August 20, 2010
NCB never received qualified audit report under ULP – PM

The National Commercial Bank (NCB) has never received a qualified audit report under his administration, said Prime Minister, Dr. Ralph Gonsalves, who also holds the portfolio of Minister of Finance.{{more}}

He said this was not the case when Arnhim Eustace, Leader of the Opposition and President of the New Democratic Party (NDP), was this country’s Minister of Finance.

A qualified auditor’s report or qualified opinion report is issued when the auditor encounters one of two types of situations which do not comply with generally accepted accounting principles. However, the rest of the financial statements are fairly presented.

On the other hand, an unqualified auditor’s report or unqualified opinion is regarded by many as the equivalent of a “clean bill of health”. This type of report is issued by an auditor when the financial statements presented are free of material misstatements and are in accordance with GAAP, which in other words means that the company’s financial condition, position, and operations are fairly presented in the financial statements.

Gonsalves, who made the disclosures while giving a ministerial statement in Parliament on Thursday, August 5, said under his leadership, the Bank’s total assets have doubled the figure that he met when the incumbent Unity Labour Party (ULP), which he heads, took office in 2001.

“I hear they talk about the Bank. Let’s look at the asset base of the Bank and see how it has grown,” said Gonsalves.

Using the year 2000 as a base, Gonsalves said the total assets registered in the period amounted to $368.5 million, but by the end of the financial year in June 2009, the figure had risen to $813 million.

He disclosed that in 2000, the Bank’s total loans were $239.4 million, but in 2009 this had reached a figure of $569.2 million.

“Provision for loan losses…we have had to write off …for Union Island Resorts Limited and Valdetarro and CCYY; the National Commercial Bank, we had to write off $25 million. You hear me. This ain’t two million dollars, you know, and nobody is writing off $2 million. This is $25 million and this was a time when as you know $25 million ten years ago were worth more than $25 million today,” said Gonsalves.

The prime minister used the opportunity to call for a debate on the NCB.

“The auditors, Coopers and Lybrand, under the watch of the Honourable Leader of the Opposition, first of all Fiscal Advisor and later as Minister of Finance, for four years: ‘96, ‘97, ‘98, ‘99; the external auditors gave qualified financial statements to the bank,” said Gonsalves.

“That means the external auditors were not putting their necks on the line about the safety and solvency at the bank and more particularly in relation to the inadequacy of the provisioning for bad debts,” said Gonsalves.

Gonsalves said the qualification was only removed in 2000 when the previous administration agreed to have additional provisioning for the bad losses.

Discussing the total deposits at the NCB, Gonsalves said in 2000, this figure stood at $320.8 million; 2009 it amounted to $674.1 million.

“The shareholders equity in 2009 under the watch of this minister of finance is $83.8 million,” said Gonsalves, adding under the NDP in 2000, the shareholders equity amounted to $27.9 million.

Regarding the employment situation at the bank, Gonsalves said in 2000, there were 139 persons employed at the bank, but in 2010 that figure has increased to 196. (HN)