The Development Bank of Samoa went through “the most challenging” financial year in 2019–2020 according to the bank’s latest annual report.

The annual report for the financial year 2019–2020 highlighted the difficulties for the bank that came with the 2019 measles epidemic and the coronavirus pandemic that followed three months later in early 2020.

D.B.S. Chairman and Ministry of Finance Chief Executive Officer, Leasiosiofaasisina Oscar Malielegaoi, stated in the annual report that all the clients of the bank were affected including the tourism sector.

“The year under review will go on record as one of the most challenging years for the bank, on the back of two health crises, the measles outbreak in late 2019 and now the global pandemic in 2020,” he said. 

“The financial impact of COVID-19 has been felt by all businesses that are clients of the D.B.S. in particular the tourism sector that accounts for 67 per cent of the loan portfolio.”

The Chairman also emphasised that the impact of the last government’s state of emergency restrictions was felt in the bank’s overall performance.

“The bank’s significant exposure to the tourism sector and the effects of S.O.E. restrictions is reflected in the lending and performance outcomes for the year,” he said.

The bank’s newly approved loans number 358 and is valued at $6.8 million according to Leasiosiofaasisina, though there was a decline. 

“However, total new loans declined when compared to FY2019 by 32 per cent in number and 22 per cent by value. 

“The stimulus package received from the Government $2 million to cover interest relief and rent for private tenants over three months, provided short-term funding cover for shortfalls in revenues for the said period.”

According to the annual report, despite the coronavirus challenges the D.B.S. recorded a surplus of $1.1 million from operations compared to budgeted losses of $1.1 million and surplus of $664,000 in the previous FY2019. 

“The overall loss before tax of $444,000 for the year was an improvement when compared to budgeted loss of $2.6 million and last FY2019 loss of $683,000. 

“The prolonged period to realise non-performing loans and the uncertainty of Covid-19 will continue to challenge the Institution’s financial sustainability. 

“The D.B.S. however remains steadfast that appropriate measures are in place to effectively manage and sustain operations into the next twelve months. 

“The government has also given its assurance to support the bank’s operations through future capital injection. 

"Navigating the road ahead is difficult and challenging.”

Leasiosio also expressed confidence that the D.B.S. management is taking the right steps to strengthen its operations.

"I commend the directors for their contribution and support, and applaud management and staff for the hard work and commitment through these challenging times to deliver the outcomes of FY2020.”