government’s aggressive housing drive which was ably led by Honourable Irfaan Alli, Minister of Housing. His novel idea about “one stop shopping” saw unprecedented demands for housing loans to the extent that we raced near to our maximum lending limit. This aggressive campaign on the part of the Minister of Housing caused the New Building Society to report to government of this growing and accelerated mortgage demands. The government immediately made concessions similar to those obtained by the New Building Society to all the other financial institutions in the country for housing loans up to $8M. Thus, the mortgage market has been placed on a level playing field. This move was welcomed by the Society since we were of the firm view that no single financial institution can meet the huge demands of the mortgage market.

Our Society remains a financially sound entity and despite attempts by a few detractors to spread rumours, create mischief and fear in the minds of its members, the society was able to rake in its largest ever profit in its history. Our members, therefore, will have to be always guarded against these few detractors who are bent on spreading misinformation about the society. We previously had to debunk criticisms against our investment in the Berbice River Bridge by an uninformed little group of mischief makers and pseudo intellectuals.

Notwithstanding the fears and criticisms, I am pleased to report to you, that the investment in the bridge remains sound and has seen the society earning interest in 2009 alone to the tune of $161M. The bridge continues to be the most lucrative investment made by the society. The payments by the Bridge Company as per our agreement have been up to date. I want to commend and thank those members who have given us encouragement and support during the campaign against the investment in the Berbice River Bridge. It is with some degree of consternation that these few anti-NBS so called “concerned members” could criticize the investment by the NBS in a national project and never utter a word when investments were made overseas in the past on less lucrative ventures. The New Building Society will continue to be prudent in its investment strategy and assures its members of the soundness of these investments and the viability of this important national entity.

Financial Performance:
Despite the credit crunch and the economic downturn globally, the Society was able to record its highest ever profit of $568M. This achievement was also $280M or 97% above that of 2008 and $168M or 42% higher than the highest profit earned for any previous year.

The above achievement was even more amazing, since we reduced our mortgage interest rates from 7.5% to 6.95% for up to 8 million dollars and from 5.5% to 4.95% for low income mortgages at the start of the year. At the same time we still maintained the savings rates as high as 4.5% per annum to our members.

Additionally, the rate of earnings on investments improved by 18%, moving from 4.5% in 2008 to 5.3%. This was largely due to the attractive returns of 9.56% from our investments in the Berbice Bridge Company.

Mortgages advanced for the year was $3,922M, again the highest in the history of the Society. The mortgage portfolio recorded an increase of 10.0% for the year and stood at $20,941M as at 31st December, 2009. I am also pleased to report that although there was a phenomenal increase in the mortgage portfolio, the Society’s mortgage book remains very strong where we recorded exceptionally low levels of arrears of 0.03%. For borrowers, the fall in interest rates was also welcomed in terms of improving affordability on their part.

The Society’s Savings Balances also grew by 6.0% to $32,310M or 85% of Total Assets. By maintaining a stable savings rate, we ensured that savers obtained a reasonable return for their investments. This can also be helped by striving to ensure a low management expense ratio. We are grateful to our savers, the overwhelming majority of whom have every confidence in our ability to ensure the safety of their investments, and who chose to ignore those who wish to bring the Society into disrepute. Their confidence in us resulted in the success story of the Society which we are now reporting.

Our Total Assets also grew by 7.0% for the year to $37,903M while Reserves was a healthy $5,358M, representing 14% of Total Assets or 17% of Members’ Funds. This ratio continues to be among the highest in the financial sector.

The Society’s total Liquidity stood at $12,986M or 34% of Total Assets or 40% of Investors’ Funds. The security of members’ funds with the Society is our number one priority and such levels of Liquidity was not only above the norm in our nature of business, but provided assurances that funds would always be available to meet withdrawal demands. We guarantee you that we will continue to ensure that the right balance in this area is maintained, thus realizing security for Savers’ Deposits.

Our Members:
The Society has always endeavoured to provide a secure home for personal and corporate savings and to encourage owner-occupation of homes by providing affordable mortgage financing to this ever growing market. We aim to offer a high standard of personalised service together with competitive rates of interest. Our new Chief Office under construction at Lots 1 & 2 North Road and Avenue of the Republic when completed would enable us to better serve members in a more spacious and friendly environment. The construction work is progressing smoothly as you can all see.

Staff:
The Society is proud of its complement of staff spread around our seven (7) branches countrywide. The majority of them who are experienced and qualified will ensure our members and the public get maximum benefits from their expertise. We continue to encourage employees to enhance their personal development through training and we grant compensation to them for relevant academic qualifications achieved. We thank our staff for their dedicated service to the Society and urge them to continue to give selflessly in the interest of the further advancement of the Society.

Our Work in the Community:
Over the years, we have always prided ourselves as a good corporate citizen to many community organizations. During the year, we disbursed approximately $6.0M to several charitable and educational institutions in the country and will continue to do so in the future. You our members would normally approve amounts each year for this purpose.

Our Forecast:
We remain optimistic about the future of Guyana and are cognisant of the role we need to play in promoting economic development particularly with respect to increasing the stock of houses countrywide.

In his Budget presentation, the Minister of Finance indicated that the sum of $1.7 billion has been allocated for housing during 2007 and is expected to facilitate the provision of more than 1,500 low income house lots and regularise approximately 500 squatter settlements.  To facilitate the process several initiatives will be undertaken including accelerating the process of acquiring house lots, providing sites and services and completion of the electrification programme in un-served and under-served areas.
 
The Society has built up over the last 67 years an in-depth knowledge of our members through a well trained labour force.  We are therefore well positioned to take advantage of the opportunities as they present themselves. 

Conclusion:
The Society is committed to providing a secure environment for savings at attractive rates and encouraging home ownership by the provision of affordable mortgage finance. I am confident that with our strong Asset Base, these objectives will be achieved.
Finally, I would like to thank my fellow Directors, Management and Staff and most importantly our members for their support during the year and look forward to their continuing co-operation during 2010. Our detractors also helped as we ensured we proved them wrong.