Development Bank’s “borrowings” over $122 million
The Development Bank of Samoa (D.B.S.) has "borrowings" totalling over $122 million from local and international banks and financial institutions as of June 30, 2018.
Details of the outstanding loans were briefly highlighted in the bank’s 2018 Annual Report and the list of lenders include the International Development Association (IDA), Asian Development Bank (ADB), European Investment Bank (EIB), the European Economic Community (EEC), Samoa’s National Provident Fund (NPF), and the Central Bank of Samoa (CBS).
According to the annual report, the bank owes N.P.F. $16.69 million and their repayment is $1.84 million per annum with a term of 22 years.
For the CBS, the bank has seven outstanding loans totaling $88.5 million with the repayment terms ranging from 10 to 15 years. Its biggest loan portfolio with the CBS is for Tropical Cyclone Evans and is valued at $32.03 million. The D.B.S. has paid $7.75 million to the Central Bank for the 2018 financial year.
For the IDA, the bank has paid $458,189 with the annual report stating that the repayment schedule is flexible to allow the bank to manage its cash flow position. While for the ADB loan, a total of $566,113 has been paid since June 2018.
The borrowings by the bank – arranged by the Government of Samoa – is payable in Samoan tala and therefore poses no exchange risk according to the annual report.
However, the borrowings from the E.E.C are payable in European currency and the Government is responsible for the exchange risk due to exchange fluctuations.
“Where certain covenants of the Asian Development Bank loans have not been complied with, maturity dates for repayment could be accelerated,” stated the report.
Also highlighted in the annual report is a $15.18 million loss incurred by the D.B.S. in the last six years.
Established in 1974, the D.B.S. financial year 2013 retained losses were $6.12 million and increased to $10 million in 2014, a difference of $4.55 million.
It continued to increase in 2015 in the amount of $12.32 million. Furthermore, according to the reports, in 2016 it reached $13.14 million.
However, in 2017 the loss decreased to $13.07 million and then in 2018 another peak of $15.18 million, added the report.
As reported recently, the inability of hoteliers to repay their loans was cited as a “significant challenged” for the bank, and left a negative impact on its operation.
DBS Chief Executive Officer, Fauena Susana Laulu, has not responded to emailed questions while an appointment with the Minister of Finance, Sili Epa Tuioti, last Friday afternoon was cancelled.