1st NB 2019 AR - Web

ANNUAL
REPORT
2019
EMERGING WAPÒ POU
EXCELLENCE
Èmèjé LANNÉ-A
Èksèlans 2019
Èmèjé Èksèlans | 1st National Bank RAPPORT ANNUAIRE 2019 1

ANNUAL
REPORT
2019
EMERGING
EXCELLENCE
WAPÒ POU
Èmèjé LANNÉ-A
Èksèlans 2019
The theme for the 2019 Annual Report for 1st Sijé pou Wapò pou lanné 2019 pou 1st
National Bank reflects both the aspiration and National Bank ka montwé aspiwasyon
accomplishments of the Bank over the year in èk akonplisman bank-lan diwan 2019
question as well as its evolutionary progress osi èvolisyon pwogwé pa owigin-li ki
from its origins and deeply rooted indigenous wasiné an endiginé. Kon yon ki pousé
status. As a key enabler of personal and dévèlopman pèsonèl èk nasyonal pou
national development for the entire financial sistènm finasyal lokal, Bank-lan ka kontiné
system locally, the Bank continues its progress pwogwé’y an modès fonksyonalité pou
from humble functionality to internationally entonnasyonalman bon pwatik wèspèktab.
respected leading practice. The theme Sijé èmèjé èksèlans wékognizé ki bank-lan
Emerging Excellence recognises that the ja ni akonplisman pou anpil tan an otowité
Bank has long accomplished its core mandate pwensipal pou tout moun pou bon sèvis la
of access for all peoples to quality banking Bank, èk pou dévès jenéwasyon ja achivé
services and has for generations achieved wékognisyon an enovasyon, komitman pou
recognition for innovation, commitment to all tout jan ki ni lo èk enpovman kontinèlman
stakeholders and continuous improvement an espéans èk kapasité enstitisyonèl. Tout
in experience and institutional capability, all sa ka fè pou an bank pofitab èk stab. Wapò
these redounding to profitable and stable pou lanné Dé Mil Diswit (2018) établi émèjé
Bank. The 2018 Annual Report heralded this hòd bon pou pli bon kay kontiné pousé
emergence from GOOD and assures that envèsman èk opéwasyon dévèlopman pou
‘better’ will continue to drive investment and gwandè. Wapò-a sé an listwa histowik pou
operational development into GREATNESS. avansman èksèlans osi pou jan lo démandé
The Report thus acts both as a historical èk kontiné twavay stanza lendistwi nèf
record of the year’s steps toward excellence pati toujou asou pwoposisyon-an ki lé pèp
as well as a clarion call to all stakeholders to nasyonal Sent Lisi èk jan entonnasyonal ki
demand and continue to work toward new and chwazi pou fè biznis an nasyon-a méwité pli
industry-defining standards of excellence, bon sèvis pa an enstitisyon finasyal endiginé
based as always on the core proposition that
Saint Lucian nationals and the non-nationals
who choose to do business in the nation,
deserve the very best from the premier
indigenous financial institution.

VISION STATEMENT
1st National Bank St. Lucia Limited, a prudent, innovative, customer-

centric, technologically-driven and socially-responsible employer of
choice is the Caribbean’s leading financial services provider ranking
in the top three in profitability.
MISSION STATEMENT
To improve our customers’ financial well-being by providing high

quality financial solutions as we create sustainable return on share-
holders’ investments and contribute to national development.
CORE VALUES
Integrity
Confidentiality
Accountability
Professionalism
Déklawasyon visyon
Pwenmyé Bank Nasyonal dé Sent Lisi sé an Bank pokosyon enové,

klian-sentwal, tèknologi avansé, épi wèskonsabilité sosial, enplòyè
di chwa sé pli fò an sèvis finasyal ki anpami twa pli fò bank an pofi an
kawaib-la.
Déklawasyon misyon
Pou enpouvé santé finansyal Klian nou pa ka ofè bon kalité solisyon
finansyal kon nou ka kwiyé pofi diwab asou envèsman pou jan ki ni lo
an Bank nou èk kontwibité pou dévèlopman nasyonal.
Valè Pwensipal
Lonèkté
Konfidentyalité
Wèkosabilité
Pwofèsyonabilité
ANNUAL WAPÒ POU
REPORT LANNÉ-A
2019 2019
CONTENTS
Notice of Annual Meeting 6
Corporate Data 11
Financial Highlights 12
Board of Directors 14
Board of Directors’ Report 22
Board and Board Committee Meetings 26
Managing Director’s Report 28
Organizational Chart 33
Executive Management Team 34
Senior Management Team 35
Management Discussion & Analysis 36
Independent Auditor’s Report 58
Statement of Financial Position 61
Statement of Income 62
Statement of Profit or Loss and Other Comprehensive Income 63
Statement of Changes in Equity 64
Statement of Cash Flows 66
Notes to the Financial Statements 67

AGENDA
1. Tabling of Proxies.
2. To confirm the Minutes of the 81st Annual Meeting of Shareholders held on 30th May, 2019.
3. Review of Matters arising out of the Minutes.
4. To consider and adopt the 2019 Report of the Board of Directors.
5. To consider and adopt the Independent Auditor’s Report to the Shareholders for the year ended 31st
December, 2019.
6. To consider and adopt the Audited Financial Statements for the year ended 31st December, 2019.
7. To Appoint the Independent Auditor for the year ending 31st December, 2020.
8. To sanction the payment of a dividend as recommended by the Board of Directors.
9. To elect three Directors.
i. In accordance with Section 4.6 of the Bank’s By-Law No. 1, the following directors retire by rotation:
• Mrs. Brenda Floissac-Fleming – who will not be seeking re-election

• Mr. Richard Monplaisir – who is eligible for re-election
• Ms. Jennifer Remy – who will not be seeking re-election.
NOTE
Notice of Postponement
The Board of Directors of 1st National Bank St. Lucia Limited wish to inform its Shareholders that the Annual Meeting of
Shareholders normally held in May, has been postponed due to the COVID-19 pandemic. As a result, the Directors are
unable to set a new date for the Meeting at this time, due to social distancing and safety protocols established by the
Government of St. Lucia. The Bank will keep you informed on our progress to convene our Annual Meeting. Thank you
for your patience and continue to follow instructions to keep our communities safe.
BY ORDER OF THE BOARD
Carleen Jn. Baptiste-St. Marthe

Corporate Secretary (Acting)
3rd August, 2020
6 1st National Bank Annual Report 2019 | EMERGING EXCELLENCE

NOMINATION OF CANDIDATE FOR ELECTION AS A DIRECTOR OF 1ST NATIONAL BANK ST. LUCIA LIMITED
NOTE
Every director shall be the holder in his or her own right of at least one hundred unencumbered shares in the capital of
THE COMPANY.
No one (other than a retiring director) shall be eligible to be a director unless notice in writing that he or she is a
candidate for such office shall have been given to THE COMPANY by two other shareholders of THE COMPANY at the
Corporate Office of THE COMPANY in Rodney Bay, Gros-Islet at least five days before the day of holding the meeting at
which the election is to take place.
We, the undersigned Shareholders of the above Bank nominate ……………………................………………………………...............................of
……………………................………………………………............................... as a candidate for election as a Director of the Bank at the
Annual Meeting of Shareholders scheduled for ……………………………………………………………………................………………………………
Candidate’s Contact No. …………………………………................... Email Address.…………………………………......................................
Signed:…………………………………………………………………................ Signed:…………………………………………………………………................
…………………………………………......................................................... ………………………………………….........................................................
Print Name Print Name
Date:……………………………………………………………………………...... Date:……………………………………………………………………………......
Tele. Contact No. .……………………….……….……….……….............. Tele. Contact No. .……………………….……….……….………..............
Email Address ………………….……….……….……….......................... Email Address ………………….……….……….………..........................
Please refer pages 8 - 9 for the Guidelines on minimum criteria

for determining fitness for Directorship.

GUIDELINES ON MINIMUM CRITERIA FOR DETERMINING FITNESS FOR DIRECTORSHIP are
outlined in Section 97 of the Banking Act No. 3 of 2015
Every person who is, or is likely to be a director of the Bank, must be a fit and proper person to hold the particular
position. In general determination of this status, regard shall be had to the following:-
(a) the person’s probity, competence and soundness of judgement for fulfilling the responsibility of a Director;
(b) the academic or professional qualifications or effective experience in banking, finance, business or administra-
tion or any other relevant discipline of the person concerned;
(c) the diligence with which that person is likely to fulfill the responsibilities of the position;
(d) whether the interests of depositors or potential depositors of the Bank are, or are likely to be, in any way,
threatened by the person holding the position;
(e) whether the person is a significant shareholder, director or officer or holds any position of authority in any
licensed financial institution locally or elsewhere whose licence has been suspended, or revoked or otherwise
than as a result of an amalgamation or voluntary liquidation or which has been or is being wound up or com-
pulsorily liquidated;
(f) whether the person has failed to satisfy any judgment or order of a court locally or abroad including the repay-
ment of a debt;
(g) whether the person is an un-discharged bankrupt or has been declared a bankrupt locally or abroad; and
(h) whether the person has been removed or suspended by a regulatory authority from serving as a director or of-
ficer in a licensed financial institution or any body corporate locally or abroad.
Continued Overleaf

In addition to the general provisions above, regard must be had to the previous conduct and activities in business
or financial matters of the person, and in particular, to any evidence that the person nominated as a candidate has:-
(a) committed an offence involving fraud or other dishonesty or violence;
(b) contravened any provision made by or under an enactment designed for protecting members of the public
against financial loss due to dishonesty, incompetence or malpractice by persons concerned in the provi-
sion of banking, insurance, investment or other financial services or the management of companies or against
financial loss due to the conduct of a discharged or un-discharged bankrupt;
(c) engaged in any business practices appearing to the board to be deceitful or oppressive or otherwise improper
(whether unlawful or not) or which otherwise reflect discredit on the person’s method of conducting business;
(d) an employment record which leads the board to believe that the person carried out an act of impropriety in the
handling of his employer’s business; or
(e) engaged in or been associated with any other business practices or otherwise conducted himself in a manner
as to cast doubt on his competence and soundness of judgment.
Further, a person nominated as a candidate for Directorship must:
(a) be current in his/her financial commitments and other obligations to the Bank and other financial institutions;
and
(b) not be a member of either the Board, Management or Staff of institutions involved in business of a financial
nature including banking business.
Note : All Nominees for Directorship are required to complete a Questionnaire provided by the Bank. Due Diligence will
also be conducted by the Bank with respect to all nominees.

APPOINTMENT OF PROXY
Note
The instrument appointing a proxy shall be in writing under the hand of the appointer, or of his or her attorney duly
authorised in writing, or if such appointer be a corporation either under its common seal or under the hand of an officer
or attorney so authorised. A proxy shall have the same rights as the shareholder appointing him or her as defined in
Sections 138 and 145 of THE COMPANIES ACT 1996 (Rev. 2001). A proxy is valid only at the meeting in respect of
which it is given or any adjournment thereof.
The instrument appointing a proxy and the power of attorney or other authority if any under which it is signed or a
notarially certified copy of that power of authority shall be deposited at the Corporate Office of THE COMPANY in
Rodney Bay, Gros-Islet not less than forty-eight hours before the time for holding the meeting at which the person named
in the instrument proposes to vote and in default the instrument of proxy shall not be treated as valid.
A person appointed by proxy need not be a shareholder.
I.....……………………………………………….......................................... of .....………………………………………………....................................... being
a shareholder of the above company, hereby appoint……….....………………………………………………..................................................of
……………..….....………………………………………………....................or failing him/her…….....………………………………………………....................
of …………………………………………………………..my proxy to vote for me and on my behalf at the meeting
of shareholders of the above company to be held on …………………............................... the …………...................................... day of
………………………......................., 20…...........and at any adjournment or adjournments thereof.
Signed this.....………………………………………………....................................... day of ……………………………….................., 20…...................…
Signed: .....………………………………………………............................................………………
.....………………………………………………..............................................................................
Print Name

Corporate
Data
Corporate Office Tel: (758) 455-7207
Rodney Bay, Gros Islet Fax: (758) 451 8482
P. O. Box 168 SWIFT: LUOBLCLC
Castries, St. Lucia Email: manager@1stnationalbankslu.com
West Indies Website: www.1stnationalbankonline.com
Tel: (758) 455 7000
Fax: (758) 453 1630 BOARD OF DIRECTORS
Nigel A. Fulgence
Castries Branch President
21 Bridge Street
P. O. Box 168 Geraldine Lendor-Gabriel
Castries, St. Lucia 1st Vice President
West Indies
Tel: (758) 455 7000 Brenda Floissac-Fleming
Fax: (758) 453 1630 2nd Vice President
Rodney Bay Branch Johnson Cenac

J.Q.’s Mall Tedburt Theobalds
Rodney Bay, Richard Monplaisir
Gros Islet Jennifer Remy
Tel: (758) 455 7000 Agosta Degazon
Fax: (758) 452 8884 Juliana Alfred
Callistus Vern Gill
Vieux-Fort Branch Mauricia Thomas-Francis
Commercial street
P. O. Box 342 Johnathan Johannes
Vieux Fort Managing Director
Tel: (758) 454 6213
Fax: (758) 454 6137 Henri-Jacques Mangal
Corporate Secretary & Legal Officer
Marigot Bay Sub Branch
Marina Village SOLICITOR
Marigot Bay, Castries Floissac, Fleming & Associates
Tel: (758) 455 7302
Fax: (758) 458 3638 AUDITOR
KPMG Barbados & Eastern Caribbean
Choc Bay Sub Branch
Mercury Court REGULATOR
Choc Bay, Castries Eastern Caribbean Central Bank
Tel: (758) 455 7042
Fax: (758) 453 0943 AFFILIATIONS
Caribbean Credit Card Corporation
Rodney Bay Marina Sub Branch (CCCC); Eastern Caribbean Home Mortgage
Rodney Bay Marina, (ECHMB);Caribbean Association of Banks (CAB)
Gros Islet Eastern Caribbean Institute of Banking (ECIB); Caribbean
Tel: (758) 455 7050 Association of Audit Committee Members Inc.
Fax: (758) 458 4982 (CAACM); St. Lucia Chamber of Commerce, Industry
and Agriculture (SLCCIA); Eastern Caribbean Securities
Bureau de Change Exchange (ECSE);St. Lucia Employers Federation (SLEF);
George F.L. Charles Airport St. Lucia Hotel & Tourism Association (SLHTA).
Vigie, Castries

At a Glance
01 03 05
6.38%NPL Ratio
02 8%
Deposit
15.47
Book Value
Growth 04
56.7%
10%
Cost Efficiency
Net Loan &

Advances
Growth

Financial
Highlights
Year 2019 2018 2017 2016 2015
$ ' 000 $ ' 000 $ ' 000 $ ' 000 $ ' 000
Operating results
Gross income 54,416 51,445 43,869 38,821 40,055
Interest income 39,960 38,341 32,960 29,340 30,976
Interest expense 12,670 10,997 10,995 10,557 12,374
Net interest income 27,290 27,344 21,965 18,783 18,602
Other income 14,457 13,104 10,909 9,481 9,079
Other operating expenses 23,689 21,882 20,311 17,241 17,274
Profit after tax 9,638 9,929 3,545 1,457 1,028
Balance sheet data
Customer deposits 696,000 645,176 580,957 540,515 506,388
Common share capital 20,000 20,000 20,000 7,971 7,971
Total shareholder equity 101,306 92,930 84,712 77,289 76,006
Total assets 823,792 764,567 671,688 626,269 588,367
Common shares issued & paid ('000) 6,549 6,372 6,372 5,000 5,000
Weighted average shares ('000) 6,476 6,372 5,410 5,000 5,000
Performance $ $ $ $ $
Cash dividends declared 0.10 0.25 0.20 0.11 0.10
Earnings per share 1.49 1.56 0.66 0.29 0.21
Book value per share 15.47 14.58 13.29 15.46 15.20
Return on average assets 1.21% 1.38% 0.55% 0.24% 0.18%
Return on average equity 9.92% 11.18% 4.38% 1.90% 1.36%
Net interest margin 3.44% 3.81% 3.38% 3.09% 3.26%
Cost efficiency 56.7% 54.1% 61.8% 61.0% 62.4%

Board of Bòd
Directors Diwètè
FROM THE LEFT: Agosta Degazon , Callistus Vern Gill, Brenda Floissac-Fleming - 2nd Vice President,
Nigel A. Fulgence - President, Geraldine Lendor-Gabriel - 1st Vice President.

Board of Bòd
Directors Diwètè
FROM THE LEFT: Jennifer Remy, Mauricia Thomas-Francis, Richard Monplaisir, Tedburt Theobalds,
Juliana Alfred.

Nigel A. Fulgence | Chairman / President
BSc. (Hons.) Electrical Engineering.
Mr. Nigel A. Fulgence, the current President and Chairperson of the Board of Directors of 1st National
Bank St. Lucia Limited, was elected to the Board of Directors in the year 2000. He has served as the
Chairperson of the Audit and Corporate Governance Committees, and as a member of the Credit Risk
and Human Resource Committees. Currently, he is the Chairperson of the Credit Risk Committee and
a member of the Audit Committee. From 2010 to 2016, Mr. Fulgence represented 1st National Bank as a
Director of the Caribbean Association of Audit Committee Members Inc. (CAACM). Additionally, Mr. Fulgence is a member of the
following professional bodies namely, The Institute of Engineering and Technology (UK) (4th April, 1988); The Institute of Electrical
and Electronics Engineers (USA); The Association of Professional Engineers (St. Lucia) (4th April, 1998); The Institute of Internal
Auditors (2008) and Chartered Secretaries Association (Canada). He is an Electrical Engineer by profession, having graduated
from John Moores University, Liverpool in 1996, where he obtained a BSc. (Hons.) degree. He is currently employed with St. Lucia
Electricity Services Limited as the Construction Engineer.
Mr. Fulgence is also an Accredited Director, having successfully completed the Director Education Accreditation Programme
(DEAP) facilitated jointly by the Institute of Chartered Secretaries and Administrators of Canada, and the ECSE. His attendance at
Board and Committee Meetings is captured in the table below.
board JOINT AUDIT

finance, PLANNING AND human credit corporate
board audit seminars/ AND
INVESTMENT resource risk governance
special sessions FINANCE
2019 meetings held
13 4 2 6 2 3 9 2
2019 meetings attended
13 N/A 2 6 2 N/A 9 2
Geraldine Lendor-Gabriel | 1st Vice-President

BSc. (Hons.) Economics and Management; MSc. Environmental Management and Certified General
Accountant (CGA)
Mrs. Geraldine Lendor-Gabriel is a member of the Board of Directors of 1st National Bank St. Lucia Lim-
ited. She was elected to the Board of Directors in the year 2011 and serves on the Audit, Finance, Invest-
ment and Planning, Human Resource and the Credit Risk Committees. She is currently the Chairperson
of the Finance, Planning and Investment Committee, and a member of the Credit Risk Committee and Deputy Chairperson of the
Audit Committee.
She graduated from the University of the West-Indies with a BSc. Hons. Degree in Economics and Management (1991), and is a
Certified General Accountant (CGA) (1997). She also holds a Post Graduate Diploma (2005) and a MSc. in Environmental Man-
agement from the University of Derby, UK (2007). Mrs. Lendor-Gabriel is a Business and Environmental Consultant at her Com-
pany BEEQ Investments Ltd.
She has technical and professional training and experience in the areas of Accounting, Finance, Human Resource Management,
Environmental Management and Management Consulting. She holds the designation of Certified Management Consultant (2015)
from the Caribbean Institute of Certified Management Consultants which is associated with the CMC International Global certifi-
cation. She is a trained facilitator of the Stephen Covey training Programs 5 Choices to Extraordinary Productivity (2016) and the 7
habits of Highly Effective People (2015).
Mrs. Lendor-Gabriel is an Accredited Director, having successfully completed the Director Education Accreditation Programme
(DEAP) facilitated jointly by the Institute of Chartered Secretaries and Administrators of Canada, and the ECSE in 2007. Her at-
tendance at meetings is illustrated below.
board JOINT AUDIT

finance, PLANNING human credit corporate
AND INVESTMENT resource risk governance
2019 meetings held
13 4 2 6 2 3 9 2
13 4 2 6 2 N/A 8 2

Brenda Floissac-Fleming | 2nd Vice-President
B.A. (Hons.) Law
Mrs. Brenda Floissac-Fleming is the 2nd Vice-President of the Board of Directors of 1st National Bank
St. Lucia Limited. She was elected to the Board of Directors in 1993 and is currently the longest serving
Board member. She is currently the Chairperson of the Audit Committee and a member of the Credit
Risk Committee. Mrs. Floissac-Fleming is an Attorney-at-Law by profession having graduated on the 8th
July 1982 from the Chelmsford Institute of Higher Education, Essex, England with a B.A. (Hons.) in Law, and having obtained on the
26th November 1985, the Degree of Utter Barrister from the Honourable Society of Gray’s Inn. She is a Partner in the law firm of
Floissac-Fleming & Associates (formerly Floissac & Giraudy).
In December 2011, she became an Accredited Director, having successfully completed the Director Education Accreditation Pro-
gramme (DEAP) facilitated jointly by the Institute of Chartered Secretaries and Administrators of Canada, and the ECSE. On June
12th 2013, Mrs. Floissac-Fleming was appointed Honorary Consul to the Republic of Chile. Her attendance at meetings is illustrated
below.
board JOINT AUDIT

2019 meetings held
13 4 2 6 2 3 9 2
12 N/A N/A 4 2 1 9 2
Tedburt Theobalds | Director

Dip. Agricultural Extension; Dip. Mass Communication; MBA
Mr. Tedburt Theobalds is a member of the Board of Directors of 1st National Bank St. Lucia Limited. He
was first elected to the Board for the period 1998-2004, and he was re-elected to the Board in the year
2008. Mr. Theobalds has served on the Audit and Credit Risk Committees. He is the former Chairper-
son of the Special Building Sub-Committee and is a member of the Credit Risk and Corporate Gover-
nance Committees.
Mr. Theobalds is a graduate of the University of the West Indies and holds an MBA in Business Administration (1995) as well as
postgraduate Diplomas in Agricultural Extension (1984) and Mass Communication (1979). He is also a certified Mediator (2013)
and an Associate Member of the Chartered Institute of Arbitrators (UK) (2011) and Past Chairman of the St. Lucia Bureau of Stan-
dards.
He is a Valuation Surveyor and agricultural consultant who has been in public and private practice for over twenty five years. He is
qualified in the fields of Agricultural Extension; Mass Communication; Valuation Science (2010) and Business Administration. He
is presently the CEO and Managing Director of Theobalds and Associates Surveying Services.
Mr. Theobalds is also a member of the following professional bodies, namely, The Institute of Surveyors (St. Lucia) Inc. (2003),
The International Real Estate Institute (IREI) (1990), The Environmental Assessment Association (EAA) (1997), The Project Man-
agement Institute (PMI) (2005), The Institute of Internal Auditors (IIA) (2014), The Royal Institute of Chartered Surveyors (RICS)
(2013). He is also a recognized valuer by the Government of Saint Lucia (1999).
In 2011, Mr. Theobalds became an Accredited Director, having successfully completed the Director Education Accreditation Pro-
gramme (DEAP) facilitated jointly by the Institute of Chartered Secretaries and Administrators of Canada, and the ECSE. Meetings
attended by Mr. Theobalds are encapsulated below.
board JOINT AUDIT

2019 meetings held
13 4 2 6 2 3 9 2
13 N/A N/A N/A 2 2 6 1

Richard Monplaisir | Director
BA (Hons.) Bus Admin; Acc. Dir. (ICSA.)
Mr. Richard Monplaisir is a member of the Board of Directors of 1st National Bank St. Lucia Limited. He
was elected to the Board of Directors in the year 2013 and has served on the Finance, Planning and
Investment Committee in addition to the Special Building Sub-Committee. He currently serves on the
Corporate Governance, Human Resource and Finance, Planning and Investment Committees.
He graduated from the Toronto School of Business in May, 1989 with Honours in Business Administration, Accounting and Com-
puters. Mr. Monplaisir has over fourteen years of accounting experience having begun his career as an Auditor at Price Water-
house Coopers before joining C. O. Williams Construction as Accounts Supervisor. He was promoted to Financial Controller of C.
O. Williams Group of Companies and is currently a Director of all the C. O. Williams Group of Companies in St. Lucia with direct
responsibility for Administration and Finance. Mr. Monplaisir also gives of his time to serve on the Finance Committee of the Arch-
bishop Kelvin Felix Pastoral Centre.
In 2016, Mr. Monplaisir became an Accredited Director, having successfully completed the Directors’ Education Accreditation
Programme (DEAP) jointly facilitated by the Institute of Chartered Secretaries and Administrators Canada (ICSA) and the Eastern
Caribbean Securities Exchange (ECSE). He attended Board related meetings as follows:
board JOINT AUDIT

2019 meetings held
13 4 2 6 2 3 9 2
12 4 2 N/A N/A 2 4 2
Jennifer Remy | Director

BA (Hons.)
Ms. Jennifer Remy is a member of the Board of Directors of 1st National Bank St. Lucia Limited, having
been elected in the year 2016. She is the Chairperson of the Corporate Governance Committee currently
serves on the Human Resource Committee. She graduated from the University of Western Ontario in
1971 with a B.A. (Hons.) majoring in Psychology and Philosophy. She then proceeded to the UK where
she pursued Law. She was admitted as a member of the Honourable Society of the Inner Temple on
the 5th June 1975, and was called to the Bar of the England and Wales on the 21st November 1978, and
subsequently the Saint Lucia Bar.

From 1983 to the present she has been head of the Law firm, Jennifer Remy & Associates during which time she served as Presi-
dent of the St. Lucia Bar Association and also as a Magistrate prior to her appointment as a High Court Judge in 2009. She retired
from the Bench in 2013 having reached retirement age. Ms. Remy is still in private practice, and serves as a Court appointed media-
tor and is on the Roster of Mediators. She attended the following Board related meetings:
board JOINT AUDIT

finance, PLANNING AND human credit corporate
INVESTMENT resource risk governance
2019 meetings held
13 4 2 6 2 3 9 2
9 N/A 2 N/A N/A 3 3 2

Agosta Degazon | Director
MBA; BSc (Accounting); C. Dir.
Mr. Agosta Degazon is a member of the Board of Directors of 1st National Bank St. Lucia Limited, having
been elected in the year 2018. He currently serves on the Credit Risk and Audit Committees. Mr. Dega-
zon graduated from the University of the West Indies, Mona Campus in 1988 with a B.Sc. in accounting.
He also attained an MBA with the University of the West Indies, Cave Hill Campus.
He has over 30 years’ experience in taxation, accounting, auditing, finance and management. He also has four years of experi-
ence in national security and citizenship, which he attained while in the service of the Government of Saint Lucia as the Permanent
Secretary in the Ministry of Home Affairs and National Security. He is currently the Permanent Secretary in the Department of
Housing, Urban Renewal and Telecommunications, a position which he has held since 2018.
In 2017, Mr. Degazon became a Chartered Director, having successfully completed the Caribbean Governance Training Institute
Chartered Director Programme. His attendance at meetings is shown below:
board JOINT AUDIT

2019 meetings held
13 4 2 6 2 3 9 2
13 N/A N/A 5 1 N/A 4 2
Callistus Vern Gill | Director

BA(Hons.) History & Sociology; LL.B (Hons.); LL.M Public International Law
Mr. Callistus Vern Gill is a member of the Board of Directors of 1st National Bank St. Lucia Limited, having
been elected in May 2019. As a new member to the Board, Mr. Gill has been invited to several Commit-
tee meetings to observe the functioning of the various Committees. He graduated from the University
of the West Indies, Cave Hill Campus with a B.A (Hons.) in History and Sociology, and subsequently
graduated from the aforementioned institution with a Bachelor of Laws (LL.B.) (Hons.). Mr. Gill also holds a Master of Laws (LL.M)
in Public International Law from the London School of Economics and Political Science. Mr. Gill is also a graduate of the University
College of London where he attained a Certificate in Air and Space Law. Mr. Gill was admitted as a Barrister of the Middle Temple
in 1990.
From 1990 to present, Mr. Gill has practiced as a Barrister-at-Law in Saint Lucia. He has served on several Boards of various enti-
ties, and currently serves as the President of the Saint Lucia Employers Federation, Board Executive Member and Vice-President
of the Caribbean Employers Federation, Director of SAGICOR LIFE (Eastern Caribbean Inc.), Deputy Chairman of the National
Utilities Regulatory Commission, and the Chairman of the Government Negotiating Team. His attendance at meetings is evidenced
below:
board JOINT AUDIT

2019 meetings held
13 4 2 6 2 3 9 2
4 N/A N/A N/A 1 N/A 5 N/A

Mauricia Thomas-Francis | Director
EMBA; Acc. Dir. (ICSA)
Mrs. Mauricia Thomas-Francis is a member of the Board of Directors of 1st National Bank St. Lucia Lim-
ited, having been elected in May 2019. As a new member to the Board, Mrs. Thomas-Francis has been
invited to several Committee meetings to observe the functioning of the various Committees. She holds
an Executive MBA from the University of the West Indies.
She is a Business and Financial Consultant and serves as an Adjunct Professor at Monroe College where
for the past eight (8) years she has been lecturing in several Management disciplines at both undergraduate and graduate levels.
She also has extensive knowledge and experience in commercial banking having worked with Barclays Bank PLC and subsequently
CIBC FirstCaribbean for an aggregate of 37 years. Approximately 30 years of her tenure were spent in leadership roles within the
banking sector. Prior to her retirement from that field in February 2014, she served in the capacity of Country Manager Southern
EC at CIBC FirstCaribbean International Bank with responsibility and accountability for the territories of St. Lucia, St. Vincent and
Grenada.
Her sound business acumen has earned her several awards and recognition including the St. Lucia Chamber of Commerce’s Busi-
ness Person of the Year 2007 and Business Focus Magazine’s 2011 Top Four Women in Leadership. Under her stewardship, CIBC
FirstCaribbean also earned the St. Lucia Chamber of Commerce Corporate Social Responsibility Award and Service Excellence
Award.
Senator Thomas-Francis was appointed to the Parliament of St. Lucia in July 2016 as an Independent Senator and she also holds
the title of Deputy President of the Senate. She is the current Chairperson of the National Awards Committee. and has served on
several local and regional boards including FirstCaribbean Comtrust Foundation, FirstCaribbean Finance Company of the Leeward
and Windward Islands Ltd, Do Something World, St. Lucia Chamber of Commerce, St. Lucia Hotel and Tourism Association and Sir
Arthur Lewis Fund Raising Committee. She is also the past President of the St. Lucia Bankers Association and currently serves as a
Director on the Advisory Board of Monroe College, St. Lucia Campus.
Mrs. Thomas-Francis also holds the designation of Accredited Director, having successfully completed the Directors’ Education
Accreditation Programme (DEAP) jointly facilitated by the Institute of Chartered Secretaries and Administrators Canada (ICSA)
and the Eastern Caribbean Securities Exchange (ECSE). Since her election to the Board in May, she has attended the following
Board related meetings:
board JOINT AUDIT

2019 meetings held
13 4 2 6 2 3 9 2
5 N/A 1 N/A 1 N/A 6 N/A

Juliana Alfred | Director
Bsc. (Hons.) Government/Political Science & History; Msc. Government/Political Science; C.Dir.
Ms. Juliana Alfred is a member of the Board of Directors of 1st National Bank St. Lucia Limited, having
been elected in May 2019. As a new member to the Board, Ms. Alfred has been invited to several Com-
mittee meetings to observe the functioning of the various Committees. She graduated from the Univer-
sity of the West Indies, St. Augustine Campus with a B.Sc. (Hons.) in Government/Political Science and
History and a M.Sc. in Government/Political Science.
Ms. Alfred’s areas of expertise include Social Protection Policy and Development Strategies with comprehensive work experience
and training in the design of social protections systems, including social care services, safety nets and labour market policies. Ms
Alfred also harnesses vast non-governmental leadership locally and internationally and a broad human resource development skill
set. From December 2013, she has served as a Permanent Secretary within the Government of Saint Lucia and is currently the Per-
manent Secretary in the Attorney General’s Chambers. In 2017, she became a Chartered Director, having successfully completed
the Caribbean Governance Training Institute Chartered Director Programme. Her attendance at Board related meetings is shown
below:
board JOINT AUDIT

2019 meetings held
13 4 2 6 2 3 9 2
4 N/A N/A N/A 1 N/A 5 N/A
Johnathan J. Johannes | Managing Director

BA International Business
Mr. Johnathan Johannes the Managing Director of 1st National Bank St. Lucia Limited, having joined the
Bank in June 2017. He graduated from the University of Lincoln with a degree in International Business
Administration. He brings a wealth of knowledge and experience in retail, sales, operations, customer
service and performance management, having spanned a career of 16 years in banking and management.
Mr. Johannes distinguished himself early in his career as one of five candidates selected from 300 Caribbean applicants to join
the Barclays Leadership programme. He was part of the Barclays Bank Caribbean and CIBC West Indies Integration Team in the
establishment of the First Caribbean International Bank. His natural ability to lead and passion for people and banking saw him
progress to senior positions within the OECS region and Barbados in various roles.
This senior banking and retail expert has an award winning track record for surpassing performance goals and has also been
recognized for consistently implementing strategies that increase efficiencies. His most recent position at Unicomer as OECS
Director of Sales saw him successfully manage various teams across six Caribbean territories with direct oversight for 200 staff.
In his quest to give back, he also served as a lecturer with the Eastern Caribbean Central Bank’s Financial Education Programme
(November 2004 – April 2012), a Director of the Eastern Caribbean Institute of Banking (November 2004 – July 2007) and a
member of the Chartered Management Institute (13th December, 2002).
Mr. Johannes continues to serve his country and believes in the ingenuity of our people. His passion for service excellence will
ensure that customers receive world class customer experience from a world class institution that we can all be proud to call our
own. His attendance at Board related meetings is illustrated below:
board JOINT AUDIT

2019 meetings held
13 4 2 6 2 3 9 2
13 4 2 N/A 1 1 6 2

Board Of Wapò
Directors’ Bòd
Report Diwètè
“Excellence Èksèlans
depends on ka dépan asou
foresight and vi èk
the framing of fòmilasyon
policies and pòlisi èk
adherence engajman
to good pou bon
governance. govènans.

First of all, I would like to thank my fellow members of the 3. Bank of Year St. Lucia – The Banker Magazine
Board of Directors, our shareholders, and our management
team for the year just ended. 2019 continued to deliver in- 4. Corporate Leadership Award (Women in Leadership)
cremental, but critical, improvements in strengthening the – Brescia University College
Bank’s core foundations to meet growing challenges and
opportunities head on. Our efforts at transitioning into a These are important achievements which would not have
more technology-enabled, more efficient and more agile been possible without the untiring efforts of our team.
institution is possible because of the guidance and wise These awards also bear testimony to the fact that 1st Na-
counsel of the Board of Directors, continued customer and tional Bank continues to resonate in the marketplace as an
shareholder support, the management team and staff per- institution which cares and is focused on delivering excel-
severance and dedication. lence.
This view is supported by our results for 2019 in relation to The primary role of the Board is to support the Bank’s ex-
efforts at strengthening strategic alliances and growing the ecutive team to sustain its leadership position today, and
footprint of the Bank beyond Saint Lucia’s borders. In 2019, into the future. In this regard, we are required to act as
we announced that a consortium of indigenous banks had stewards and provide oversight to ensure the Bank’s stra-
expressed interest in purchasing RBC’s operations in the tegic plans and priorities create value and align with our
OECS, a significant achievement which will go a long way risk appetite. During 2019, we sought to ensure that the
towards positioning the Bank for a more competitive fu- required effort to clearly define a risk appetite statement
ture. We also received four major awards this year namely: for the Bank was pursued. Importantly, we will continue to
monitor our risk-based activities on a continuous basis by
1. Business of the Year – The St. Lucia Chamber of Com- constructively challenging management and monitoring
merce, Industry and Agriculture. organizational initiatives.
2. Customer Service Excellence - The St. Lucia Chamber

of Commerce, Industry and Agriculture.
Wapò Bòd Diwètè

Pwenmyéman, mwen vlé wimèsyé kòlèg 2. Èkselan an Sèvis klian - Chanm di nèlman pa ka envité manajman èk ogzové
Bòd Diwètè mwen, manm ki ni lo an Konmès, Lendustwi èk Agwikilti initiativ òganisyonel.
Bankl-an, èk Manajman nou pou lanné-a
ki fini bout-la. Lanné Dé mil diznèf (2019) 3. Bank pou lanné an Sent Lisi – Maga- Nou ka gidé administwatif bank-lan konm
kontiné délivyé plus mé èpovman kwitik zin dé Bankè li ka antisipé nésesité klian nou, pandan
ki enfosi fondasyon bank-lan pou konbaté nou ka sézi bon biznis opòtunité adan
chalanj èk òpòtunité pwensipalman. Éfò 4. Pwi Lidaship entopwiz (Fanm an Lida- an chanjman wapid èk ògmantasyon
nou pou twansisyon adan plis tèknoloji épi ship) Kolèj Inivèsité Brescia an kopétisyon finasyal. Nou wékògnizé
an enstitisyon ki plis konpitan posib pa gid wèskosabilité sovélans sa-a, pa sa fèt pa
èk konsey Bòd diwètè, sipò klian, manaj- Sé akoplisman sa-a pa té kay posib si pa té nou sèlman mé pa sipò moun ki ni lo an
man, épi dèdikasyon èk tanasité twavayè. gwan éfo pa tout twavyé bank-lan. Sé pwi bank-lan, twavayè èk klian nou. Pou wé-
sa-a sé atèstasyon wéalité 1st National zon sa-a, nou établi an téléfonn pou wé-
Opinion sa-a sipóté pa wézolta 2019 an Bank ka kontiné wézoné an maché-a kon aksyon klian èk an “fè nou sav” pou asiwé
wilasyon pou èfo pou èfosi aliyans stwati- an enstituosyon ki kontan klian’y èk ka enfonmasyon méwité pou bay bon kalité
jik èk pwofitman Bank-lan déwó Sent Lisi. mété atansyon’y an ka délivwé èksèlans. sèvis èk bon gouvenans épi mowal établi.
An 2019 nou anonsé ki an konsotianm Pou fè sa nou ni pou nibon lidé èk konpé-
bank natal té montwé lentéwé pou achté Wòl pwensipal Bòd-la sé pou sipoté ad- tans. An antansyon sa-a, nou wèkognizé
opéwasyon RBC an sé péyi OECS-la. Sa mistwatif bank-lan pwolongé posisyon nésèsité-a pou apiyé kapabilité Bòd-la an
kay an gwan achivman ki kay mété Bank- lidaship jòdi èk avini. An atansyon sa-a, ka ilèkté an manm ki abil an konpètétans
lan adan a posisyon pli konpètétif. Nou nou sipozé twavay kon konmisè pou asi- Tèknoloji enfomasyon. Nou sa sèlman
osi touvé kat pwi pou lanné-a konm: wé plan stwatiji Bank-lan épi payowité’y achivé sa èk sipò sa ki ni lo an bank-lan.
kwiyé vale èk aliyé pou wis li. Diwan
1. Biznis pou lanné-a - Chanm di Kon- 2019, nou aséyé asiwé éfò pou klawifyé Sé Diwètè-a ka défann valè pwensipal ki
mès, Lendustwi èk Agwikilti an dékawasyon wis fèt pou Bank-lan. Nou ka gidé manyè bank-lan ka opéwé – an-
kay kontiné kontolé aktivité wis nou konti- didan èk an déwò. Pou nou lidaship sé ka

We guide the Bank’s leadership team as it anticipates the of good governance are an essential foundation for strong
fastly-evolving needs of our clients while seizing the right performance and fundamental to the Bank’s success. We
business opportunities in a rapidly changing and increas- have therefore strengthened the Bank’s Fraud Policy and
ingly competitive financial landscape. We recognize that adopted a zero tolerance to fraudulent behaviors. We have
this oversight responsibility cannot be done alone without seen the debilitating impact of this unacceptable behav-
the valuable input and support of our shareholders, staff ior on many great institutions and will therefore learn from
and customers. To this end, we instituted the Customer them to safeguard ourselves.
Feedback hotline and the Whistle Blower hotline to ensure
that information required to deliver a high quality service As Chairman of the Board, I will continue my efforts at un-
with due regard to good governance and a strong ethical locking the imagination and insights of our people to cre-
framework is obtained. To do so, we must have the right ate even greater value for our shareholders, clients, the
skill sets and mindset. In this regard, we recognize the need communities we serve and are about to serve. Your Board
to bolster the Board’s capability by electing a member with is proud to support the Managing Director and Executive
Information Technology competence, which can only be team in making this happen through sound counsel, a sup-
achieved with shareholders’ support. portive culture, strong risk management, and good gov-
ernance. As we celebrate the 81st anniversary, the Board
Directors champion the core values which guide the way appreciates everything Mr. Johnathan Johannes our Man-
the Bank operates – internally and externally. For us, lead- aging Director, his leadership team and our dedicated em-
ership is about setting the required standards and serving ployees have done to deliver another successful year. We
as an example for others. Therefore in 2020, we will place are confident in the Bank’s strategic direction and believe
increased focus on strengthening governance systems and the people centered approach will help us drive commu-
will continue to enhance Board and Committee reporting nity and national success in the way that our founders en-
on conduct and culture matters. Another important area of visaged.
focus that relates to both risk management and community
and social impact is climate change. As part of the Board’s Once again, I thank my fellow Directors, management and
oversight, important steps were taken in 2019, in the area staff for your efforts and continued commitment to the
of disaster risk management. During 2020 we will advance success of the 1st National Bank. To you our customers and
our capabilities in climate risk management, to ensure that shareholders, thanks for your support and commitment to
it better aligns with best practice in the industry. our indigenous institution. We pledge that we will listen to
you as we strive to serve you, better every day.
Fraud is an issue which all financial institutions must en-
sure is adequately managed so as to sustain an institution
which stakeholders including regulators, shareholders,
staff and Board are pleased to be associated with. We have Nigel A. Fulgence
and continue to signal as a Board that the highest standards Chairman
mété stanza méwité èk ka sèvi kon an vayè èk Bòd kay ni plézi an ka asosiyé nou ka selébwé katwiven pwemyé (81st)
èkzanp pou lézòt. Konsa, an Dé Mil Ven épi. Nou ni èk kay kontiné signal kon an annivèsè nou, Bòd-la ka apwésyé tout sa
(2020) nou kay plasé antansyon nou an Bòd lé pli ho stanza bon gouvenans ki sé Diwètè nou Misyé Johnathan Johannes,
ka enfòsi sistenm gouvenansèk nou kay an fondasyon ensensyal pou fò akplisman Kolèg li èk twavayè nou ja fè pou délvwyé
kontiné ogmanté wapò Bòd èk konmiti fodanmental pou siksé bank-lan. Nou ja an lot lanné siksé. Nou ni konfyans an di-
asou matyè kondwit èk kilti. An lòt koté enfòsi polisi vòl bank-lan èk adopté an wèksyon stwatijik bank-lan èk nou ka kwè
nou kay mété atansyon nou an wilasyon tolowas zéwo pou labitid vòl. Nou ja wè ki apoch pèp nou kay endé nou pousé kon-
manajman wis èk konminité èk sosial sé manyè labitid vòl sa-a ja domajé gwan min èk siksé nasyonal an manyè sé pwe-
chanjman klima. Kon an manyè kondwit bank èk nou ka apwann pa yo pou pwotéjé nyé fondatè-a té ka katjilé
Bòd-la, démach enpotan té entamé an kò nou.
2019 an ling di dézas èk manajman wis. Ankò, mwen vlé wimèsyé kòlèg Diwètè
Diwan 2020 nou kay advansé kapabilité Kon Pwésidan, mwen kay kontiné èfo mwen manajman èk twavayè pou èfo’w
nou an manajman wis, klima pou asiwé I mwen pou délaklé imaginasyon èk idé èk konmiman’w pou siksé 1st National
aliyé èk pli bon pwatik dan lendéstwi-a pèp nou pou fè a pli fò valè pou sa ki ni Bank. Pou klian nou èk sa ki ni lo an bank-
lo, klian, konmin-lan, nou ka bay sèvis lan, mèsi pou sipò’w èk konmitman’w pou
Vòl ki konmen an tout enstitousyon fi- èk sa nou kay wann sèvis. Bòd Diwètè’w bank natal nou. Nou ponmèt pou kouté’w
nasyal ni pou asiwé I byen manajé pou kontan pou sipoté Diwètè èk Aministwa- kon nou kay éséyé sèvi’w mèyè jou pa jou.
pwolongé an institousyon ki jen ki ni len- tif Bank-lan pou siksé-a pa kosey sipò kilti
téwé enkludé wégolatè, sa ki ni lo, twa- fò manajman wis èk bon govenas. Kon

Visionary Leadership Drives Success
Lidaship visyonel ka pousé siksé
Excellence Èksèlan bizwen
requires a sense of konmitman
commitment. pa Kominote.
We are proud and pleased that we as a group of small
islands came together to pursue this momentous deal Nou kontan ki nou kon an gwoup ti lil, vini ansanm pou
for the benefit of all of our stakeholders. We see this fè an dil pou benéfis tout jan lo. Nou ka wè sa kon an
as a significant milestone in the life of our Bank as we sijé enpotan an lavi Bank nou kon nou ka kontiné pofité
continue to grow in a way that will allow us to bet-
ter serve our customers. There are no plans for any adan an manyè ki kay fè nou sèvi klian nou pli mèyè.
immediate changes to the operation of the business/ La pa ni pyès plan imdiatman pou chanjé opéwasyon
branches that we are acquiring. In addition, where biznis bwanch nou ka pwan-an. An plis, ko ki posib nou
possible, we will adopt best practices of RBC to ensure kay adòpté pli mèyè pwatik RBC pou asiwé nou kontiné
we maintain the very high-quality service levels that bay bon kalité sèvis klian RBC té ka jwenn.
RBC customers have come to expect.

Board and Board Committee Meetings
for January - December 2019
Board Changes
The Bank’s Eighty-First Annual Meeting of Shareholders was held on Thursday 30th May 2019 at the Finance Adminis-
trative Center. At the Meeting, three seats were available on the Board of Directors. Two Directors retired by rotation,
namely Mr. Johnson Cenac and Mr. Adrian Augier. They did not seek re-election. The third vacant seat was as a result of
the resignation of Mr. Derek George. The meeting elected Mr. Callistus Vern Gill, Mrs. Mauricia Thomas-Francis and Ms.
Juliana Alfred to serve on the Board for a three-year term.
Board Training
1st National Bank St. Lucia Limited is committed to keeping its Directors abreast of developments in the ever-changing
banking industry locally, regionally and internationally. As a result, the Bank embarked on an extensive course of training
through the 2019 financial year. The Caribbean Association of Banks held its CEO and Director Forum in Miami on 7th
July, 2019. There, the President, 1st Vice-President, Managing Director and Corporate Secretary were trained in Corporate
Governance with an emphasis on Global Trends and Best Practices. This training was facilitated by Deloitte & Touche and
The Caribbean Governance Training Institute.
On June 18th, 19th , and 29th 2019, members of the Credit Risk Committee were trained in valuations by the Royal Institution
of Chartered Surveyors (RICS). The Bank was also represented at a Chairman’s Course facilitated by Dr. Chris Bart of
the Caribbean Governance Training Institute on 10th July, 2019. An IFRS 9 training session was also facilitated by KPMG
Barbados and the Eastern Caribbean on 21st September, 2019. The final training session for the Board consisted of a
seminar on Anti-Money Laundering and Anti-Terrorist Financing. This session was facilitated by the Financial Intelligence
Authority on 5th December, 2019.
In addition to the above, the Bank’s Directors Resource Library was supplemented with further publications namely:
Boards that Lead and Boards that Deliver.

FINANCE, board JOINT AUDIT
human credit corporate
board PLANNING AND audit seminars/ AND
resource risk governance
INVESTMENT special sessions FINANCE
2019 meetings held
DIRECTORS 13 4 2 6 2 3 9 2
Nigel Fulgence 13 2 6 2 9 2
Geraldine Lendor-Gabriel 13 4 2 6 2 8 2
Brenda Floissac-Fleming 12 4 2 1 9 2
*Johnson Cenac 4 1 1 1
Tedburt Theobalds 13 2 2 6 1
*V. Adrian Augier 1
Richard Monplaisir 12 4 2 2 4 2
Jennifer Remy 9 2 3 3 2
Agosta Degazon 13 5 1 4 2
*Callistus Vern Gill 4 1 5
*Mauricia Thomas-Francis 5 1 1 6
*Juliana Alfred 4 1 5
Johnathan Johannes 13 4 2 1 1 6 2
* Mr. Johnson Cenac and Mr. Adrian Augier retired 30th May, 2019
* Mr. Callistus Vern Gill, Mrs. Mauricia Thomas-Francis and Ms. Juliana Alfred were appointed to the Board 30th May,
2019

Managing Wapò
Director’s Diwètè
Report
“Excellence is “Èksèlans sé
the compass, not kompas-la
just a destination pa sèlman an
- guided by dèstinasyon – gidé
commitment, pa konmitman,
driven by passion.” kondwi pa pasyon.”

A. Major Achievements Aside from those extraordinary accomplishments, the
Bank maintained a solid financial performance in 2019
In the wake of our historic 80th anniversary in 2018, 1st Na- with continuing robust profitability through steady asset
tional Bank’s momentous journey from Good to GREAT growth, encouraging reduction in its non-performing loan
was recognised in 2019 with major local and international ratio, respectable revenue increases, judicious cost con-
accolades, even as we took bold steps towards consolidat- tainment strategies, investment in efficiency-enhancing
ing the Bank’s position as a major player in the local and technology, and, of course, thanks to the sterling effort and
regional banking industry. drive of our dedicated teams.
I am delighted to report that 1st National Bank was the re- We are pleased once again to reassure our shareholders
cipient of four major awards, namely the Saint Lucia Busi- that your bank remains sound, profitable, solidly posi-
ness Awards 2019 – Customer Service Excellence and Busi- tioned to attain all of its strategic goals and to forge even
ness of The Year; The Banker Magazine – Bank of The Year more beneficial prospects for its shareholders, customers,
2019 Saint Lucia; Brescia University College - Corporate partners, community and staff.
Leadership in dedication to Women in Leadership. Further-
more, it was my honour and privilege to lead a consortium Financial Performance
of indigenous commercial banks within the Eastern Carib-
bean Currency Union (ECCU) in an assertive move to ac- Following on from the performance of 2018, 1st National
quire the sub-regional assets of the Royal Bank of Canada Bank recorded a small year on year decline of 3% in profits,
(RBC), which includes RBTT. In making this decisive move, moving from EC$9.9 million in 2018 to EC$9.6 million in
we sought to address the issue of overbanking in the ECCU 2019. Overall total income grew by 6% while total costs
not by the typical amalgamation of indigenous banks but, grew by 8%. Further, deposits increased by 8% in 2019, as
in a reversal of roles, by those indigenous banks approach- did our net loan portfolio, recording growth of 10%, thus
ing an international bank to purchase its regional business. influencing an 8% balance sheet improvement to EC$824
million, which surpassed the target of EC$810 million for
the end of 2019.
Wapò Diwètè
A. Achivman pwensipa endigené an lilyon Eastern Caribbean enplòyè.
Currency (ECCU) adan an mouvman
An palan di katwiven pwenmyé an- pou twapé popiyétè Bank Royal dé Akonplisman Finansyèl
nivèsè an 2018, Voyaj Pwenmyé Bank Cannada (RBC) ki enkludé RBTT. An
National Dé Sent Lisi sòti an bon pou ka fè disisyon sa-a nou éséyé adwésé Ka kontiné asou akonplisman 2018,
fòmidab té wékognizé an 2019 èk an pwoblenm plizyè bank an ECCU-a pa Pwenmyé Bank National Dé Sent
gwan pwi entonnasyonal, menm kon pou jimnaj bank endigené mé pa wòl Lisi wégistwé an piti lanné asou
nou pwen démach pou ka konsòlidé wévèsé pa sé bank endigené ka apo- lanné wédòksyon twa pousan (3%)
posisyon Bank-lan kon yon ki sé an ché an bank entonnasyonal pou achté an pofi, sòti an nèf pwen nèf milyon
gwangwèk an lendèstwi bank lokal èk biznis wijonal-li. dola ($9.9M) pou nèf pwen sis mi-
wigonal. lyon ($9.6M) an 2019. An tout, lajan
Apa di sé akonplisman èkstwòdinè- ògmanté pa sis pousan (6%) padan
Mwen èksité pou wapòté ki Pwenmyé a, Bank-lan tjbé an pèfòmans finasyèl dépas ògmanté pa 8%. An plis, lajan
Bank National Dé Sent ganyen kat (4) solid an 2019 èk go pwofi pa pofitman deposit ògmanté pa 8% an 2019, kon
pwi pwensipal ki: Pwi Biznis Sent Lisi an popiyétè, wédòksyon an loan dé- pòtfèy loan nou ògmanté pa 10% kon-
pou 2019, Bizis pou lanné-a - Chanm lika, ògmantasyon an lajan, kontòl di sayé, ka enfluansé enpovman bilan-
di Konmès, Lendustwi èk Agwikilti, dépans, envèsman an tèknoloji èk pou an pou Wit San vennkat Milyon dola
Èkselan an Sèvis klian - Chanm di Kon- tan, gwan éfo pa enplòyè bank-lan. ($824M) ki pasé tagèt EC$810M pou
mès, Lendustwi èk Agwikilti, Bank pou bout lanné 2019.
lanné an Sent Lisi – Magazin dé Bankè Nou kontan ankò pou wékofò Jen lo, ki
èk Pwi Lidaship entopwiz (Fanm an bank nou solid, pofitab èk adan an po- Enfòmasyon ka montwé ki Bank-lan
Lidaship) Kolèj Inivèsité Brescia. An sisyon solid pou touvé òbjèktif stwati- ki té ni pofi solid an 2019 enkludé fò
plis, mwen ni lonè–a èk pwévilaj-la pou jik èk pou fabwiké pli benéfis pou jen ògmantsyon pofi asou pa Bank-lan
kondwi an kòsòtim bank konmèsyal lo nou, klian, kanmawad, konminité èk (ROE) di 9.92% magwé pa wimakab

Additional indications of the Bank’s solid profitability in Non-Financial Performance
2019 included a continuing strong return on equity (ROE)
performance of 9.92%, which though not as remarkable It is with a distinct sense of pride that we witnessed in 2019
as the phenomenal 155% leap in 2018, was nevertheless an ongoing positive response of the Saint Lucian market to
strong by industry standards. Earnings per share fell from our attempt to carve out a niche as a fast-expanding albeit
$1.56 in 2018 to $1.49 at the end of 2019 and return on customer-centric, enlightened and socially responsible in-
assets from 1.38% to 1.21%. Further, the Tier 1 capital ad- digenous Bank. The positive feedback, even from our com-
equacy ratio was once again a solid 18% from 17% in 2018, petitors, and demonstrated confidence in the actions being
which is better than the satisfactory industry standard of taken by management, strengthens our resolve to remain
12%. on the right track.
Net loans and advances moved from EC$502 million in As you read through this year’s Annual Report, I am sure
2018 to EC$553 million in 2019, indicating a 10% year you will share my sense of pride in the efforts of our award-
on year increase. As we strive to attain the ECCB’s chal- winning teams. I think I captured it best during the accep-
lenging 5% non-performing loan (NPL) ratio target, I am tance speech for the Saint Lucia Business of the Year Award
particularly pleased with our efforts to reduce our NPL in saying that, “…none of this would have been possible
ratio, which fell to 6.38% at the end of 2019, continuing without the efforts and energies of our teams and their
the strong recovery from previous years (15.6% in 2016, to families”. Thus far, I am thrilled with the performances our
12.6% in 2017 and to 8.65% in 2018), which keeps us on a 1st National teams but we cannot rest on our laurels. The
positive trajectory towards attaining a sub 5% NPL within journey from Good to GREAT is a long one and each and
the next two years. every one of us must constantly strive to be better than
we were yesterday. That said, there is a persistent pressure
On the whole, 2019 saw another encouraging performance for our teams to re-invent themselves, find ways of work-
in all our key performance indicators (KPI), with our Bank ing smarter and exceed previous years’ performances and
maintaining strong performances across revenue lines
market expectations.
while instituting prudent cost containment strategies. We
continue to see an upsurge in our customer acquisition
rates, bringing us closer to our objective of being the bank
of choice for persons doing business in St. Lucia.
kon 155% an 2018, té fò pa stanza An tout lanné 2019 wè an lòt pèfò- asiwé ou kay patajé èk logey éfo pwi-
lendètwi-a. lajan pa lo tonbé soti an mans an tout pèfòmans indikasyon ganyen enplòyè nou. Mwen ni lidé
$1.56 an 2018 pou $1.49 an 2019 èk (KPI), èk bank nou ka tjbé fò pèfò- mwen di’y mèyè diwan pawol akcèpt-
lajen asou popiyétè sòti 1.38% pou mans an tout ling di lajan pandan ab Pwi lanné biznis Sent Lisi; Lè mwen
1.21%. An plis Tier 1 wécho di adik- nou ka tjenn stwatiji dépans. Nou ka di: “ anyen kon sa pa té posib san éfò
wasyon di capital té ankò solid 18% kontiné wè ògmatasyon an klian nou, èk ennègi enployè nou èk fanmi yo.
soti a 17% an 2018 ki mèyè ki stanza ka pòté nou pli pwé objèktif nou pou Pou tan, mwen byen kontan èk pèfo-
lendèstwi a 12%. bank di chwa pou moun ki ka fè biznis mas twavayè nou mé nou pasa asiz
an Sent Lisi. asou dèyè nou. Voyaj la sòti an bon
Loan monté sòti an EC$502 milyon pou fòmiab sé yon ki long èvèk chak
an 2018 pou EC$553 milyon an2019, Pèfomans ki pa Finansyal di nou ni pou èséyé kostanman pou fè
ka montwé dis pousan (10%) lanné pli mèyè ki yè. An sa, la ni pwésyon
pou lanné ògmatasyon. Kon nou ka Sé èvèk logey nou fè témwenaj an kontinelman pou twavayè nou pou en-
‘eséyé achevé Bank centwal (ECCB) 2019 ki Maché Sent Lisi ka wéponn vanté kò yo, touvé manyè pou twavay
senk pousan (5%) loan délika (NPL) positivman pou atenp nou pou ni a pli étélijan pou pasé pèfomans lanné
tagèt ratio, Mwen twè kontan épi éfò nich pou ògmanté klian èk wèkon- pasé épi espéans maché
nou pou desann NPL nou, ki tonbé sabilité social bank endigené, wépons
pou 6.38 pousan an 2019, ka kontiné positiv pa sa ki an kopétisyon épi nou Wèkonsabilité entèpwiz so-
fò wikouvè soti an sé lanné-a (15.6% ka ban nou kofyans an aksyon manaj-
an 2016 pou 12.6% an 2017 èk pou
cial
man pou enfosi lafwa nou pou westé
8.65% an 2018) ka tjenn nou adan an chimen dwèt. Nou pa ka manajé Bank-lan pou wi-
chimen positiv pou achivé 5% NPL an
souvwè médaj oben pwi, nou ka
lòt dézan. Kon ou li wapò pou lanné 2019, mwen manajé bank-lan pou délivwé valè pou

Corporate Social Responsibility tion to our communities and have enjoyed a long-standing
relationship with them. They have always been a part of
We do not run this Bank to receive accolades or awards, we us, part of our foundation and we a part of them. 1st Na-
run a bank to deliver value to our shareholders, to provide a tional Bank has always been a Bank about people looking
safe, secure and world class experience for our customers, after people and this is evident in the numerous Corporate
to support the socio-economic advancement of our com- Social Responsibility Awards, we have won over the years.
munity and, most importantly, to make our work environ- While we cannot be all things to all men, we are proud of
ment one where our employees feel empowered and proud our level of contribution throughout 2019 as we continue
to work. With that said, it does feel good when your com- to improve communities and impact lives in a meaningful
pany’s efforts are recognized publicly, with awards and ac- way. We remain a part of the communities in which we
colades, and 2019 was definitely an award-winning year for serve; always “here for…. You!
1st National Bank. Being recognized locally by our Chamber
of Commerce as business leaders for customer service ex- B. Challenges
cellence and being named Business of the Year; receiving
an international recognition by The Financial Times/The The two primary challenges during the year in review were
Banker Magazine as Bank of the Year 2019 Saint Lucia; and the persistently sluggish economic growth in Saint Lucia
being honoured by Brescia University College for corporate and the delayed start of major national infrastructure proj-
leadership in respect of our dedication to women in man- ects, both of which limited our opportunities to expand
agement, has solidified our position as Saint Lucia’s most credit to the private and public sectors.
award-winning bank, something we can all be proud of.
The need for continued significant investment in technol-
We continued our corporate social responsibility thrust ogy to improve operational efficiency and customer ser-
in 2019 exercising our social conscience through engage- vice is key, but there are only so many projects that can
ment, collaborations and giving back to communities in the be run simultaneously and there is only so much we can
various areas of education, youth, arts and culture, health, afford to invest in a given year. That said, while strides were
social development, sports and the environment. We are made, limited resources dictated that not all projects could
ever mindful of our journey ensuring that our footprint is be completed in a single financial year. We are neverthe-
forever etched throughout the landscape of those com- less progressing with our technology and operational ef-
munities. As an indigenous institution woven within the ficiency initiatives, which we expect to remain aligned with
economic fabric of Saint Lucia, we feel a genuine connec- our plans in 2020.
jan ki ni lo an bank-lan pou potjwé Nou kontiné Wèkonsabilité entèp- sé konmin-la èk lavi yo adan an gwan
sauf èpéans klas modial pou klian nou wiz social nou an 2019 adan a manyè manyè. Nou kay wèsté pa sé konmin-
pou sipòté avansman social èk èkon- pou délivwé konsyans sosial nou pa lan kon nou ka bay sèvis; Nou toujou
mik di konminité nou èk plis épotan engajman kolabowasyon èk ka viwé la…. pou’w.
pou fè enviwaman travay nou yon koté bay konmin an dévès manyè kon
enployè nou santi habilité èk ni logey ‘edikasyon, jenn Jan, kilti, santé, spò, B. Difikilté
pou twavay. Épi sa, I twè bon lè éfò dévèlopman social èk enviwoman-
la kopani’w ka jwenn wékònzé piblik- a. Nou ni lidé nou asou voyaj nou ka Sé dé pli go difikité diwan lanné-a sé
man épi pwi èk méday èk 2019 se té asiwé ki mak pyé nou planté an sé té lantman pofitman ekononmi Sent
ganyen-pwi pou 1st National Bank. Ka konmin-la. Kon an enstitisyon en- Lisi èk wétadman gwan pojé nasyo-
jwenn wékognizé pa Chanm di Kon- digèné naté an had èkononmi Sent Lisi nal. Tou lé dé anpéché nou agwandi
mès kon lida biznis pou sèvis èksèlan nou ka santi a konèksyon èk konmim sèvis nou pou sèkté pwivé èk piblik.
pou klian èk lomen Biznis pou lanné;ka nou èk jwi an bon wilasyon épi yo. Yo La bwizen-an pou kontiné envèsté an
wisivwè wékognisBanker Magazinn toujou an pa di nou, fodasyon nou èk tèknologi pou pli mèyè opéwasyon
kon bank pou lanné 2019 Sent Lisi épi nou sé an pa an yo. 1st National Bank pou sèvis kilan enportan, mé la ni an-
honéwé pa Univèsité kolej Brescia pou sé toujou an Bank di moun, ka gadé pil pojé ki sa fèt anlafwa èk sé pa tout
Lidaship entòpwiz an wespé pou dèdi- pou lentenwé moun èk sa èvidan pa ki sa fèt adan yon lanné. An sa pandan
kasyon mou pou fanm an manajman wèkonsabilité entèpwiz social pwi twavay té fèt wésòs limité anpéché
ja solidifyé posisyon nou Bank-lan ki nou ja ganyen an sé lanné-a. Pandan tout pojé fèt andan an sèl lanné finan-
ganyen pli méday an Sent Lisi èk sa sé nou pasa tout bagay pou tout moun, syal. Kantmenm, nou ka pogwésé épi
an bagay nou sipozé ni logey pou. nou kontan èpi kontwibisyon-an nou tèknologi èk opéwasyon ògmantasyon
fè an 2019 kon nou ka kontiné enpové nou ki kay aliyé épi plan nou pou 2020.

For obvious reasons, the banking sector is a prime target This has resulted in significant revenue shortfalls for the
for hackers and fraudsters, and we must constantly man- government who advised of year on year revenue declines
age the delicate balance between customer experience and for the month of April of approximately 60%.
fraud management. While deterrence systems do create
friction, particularly with declined customers, fraudulent Commercial banks, ours included have offered impacted
scams can result in lost relationships. Fortunately, we have clients a 6-month moratorium on interest and principle
largely managed to minimize exposure to cyber-attacks payments as part of our COVID-19 Relief Package.
and maintain quality relationships with our client base.
2020 will be a challenging year for St. Lucia and for our
C. Outlook Bank, and despite our solid performance in 2019, revenue
and earnings will be down meaningfully in 2020 because
2020 was shaping up to be an exciting year, one filled with of the impact of COVID-19.
new opportunities and promise for our Bank and our na-
tion’s economy, until the emergence of COVID-19. Despite the challenges ahead, it is my firm belief that we
have the resources to emerge from this crisis as a stronger
The global Covid-19 pandemic is exacting a terrible hu- financial institution.
man toll and menacing the world economy and as of April
2020, there are simply too many unknowns surrounding “Entering into a crisis is not the time to figure out what you
COVID-19 for markets to predict the economic impact, want to be. You must already be a well-functioning organi-
leading to fear and extreme volatility. zation prepared to rapidly mobilize your resources, take your
losses, and survive another day for the good of all your stake-
In our own jurisdiction we felt the impact early, with the holders.” Jamie Dimon, Chief Executive Officer, JP Morgan
cessation of international and regional flights as well as Chase
cruise calls. This led to the full closure of our tourism sec-
tor, setting up a scene that few if any St. Lucian has ever
seen… zero air traffic, zero cruise ships, zero passenger fer-
ries, all hotels closed – an island dependent on tourism, Johnathan Johannes
without one single tourist. Managing Director
Pou wézon évidan sèktè la bank sé Nou santi impak-la bonè lè tout vòl lè pou’w katjilé ki sa vlé fè. Sé pou’w
koté moun ka gadé pou fè vòl èk avion entonnasyonal èk bato towis ja an òganizasyon ki ka byen fòksyoné
bòbòl. Nou ni pou konstanman mana- awété vini an péyi nou. Sa wézolté an ki pawé pou mobilize tout wésòs ou
jé balans ant èspéans klian èk manaj- sèktè towis fenmé an bagay ki anpil pou’w aksèté pèdant pou’w chapé an
man bòbòl. Pandan sistènm anpéch- moun pa jenmen wè. An péyi ki ka lòt jou pou benéfis moun ki ni lo an
man ka diminwé klian, bòbò èk vòl sa dépan asou towis pa ni yonn. Bank-lan.” Jamie Dimon, Chèf Ofisyé
fè nou pèd bon wilasyon. Èwèzman èkzèkitiv, JP Morgan Chase
nou ja manajé an gwan manyè cyber- Sa Ja koupé asou lajan Gouvèdman
attack pou tjenbé bon wilasyon èvèk pa apochan swasant pousan (60%)
klian nou. an mwa Mé. Bank konmèsyal enklu-
dé sannou ja ofè klian nou ki afètè pa
C. Pèspètiv COVID sis (6) mwa chans an ka péyé
loan yo kon pat di soulajman COVID.
Dé Mil Ven (2020) té komansé ka
gadé kon lanné èksitan, yon ki té kay 2020 kay ni anpil difikilé pou Sent Lisi
plen òpòtinité èk ponmèt pou bank èk pou Bank nou èk magwé bon pè-
nou èk ekononmi nasyon nou mé CO- fonmas an 2019 lajan gayen kay désan
VID 19 échwé. byen ba an 2020 anékoz di COVID 19.
Pandenmi COVID 19 ka enékoz gwan Magwé difikilé-a ki kay antamé nou,

soufans asou moun èk ka domagé mwen kwayans ki nou kay vini pli fò
enkononmi modial koumansé an kon an institisyon finansyal padan
Avwil 2020. I ni twòp ki nou pa konèt twakasman sala.
di COVID pou pwidikté empak asou
enkononmi-a èk lapè pou li méchan. “Ka antwé adan an twakasman sé pa

ORGANIZATIONAL CHART
BOARD OF DIRECTORS
MANAGING DIRECTOR
Johnathan Johannes
Corporate Executive Manager, Executive Manager, Executive Manager, Executive Manager, Executive Manager, Executive Manager, Executive Manager, Risk Head, Executive Manager,
Secretary & Information Operations and Human Resource, Finance Marketing & Sales Compliance, Recoveries Credit Assessment Internal Audit
Legal Officer Technology Client Support Organisational A. Lafeuillee Public Relations S. Alcee & Securities P . Aimable D. Holden-Pierre
H. Mangal and Premises V. Marshall-St. Omer Development R. Fevrier C. Auguste- Taylor
M. Isaac P. Eristhee-Delice
Manager, Manager, Manager, Manager, Manager, Manager, Manager, Retail Managers, Manager, Manager, Manager, Assistant Manager,
Manager,
Client Support Client Services Card Services Human Resources Accounting Finance Corporate Lending N. Promesse-Edward Corporate Lending Recoveries Credit Assessment Internal Audit
Customer Experience
J. Jacques-Popo J. Anthony M. Charles H. Francis T. Edgar-Louis C. Emmanuel B. Greene A. d’Auvergne F. Ferdinand A. d’Auvergne & Securities M. Julius T. Thomas
Manager, MSME S. Jn. Charles P. Howell
L. Wilson L. Mirville

Executive Jesyon
Management Ekip la
Team
1 2
4 5 6
1. CENTER: Johnathan J. Johannes, Managing Director. 2. Left: Sylvia Alcee Executive Manager,
Sales | CENTER: Aurea Lafeuillee, Executive Manager, Finance. 3. Left: Robert Fevrier Executive
Manager, Marketing & Pr | Clarette Auguste-Taylor, Executive Manager, Risk, Compliance, Recover-
ies & Securities | EXTREME RIGHT: Valery Marshall-St. Omer Executive Manager, Operations & Cli-
ent Support. From Left To Right: 4. Mozel Isaac, Executive Manager, Information Technology
| Henri-Jacques Mangal Corporate Secretary & Legal Officer. 5. Prisca Eristhee-Delice, Executive
Manager, Human Resource & Organisational Development 6. Teather T. Thomas Assistant Man-
ager, Internal Audit | Peter Aimable Head, Credit Assessment.

Senior Jesyon
Management Ekip la
Team
Lester Solange Angel Mansley Chermaine Hermina Naomi Patricia
Wilson JeanCharles d’Auvergne-Emmanus Julius Emmanuel Francis Promesse-Edward Howell
Manager, Manager, Retail Manager, Manager, Credit Manager, Manager, Manager, Retail Manager, Recoveries
MSME Rodney Bay Mall Corporate Lending Assessment Accounting Card Services Vieux Fort Branch & Securities
Medina Juliana Jean Trudy Edgar- Beverley Fibronia Irving Springer Lucina Mirville
Charles Jacques-Popo Louis Greene Ferdinand
Manager, Manager, Customer Manager, Human Manager, Business Manager, Business Manager, Retail,
Client Services Experience Resources Finance Executive Development Choc Bay Branch

Management
Discussion &
Analysis
The Bank’s performance for this financial year demonstrates resilience, supported by a strong capital position and strong
earnings potential. The Bank remained resolute in the management of credit risk, manifested in the reduction of the non-
performing loans ratio to 6.38% at the end of 2019. The strategy will continue to be honed to ensure continued growth of
its financial position and remain a going concern, while keeping its vision to be the best bank in the region in clear focus.
The Statement of Income
The Bank delivered another solid performance for the year ended 2019, notwithstanding a slightly lower profit after tax
of $9.64 million. This was lower than the prior year by 3% or $0.29 million, driven by the Bank’s strategic business com-
bination initiatives to grow the Bank and to ultimately grow shareholder wealth in the medium to long term. Net interest
income was slightly lower than the prior year by $0.05 million and non-interest expenses increased by 8% or $1.81 mil-
lion, offset by an increase in other income of 10% or $1.35 million.
Table 1
Description 31-Dec-19 31-Dec-18 Variance

$’m $’m $’m %
Interest income 39.96 38.34 1.62 4%
Interest expense (12.67) (11.00) (1.67) -15%
Net interest income 27.29 27.34 (0.05) -0.2%
Other income 14.46 13.10 1.36 10%
Non-interest expenses (23.69) (21.88) (1.81) -8%
Profit before provision 18.06 18.56 (0.50) -3%
Provision (4.37) (4.72) 0.35 7%
Profit before tax 13.69 13.84 (0.15) -1%
Income tax expense (4.05) (3.91) (0.14) 4%
Profit after tax 9.64 9.93 (0.29) -3%
Revenue
The Bank’s total revenue continued along its growth trajectory albeit at a slower pace of 6% or $2.97 million over the
recorded position for last year. The table below illustrates a fairly strong performance for interest on loans and advances
arising out of the Bank’s credit portfolio growth before expected credit losses (ECL’s) of 9%. Loan interest income in-
creased by 7% or $2.1 million. As anticipated, other income contributed favourably to the overall total revenue perfor-
mance, increasing by 10% or $1.35 million. Interest on deposits with banks was lower than the prior year due to lower
balances held in nostro accounts for most of the year to fund loan growth.

Table 2
Total revenue 31-Dec-19 31-Dec-18 Variance

$ $ $ %
Loans and advances 33,578,036 31,526,905 2,051,131 7%
Deposits with banks 66,811 430,645 (363,834) -84%
Investment securities 5,857,413 5,938,522 (81,109) -1%
Credit Card Interest 457,491 445,123 12,368 3%
Other income 14,456,684 13,103,946 1,352,738 10%
Total 54,416,435 51,445,141 2,971,294 6%
Table 2 above reveals that the Bank continues to make strides to achieve its objective of revenue diversification. Other
income comprised 27% of total income this year compared to 25% last year. The increase in other income was driven
by increases in merchant activity, foreign exchange, loan fees, swift income and bad debts recovered. Included in other
income was a loss of $0.4 million caused by the liquidation of an investment in debt held at fair value.
Chart 1: Composition of Revenue
Other income
Credit card interest
Investment securities
Other income
Credit card interest Deposits with banks
Investment securitiesLoans and advances
Deposits with banks
Loans and advances
Interest expenses
Interest on customer deposits increased over the prior year ended December 31, 2018 by 9% or $0.98 million as a result
of increases in total customer deposits of $50.8 million or 8%. Additionally, the interest rate on some term deposits
increased, causing the weighted average interest rate on deposits to increase to 1.93% at the end of December 2019
from 1.86% at December 31, 2018.
Table 3
Interest expense 31-Dec-19 31-Dec-18 Variance

$ $ $ %
Time deposits 3,092,047 2,663,665 (428,382) -16%
Savings deposits 8,745,242 8,201,934 (543,308) -7%
Demand deposits 135,344 131,474 (3,870) -3%
Total 11,972,633 10,997,073 (975,560) -9%

The total interest expense includes interest expense imputed on the Bank’s lease liabilities of $0.70 million as a result
of the implementation of International Financial Reporting Standard 16 (IFRS 16). This causes the increase in the total
negative variance over the result at December 31, 2018 to 15% or $1.67 million.
Table 4
Interest expense 31-Dec-19 31-Dec-18 Variance

$ $ $ %
Time deposits 3,092,047 2,663,665 (428,382) -16%
Savings deposits 8,745,242 8,201,934 (543,308) -7%
Demand deposits 135,344 131,474 (3,870) -3%
Lease liabilities 696,987 -100% (696,987) (975,560)
Total 12,669,620 10,997,073 (1,672,547) -15%
Net interest income was similar to that achieved for 2018 at $27.3 million with a small difference of $0.05 million or
0.2%. The position is acceptable considering the demand for loans was higher than deposit growth.
Chart 2: Net Interest Income
28,000
27,344 27,290
21,000
21,965
18,602 18,783
$ '000
14,000
7,000
0
2015 2016 2017 2018 2019
Non-interest expenses
Total non-interest expenses before expected credit losses grew by 8% or $1.81 million to $23.7 million at the end of the
financial year. Significant contributors to this variance include staff, card and security expenses and professional fees.
Total staff expenses increased by 13% or $1.1 million over that recorded for the year ended December 31, 2018. This
increase was largely due to:
1. a salary increase of approximately 3%;
2. the need to maintain our customer service delivery targets to ensure that banking is personal to each customer.
This would not have been possible without the continued commitment of the staff. This took the form of an in-
crease in the staff complement;
3. training undertaken across functions at the Bank. Leadership is critical to the Bank’s success and as a result, all
supervisors were put through an eleven-week training program. Training was also conducted for executive man-
agement. The management of a sales culture was a necessary additional expense during the year, so too was
expenditure to manage staff morale and loyalty;

4. initiatives implemented to manage risks throughout the business and to improve the quality of its Micro, Small and
Medium Enterprises (MSME) credit portfolio.
Total administrative expenses increased by 7% or $0.8 million, caused largely by professional fees as a result of the
ongoing business combination initiatives, increases in card activity, an additional audit consultancy, more shareholder
functions held during 2019, a farewell cocktail held for two retiring directors, air quality assessments at various branches
and deep cleaning arising from mold and dust to ensure health and safety standards are maintained.
A high variance was recorded for depreciation of $0.3 million or 24% due mainly to the transfer of work in progress as-
sets for the relocation of the Vieux Fort business unit to the Daher Plaza.
Provision for expected credit losses

The total provision for expected credit losses (ECL) on the Bank’s credit portfolio decreased by 7% or $0.35 million due
to the improved performance of the credit portfolio and stable performance of the economy. This comprises a 17% or
$0.82 million reduction on the loans and advances portfolio, a 235% or $0.18 million increase in ECL for undrawn com-
mitments and a 436% or $0.29 million increase in ECL on investments, driven by increases for probability of default for
some of our securities in the investment portfolio.
The non-performing loans and advances (NPL) ratio followed a downward trajectory from 15.6% at the year ended 2016
to 6.38% at the end of 2019. This is a commendable result and we thank our teams in Sales, Credit Risk and Recoveries
who continue to work assiduously to achieve the regulatory NPL threshold ratio of 5%.
The Statement of Financial Position
Despite the heightened competition for product offerings, the Bank’s financial position continued along its growth path,
increasing by 8% or $59 million at the financial year ended December 31, 2019 when compared to the previous year.
This commendable performance is primarily attributable to increased deposits of 8% or $51 million, fueling the increase
in the net loans and advances portfolio of 10% or $51 million.
Chart 3: Total Assets
900,000
823,792
675,000
764,567
671,688
626,269
588,367
$ '000
450,000
225,000
0
2015 2016 2017 2018 2019

Cash and balances with Central Bank
This asset category was keenly monitored to ensure that there were no liquidity issues that prevented the Bank from
meeting its obligations as they become due. Cash and balances with the Eastern Caribbean Central Bank (ECCB) in-
creased by 12% or $7 million and comprised 9% of total deposits. The increase arose from the growing deposit base and
the need to adhere to the regulatory threshold. Management deemed the position to be adequate at the reporting year
end.
Due from other banks

The balance in due from other banks increased from $28 million at the last audited position to $34 million, increasing
by 21% or $6 million. The largest portion of these cash equivalents was held with the Bank of New York Mellon. The
weighted average effective interest rate (WAEIR) on deposits with banks was similar to last year at 1.34%.
Treasury bills
The treasury bill portfolio was $31 million at the close of the financial year ended December 31, 2019. The value declined
by 14% or $5 million due chiefly to planned liquidation of treasury bills held with the Governments of St. Vincent and
the Grenadines and Grenada to maintain liquidity levels to support lending growth. The WAEIR on treasury bills fell to
3.58% from 3.61% at December 31, 2018.
Loans and advances to customers

For yet another year, the total loans and advances portfolio recorded substantial growth of 9% or $45 million over that
recorded at December 31, 2018. The total portfolio grew from $526 million to an impressive $571 million. The net port-
folio increased from $502 million to $553 million, registering an increase of 10%. The difference between the total and
net portfolio lies in the positive provision movement of $6 million from the year before. At December 31, 2019, the Bank
committed to $63 million in loans and advances not yet booked.
Chart 4: Total Loans and Advances
600,000
570,822
526,009
450,000
400,115 409,095
386,469
$ '000
300,000
150,000
0
2015 2016 2017 2018 2019
Demand loans comprise the largest percentage (62%) of the performing loans and advances portfolio, followed by
mortgages at 32%.

Chart 5: Composition of Performing Portfolio
Credit Cards Mortgages Promissory

Demand Loans Overdrafts
The demand, mortgage and overdraft portfolios increased by $26 million, $25 million and $5 million respectively whilst
promissory notes fell by $2 million and credit cards fell by a marginal $0.08 million. The graph below illustrates the
comparisons.
Chart 6: Comparison of the performing loans and advances portfolio
350,000,000
262,500,000
$ '000
175,000,000
87,500,000
0
Overdrafts Demand Loans Promissory Notes Mortgages Credit Cards
12/31/19 12/31/18
In terms of exposure to economic sectors, the chart below illustrates that the Bank has little exposure to financial institu-
tions, tourism and the manufacturing sectors but has high exposure to the personal sector.

Chart 7: Industry Sector Risk
300,000,000
225,000,000
$ '000
150,000,000
75,000,000
0 Financial Institutions Manufacturing Tourism Government Professional and other services Personal Other Industries
Credit risk management remained in focus this year, having reduced the NPL ratio from double digits to single digits in
the last two years. The NPL ratio reduced from 8.65% at the end of 2018 to an impressive 6.38% this year end. This
resulted from a combination of efforts from the Sales and Credit Risk teams, coupled with the targeted implementation
of the NPL strategy.
As a direct result of the improving NPL ratio and the increased loan write offs, the ECL on loans and advances for 2019
fell by $6 million or 26% from $23 million registered at the end of financial year 2018. The total ECL on loans and ad-
vances comprises 49% of the value of the non-performing loan portfolio.
This asset category includes all investment securities other than treasury bills. It comprises equity instruments at a fair
value of $9 million, debt instruments at fair value (to other comprehensive income) of $32 million and debt instruments
at amortized cost of $71 million. The total value is less than that held at December 31, 2018 by 3% or $4 million owing
to the liquidation of investment securities called during the last quarter. The composition of this portfolio is illustrated
in the chart below.
Chart 8: Composition of Investments
Total equity instruments at fair value (OCI)

Total debt instruments at fair value (OCI)
Debt instruments at amortized cost

The WAEIR on this investment category was 4.45% (2018; 4.56%). The result was lower due to liquidity in the market
which drove down interest rates on some instruments. They are neither past due nor impaired and as a result, there were
no stage 3 ECLs for the category. The IFRS 9 ECL on the portfolio was 0.4% of the portfolio.
Property and equipment

A decline of 1% was recorded in property and equipment over the prior year, largely due to depreciation of $1.3 million
exceeding additions for the year of $1.2 million.
Right of use assets

The Bank implemented IFRS 16 (Leases) in 2019 in accordance with the reporting year prescribed by the International
Accounting Standards Board. The Bank recognized lease liabilities representing its payment obligations and a right of
use asset at the date of transition to the new standard. The right of use assets will be depreciated on a straight-line
basis over the remaining lease term for each lease. Previously, rental payments under these leases were recorded within
operating expenses. The total right of use assets at the end of the financial year was $7.3 million.
Defined benefit asset

A defined benefit plan was in effect for employees during the reporting period. The value of the plan fell by 1%, resulting
from an unfavourable membership experience during the year.
Other assets
The total value of other assets was $5 million at the year end, reducing by 34% or $3 million over the prior year. The
variance is largely due to the settlement of merchant receivables.
Customer deposits
Our brand presence remained strong in 2019 and customers demonstrated their loyalty by increasing their deposits with
the Bank. Total deposits increased by a robust 8% or $51 million. Savings deposits grew by a steady 8% or $32 million
and term deposits increased by 22% or $33 million, both over the prior year. Demand deposits fell by 14% or $15 million
as this asset category is more subject to fluctuations.
Chart 9: Deposit Growth
Growth Customer deposits
800000
696,000
600000 645,176
580,957
540,515
506,388
$ '000
400000
200000
0
2015 2016 2017 2018 2019

Savings deposits continue to perform well and comprised 60% of the total deposit portfolio, followed by fixed deposits
and demand deposits which formed 27% and 13% of the total deposit portfolio respectively.
Chart 10: Composition of Deposits
Demand deposits Savings Time deposits
Other liabilities
This consists mostly of manager’s cheques and drafts outstanding, accrued expenses and accounts payable. The total
value of other liabilities reduced to $17 million from $23 million in the prior year and arose as a result of delays and timing
differences by payees to effect payment on their instrument.
Lease liabilities
Under IFRS 16, the Bank recognized lease liabilities arising from leased premises which were measured at the present
value of lease payments to be made over the remaining lease terms. The lease payments include fixed payments less any
lease incentives receivable. The value of lease liabilities was $7.6 million at December 31, 2019.
Equity
The Bank’s total equity increased to $101 million from $93 million at December 31, 2018. This was 9% or $8 million
higher than the prior year and was mainly attributable to the increase in profit for the financial year. A total of $1.6 mil-
lion was paid in dividends pertinent to the financial year ended 2018 as well as a profit share of $0.5 million paid to staff.
Achievements
Table 5 below illustrates the achievements of the Bank, relative to ECCB’s expectations. Management is indeed pleased
to indicate that all of the indicators in the table were met with the exception of the NPL ratio. Moreover, it is worthy to
note that this ratio reduced by two percentage points over that attained last year, bringing us closer to the threshold of
5% established by ECCB.

Table 5
Criterion ECCB Minimum requirement Achievement

Capital adequacy 8% 18%
NPL ratio 5% 6%
ROA (before tax) 1.5% 1.7%
Provision for loan loss to NPL 10% 49%
Cash reserves 6% 9%
Fixed assets to total capital <50% 13%
Non performing loans to Tier 1 capital <100% 40%
Liquid assets/deposits+short term li- >25% 26%
abilities
Net loans to deposit <85% 79%
Credit Risk Management
The Bank defines credit risk as the risk of financial loss if a borrower or counterparty fails to fully honour their obligations
in accordance with agreed terms and conditions. The likelihood of credit risk losses arises primarily from direct lending,
granting of overdrafts and credit cards, and investment activities.
Credit risk is managed utilizing policies inclusive of an established lending process operating within a structure of del-
egated authorities. Our credit risk policies incorporate prudent lending criteria and are reviewed annually by the Board
of Directors. There is a robust risk assessment and sanctioning process to ensure that we continue to lend appropriately
and responsibly while maintaining effective risk identification, management and oversight.
The Credit Risk Committee of the Board of Directors has overall responsibility for the credit risk function, through del-
egated authority to the Managing Director, with support from the Finance, Credit Assessment and Recoveries Depart-
ments. There is adequate separation of duties between the customer facing lending function which is responsible for
originating and controlling lending exposures and the Credit Assessment function which has the responsibility for credit
adjudication and management of the performing lending portfolio.
The Bank’s agreed credit risk framework is being implemented by adopting strict adherence to the requirements of ex-
isting credit policies, maintaining a suitable credit administration system, assigning and managing delegation of credit
limits to ensure a sound credit approval process, using credit grading and loan review/monitoring systems to facilitate
the early identification of accounts at risk and employing credit risk mitigation techniques to minimise the likelihood of
default, effective management of concentration risk and applying stringent provisioning requirements to ensure that ad-
equate provisions are applied to non-performing loans in accordance with ECCB guidelines and international accounting
and statutory reporting standards.
Our ratio of non-performing loans and advances (NPL) to total loans and advances continued a downward trend to
6.38% as at the end of the 2019 financial year. This was achieved by focused sales, further enhancing our ongoing debt
collection methods and aggressively pursuing our debt recovery strategy to ensure a continuing reduction in the NPL
ratio.

The Risk, Compliance, Recoveries & Securities (RCRS) Unit worked assiduously to reduce the Bank’s NPL portfolio year
over year. In 2013, the bank wide NPL ratio appeared to be in a standing position at 21% and so we began the journey
to reduce the ratio. There were many twists and turns along the way, challenges and trials some of which are mentioned
below:
1. Shortage of manpower due to staff moves;
2. The change from being a sellers’ market to a buyers’ market;
3. The difficulty with the judicial court system;
4. The stagnation of the economy;
5. Difficulty in establishing contact with various customers particularly those overseas;
6. Increase in job losses due to closure of businesses and/or mergers; and
7. Debt abandonment due to customer migration.
With every passing year, the RCRS has improved its recovery strategy, using the challenges faced in the previous recov-
ery efforts to guide our actions and to remain abreast with the ever-changing economic rollercoaster. Having surpassed
our set target of 10% in 2018, the team set out yet again to improve our recovery strategy so as to ensure that we sur-
passed the new target of 6.65% for end of year, December 2019. The improved strategy included but was not limited to:
• Increased manpower;
• Increased focus on 5-89 day loans;
• New advertising platform for property sales (Bank Website);
• Increased constant communication with customers, guarantors etc.;
• Use of additional communicating platforms such as WhatsApp & Skype;
• Increased focus on private sales where possible.
The aforementioned tactical strategy, in conjunction with the sales and credit assessment efforts, enabled the Bank to
attain an NPL ratio of 6.38% at December 31, 2019
Declassifying & Restructuring of NPL

• The entire NPL portfolio was reviewed which resulted in identifying and targeting specific NPLs which met the
ECCB declassifying/restructuring requirements and were within the Bank’s Policies and Guidelines.

Compromise Settlements
• Our records show that repayment of loans is often affected by gross changes in customers finances. Some of
the noted difficulties faced by the customers which affected their ability to repay their debts included:-
1. Growth of the household due to the permanent housing of sick/elderly and/or unemployed family mem-
bers;
2. Increase in household commitments due to unforeseen medical emergencies etc.;
3. Retrenchment and/or closure of business houses resulting in loss of jobs;
4. Reduction in household salaries as a result of a breakdown in family relationships;
5. Increase in household expenditure due to new taxes and fluctuating gas prices;
6. Non servicing of student loans as the graduates are unable to secure employment in their various areas
of study;
7. Abandonment of the debt due to resettlement/relocation; and
8. Prioritizing finances due to unforeseen circumstances.
• The Team however, moved swiftly but cautiously in engaging customers where necessary and accepted/of-
fered compromise settlements on non-productive loans on a case by case basis.
Detach toxic debts from the portfolio

• A toxic debt refers to a loan that has a less than a poor chance of being repaid. Although our terminology is to
“write off” these debts, these toxic debts were transferred to our Debt Written Off Team (DWO) for recovery
through various means. As part of the strategy in 2019, the RCRS outsourced the unsecured toxic debts to a
collection agency with the view of maximizing our recovery efforts.
Dependency on the achievement of the Established Growth Percentage of the Credit

Portfolio
• In 2019, the Bank achieved a 9% growth in the total credit portfolio through the attraction of quality lending.
This achievement assisted significantly in the reduction of the NPL ratio.

Disposal of Security
• The RCRS unit took an aggressive approach to dispose of all security on encumbered non-performing loans
where applicable through public or private sales. To assist in this approach the Team undertook the various
strategies as listed below:
a. Engaging various Realtors who would assist in advertising and securing potential buyers;
b. Engaging a Receiver where applicable;
c. Attaining judgment where applicable so as to enforce judgment and to secure a Writ for seizure and sale of the
properties;
d. Advertising the properties in the Gazette and local newspapers;
e. The RCRS made themselves available to customers after working hours, on weekends and holidays to view the
distressed properties;
f. Visiting properties, taking pictures and placing them on the Bank’s website for the viewing public; and
g. Encouraging private sales as opposed to auctions where applicable.
Maintain a Threshold of 5% on Delinquent Loans

As the live loan portfolio increased, the RCRS placed some focus on stemming the flow of live loans into the non-per-
forming category. To achieve this, the team increased the manpower managing that portfolio, thereby maintaining robust
pursuit of all delinquent customers. The Team was able to successfully attain a threshold of 2.95% against a target of
5% at December 31, 2019.
Recovery of Debts Written Off

In 2019, the Debts Written Off (DWO) Team was given a target of $3 million. With the implementation of the new strat-
egy, the DWO team was able to recover circa $3.02 million. Although the Team surpassed their target, they suffered four
(4) major challenges in the year. These challenges included:
1. Inability to attain many judicial sale dates due to the lack of judicial court staff;
2. Depressed market conditions causing a lack of interest in the purchase of properties;
3. Challenges faced by Debt Collectors in establishing contact with the toxic debtors and/or encouraging
them to repay their debts; and
4. Inability to collect on targeted written-off debts due to systemic failures, buyers’ inability to receive fund-
ing on time and inability to take advantage of an offer from a Debt Recovery Agency.

Having implemented the above strategies, the RCRS was able to exceed all set targets for 2019 namely:
1. Achieve a delinquency ratio of 2.95% for loans 5 – 89 days in arrears;
2. Assist with the achievement of a non-performing loan ratio of 6.38% against a target of 6.65%;
3. Successfully sell properties at both private and public sales;
4. Successfully attain judgment on difficult non-performing loans;
5. Successfully accept and closed compromise settlements where applicable;
6. Through restructuring processes, the team was able to rehabilitate loans which had proved to be difficult;
7. Maintain the regulatory standards in our Credit Risk Policy guidelines;
8. Attain the DWO target; and
9. Attain the Securities target.
Securities
The Securities Department is mandated to ensure adherence to the Bank’s approved procedures for the maintenance of
its pledged collateral and to ensure that the Bank’s revenue and assets are always protected.
Over the years, the Bank has grown exponentially and similarly, the Bank’s movable and immovable pledged collateral
has also increased in numbers. The Securities Team was given the task to ensure that the total number of mortgages
which have not yet been registered within 90 days of the issuance of the loan, does not exceed 1% of the total Securities
Portfolio. Our records show that in 2019 the Securities department achieved a ratio of 0.49%, which was significantly
below the target ratio of 1%.
Centralization of Securities
For some time now, the Bank maintained the view that in order to achieve economies of scale, it would require centraliza-
tion of the Securities function. This would ensure:
1. Uniformity of practice;
2. Pooling of institutional knowledge;
3. Effective management and storage of the Bank’s documentation and security items; and
4. Increased efficiency through a more specialized workforce.
In 2019, the Securities Unit together with the Sales Unit commenced the process of centralization. Whilst it has been
slower than anticipated, we expect completion of this activity by December 2020.

Compliance & Risk
All organizations must have layers of defence in order to protect assets and to allow the organization to consistently
realize its strategic objectives. In any business environment, an effective Governance, Risk Management and Compli-
ance (GRC) strategy necessitates layers of protection to ensure that the organization can “reliably achieve objectives
[Governance] while addressing uncertainty [Risk Management] and act with integrity [Compliance].” This is the official
definition of GRC that is found in the OCEG GRC Capability Model. www.OCEG.org
It is therefore the Three Lines of Defense that enables organizations to organize and manage layers of GRC controls and
responsibilities. The Three Lines of Defense Model was originally established in 2006 by the European Commission.
Since the establishment, the model has grown in popularity and is now a globally accepted framework for integrated
GRC across lines of defense within organizations.
Our three (3) lines of defense are clear –
1. Operations
Every day our frontline implements the policies, procedures and the internal controls set out for them. Our Business
Units (BUs) through their managers are responsible for the prudent day-to-day management of the business and they
report directly to senior management. Our senior management issues guidance outlining their supervisory expectations,
business line management, and independent risk management and controls in the form of policies and procedures. Se-
nior management also ensures that the BUs execute activities reflective of the Bank’s strategy and risk tolerance levels,
that they identify and manage the risk within the business units, provide sufficient resources and infrastructure to the
business units, ensure the business has a suitable system of internal controls and ensures accountability for operating
within pre-determined policies and procedures.
2. Compliance & Risk Management
Our Compliance & Risk function oversees the Bank’s risk-taking activities and, working with the BUs, it creates a com-
pliance management system. This includes developing policies and procedures, providing training, monitoring the BUs
activities and reporting to management and the Board of Directors.
The Compliance arm monitors the BUs for several distinctive risks such as non-compliance with policies, procedures,
applicable laws and regulations.
The Risk function facilitates and monitors the implementation of applicable risk management practices through opera-
tional management and assists the risk owners in recognizing the target risk exposure. The Risk unit is also charged with
reporting enough risk-related information throughout the organization so as to competently mitigate the risks.
In late 2018, the Bank recognized the need for an Enterprise Wide Risk Management (EWRM) platform which would
holistically allow for the identification, analysis, treatment and monitoring of all risks within the entire organization. It
would further ensure that the Bank devise and implement risk mitigation strategies and minimization actions over the
short, medium and long term. To undertake this exercise, the Bank has been working with a consulting firm and to date
the exercise is on-going and should be completed by mid 2020.
3. Internal Audit
Our Internal Audit function provides our Board of Directors with assurance based on independence and objectivity with-
in the Bank. Internal audit provides assurance on the effectiveness of governance, risk management, and internal con-
trols, including the way in which the first and second lines of defense achieve risk management and control objectives.
The Compliance Unit remains the direct liaison for engagements between the Bank and our Anti-money Laundering
Regulators providing these authorities with the relevant information required as and when needed.

Key to the Compliance function is the provision of training to all staff and 1st National Bank ensures that in addition to the
mandatory annual training expected, targeted training for specific units is undertaken. This education of staff through
training ensures the awareness that is needed to keep the organization guarded against money laundering, terrorist
financing, human trafficking and the proliferation of weapons of mass destruction.
The Bank therefore continues to ensure that its observation of Know Your Customer (KYC) regulations is maintained
and that Customer Due Diligence (CDD) standards are in place for all customer on-boarding.
Through its regular reporting to Management and Board, the Compliance unit ensures that they are apprised of all criti-
cal matters within the organization.
Internal Audit
The role of the Internal Audit Unit is to provide an opinion to the Board of Directors through the Audit Committee on the
adequacy and effectiveness of the Internal Control System to ensure the achievement of the organization’s objectives in
the areas targeted for review within the financial year. The Unit has unrestricted access to the Bank’s records and em-
ployees through the authority given in the Audit Charter. The Unit is independent in the organization and in its function.
Our internal audit work for the twelve-month period January 01 to December 31, 2019 was carried out in accordance
with the Internal Audit Plan approved by the Audit Committee which was designed to address both current and emerg-
ing risks. The plan was based upon discussions held with management, a scan of the internal and external environment
as well as through the review of prior reports provided by stakeholders such as our external auditors and the Eastern
Caribbean Central Bank. It was constructed in such a way as to gain a level of assurance on the main financial and man-
agement systems reviewed. There were no restrictions placed upon the scope of our audit and our work complied with
International Internal Auditing Standards.
During the fiscal year, the unit bid farewell to a key employee. Notwithstanding, we worked assiduously in ensuring that
the workplan of the Unit was executed with minimal disruptions. An assessment of the skill set within the Unit was
undertaken and appropriate hiring is being pursued to enhance the skill set to address current and emerging issues. We
also continue to ensure that our employees within the Unit keep abreast with the changes in the industry through con-
tinuous professional development and ongoing training. Focus will be placed on enhancing skills in such areas as fraud,
IT auditing and Basel.
At the end of 2019, the Bank’s EWRM plan was still in progress. This important tool will assist in ensuring sound risk
management and focus on addressing internal control weaknesses at all levels within the business.
Towards the end of the year, the Bank commenced an independent security test of network infrastructure and specific
controls within the Card Services Department. External certified experts performed the tests in these areas with a view
to obtaining both independent assurances as well as recommendations on areas for improvement.
The Audit Committee has monitored the work of the Internal Audit Unit through the review and discussion of regular
quarterly reports. The reports included the content of reviews performed, the adequacy and effectiveness of internal con-
trols, risk management, findings relating to deficiencies as well as prognoses in relation to the system of eliminating those
deficiencies. The Audit Committee also received detailed status reports on the realisation and non-realisation of recom-
mendations.
It has been found that the Internal Audit Unit acts independently and in accordance with the adopted work programme
and rules governing the implementation of internal audits. In our view, the area of internal auditing is governed with ap-
propriately formed rules, work instructions, auditing methodology and a system of assessing risks in individual areas as the
basis for preparing the work programme of the Unit. The Unit is developing and maintaining the programme to improve the
quality of operations.
2020 promises to be an exciting year as we look forward to an increased level of monitoring through the maximization
of Information Technology software which will reduce audit time and improve productivity.

Sales and Service Delivery
Customer experience is critical to the survival of any organization and remains a top priority at 1st National Bank for con-
tinued growth and long-term sustainability. During the financial year the Sales Team focused on providing exceptional
customer service, quick turnaround times and specialized loan promotions tailored to meet the needs of our valuable
customers. The most successful promotion in 2019 was the 100% financing home mortgage with sales of $33M. Other
promotions like 1st Wheels and the 1st Future land designed for young St. Lucians, continued to receive high praise and
positive publicity.
Our strategy to focus on organic growth to increase the share of the wallet, grow customer base and improve efficiency
through synergies was successful and contributed significantly to our achievements in 2019. Additionally, our Saturday
banking coupled with competent and committed employees continue to provide us with a competitive edge. 1st National
Bank is committed to improving its customers’ experiences through quick, reliable and convenient banking and it is for
this reason that we continue to invest heavily in state-of-the-art technology that will redound to reliable service chan-
nels, accelerated growth and further improve customer service.
Finally, and most importantly, we recognize that our employees are essential to the success of the business and as a
result, we focused on training our employees consistently to continue to deliver our trademark service, and to reward
staff excellence to ensure that they remain motivated to continue to excel. They are encouraged to maintain very high
standards in order to deliver excellent customer service as a great customer experience is the key to success.
Branch Operations and Service Excellence
At 1st National Bank, we define Customer Service Excellence as simply putting our customers’ needs first and recognis-
ing their value to the success of our business. We always focus on the fact that our Bank was founded on the philosophy
of “people looking after people”. This legacy holds true as we grow our business to provide that level of service to our
customers wherever they may be. To achieve this, we provide our team members with the requisite training which would
allow them to not only meet but surpass customers’ expectations. Our strategy is to engender this culture of outstand-
ing customer service from the recruitment stage.
We focus on getting it right the first time but we also take the time to listen to our customers to hear what they have
to say. In 2019, we took the bold initiative and introduced our Customer Feedback Hotline. This enabled customers to
provide feedback on the service received, to raise queries and voice concerns. We lived up to our promise of responding
to all customers within a 24-hour period. This initiative was well received by our customers. In addition to the Customer
Feedback Hotline, we conducted semi -annual Customer Satisfaction surveys so that we can implement solutions to
better serve the needs of our customers.
Technology
As an indigenous financial institution, we understand that technology plays a vital role in enhancing the customer ex-
perience. In 2019, we remained leaders in the Mobile Banking Technology, having been the first financial institution
to introduce this innovative product offering to the local community. During the year, we launched an upgrade to our
Mobile Banking product, which provided enhanced features to the application, which serves to benefit our customers as
they transact business at their convenience. Customers can now enjoy the new look and feel as well as the secure mes-
saging from the “App” to our efficient Customer Support representatives. Mo Banking customers can now make use of
the self-reset option, fingerprint login, establish alerts, transfer funds, pay bills, view all transactions and access account
information immediately.
The results of these initiatives are phenomenal. Our customer base continues to grow rapidly, and we received local, re-
gional and international recognition, among those being the prestigious St. Lucia Business Award for Service Excellence
for 2018. The year 2020 promises to be a very exciting year for our Bank as we focus on building on our successes. Our
focus on service excellence will play a pivotal role in transitioning our fine institution from Good to GREAT.

Cards & Electronic Banking
The past year was very successful and there was notable progress in the Cards & Electronic Banking Department, es-
pecially in the Debit Cards Portfolio. Generally, all three portfolios excelled and despite a 49% reduction in ATM Cash
Advances, there was a substantial increase in combined net income of 22% from the prior year ended 2018.
In 2019, the Cards & Electronic Banking Department captured the most desirable Managing Director’s Award for the
very first time, which is a significant landmark in the Department’s existence.
There were some major Project milestones and upgrades including but not limited to: NSF Automation, Visa Fast Funds
Certification, Visa 3D Secure Authentication, security upgrade on our POS machines and approval of EMV Contactless
Credit and Debit Card designs.
Our thrust to upgrade our ATM networks, POS machines and to roll out the much anticipated EMV Contactless cards
continued in 2019 and there was significant progress in those areas. This will give rise to greater security and seamless
customer experiences in the latter half of 2020.
With the transition of the Electronic/Digital Payments landscape and the Internet of Things (IoT), we anticipate a myri-
ad of payment options which will manifest in great opportunities to fulfil the diverse needs of our customers.
Unquestionably, we are optimistic that the same or greater levels of Electronic/Digital payments will be realized in 2020
as the disruptions continue in this Industry. We are virtually on the brink of a new revolution of, “Open Banking”, which
will undoubtedly create opportunities for growth shortly for Cards and Electronic Banking.
Corporate Social Responsibility
1st National Bank continues a legacy begun over 81 years ago. Our evolution continues to help build our nation’s economy
on a culture of savings, investments and accessible credit facilities for all Saint Lucians.
We continue to exercise our social conscience by giving back to communities in which we operate. We remain commit-
ted to changing lives and impacting communities for the better through our Corporate Social Responsibility policy which
supports the following:
Education
Arts and Culture
Social Development
Sports

Education
Access to education is critical for our nation’s youth. Our 1st Class Student Loan facility offers a maximum of
XCD$20,000.00 unsecured for online and certification programmes while we offer a maximum of XCD$250,000.00
for higher educational programmes. The Bank has also partnered with Sir Arthur Lewis Community College by provid-
ing tailor made student loan packages to ensure that students achieve their educational goals. Scholarships are also
available to children of shareholders, customers and staff who are successful at the Common Entrance Examination. A
total of eight students for 2018 and 2019 have benefited at a total cost of $13,500.00. Additionally, the Bank assisted 33
schools island-wide with their various graduation ceremonies, recognizing and rewarding students in academia, techni-
cal competencies, information technology, sports and discipline.
Arts and Culture

The Bank continues to live up to its legacy “Patron of the Arts “because of its unwavering support for arts and culture.
This was evident when the Bank partnered once again with the Folk Research Centre in its major fundraising effort to
re-establish and rebuild its premises after a devastating fire earlier this year. To date, we are the only bank that has con-
tributed to the rebuilding effort to the tune of $10,000.00. Jazz and Carnival, the biggest cultural activities on island also
received financial support from the Bank.
Social Development
We continue our civic duty through long -standing partnership with the National Community Foundation through our
annual donation of $10,000.00 in support of the organization’s causes such as youth at risk, health and the elderly. We
support the fundraising activities of many other charitable and NGO’s such as the St. Lucia Crisis Centre, The Holy Fam-
ily Children’s Home, the St. Lucy’s home for the elderly, The Marian Home, the Boys Training Centre. Partnering in Career
guidance showcases, participating and mentoring youth has become a staple for the Bank. Employees are always very
visible at such events demonstrating the Bank’s commitment to the nation’s future.
Sports
As an indigenous institution we understand the significance and benefits of sports and physical activity to a people and
by extension a nation; that is why we encourage and support activities which promote healthy lifestyles. One example
was our title sponsorship of the “Round the Island Independence Challenge Walk”. 1st National Bank was proud to be
the presenting sponsor as we commemorated the island’s 40th Anniversary of independence. The Bank also supported
“Walk For A Cause,” a fundraising charity event. Employees embraced the cause and endured the grueling walk to raise
funds for children suffering with cerebral palsy.
Human Resources
A paradox of long-term thinking and planning is that the more we try to imagine the future, the more critical becomes
the tasks of the next twelve months to clarify it.
OUR PEOPLE continue to be our most valued assets because they individually and collectively contribute to achieving
our business objectives. 1st National Bank endeavours to build and embed a humane employer model, supported by an
employee experience equal to the experience we want for our customers.
The biggest opportunity for 1st National Bank is to ensure value is added through people expertise, leadership, career
models and performance to ensure organizational agility. Ensuring the development of our current and future capabili-
ties, recognizing and developing internal capabilities, recruiting and promoting profiles with promising talent, and sup-
porting personal development, above and beyond job descriptions is critical for us at this institution.
In 2019, we invested significantly in all our people across all our functions. This was intentional in our attempts to reduce
competency gaps within the organization. Training adopted several forms including instructor-led, eLearning to hands-

on training, coaching or mentoring, lectures, group discussion and activities, role-playing, management-specific activities
and required reading.
As a strategic partner, talent development is a strategic imperative to facilitate organizational performance and change
efforts. Driving and elevating talent development is a critical component for the growth and development of 1st National
Bank. It represents a new era in recruiting and retaining a quality workforce and will require a paradigm shift in the way
training is viewed, administered and integrated into the fabric of 1st National Bank.
Leadership training was an identified priority in 2019 with various interventions including executive coaching as well as
other instructor led training being held. Our supervisors were also privileged to be part of an eleven (11) week training
programme aimed at building their capacity and improving the leadership of 1st National Bank.
In 2019, the establishment of HR workplace policies geared at establishing clear boundaries, guidelines, and best prac-
tices for acceptable behavior within 1st National Bank took precedence. We received Board approval for at least nine (9)
new policies. It is hoped that this will serve to clearly communicate to staff our expectations and acceptable patterns of
behaviour for 1st National Bank.
We hosted our first ever Family Fun Day in 2019, and it was hailed an overwhelming success. This provided an opportunity
to thank our wider staff family. The event was held at La Fargue, Choiseul.
We continue to honour our men and women of 1st National Bank and so their respective days International Men’s and
Women’s Day were celebrated.
The Ferrel Charles Scholarship in which we recognize excellence among our team members, shareholders and custom-
ers continued. This year we awarded four scholarships to two children of staff and two children of customers. A one-day
workshop was held under the theme “Aspiring “with presentations and hands-on coaching by various resource persons.
We recorded an increase in membership of the Medical Plan by 122%. This was the result of an aggressive drive to in-
crease the membership as well as make it compulsory.
In 2019, the Bank convened and completed its first ever Union negotiations. Despite its “novelty” to the Bank, I applaud
and commend the efforts of 1st National Bank’s Negotiating Team as well as the National Worker’s Union for such a fruit-
ful, enriching and mutually beneficial experience.
While all change in organizations is challenging, perhaps the most daunting is changing culture. For 1st National Bank,
an understanding of the current culture, the organization’s strategic direction, the desired culture, and the commitment
by individuals to change behaviors are paramount. Re-inforcing/ rebuilding our managerial culture around trust, col-
laboration, and supporting employee engagement by encouraging them to exercise autonomy, responsibility and initia-
tive within a shared trajectory is our ultimate goal. With this in mind, several culture change initiatives were adopted
organization-wide in 2019. It is hoped that these will bear fruit in the future as we endeavor to become collectively agile.

Commitment Is Its Own Reward
Konmitman sé pwi imenm
Without a strong and San solid èk twavayè
talented team excellence ki ni talan Ou pa sa
can never be achieved. achivé èksèlan.
At 1st National Bank we bring together the most An Pwenyé Bank National Dé Sent Lisi nou ka pòté
diverse and brightest in the business who carry ansanm moun ki pli fò an biznis ki sa chayé asou
on their shoulders the weight of a nation’s dreams zépòl yo chay wèv nasyon-an èk aspiwasyon – an
and aspirations - a responsibility we do not take wèkonsabilité nou pa kay pwan léjèman. Sé pou sa
lightly. This is why we always go beyond the call to nou ka toujou alé pli lwen pou fè bagay èktwòdinè
do extraordinary things for our customers and the pou klian nou èk péyi-a èk tanzantan nou ka jwenn
country and every now and then we get nationally wèkògnizé nasyonalman èk touvé pwi pou an bon
recognized and rewarded for a job well done. But jòb. Mé sa nou ka pli apésyé sé manyé èksèlas
what we appreciate the most is how this excel- sa-a ka tounen wèv pèp-la an wéalité.
lence turns our people’s dreams into reality.

Financial Statements
December 31, 2019
(Expressed in Eastern Caribean Dollars)

204 Johnsons Centre

No.
204 2Johnsons
Bella Rosa Road
Centre
P.O. Box GI 2171
No. 2 Bella Rosa Road
Gros-Islet
P.O. Box GILC01 101
2171
Saint Lucia
Gros-Islet LC01 101
Saint Lucia
Telephone: (758) 453-5764
Email:
Telephone: ecinfo@kpmg.lc
(758) 453-5764
Email: ecinfo@kpmg.lc
INDEPENDENT AUDITORS’ REPORT

INDEPENDENT AUDITORS’ REPORT
To the Shareholders of 1 National Bank St. Lucia Limited
st
To the Shareholders of 1st National Bank St. Lucia Limited

Report on the Audit of the Financial Statements
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of 1st National Bank St. Lucia Limited (“the
Opinion
Bank”),
We havewhich comprise
audited the statement
the financial of financial
statements positionBank
of 1st National as at December 31, 2019,
St. Lucia Limited the
(“the
statements of income, profit or loss and other comprehensive income, changes in
Bank”), which comprise the statement of financial position as at December 31, 2019, theequity
and cash flows
statements for theprofit
of income, year or
then
lossended, and comprehensive
and other notes, comprising significant
income, changesaccounting
in equity
policies and other explanatory information.
and cash flows for the year then ended, and notes, comprising significant accounting
policies and other explanatory information.
In our opinion, the accompanying financial statements present fairly, in all material
respects, the financial
In our opinion, position of the
the accompanying Bank asstatements
financial at December 31, 2019,
present fairly,and
in its
all financial
material
performance and its cash flows for the year then ended in accordance with International
respects, the financial position of the Bank as at December 31, 2019, and its financial
Financial
performanceReporting
and its Standards
cash flows(IFRS).
for the year then ended in accordance with International
Financial Reporting Standards (IFRS).
Basis for Opinion
We conducted
Basis our audit in accordance with International Standards on Auditing (ISAs).
for Opinion
Our responsibilities
We conducted our audit under those standards
in accordance are furtherStandards
with International describedon in the Auditors’
Auditing (ISAs).
Responsibilities for the Audit of the Financial Statements section of our
Our responsibilities under those standards are further described in the Auditors’ report. We are
independent of the
Responsibilities forBank in accordance
the Audit with theStatements
of the Financial ethical requirements
section of that are relevant
our report. We areto
our audit of the financial statements in Saint Lucia, and we have fulfilled our other
independent of the Bank in accordance with the ethical requirements that are relevant to ethical
responsibilities
our in accordance
audit of the financial with these
statements requirements.
in Saint Lucia, and We believe
we have that the
fulfilled audit
our evidence
other ethical
we have obtained is sufficient and appropriate to provide a basis for our opinion.
responsibilities in accordance with these requirements. We believe that the audit evidence
we have obtained is sufficient and appropriate to provide a basis for our opinion.
1
1
KPMG, a Barbados and Eastern Caribbean partnership, registered in Barbados, Antigua and Barbuda, Saint Lucia and St. Vincent and the
Grenadines, and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG
KPMG, a International”), a SwissCaribbean
Barbados and Eastern entity. All partnership,
rights reserved.
registered in Barbados, Antigua and Barbuda, Saint Lucia and St. Vincent and the
Grenadines, and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative
(“KPMG International”), a Swiss entity. All rights reserved.

INDEPENDENT AUDITORS’ REPORT (CONT’D)
Other Information
Management is responsible for the other information. The other information comprises
the information included in the Annual Report 2019 but does not include the financial
statements and our auditors’ report thereon. The Annual Report is expected to be made
available to us after the date of this auditors’ report.
Our opinion on the financial statements does not cover the other information and we will
not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the
other information identified above when it becomes available and, in doing so, consider
whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the audit, or otherwise appears to be materially misstated.
When we read the Annual Report 2019, if we conclude that there is a material
misstatement therein, we are required to communicate the matter to those charged with
governance.
Responsibilities of Management and Those Charged with Governance for the

Management is responsible for the preparation and fair presentation of the financial
statements in accordance with IFRS, and for such internal control as management
determines is necessary to enable the preparation of financial statements that are free
from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Bank’s
ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either
intends to liquidate the Bank or to cease operations, or has no realistic alternative but to
do so.
Those charged with governance are responsible for overseeing the Bank’s financial
reporting process.
Auditors’ Responsibilities for the Audit of the Financial Statements

Our objectives are to obtain reasonable assurance about whether the financial statements
as a whole are free from material misstatement, whether due to fraud or error, and to issue
an auditors’ report that includes our opinion. Reasonable assurance is a high level of
assurance, but is not a guarantee that an audit conducted in accordance with ISAs will
always detect a material misstatement when it exists. Misstatements can arise from fraud
or error and are considered material if, individually or in the aggregate, they could
reasonably be expected to influence the economic decisions of users taken on the basis
of these financial statements.
Èmèjé Èksèlans | 1st National Bank WAPÒ POU LANNÉ-A 2019 59

INDEPENDENT AUDITORS’ REPORT (CONT’D)
Auditors’ Responsibilities for the Audit of the Financial Statements (cont’d)

As part of an audit in accordance with ISAs, we exercise professional judgment and
maintain professional skepticism throughout the audit. We also:
 Identify and assess the risks of material misstatement of the financial statements,
whether due to fraud or error, design and perform audit procedures responsive to
those risks, and obtain audit evidence that is sufficient and appropriate to provide a
basis for our opinion. The risk of not detecting a material misstatement resulting from
fraud is higher than for one resulting from error, as fraud may involve collusion,
forgery, intentional omissions, misrepresentations, or the override of internal control.
 Obtain an understanding of internal control relevant to the audit in order to design
audit procedures that are appropriate in the circumstances, but not for the purpose of
expressing an opinion on the effectiveness of the Bank’s internal control.
 Evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
 Conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty
exists related to events or conditions that may cast significant doubt on the Bank’s
ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditors’ report to the related
disclosures in the financial statements or, if such disclosures are inadequate, to
modify our opinion. Our conclusions are based on the audit evidence obtained up to
the date of our auditors’ report. However, future events or conditions may cause the
Bank to cease to continue as a going concern.
 Evaluate the overall presentation, structure and content of the financial statements,
including the disclosures, and whether the financial statements represent the
underlying transactions and events in a manner that achieves fair presentation.
We communicate with those charged with governance regarding, among other matters,
the planned scope and timing of the audit and significant audit findings, including any
significant deficiencies in internal control that we identify during our audit.
Chartered Accountants
Castries, Saint Lucia
May 29, 2020
3
1st National Bank St. Lucia Limited
Statement of Financial
1ST NATIONAL BANK ST.Position
LUCIA LIMITED
December 31, 2019
Statement of Financial Position
(Expressed in Eastern Caribbean Dollars)
December 31, 2019
(Expressed in Eastern Caribbean dollars)

Notes 2019 2018
Assets $ $
Cash and balances with Central Bank 7 64,840,476 57,859,437
Due from other banks 8 33,841,222 28,003,720
Treasury bills 9 31,311,935 36,422,936
Loans and advances to customers 10 553,069,683 502,107,145
Investment securities 12 112,055,254 115,691,583
Defined benefit asset 21 2,721,000 2,743,000
Property and equipment 13 12,895,793 13,069,542
Right-of-use assets 14 7,301,319 -
Intangible assets 15 477,475 614,282
Other assets 17 5,277,870 8,055,755
Total assets 823,792,027 764,567,400
Liabilities
Due to customers 18 695,999,847 645,176,129
Other liabilities 19 16,914,982 23,368,014
Lease liabilities 14 7,637,606 -
Current income tax payable 1,151,484 2,744,757
Provisions 20 144,028 39,131
Deferred income tax liability 22 638,434 309,399
Total liabilities 722,486,381 671,637,430
Equity:
Capital and reserves:
Share capital 23 20,000,000 20,000,000
Reserves 24 22,861,104 21,450,049
Retained earnings 58,444,542 51,479,921
Total equity 101,305,646 92,929,970
Total liabilities and equity 823,792,027 764,567,400
See accompanying notes to the financial statements.
EMERGING EXCELLENCE | 1st National Bank Annual Report 2019 61

Statement of Income
For the
ST year ended December 31, 2019
1 NATIONAL BANK ST. LUCIA LIMITED
Statement of Income
For the year ended December 31, 2019
Notes 2019 2018

$ $
Interest and similar income 25 39,959,751 38,341,195
Interest expense and similar charges 25 (12,669,620) (10,997,073)
Net interest income 27,290,131 27,344,122
Other operating income 26 14,456,684 13,103,946
Net interest and other operating income 41,746,815 40,448,068
Other expenses 27 (23,689,435) (21,881,810)
Impairment losses on financial assets 30 (4,371,811) (4,723,925)
Profit before income tax 13,685,569 13,842,333
Income tax expense 31 (4,047,216) (3,913,403)
Profit for the year 9,638,353 9,928,930
Earnings per share

(expressed in EC$ per share)
Basic and diluted 32 1.49 1.56
5
1ST NATIONAL
Statement BANK
of Profit ST. LUCIA
or Loss LIMITED
and Other Comprehensive Income
For Statement
the year of
ended December
Profit or 31, 2019
Loss and Other Comprehensive Income
(Expressed
For theinyear
Eastern Caribbean
ended Dollars)
December 31, 2019
2019 2018
$ $
Other comprehensive income:
Items that will never be reclassified to profit or loss:

Re-measurement of defined benefit asset (Note 21) (277,000) (51,000)
Revaluation adjustment on land and buildings - (2,274,832)
Net fair value gains on equity investments at FVOCI 879,627 -
Items that are or may be reclassified subsequently to profit or loss:

Net fair value gains/(losses) on debt investments at FVOCI 239,042 (1,159,554)
Other comprehensive income (loss) for the year 841,669 (3,485,386)
Total comprehensive income for the year 10,480,022 6,443,544
6
11stSTNational Bank St. Lucia Limited
NATIONAL BANK ST. LUCIA LIMITED
Statement of Changes in Equity
Statement
For of Changes
the year Equity
endedinDecember 31, 2019
(Expressed
For the yearin ended
EasternDecember
Caribbean 31, 2019
Dollars)
Revaluation
reserve on
Share Statutory Revaluation FVOCI Other Retained
capital reserve reserve investments reserves earnings Total equity
$ $ $ $ $ $ $
Balance at December 31, 2018 20,000,000 10,666,264 1,427,166 (214,191) 9,570,810 51,479,921 92,929,970
Total comprehensive income

Profit for the year - - - - - 9,638,353 9,638,353

Other comprehensive income
Fair value gain on FVOCI investment securities - - - 1,118,669 - 1,118,669
Re-measurement of defined benefit asset (Note 21) - - - - - (277,000) (277,000)
Total other comprehensive income - - - 1,118,669 - (277,000) 841,669
Total comprehensive income - - - 1,118,669 - 9,361,353 10,480,022
Net transfer from retained earnings (Note 24) - 1,927,670 52,497 - 3,000,000 (4,980,167) -
Reserve for loan loss provision (Note 24) - - - - (3,221,005) 3,221,005 -

Reserve for interest recognized on non-performing
loans (Note 24) - - - - (1,466,776) 1,466,776 -
Profit share 2018 - - - - - (511,233) (511,233)
Transactions with owners
Dividends to shareholders (Note 33) - - - - - (1,593,113) (1,593,113)
Balance at December 31, 2019 20,000,000 12,593,934 1,479,663 904,478 7,883,029 58,444,542 101,305,646
7
11stSTNational
NATIONALBank St. Lucia
BANK Limited
ST. LUCIA LIMITED
Statement of Changes in Equity (continued)
Statement of Changes in Equity (continued)
Revaluation
reserve on
Share Statutory Revaluation FVOCI Other Retained
capital reserve reserve investments reserves earnings Total equity
$ $ $ $ $ $ $
Balance at December 31, 2017 20,000,000 8,680,478 3,708,673 945,363 3,217,260 48,160,670 84,712,444
Impact of adopting IFRS 9 at January 1, 2018 - - - - - 3,402,984 3,402,984
Restated balance at January 1, 2018 20,000,000 8,680,478 3,708,673 945,363 3,217,260 51,563,654 88,115,428
Total comprehensive income
Profit for the year - - - - - 9,928,930 9,928,930
Other comprehensive income

Fair value loss on debt investment securities - - - (1,159,554) - - (1,159,554)
Revaluation of land and buildings - - (2,274,832) - - - (2,274,832)
Re-measurement of defined benefit asset (Note 21) - - - - - (51,000) (51,000)
Total other comprehensive income - - (2,274,832) (1,159,554) - (51,000) (3,485,386)
Total comprehensive income - - (2,274,832) (1,159,554) - 9,877,930 6,443,544
Net transfer from retained earnings (Note 24) - 1,985,786 (6,675) - - (1,979,111) -
Reserve for loan loss provision (Note 24) - - - - 5,007,668 (5,007,668) -

Reserve for interest recognized on non-performing
loans (Note 24) - - - - 1,345,882 (1,345,882) -
Profit share 2017 - - - - - (354,512) (354,512)
Transactions with owners
Dividends to shareholders (Note 33) - - - - - (1,274,490) (1,274,490)
Balance at December 31, 2018 20,000,000 10,666,264 1,427,166 (214,191) 9,570,810 51,479,921 92,929,970

1ST NATIONAL
Statement of CashBANK ST. LUCIA LIMITED
Flows
ForStatement
the yearofended December 31, 2019
Cash Flows
For theinyear
(Expressed ended
Eastern December
Caribbean 31, 2019
Dollars)

Notes 2019 2018
Cash flows from operating activities $ $
Adjustments for:
Depreciation and amortization 13,15 1,450,533 1,171,632
Depreciation on right-of-use assets 14 907,000 -
Loss on disposal of property and equipment 26 27,807 79,985
Loss on disposal of investment 26 390,214 -
Impairment losses on financial assets 30 4,371,811 4,723,925
Defined benefit income 21 (56,000) (52,000)
Dividend income 26 (193,893) (162,243)
Tax expense 4,047,216 3,913,403
Interest and similar income (39,959,751) (38,341,195)
Interest expense and similar charges 12,669,620 10,997,073
Cash flows before changes in operating assets and liabilities (6,707,090) (7,740,490)
Change in mandatory reserve deposits with Central Bank (400,695) 17,199,591
Change in loans and advances to customers (56,764,409) (116,418,587)
Change in other assets 2,777,885 (166,954)
Change in due to customers 50,680,820 64,479,432
Change in other liabilities (6,503,895) 17,995,023
Cash used in operations (16,917,384) (24,651,985)
Interest and similar income received 41,915,120 35,369,503
Interest expense and similar charges paid (12,526,723) (11,257,121)
Profit sharing and bonuses paid (511,233) (354,512)
Defined benefit contributions paid (199,000) (196,000)
Income taxes paid (5,311,455) (1,151,469)
Net cash generated from/(used in) operating activities 6,449,325 (2,241,584)
Cash flows from investing activities
Purchase of treasury bills (2,795,925) (25,488,359)
Proceeds from sale of treasury bills 7,760,512 20,497,274
Purchase of investment securities (16,776,818) (30,986,890)
Proceeds from sale of investment securities 20,867,605 13,430,365
Dividends received 193,893 162,243
Proceeds from sale of property and equipment 4,207 1,350
Acquisition of property and equipment 13 (1,171,992) (3,592,639)
Acquisition of intangible assets 15 - (233,029)
Net cash generated from/(used in) investing activities 8,081,482 (26,209,685)
Cash flows from financing activities
Principal portion of lease liabilities 14 (570,713) -
Dividends paid (1,542,248) (1,122,315)
Net cash used in financing activities (2,112,961) (1,122,315)
Net increase/(decrease) in cash and cash equivalents 12,417,846 (29,573,584)
Cash and cash equivalents at 1 January 47,647,462 77,221,046
Cash and cash equivalents at 31 December 16 60,065,308 47,647,462
9
1ST NATIONAL BANK ST. LUCIA LIMITED
Notes to the Financial Statements
ForNotes to theended
the year Financial Statements 31, 2019
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31, 2019
Dollars)
1. Reporting entity
1st National Bank St. Lucia Limited, (“the Bank”) was incorporated in Saint Lucia in December 1937 and
continued under the Companies Act of 1996. It commenced trading in January 1938 and provides commercial
and retail banking services, including the acceptance of deposits, granting of loans and advances, credit and
debit cards, foreign exchange services, and online and mobile banking services.
The Bank is subject to the provisions of the Banking Act of Saint Lucia No. 3 of 2015 and the Companies
Act, Cap 13.01 of the revised laws of St. Lucia. It is regulated by the Eastern Caribbean Central Bank
(ECCB), the Financial Services Regulatory Authority and the Eastern Caribbean Securities Regulatory
Commission.
The Bank serves the public from six branches and one Bureau De Change all located in Saint Lucia. The
registered office and principal place of business of the Bank is #21 Bridge Street, Castries, Saint Lucia.
2. Basis of preparation
(a) Statement of compliance

These financial statements have been prepared in accordance with International Financial Reporting
Standards (“IFRS”).
The financial statements were approved by the Board of Directors and authorized for issue on May 29, 2020.
(b) Basis of preparation

These financial statements have been prepared on the historical cost basis, except for the following material
items in the statement of financial position that are measured at fair value:
• Debt investments measured at fair value through other comprehensive income

• Equity investments designated at fair value through other comprehensive income
• Land and buildings measured at revalued amounts
• Net defined benefit asset, which is measured at the fair value of plan assets less the present value of the
defined benefit obligation, as explained in Note 21.
(c) Functional and presentation currency

These financial statements are presented in Eastern Caribbean dollars, which is the Bank’s functional
currency. All amounts have been rounded to the nearest dollar, unless otherwise indicated.
(d) Use of judgements and estimates

In preparing these financial statements, management has made judgements, estimates and assumptions that
affect the application of the Bank’s accounting policies and the reported amounts of, assets, liabilities, and
the income and expenses. Actual results may differ from those estimates.
10
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31, 2019
Dollars)
2. Basis of preparation (cont’d)
(d) Use of judgements and estimates (cont’d)

Estimates, and underlying assumptions, are reviewed on an ongoing basis. Revisions to estimates are
recognized prospectively.
Judgements
For the purpose of these financial statements which are prepared in accordance with IFRS, judgement refers
to the informed identification and analysis of reasonable alternatives, considering all relevant facts and
circumstances, and the well-reasoned, objective and unbiased choice of the alternative that is most consistent
with the agreed principles set out in IFRS. Judgements made by management in the application of IFRS that
have a significant effect on the amounts recognized in these financial statements are set out below:
 Classification of financial assets

Notes 2 (e), 3 (e)(ii) and 12: Assessment of the business model within which the assets are held and
assessment of whether the contractual terms of the financial asset are SPPI on the principal amount
outstanding.
 Expected credit losses

Notes 2 (e), 3 (e)(v) and 11: Establishing the criteria for determining whether credit risk on the financial
asset has increased significantly since initial recognition, determining methodology for incorporating
forward-looking information into measurement of ECL and selection and approval of models used to
measure ECL.
 Income taxes
Notes 3 (k) and 31: Significant judgment is required in determining the provision for income taxes
including any liabilities for tax audit issues. There are some transactions and calculations for which the
ultimate tax determination is uncertain during the ordinary course of business.
 Leases - Determining the lease term of contracts with renewal and termination options
Notes 2 (e), 3(p) and 14: The Bank determines the lease term as the non-cancellable term of the lease,
together with any periods covered by an option to extend the lease if it is reasonably certain to be
exercised, or any periods covered by an option to terminate the lease, if it is reasonably certain not to
be exercised.
The Bank applies judgement in evaluating whether it is reasonably certain to exercise the option to
renew. That is, it considers all relevant factors that create an economic incentive for it to exercise the
renewal. After the commencement date, the Bank reassesses the lease term if there is a significant event
or change in circumstances that is within its control and affects its ability to exercise (or not to exercise)
the option to renew.
The Bank included the renewal period as part of the lease term for all leases of property relevant to the
branches, Bureau De Change and administrative building.
Furthermore, the periods covered by termination options are included as part of the lease term only
when they are reasonably certain not to be exercised.
11
For Notes to theended
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31, 2019
Dollars)
Assumptions and estimation uncertainties
Information about assumptions and estimation uncertainties that have a significant risk of resulting in a
material adjustment in these financial statements are set out below:
 Leases - Determining the incremental borrowing rate

Notes 2 (e), 3(p) and 14: The present value of the lease payments of the leased properties is determined
using the discount rate representing the Bank’s incremental borrowing rate. This rate represents the
rate of interest that a lessee would have to pay to borrow over a similar term, and with a similar security,
the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic
environment. Significant judgement was applied to determine the incremental borrowing rate.
 Impairment of financial assets

Notes 2 (e) and 3 (e)(v): Determining inputs into the ECL measurement model, including incorporation
of forward-looking information.
 Impairment of financial assets

Note 3 (e)(v): Key assumptions used in estimating recoverable cash flows. To the extent that the net
present value of estimated cash flows differs by +/-5%, the portfolio provision would be estimated to
be $1,762,992 /$1,929,326 [lower/higher].
 Measurement of defined benefit obligations

Notes 3 (j) and 21: The present value of the retirement benefit obligations depends on a number of
factors that are determined on an actuarial basis using a number of key actuarial assumptions. Any
changes in these assumptions will impact the carrying amount of pension obligations.
 Determination of fair values

Note 3 (e)(iv) and 5: The determination of fair value for financial assets and liabilities for which there
is no observable market price requires the use of valuation techniques as described in Note 3(e)(v). For
financial instruments that trade infrequently and have little price transparency, fair value is less
objective, and requires varying degrees of judgment depending on liquidity, concentration, uncertainty
of market factors, pricing assumptions and other risks affecting the specific instrument.
12
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31, 2019
Dollars)
Assumptions and estimation uncertainties (cont’d)
 Determination of fair values (cont’d)

When measuring the fair value of an asset or a liability, the Bank uses observable market data as far as
possible. Fair values are categorized into different levels in a fair value hierarchy based on the inputs
used in the valuation techniques as follows:
• Level 1: Quoted market price (unadjusted) in an active market for identical assets and liabilities.
• Level 2: inputs other than quoted prices included in Level 1 that are observable for the asset or
liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).
• Level 3: inputs for the asset or liability that are not based on observable market data (unobservable
inputs).
If the inputs used to measure the fair value of an asset or a liability fall into different levels of the same
fair value hierarchy, then the fair value measurement is categorized in its entirety in the same level of
the fair value hierarchy as the lowest level input that is significant to the entire measurement. Fair
values of financial assets and financial liabilities that are traded in active markets are based on quoted
market prices or dealer price quotations.
The Bank recognizes transfers between levels of the fair value hierarchy at the end of the reporting
period during which the change has occurred.
(e) Adoption of new accounting standards or amendments to standards
The Bank adopted the following standards from January 1, 2019.
IFRS 16 Leases
IFRS 16 Leases supersedes IAS 17 Leases, IFRIC 4 Determining whether an Arrangement contains a Lease,
SIC-15 Operating Leases-Incentives and SIC-27 Evaluating the Substance of Transactions Involving the
Legal Form of a Lease. The standard sets out the principles for the recognition, measurement, presentation
and disclosure of leases and requires lessees to account for most leases under a Single on-balance sheet model.
Lessor accounting under IFRS 16 is substantially unchanged from IAS 17. Lessors will continue to classify
leases as either operating or finance leases using similar principles as in IAS 17. The Bank adopted IFRS 16
using the modified retrospective method of adoption with the date of initial application of 1 January 2019.
Under this method, the standard is applied retrospectively with the cumulative effect of initially applying the
standard recognised at the date of initial application. At the date of initial application, there were no lease
contracts with a lease term of 12 months or less that do not contain a purchase option (‘short-term leases'),
and there were no lease contracts for which the underlying asset is of low value ('low-value assets').
13
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31,
Dollars) 2019
(e) Adoption of new accounting standards or amendments to standards (cont’d)
IFRS 16 Leases (cont’d)
The effect of adoption IFRS 16 as at 1 January 2019 (increase/(decrease)) is as follows:

$
Assets
Right-of-use assets 8,208,319
Liabilities
Lease liabilities 8,208,319
Total adjustment on equity:
Retained earnings -

The lease liabilities as at 1 January 2019 can be reconciled to the operating lease commitments as of 31
December 2018 as follows:

Operating lease commitments as at 31 December 2018 2,672,761
Weighted average incremental borrowing rate as at 1 January 2019 8.86%
Discounted operating lease commitments at 1 January 2019 2,176,943
Add: Lease payments relating to renewal periods not included in operating lease
commitments as at 31 December 2018 6,031,376
Less: Commitments relating to short-term leases or low value assets -
Lease liabilities as at 1 January 2019 8,208,319

The Bank has lease contracts for leased property. Before the adoption of IFRS 16, the Bank classified each
of its leases (as lessee) at the inception date as either a finance lease or an operating lease. A lease was
classified as a finance lease if it transferred substantially all of the risks and rewards incidental to ownership
of the leased asset to the Bank; otherwise it was classified as an operating lease. Finance leases were
capitalised at the commencement of the lease at the inception date fair value of the leased property or, if
lower, at the present value of the minimum lease payments. Lease payments were apportioned between
interest (recognised as finance costs) and reduction of the lease liability. In an operating lease, the leased
property was not capitalised and the lease payments were recognised as rent expense in profit or loss on a
straight-line basis over the lease term. Any prepaid rent and accrued rent were recognised under trade and
other receivables and trade and other payables, respectively.
14
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31,
Dollars) 2019
(e) Adoption of new accounting standards or amendments to standards (cont’d)
IFRS 16 Leases (cont’d)

Upon adoption of IFRS 16, the Bank applied a single recognition and measurement approach for all leases,
except for short-term leases and leases of low-value assets. The standard provides specific transition
requirements and practical expedients, which has been applied by the Bank.
Leases previously classified as finance leases
The Bank did not have lease contracts previously classified as finance leases.
Leases previously accounted for as operating leases
The Bank recognised right-of-use assets and lease liabilities for those leases previously classified as operating
leases, except for short-term leases and leases of low-value assets. The right-of-use assets were recognised
based on the amount equal to the lease liabilities, adjusted for any related prepaid and accrued lease payments
previously recognised. Lease liabilities were recognised based on the present value of the remaining lease
payments, discounted using the incremental borrowing rate at the date of initial application.
IFRIC 23 Uncertainty over Income Tax Treatments

The interpretation addresses the determination of taxable profit (tax loss), tax bases, unused tax losses, unused
tax credits and tax rates, when there is uncertainty over income tax treatments under IAS 12. It specifically
considers:
 Whether tax treatments should be considered collectively;

 Assumptions for taxation authorities’ examinations;
 The determination of taxable profits (tax loss), tax bases, unused tax losses, unused tax credits and tax
rates; and
 The effect of changes in facts and circumstances.
There was no impact on the Bank’s financial statements from the adoption of this interpretation.
Amendments to IFRS 9 Financial Instruments

Amendments to IFRS 9 Financial Instruments relating to prepayment features with negative compensation.
This amends the existing requirements in IFRS 9 regarding termination rights in order to allow measurement
at amortised cost (or, depending on the business model, at fair value through other comprehensive income)
even in the case of negative compensation payments.
The Company anticipates that these standards and amendments will be adopted in the initial period when they
become mandatorily effective. The impact of these are currently being assessed by the Company.
There was no impact on the Bank’s financial statements from the adoption of this amendment.
15
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31, 2019
Dollars)
(f) New standards, and interpretations of and amendments to existing standards that are not yet effective
A number of new standards and amendments to standards are effective for annual periods beginning after
January 1, 2019 and earlier application is permitted; however, the Bank has not early adopted these new or
amended standards in preparing these financial statements.
None of these is expected to have a significant impact on the Bank’s financial statements.
3. Significant accounting policies
The accounting policies set out below have been consistently applied to all periods presented in these financial
statements unless otherwise stated.
(a) Functional and presentation currency

These financial statements are presented in Eastern Caribbean dollars, which is the Bank’s functional
currency, except when otherwise indicated. All amounts presented in Eastern Caribbean dollars have been
rounded to the nearest dollar.
(b) Foreign currency transactions

Transactions in foreign currencies are translated at the foreign exchange rate ruling at the dates of the
transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are
translated to the functional currency at the foreign exchange rate ruling at that date. Foreign exchange
differences arising on translation are recognized in profit or loss. Non-monetary assets and liabilities
denominated in foreign currencies that are stated at fair value are translated to the functional currency at
foreign exchange rates ruling at the dates the values were determined.
(c) Cash and cash equivalents

For the purposes of the statement of cash flows, cash and cash equivalents comprise balances with less than
three months maturity from the date of acquisition, including cash and non-restricted balances with the
Central Bank and deposits with other banks.
(d) Sale and repurchase agreements

Securities purchased under agreements to resell (“reverse repos”) are recorded as loans and advances to
financial institutions or customers, as appropriate. The difference between sale and repurchase price is treated
as interest and accrued over the life of the agreements using the effective interest method. They are measured
at amortized cost using the effective interest rate.
(e) Financial instruments
(i) Non-derivative financial assets and financial liabilities – Recognition, initial measurement and derecognition
The Bank initially recognizes loans and advances, deposits and debt securities on the date they are originated.
All other financial assets and financial liabilities are initially recognized on the trade date when the entity
becomes a party to the contractual provisions of the instrument.
16
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31, 2019
Dollars)
3. Significant accounting policies (cont’d)
(e) Financial instruments (cont’d)
(i) Non-derivative financial assets and financial liabilities – Recognition, initial measurement and derecognition
(cont’d)
A financial asset or financial liability is measured initially at fair value plus, for an item not at FVTPL,
transaction costs that are directly attributable to its acquisition or issue.
The Bank derecognizes a financial asset when the contractual rights to the cash flows from the asset expire,
or it transfers the rights to receive contractual cash flows in a transaction in which substantially all of the risks
and rewards of ownership of the financial asset are transferred, or it neither transfers nor retains substantially
all of the risks and rewards of ownership and does not retain control, over the transferred asset. Any interest
in such derecognized financial assets that is created or retained by the Bank is recognized as a separate asset
or liability.
Financial assets that are transferred to a third party but do not qualify for derecognition are presented in the
statement of financial position as “Assets pledged as collateral”, if the transferee has the right to sell or re-
pledge them.
On derecognition of a financial asset, the difference between the carrying amount of the asset (or the carrying
amount allocated to the portion of the asset derecognized) and the sum of (i) the consideration received
(including any new asset obtained less any new liability assumed) and (ii) any cumulative gain or loss that
had been recognized in OCI is recognized in profit or loss.
Any cumulative gain/loss recognized in OCI in respect of equity investment securities designated as at FVOCI
is not recognized in profit or loss on derecognition of such securities.
The Bank derecognizes a financial liability when its contractual obligations are discharged, or cancelled, or
when they expire.
(ii) Classification and measurement
On initial recognition, a financial asset is classified as measured at: amortized cost, FVOCI or FVTPL.
Financial assets are measured at initial recognition at fair value and are classified and subsequently measured
at amortized cost if it meets both of the following conditions and is not designated as at FVTPL:
 the asset is held within a business model whose objective is to hold assets to collect contractual cash
flows; and
 the contractual terms of the financial asset give rise on specified dates to cash flows that are solely
payments of principal and interest on the principal amount outstanding.
A debt instrument is measured at initial recognition at fair value and is classified and subsequently measured
at FVOCI only if it meets both of the following conditions and is not designated as at FVTPL:
17
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31,
Dollars) 2019
(ii) Classification and measurement (cont’d)
 the asset is held within a business model whose objective is achieved by both collecting contractual cash
flows and selling financial assets; and
 the contractual terms of the financial asset give rise on specified dates to cash flows that are solely
On initial recognition of an equity investment that is not held for trading, the Bank may irrevocably elect to
present subsequent changes in fair value in OCI. This election is made on an investment-by-investment basis.
All other equity investments are classified as measured at FVTPL. In addition, on initial recognition, the Bank
may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortized
cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that
would otherwise arise.
A financial asset is classified into one of these categories on initial recognition. However, for financial assets
held at initial application, the business model assessment is based on facts and circumstances at that date.
Also, IFRS 9 permits new elective designations at FVTPL or FVOCI to be made on the date of initial
application and permits or requires revocation of previous FVTPL elections at the date of initial application
depending on the facts and circumstances at that date.
Business model assessment

IFRS 9 requires that financial assets are classified on the basis of the Bank’s business model for managing
such assets unless it makes an irrevocable election to designate the asset at fair value through profit or loss.
The business model refers to how financial assets are managed in order to generate cash flows. The Bank
determines its business model at the level that best reflects how it manages its portfolios of financial assets to
achieve its business objectives. Judgment is used in determining the Bank’s business models that is supported
by relevant, objective evidence including:
- The stated policies and objectives for the portfolio and the operation of those policies in practice;
- How performance of the business model and the financial assets held within the model are evaluated and
reported to key management personnel;
- How managers of the business are compensated (e.g. whether compensation is based on the fair value of
the assets managed or the contractual cash flows collected);
- The frequency and significance of past sales activity, the reason for those sales as well as expectations
about future sales; and
- The significant risks affecting the performance of the business model for example, market risk and credit
risk and the activities undertaken to manage those risks.
18

December
For theinyear
(Expressed ended
Eastern December
Caribbean 31, 2019
Dollars)
Financial assets that are held for trading or managed and whose performance is evaluated on a fair value basis
are measured at FVTPL because they are neither held to collect contractual cash flows nor held both to collect
contractual cash flows and to sell financial assets.
The business model assessment is forward looking in that if cash flows are realized in a manner that is
different from expectations the classification of the remaining assets in the business model is not changed but
instead that information is used to assess new instruments acquired.
Applicability to the Bank
The Bank’s business models fall into two main categories, which are indicative of the key strategies used to
generate returns as follows:
- Hold to collect contractual cash flows (HTC) - the objective of this business model is to hold assets in
order to collect contractual cash flows. Under this model, the Bank holds loans and investment securities
to collect contractual principal and interest cash flows. Sales are expected to be insignificant or
infrequent; and
- Hold to collect contractual cash flows and to sell (HTCS) - the objective of this business model is to
both collect contractual cash flows and to sell. Under this model the Bank holds investment securities
to manage everyday liquidity needs and sales are significant in value.
Assessment of whether contractual cash flows are solely payments of principal and interest - SPPI assessment
For classification purposes the Bank first reviews the terms of the instruments to determine whether they give
rise on specified dates to cash flows that meet the SPPI test.
For the purposes of this assessment, ‘principal’ is defined as the fair value of the financial asset on initial
recognition. ‘Interest’ is defined as consideration for the time value of money and for the credit risk associated
with the principal amount outstanding during a particular period of time and for other basic lending risks and
costs (e.g. liquidity risk and administrative costs), as well as profit margin.
In assessing whether the contractual cash flows are SPPI, the Bank considers the contractual terms of the
instrument. This includes assessing whether the financial asset contains a contractual term that could change
the timing or amount of contractual cash flows such that it would not meet this condition.
Reclassifications
Financial assets are not reclassified subsequent to their initial recognition, except in the period after the Bank
changes its business model for managing financial assets.
19
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31, 2019
Dollars)
Under IFRS 9 – Applicability to the Bank
Due from banks, treasury bills, loans and advances to financial institutions and loans and advances to
customers
The Bank measured due from banks, treasury bills, loans and advances to financial institutions, loans and
advances to customers and investment securities at amortized cost if both of the following conditions are met:
- The financial asset is held within a business model whose objective is to hold financial assets in order
to collect contractual cash flows; and
- The contractual terms of the financial asset give rise on specific dates to cash flows that are solely
The financial assets are measured at fair value through OCI if both of the following conditions are met:
- The financial asset is held within a business model whose objective is achieved by both collecting
contractual cash flows and selling financial assets; and
- The contractual terms of the financial asset give rise on specific dates to cash flows that are solely
payment so principal and interest on the principal amount outstanding.
Loans and advances and debt instruments recognized initially at fair value are subsequently measured in
accordance with the classification of financial assets policy of the Bank. The Bank’s loan portfolio is carried
at amortized cost using the effective interest method which represents the gross carrying amount less
allowance for credit losses.
Investment Securities
Investment securities are initially recorded at fair value and subsequently measured according to their
respective classification. The Bank has no financial instruments that are measured at FVTPL.
Debt securities carried at amortized cost are measured using the effective interest method and are presented
net of any allowance for credit losses, calculated in accordance with our policy for expected credit losses
(ECL), as described below. Interest income, including the amortization of premiums and discounts are
recorded in profit or loss.
20
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31, 2019
Dollars)
Under IFRS 9 – Applicability to the Bank (cont’d)
Impairment gains or losses recognized on amortized cost securities are recorded in the allowance for
impairment. When a debt instrument measured at amortized is sold, the difference between the sales proceeds
and the amortized cost of the security at the time of sale is recorded as other gains, in profit or loss.
Debt securities carried at FVOCI are measured at fair value with unrealized gains and losses from changes in
fair value recognized in other comprehensive income (OCI). The loss allowance is recorded in OCI and does
not reduce the carrying amount of the assets in the statement of financial position. When a debt instrument
measured at FVOCI is sold the cumulative gain or loss previously recorded in equity is reclassified to profit
or loss.
All equity securities are measured at fair value. On initial recognition the Bank may make an irrevocable
election to present in OCI gains and losses from changes in fair value of certain equity instruments. When
insufficient information is available to measure fair value, then the instrument is measured at cost when it
represents the best estimate of fair value. When an equity instrument classified at FVOCI is sold the
cumulative gain or loss recorded in OCI is not recycled to profit or loss. Dividends from securities measured
at FVOCI are recognized in profit or loss.
A financial instrument with a reliably measurable fair value can be designated as FVTPL (the fair value
option) on its initial recognition even if the financial instrument was not acquired or incurred principally for
the purpose of selling or repurchasing. The Bank has not designated any financial instruments as FVTPL on
initial recognition.
Financial liabilities
At initial recognition financial liabilities are measured at fair value plus or minus, in the case of financial
liabilities not at fair value through profit or loss, transaction costs that are directly attributable to the
acquisition or issue of the financial liability. Financial liabilities other than loan commitments, financial
guarantees and derivatives are subsequently measured at amortized cost.
Financial assets and liabilities are offset and the net amount presented in the statement of financial position
when, and only when, the Bank has a legal right to set off the amounts and it intends either to settle them on
a net basis or to realize the asset and settle the liability simultaneously.
Income and expenses are presented on a net basis only when permitted under IFRS, or for gains and losses
arising from a group of similar transactions similar to the Bank’s trading activities.
21
Notes1ST NATIONAL BANK Statements
to the Financial ST. LUCIA LIMITED
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31,
Dollars) 2019
(iii) Amortized cost measurement
The amortized cost of a financial asset or liability is the amount at which the financial asset or liability is
measured at initial recognition, minus principal repayments, plus or minus the cumulative amortization, using
the effective interest method, of any difference between the initial amount recognized and the maturity
amount, minus any reduction for impairment.
(iv) Fair value measurement
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date in the principal or, in its absence, the most
advantageous market to which the Bank has access at that date. The fair value of a liability reflects its non-
performance risk.
A number of the Bank’s accounting policies and disclosures require the measurement of fair values, for both
financial and non-financial assets and liabilities.
When one is available, the Bank measures the fair value of an instrument using the quoted price in an active
market for that instrument. A market is regarded as active if transactions for the asset or liability take place
with sufficient frequency and volume to provide pricing information on an on-going basis.
If there is no quoted price in an active market, then the Bank uses valuation techniques that maximize the use
of relevant observable inputs and minimize the use of unobservable inputs. The chosen valuation technique
incorporates all of the factors that market participants would take into account in pricing a transaction.
If an asset or a liability measured at fair value has a bid price and an ask price, then the Bank measures assets
and long positions at a bid price, and liabilities and short positions at an ask price.
The best evidence of the fair value of a financial instrument on initial recognition is normally the transaction
price - i.e. the fair value of the consideration given or received. If the Bank determines that the fair value on
initial recognition differs from the transaction price, and the fair value is evidenced neither by a quoted price
in an active market for an identical asset or liability not based on a valuation technique for which any
unobservable inputs are judged to be insignificant in relation to the measurement, then the financial
instrument is initially measured at fair value, adjusted to defer the difference between the fair value on initial
recognition and the transaction price. Subsequently, that difference is recognized in profit or loss on an
appropriate basis over the life of the instrument but no later than when the valuation is wholly supported by
observable market data or the transaction is closed out.
22
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31, 2019
Dollars)
(v) Impairment
The Bank recognizes loss allowances for ECL on the following financial instruments that are not measured
at FVTPL:
- Financial assets that are debt instruments;

- Lease receivables;
- Financial guarantee contracts issued; and
- Loan commitments issued.
No impairment loss is recognized on equity investments.
The Bank measures loss allowances at an amount equal to lifetime ECL, except for the following, for which
they are measured as 12-month ECL:
- Debt investment securities that are determined to have low credit risk at the reporting date; and
- Other financial instruments (other than lease receivables) on which credit risk has not increased
significantly since their initial recognition.
12-month ECL are the portion of ECL that result from default events on a financial instrument that are
possible within the 12 months after the reporting date. Financial instruments for which a 12-month ECL is
recognized are referred to as ‘Stage 1 financial instruments’.
Lifetime ECL are the ECL that result from all possible default events over the expected life of the financial
instrument. Financial instruments for which a lifetime ECL is recognized but which are not credit-impaired
are referred to as ‘Stage 2 financial instruments’.
Measurement of ECL
ECL are a probability-weighted estimate of credit losses. They are measured as follows:
- Financial assets that are not credit-impaired at the reporting date: as the present value of all cash
shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and
the cash flows that the Bank expects to receive);
- Financial assets that are credit-impaired at the reporting date: as the difference between the gross
carrying amount and the present value of estimated future cash flows;
- Undrawn loan commitments: as the present value of the difference between the contractual cash flows
that are due to the Bank if the commitment is drawn down and the cash flows that the Bank expects to
receive; and
- Financial guarantee contracts: the expected payments to reimburse the holder less any amounts that the
Bank expects to recover.
23
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31, 2019
Dollars)
(v) Impairment (cont’d)
Restructured financial assets

If the terms of a financial asset are renegotiated or modified or an existing financial asset is replaced with a
new one due to financial difficulties of the borrower, then an assessment is made of whether the financial
asset should be derecognized and ECL are measured as follows:
- If the expected restructuring will not result in derecognition of the existing asset, then the expected cash
flows arising from the modified financial asset are included in calculating the cash shortfalls from the
existing asset.
- If the expected restructuring will result in derecognition of the existing asset, then the expected fair value
of the new asset is treated as the final cash flow from the existing financial asset at the time of its
derecognition. This amount is included in calculating the cash shortfalls from the existing financial asset
that are discounted from the expected date of derecognition to the reporting date using the original
effective interest rate of the existing financial asset.
Credit impaired financial assets

At each reporting date, the Bank assesses whether financial assets carried at amortised cost and debt financial
assets carried at FVOCI are credit-impaired (referred to as ‘Stage 3 financial assets’). A financial asset is
‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows
of the financial asset have occurred.
Evidence that a financial asset is credit-impaired includes the following observable data:
- Significant financial difficulty of the borrower or issuer;

- A breach of contract such as a default or past due event;
- The restructuring of a loan or advance by the Bank on terms that the Bank would not consider otherwise;
- It is becoming probable that the borrower will enter bankruptcy or other financial reorganization; or
- The disappearance of an active market for a security because of financial difficulties.
A loan that has been renegotiated due to a deterioration in the borrower’s condition is usually considered to
be credit-impaired unless there is evidence that the risk of not receiving contractual cash flows has reduced
significantly and there are no other indicators of impairment. In addition, a retail loan that is overdue for 90
days or more is considered credit-impaired.
24

Notesyear
For the to the Financial
ended Statements 31, 2019
December
For thein year
(Expressed ended
Eastern December
Caribbean 31,
Dollars) 2019
Presentation of allowance for ECL

Loss allowances for ECL are presented in the statement of financial position as follows:
- Financial assets measured at amortised cost: as a deduction from the gross carrying amount of the assets;
- Loan commitments and financial guarantee contracts: generally, as a provision;
- Where a financial instrument includes both a drawn and an undrawn component, and the Bank cannot
identify the ECL on the loan commitment component separately from those on the drawn component: the
Bank presents a combined loss allowance for both components. The combined amount is presented as a
deduction from the gross carrying amount of the drawn component. Any excess of the loss allowance
over the gross amount of the drawn component is presented as a provision; and
- Debt instruments measured at FVOCI: no loss allowance is recognized in the statement of financial
position because the carrying amount of these assets is their fair value. However, the loss allowance is
disclosed and is recognized in the fair value reserve.
Write-off
Loans and debt securities are written off (either partially or in full) when there is no reasonable expectation
of recovering a financial asset in its entirety or a portion thereof. This is generally the case when the Bank
determines that the borrower does not have assets or sources of income that could generate sufficient cash
flows to repay the amounts subject to the write-off. This assessment is carried out at the individual asset level.
Recoveries of amounts previously written off are included in ‘impairment losses on financial instruments’ in
the statement of profit or loss and OCI.
Under IFRS 9 – Applicability to the Bank
Impairment of Financial Assets

For loans carried at amortized cost, impairment losses are recognized at each reporting date in accordance
with the three-stage impairment model outlined below.
An impairment allowance is established for all financial assets, except for financial assets classified or
designated as at FVTPL and equity securities designated as at FVOCI, which are not subject to impairment
assessment. Assets subject to impairment assessment include certain loans, debt securities, interest-bearing
deposits with banks, customers’ liability under acceptances, accounts and accrued interest receivable.
Impairment on loans is presented in ‘Allowance for Impairment’. Impairment allowance on debt securities
measured at FVOCI is presented in other components of equity. Other financial assets carried at amortized
cost are presented net of impairment in the statement of financial position.
25
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31,
Dollars) 2019
Off-balance sheet items subject to impairment assessment include undrawn loan commitments. The
impairment is included in the provision for impairment losses to the extent that it does not exceed the related
loan balance and therefore included in other liabilities as provisions.
The impairment allowance is measured at each reporting date and is based on the three-stage impairment
model for expected credit losses.
Calculation of expected credit losses

The Bank uses the explicit probability of default method when calculating expected credit losses. The
expected credit loss allowance (ECL) is based on credit losses that are expected to arise over the life of the
asset, referred to as the lifetime ECL, unless there has not been a significant increase in credit risk since
origination, in which case a 12-month expected credit loss (12-month ECL) is measured.
The lifetime ECL is the expected credit losses that result from all possible default events over the expected
life of a financial instrument. Lifetime expected credit losses are calculated based on a weighted average of
the expected losses with the weightings being based on the respective probabilities of default. PDs and LGDs
are therefore calculated over the life of the instrument.
The 12-month ECL represents a financial asset’s expected losses that are expected to arise from default events
that are possible within the 12-month period following origination of the instrument or from each reporting
date for those assets in stage 1. It is calculated by multiplying the probability of default occurring in the next
12 months by the lifetime ECLs that would result from that default, regardless of when those losses occur.
The Bank’s policy for determining whether there is a significant increase in credit risk is outlined below.
The ECL is calculated on an individual account basis but for purposes of determining probability of default
and exposure at default, financial assets are grouped according to common characteristics.
Impairment is assessed at each reporting period. IFRS 9 establishes a three-stage impairment model based
on whether there has been a significant increase in credit risk of a financial asset since its initial recognition.
The three stages then determine the amount of impairment to be recognized as expected credit losses (ECL)
at each reporting date as well as the amount of interest revenue to be recorded.
26
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31,
Dollars) 2019
Under IFRS 9 – Applicability to the Bank (cont’d
Calculation of expected credit losses (cont’d)

The Bank makes a determination as to whether there has been a significant increase in credit risk since initial
recognition by considering the deterioration in internal rating and payment delinquencies. For purposes of
calculating ECL the Bank classifies its financial assets into Stages. The stages for loans and advances align
with the Bank’s internal ratings system. Facilities with an internal rating of 1 are aligned to Stage 1. Facilities
with an internal rating of 2 are classified as Stage 2 and facilities with an internal rating of 3-5 are classified
as Stage 3.
Stages 1 and 2 comprise performing financial assets while Stage 3 comprises non-performing assets as
follows:
Performing financial assets
• Stage 1 – For instruments in this stage, credit risk has not increased significantly since initial recognition.
A 12-month ECL is recognized and interest income is recognized on the gross carrying amount of the
financial instrument. Financial assets in this stage are operating in accordance with the contractual terms
and conditions since initial recognition. These assets align with the Bank’s internal rating of 1.
• Stage 2 – For instruments in this stage, credit risk has increased significantly since initial recognition.
Lifetime ECL is recognized and interest income is recognized on the gross carrying amount of the
financial instrument. This stage also includes financial assets reclassified from Stage 3 whose credit risk
has improved. Financial assets in this stage align with the Bank’s internal rating of 2.
Credit-impaired financial assets
• Stage 3 – When a financial asset is considered to be credit-impaired, a loss allowance is recognized equal
to credit losses expected over the remaining lifetime of the asset. Interest revenue is calculated based on
the carrying amount of the asset, net of the loss allowance, rather than on its gross carrying amount.
Financial assets in this stage align with the Bank’s internal ratings of 3 – 5.
Assessment of significant increase in credit risk and credit -impaired financial assets
The transition from recognizing 12-month expected credit losses (i.e. stage 1) to lifetime expected credit
losses (i.e. stage 2) is based on the notion of a significant increase in credit risk over the remaining life of the
instrument in comparison with the credit risk on initial recognition. The focus is on the changes in the credit
risk and not the changes in the amount of the expected credit losses.
27
1 ST
NATIONAL
Notes to the Financial BANK Statements
ST. LUCIA LIMITED
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31,
Dollars) 2019

The determination of whether there has been a significant increase in credit risk is therefore critical to the
staging process. Factors to consider include:
 Changes in market or general economic conditions;

 Expectation of potential breaches;
 Expected delays in payment;
 Deterioration in credit ratings; or
 Significant changes in operating results or financial position of the borrower.
In making the determination of whether there has been a significant increase in credit risk, the Bank considers
deterioration in its internal ratings as well as payment delinquencies. A significant increase in credit risk will
exist when repayments are 30 days in arrears and/or when there has been a deterioration in the internal rating
assigned.
Credit-impaired financial assets are those for which one or more detrimental effects on the estimated future
cash flows have already occurred. This is similar to the point at which an incurred loss would have been
recognized under IAS 39.
These instruments are in stage 3 and lifetime expected credit losses are recognized. Indicators that an asset
is credit-impaired include observable data about the following:
 Actual breach of contract, e.g. delinquency in payments

 Probability that the borrower will enter bankruptcy
Definition of default
The definition of default is integral to the ECL model. The Bank’s definition of default is consistent with its
internal risk management process and includes a qualitative creditworthiness criterion as well as a quantitative
past due criterion. For loans and advances, default occurs when the borrower is more than 90 days past due
on any obligation with the Bank and/or if the Bank considers that the borrower is unlikely to make their
repayment in full without the Bank foreclosing on the loan facility. The Bank also uses its internal rating
system to determine default. All loans and advances with a rating of 3 – 5 are considered to be in default.
For credit card balances, default occurs when payments are 90 days past due. The definition of default is
applied consistently from one year to another and to all loans and advances unless it can be demonstrated that
circumstances have changed such that a new definition is appropriate.
28
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31,
Dollars) 2019
Definition of default (cont’d)

For investment securities, the Bank considers default to take place when there has been significant
deterioration in the rating of the underlying security and payment of principal and interest is over 90 days in
arrears.
ECL Calculation Methodology

For loans and advances, the Bank calculates ECL in a manner that reflects an unbiased and probability-
weighted amount that is determined by evaluation of a range of possible outcomes, the time value of money
and reasonable and supportable information about past events, current conditions and forecasts of future
economic conditions. The Bank applies a discounted probability-weighted estimate of the cash shortfalls
expected to result from defaults over the relevant time horizon. The cash shortfall is the difference between
the cash flows that are due according to the terms of the agreement and the cash flows it expects to collect
over the relevant time period.
The Bank calculates the probability-weighted average of expected credit losses over different scenarios. Each
scenario specifies forecasts of different economic conditions and these economic conditions are used to adjust
default probabilities to incorporate this forward-looking information.
The forward-looking information is incorporated through the use of regression formulae that translate the
input economic information and uses this information to forecast default rates and non-performing loan ratios.
The macroeconomic information used by the Bank are:
 Gross Domestic Product (local GDP)

 Inflation
 Global GDP (for international investments)
Three variables are integral to the calculation of the ECL - the probability of default (PD), the exposure at
default (EAD) and the loss given default (LGD). The product of these variables is adjusted for forward-
looking information and discounted at the instrument’s original interest rate to arrive at the calculation of
ECL.
Probability of default - measures likelihood of default over a given period of time. In arriving at the
probability of default the Bank first categorizes facilities according to common characteristics and uses
migration analysis to measure the percentage of loans as they move across the relevant stages. From this
analysis marginal PDs for successive years are generated using a multiplication matrix. In the case of
investment securities, the Bank utilized information from credit loss tables that are generated by reputable
external agencies.
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Exposure at default - this is an estimate of the exposure at a default date that takes place in the future, taking
into consideration repayments of principal or interest and interest charged. In arriving at EAD estimates, the
Bank employs cash flow analyses.
Loss given default - this is an estimate of the cash shortfall the Bank expects when a facility defaults at a point
in time. For secured facilities the Bank considers the amount that may be realized from the sale of the
collateral net of costs to sell. In the case of investment securities, the Bank utilized information from credit
loss tables that are generated by reputable external agencies.
Loan Commitments
Loan commitments arise when an entity enters into a contract to provide a loan facility to another party. For
loan commitments, credit loss estimates consider the portion of the commitment that is expected to be drawn
over the relevant time period.
At the end of each reporting period, 12-month expected credit losses are initially provided for such
commitments. Where there has been a significant increase in credit risk of a default occurring on the loan to
which the commitment relates, lifetime expected credit losses are recognized.
For loan commitments, ECL is calculated as the difference between:
 The contractual cash flows for amounts that are repayable if the holder of the loan commitment draws on
the loan; and
 The cash flows that the Bank expects to receive if the loan is drawn down.
The discount rate used is the effective interest rate for the primary facility. In instances where there has been
no draw downs on the loan facility, the loss allowance is recognized and presented as a provision.
Judgement
Judgement is required in making assumptions and estimations when calculating the ECL. This includes the
movement of financial instruments between stages and the application of forward-looking information. The
underlying assumptions and estimates may result in changes to the amounts recorded from period to period
and can significantly impact the results of operations.
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Caribbean 31, 2019
Dollars)
(vi) Modifications of financial assets and financial liabilities
Financial assets
If the terms of a financial asset are modified, then the Bank evaluates whether the cash flows of the modified
asset are substantially different.
If the cash flows are substantially different, then the contractual rights to cash flows from the original
financial asset are deemed to have expired. In this case, the original financial asset is derecognised and a
new financial asset is recognized at fair value plus any eligible transaction costs. Any fees received as part
of the modification are accounted for as follows:
- fees that are considered in determining the fair value of the new asset and fees that represent
reimbursement of eligible transaction costs are included in the initial measurement of the asset; and
- other fees are included in profit or loss as part of the gain or loss on derecognition.
If cash flows are modified when the borrower is in financial difficulties, then the objective of the modification
is usually to maximize recovery of the original contractual terms rather than to originate a new asset with
substantially different terms. If the Bank plans to modify a financial asset in a way that would result in
forgiveness of cash flows, then it first considers whether a portion of the asset should be written off before
the modification takes place. This approach impacts the result of the quantitative evaluation and means that
the derecognition criteria are not usually met in such cases.
If the modification of a financial asset measured at amortised cost or FVOCI does not result in derecognition
of the financial asset, then the Bank first recalculates the gross carrying amount of the financial asset using
the original effective interest rate of the asset and recognises the resulting adjustment as a modification gain
or loss in profit or loss. For floating-rate financial assets, the original effective interest rate used to calculate
the modification gain or loss is adjusted to reflect current market terms at the time of the modification. Any
costs or fees incurred and fees received as part of the modification adjust the gross carrying amount of the
modified financial asset and are amortised over the remaining term of the modified financial asset.
If such a modification is carried out because of financial difficulties of the borrower, then the gain or loss is
presented together with impairment losses. In other cases, it is presented as interest income calculated using
the effective interest rate method.
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For theinyear
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Caribbean 31, 2019
Dollars)
(vi) Modifications of financial assets and financial liabilities (cont’d)
The Bank derecognises a financial liability when its terms are modified and the cash flows of the modified
liability are substantially different. In this case, a new financial liability based on the modified terms is
recognised at fair value. The difference between the carrying amount of the financial liability derecognised
and consideration paid is recognised in profit or loss. Consideration paid includes non-financial assets
transferred, if any, and the assumption of liabilities, including the new modified financial liability.
If the modification of a financial liability is not accounted for as derecognition, then the amortised cost of the
liability is recalculated by discounting the modified cash flows at the original effective interest rate and the
resulting gain or loss is recognised in profit or loss. For floating-rate financial liabilities, the original effective
interest rate used to calculate the modification gain or loss is adjusted to reflect current market terms at the
time of the modification. Any costs and fees incurred are recognised as an adjustment to the carrying amount
of the liability and amortised over the remaining term of the modified financial liability by re-computing the
effective interest rate on the instrument.
(f) Property and equipment
(i) Recognition and measurement

Land and buildings, which comprise mainly branches and offices, are shown at fair value, based on valuations
done by external independent valuers every 5 years, less subsequent depreciation for buildings. Any
accumulated depreciation is eliminated against the gross carrying amount of the asset and the net amount is
restated to the revalued amount of the asset.
All other assets are stated at cost less accumulated depreciation. Cost includes expenditure that is directly
attributable to the acquisition of the items. The cost of self-constructed assets includes:
• the cost of materials and direct labour;

• any other costs directly attributable to bringing the asset to a working condition for its intended use;
• in instances when the Bank has an obligation to remove the asset or restore the site, an estimate of the
costs of dismantling and removing the items and restoring the site on which they are located; and
• capitalized borrowing costs.
When parts of an item of property and equipment have different useful lives, they are accounted for as
separate items (major components) of property and equipment.
Gains and losses on disposal of an item of property and equipment are determined by comparing the proceeds
from disposal with the carrying amount of property and equipment and are recognized net within other
income in profit or loss.
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(f) Property and equipment (cont’d)
(ii) Subsequent expenditure

Subsequent expenditure is capitalized only if it is probable that the future economic benefits associated with
the expenditure will flow to the Bank. All other related expenditures are charged to profit or loss during the
period in which they are incurred.
(iii) Depreciation
Depreciation for buildings is calculated to write off their costs less their estimated residual values using the
straight-line method over their estimated useful lives, and the reducing balance method for all other property
and equipment as follows:
Buildings 2%
Furniture and fixtures 10%
Equipment 15% - 25%
Leasehold improvements 20%
Motor vehicles 20%
Depreciation methods, residual values and useful lives are reviewed, and adjusted if appropriate, at each
reporting date.
Land is not depreciated.
Assets that are subject to amortization are reviewed for impairment whenever events or changes in
circumstances indicate that the carrying amount may not be recoverable. An asset’s carrying amount is written
down immediately to its recoverable amount if the asset’s carrying amount is greater than its estimated
recoverable amount. The recoverable amount is the higher of the asset’s fair value less costs to sell and value
in use.
(g) Intangible assets

Intangible assets comprise separately identifiable intangible items arising from computer software licenses
and other intangible assets. Intangible assets are recognized at cost less accumulated amortization and any
accumulated impairment losses. Intangible assets with a definite useful life are amortized using the straight-
line method over their estimated useful economic life, generally not exceeding 4 years. Intangible assets with
an indefinite useful life are not amortized. Generally, the identified intangible assets of the Bank have a
definite useful life.
At each reporting date intangible assets are reviewed for indications of impairment or changes in estimated
future economic benefits. If such indications exist, the intangible assets are analyzed to assess whether their
carrying amount is fully recoverable. An impairment loss is recognized if the carrying amount exceeds the
recoverable amount. The Bank chooses to use the cost model for the measurement after recognition.
Intangible assets with indefinite useful life are annually tested for impairment and whenever there is an
indication that the asset may be impaired, the intangible asset is analyzed to assess whether their carrying
amount is fully recoverable.
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Caribbean 31, 2019
Dollars)
Computer software licenses
Acquired computer software licenses are capitalized on the basis of the costs incurred to acquire and bring
the specific software to use. These costs are amortized on the basis of the expected useful lives.
Software has a maximum expected useful life of 4 years (25% per annum).
(h) Guarantees and letters of credit

Guarantees and letters of credit comprise undertakings by the Bank to pay bills of exchange drawn on
customers. The Bank expects most guarantees and letters of credit to be settled simultaneously with the
reimbursement from the customers.
Financial guarantees are initially recognized in the financial statements at fair value on the date the guarantee
was given. The fair value of a financial guarantee at the time of signature is zero because all guarantees are
agreed on arm’s length terms and the value of the premium agreed corresponds to the value of the guarantee
obligation. No receivable for the future premiums is recognized. Subsequent to initial recognition, the Bank’s
liabilities under such guarantees are measured at the higher of the initial amount, less amortization of fees
recognized in accordance with IAS 18, and the best estimate of the amount required to settle the guarantee.
These estimates are determined based on experience of similar transactions and history of past losses,
supplemented by the judgement of management. The fee income earned is recognized on a straight-line basis
over the life of the guarantee. Any increase in the liability relating to guarantees is reported in profit or loss
within other operating expenses.
(i) Provisions
Provisions are recognized when:
• the Bank has a present legal or constructive obligation as a result of past events;
• it is more likely than not that an outflow of resources will be required to settle the obligation;
• and the amount has been reliably estimated.
Where there are a number of similar obligations, the likelihood that an outflow will be required in settlement
is determined by considering the class of obligations as a whole. A provision is recognized even if the
likelihood of an outflow with respect to any one item included in the same class of obligations may be small.
Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects current
market assessments of the time value of money and the risks specific to the liability. The unwinding of the
discount is recognized as a finance cost.
(j) Employee benefits

(i) Pension obligation
The Bank operates a defined benefit plan for all employees. The assets of the plan are held separately
from those of the Bank. The pension plan is funded through payments from employees and the Bank,
taking account of the recommendations of independent qualified actuaries. The Bank’s net obligation
in respect of defined benefit plans is calculated by estimating the amount of future benefit that
employees have earned in the current and prior periods, discounting that amount and deducting the fair
value of any plan assets.
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Dollars)
(j) Employee benefits (cont’d)
(i) Pension obligation (cont’d)

The calculation of defined benefit obligations is performed annually by a qualified actuary using the
projected unit credit method. When the calculation results in a potential asset for the Bank, the
recognized asset is limited to the present value of economic benefits available in the form of any future
refunds from the plan or reductions in future contributions to the plan. To calculate the present value
of economic benefits, consideration is given to any applicable minimum funding requirements.
Re-measurements of the net defined benefit liability, which comprise actuarial gains and losses, the
return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest)
are recognized immediately in OCI. The Bank determines the net interest expense/(income) on the net
defined benefit liability/(asset) for the period by applying the discount rate used to measure the defined
benefit obligation at the beginning of the annual period to the then-net defined benefit liability/(asset),
taking into account any changes in the net defined benefit liability/(asset) during the period as a result
of contributions and benefit payments. Net interest expense and other expenses related to defined
benefit plans are recognized in personnel expenses in profit or loss.
When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that
relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The
Bank recognizes gains and losses on the settlement of a defined benefit plan when the settlement
occurs.
(ii) Profit-sharing and bonus plans

The Bank recognizes a liability and an expense for bonuses and profit-sharing, based on a formula that
takes into consideration the profit attributable to the Bank’s shareholders after certain adjustments. The
Bank recognizes a provision where contractually obliged or where there is a past practice that has
created a constructive obligation.
(k) Income tax

Income tax expense comprises current and deferred tax. It is recognized in profit or loss except to the extent
that it relates to a business combination, or items recognized directly in equity or in OCI.
a) Current tax
Current tax comprises the expected tax payable or recoverable on the taxable profit or loss for the year and
any adjustments to the tax payable or recoverable in respect of previous years. The amount of the current tax
payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects
uncertainty related to taxes, if any. It is measured using tax rates enacted or substantively enacted at the
reporting date.
Current tax assets and liabilities are offset only if certain criteria are met.
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December
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Eastern December
Caribbean 31,
Dollars) 2019
(k) Income tax (cont’d)
b) Deferred tax
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes. The principal
temporary differences arise from depreciation of property and equipment. Deferred tax is not recognized for
temporary differences on the initial recognition of assets or liabilities in a transaction that is not a business
combination and that affects neither accounting nor taxable profit nor loss.
Deferred tax assets are recognized for unused tax losses and deductible temporary differences to the extent
that it is probable that future taxable profits will be available against which they can be used. Future taxable
profits are determined based on the Bank’s business plans and the reversal of temporary differences. Deferred
tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that
the related tax benefit will be realized; such reductions are reversed when the probability of future taxable
profits improves.
Unrecognized deferred tax assets are reassessed at each reporting date and recognized to the extent that it has
become probable that future taxable profits will be available against which they can be used.
Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they
reverse, using tax rates enacted or substantively enacted at the reporting date and which are expected to apply
when the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred tax assets and liabilities are offset only if certain criteria are met.
(l) Share capital

(i) Ordinary shares
Holders of ordinary shares are entitled to dividends as declared from time to time and are entitled to
one vote per share at general meetings of the Bank. Incremental costs directly attributable to the issue
of new shares are shown in equity as a deduction from the proceeds.
(ii) Dividends on ordinary shares

Dividends on ordinary shares are recognized in equity in the period in which they are approved by the
shareholders. Dividends for the year declared after the reporting date are disclosed in the notes to the
financial statements.
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ST. LUCIA LIMITED
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31,
Dollars) 2019
(m) Interest income and expense

Interest income and expense for all interest-bearing financial instruments are recognized within “interest
income” and “interest expense” in profit or loss using the effective interest method. The effective interest
method is a method of calculating the amortized cost of a financial asset or a financial liability and of
allocating the interest income or interest expense over the relevant period. The effective interest rate is the
rate that exactly discounts estimated future cash payments or receipts through the expected life of the financial
instrument or, when appropriate, a shorter period to the net carrying amount of the financial asset or financial
liability. When calculating the effective interest rate, the Bank estimates cash flows considering all
contractual terms of the financial instrument (for example, prepayment options) but does not consider future
credit losses. The calculation includes all fees and points paid or received between parties to the contract that
are an integral part of the effective interest rate, transaction costs and all other premiums or discounts.
Interest on loans and advances and fee income

Interest on loans is recognized in interest income using the effective interest method. The estimated future
cash flows used in this calculation include those determined by the contractual term of the asset and all fees
that are considered to be integral to the effective interest rate. Fees that are an integral part of the effective
interest rate are treated as an adjustment to the effective interest rate.
Fees that relate to activities such as originating, restructuring or renegotiating loans are deferred and
recognized as non-interest income over the expected term of such loans using the effective interest method.
Where there is a reasonable expectation that a loan will be originated, commitment and standby fees are also
recognized as fee income over the expected term of the resulting loans using the effective interest method.
(n) Fees and commission income

Fees and commissions are generally recognized on an accrual basis when the service has been provided.
Performance linked fees or fee components are recognized when the performance criteria are fulfilled.
(o) Dividend income

Dividends are recognized in profit or loss when the Bank’s right to receive payment is established.
(p) Leases
The Bank assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract
conveys the right to control the use of an identified asset for a period of time in exchange for consideration.
(i) The Bank is the lessee

The Bank applies a single recognition and measurement approach for all leases, except for short-term
leases and leases of low-value assets. The Bank recognizes lease liabilities to make lease payments and
right-of-use assets representing the right to use the underlying assets.
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Caribbean 31, 2019
Dollars)

(p) Leases (cont’d)
(i) The Bank is the lessee (cont’d)
Right-of-use assets
The Bank recognises right-of-use assets at the commencement date of the lease (i.e., the date the
underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated
depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The cost
of right-of-use assets includes the amount of lease liabilities recognised, initial direct costs incurred,
and lease payments made at or before the commencement date less any lease incentives received. The
right of use asset has been depreciated on a straight-line basis over the remaining lease term for each
lease.
Lease liabilities
At the commencement date of the lease, the Bank recognises lease liabilities measured at the present
value of lease payments to be made over the lease term. The lease payments include fixed payments
less any lease incentives receivable, variable lease payments that depend on an index or a rate, and
amounts expected to be paid under residual value guarantees.
Short-term leases and leases of low-value assets
The Bank applies the short-term lease recognition exemption to its short-term leases of office floor
lease and a few of the motor vehicle leases (i.e., those leases that have a lease term of 12 months or less
from the commencement date and do not contain a purchase option). It also applies the lease of low-
value assets recognition exemption to leases of office equipment that are considered of low value (i.e.,
below $5,000). Lease payments on short-term leases and leases of low-value assets are recognised as
expense on a straight-line basis over the lease term.
(ii) The Bank is the lessor
When assets are leased out under an operating lease, the assets are included in the statement of financial
position based on the nature of the assets. Lease income is recognized over the term of the lease on the
straight line basis.
(q) Impairment of non-financial assets

At each reporting date, the Bank reviews the carrying amounts of its non-financial assets (other than
inventories and deferred tax assets) to determine whether there is any indication of impairment. If any such
indication exists, then the asset’s recoverable amount is estimated.
For impairment testing, assets are grouped together into the smallest group of assets that generates cash
inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to
sell. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-
tax discount rate that reflects current market assessments of the time value of money and the risks specific to
the asset or CGU.
An impairment loss is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.
Impairment losses are recognized in profit or loss.
38

December
For theinyear
(Expressed ended
Eastern December
Caribbean 31, 2019
Dollars)
4. Financial risk management
The Bank has exposure to the following risks from financial instruments:
• Credit risk;
• Liquidity risk;
• Market risk (including currency risk, interest rate and other price risk); and
• Operational risk
4.1 Risk management framework
The Bank’s Board of Directors has overall responsibility for the establishment and oversight of its risk
management framework. The Bank’s activities expose it to a variety of financial risks and those activities
involve the analysis, evaluation, acceptance and management of some degree of risk or combination of risks.
Taking risk is core to retail banking, and operational risks are an inevitable consequence of being in business.
The Bank’s aim is therefore to achieve an appropriate balance between risk and return and minimize potential
adverse effects on the Bank’s financial performance.
The Bank’s risk management policies are established to identify and analyze the risks faced by the Bank, to
set appropriate risk limits and controls, and to monitor risks and adherence to limits. The risk management
policies and systems are reviewed regularly to reflect changes in market conditions and the Bank’s activities.
The Bank, through its training and management standards and procedures, aims to maintain a disciplined and
constructive control environment in which all employees understand their roles and obligations.
The Audit Committee oversees how management, through the finance department, monitors compliance with
the Bank’s risk management policies and procedures, and reviews the adequacy of the risk management
framework in relation to the risks faced by the Bank. Management identifies and evaluates financial risks in
close co-operation with the Bank’s operating units. The Board provides oversight for overall risk
management, as well as written policies covering specific areas, such as foreign exchange risk, interest rate
risk and credit risk. In addition, internal audit is responsible for the independent review of risk management
and the control environment. It undertakes both regular and ad hoc reviews of risk management controls and
procedures, the results of which are reported to the Audit Committee.
4.2 Credit risk
Credit risk is the risk of financial loss to the Bank if a customer or counterparty to a financial instrument fails
to meet its contractual obligations, and arises principally from the Bank’s loans and advances to customers
and other banks, and investment debt securities in investment securities and other bills. Significant changes
in the economy, or in the health of a particular industry segment that represents a
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ST. LUCIA LIMITED
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31, 2019
Dollars)
4. Financial risk management (cont’d)
4.2 Credit risk (cont’d)
4.2.1 Credit risk measurement
concentration in the Bank’s portfolio, could result in losses that are different from those provided for at the
reporting date. There is also credit risk in off-balance sheet financial instruments such as loan commitments.
Credit risk is managed and controlled by management which reports to the Board of Directors.
(a) Loans and advances

Eastern Caribbean Central Bank’s prudential guidelines are embedded in the Bank’s daily operational
management. The operational measurements can be compared with impairment allowances required under
IAS 39, which are based on losses that have been incurred at the reporting date (the “incurred loss model”).
The Bank assesses the probability of default of individual counterparties using the Eastern Caribbean Central
Bank prudential guidelines. Clients of the Bank are segmented into five rating classes. The Bank’s rating
scale, which is shown below, reflects the range of default probabilities defined for each rating class.
Bank’s rating Description of the grade

1 Stage 1 - Pass
2 Stage 2 - Special Mention
3 Stage 3 - Sub-standard
4 Stage 3 - Doubtful
5 Stage 3 - Loss
This means that, in principle, exposures migrate between classes as the assessment of their probability of
default changes. The Bank regularly validates the performance of the rating and their predictive power with
regard to default events.
(b) Debt securities and other bills

For debt securities and other bills, external ratings such as CariCRIS or their equivalents are used by
management for management of the credit risk exposures.
4.2.2 Risk limit control and mitigation policies
The Bank manages, limits and controls concentrations of credit risk wherever they are identified − in
particular, to individual counterparties and groups, and to industries.
The Bank structures the levels of credit risk it undertakes by placing limits on the amount of risk accepted in
relation to one borrower, or groups of borrowers, and to the industry segments. Such risks are monitored on
a revolving basis and subject to an annual or more frequent review by the Board of Directors.
The exposure to any one borrower including banks and brokers is further restricted by sub-limits.
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December
For theinyear
(Expressed ended
Eastern December
Caribbean 31, 2019
Dollars)
4.2.2 Risk limit control and mitigation policies (cont’d)
Covering on-balance sheet and off-balance sheet exposures, and daily delivery risk limits in relation to trading
items. Actual exposures against limits are monitored daily.
Exposure to credit risk is also managed through regular analysis of the ability of borrowers and potential
borrowers to meet interest and capital repayment obligations and by changing these lending limits where
appropriate.
Some other specific control and mitigation measures are outlined below.
(a) Collateral
The Bank employs a range of policies and practices to mitigate credit risk. The most traditional of these is
the taking of security for funds advanced, which is common practice. The Bank implements guidelines on the
acceptability of specific classes of collateral or credit risk mitigation. The principal collateral types for loans
and advances are:
• Mortgages over residential properties;

• Charges over business assets such as premises, inventory and accounts receivable; and
• Charges over financial instruments such as debt securities and equities.
Longer-term finance and lending to corporate entities are generally secured, while revolving individual credit
facilities are generally unsecured. In addition, in order to minimize the credit loss, the Bank will seek
additional collateral from the counterparty as soon as impairment indicators are noticed for the relevant
individual loans and advances.
Collateral held as security for financial assets other than loans and advances is determined by the nature of
the instrument. Debt securities, treasury and other eligible bills are generally unsecured.
(b) Credit-related commitments

The primary purpose of these instruments is to ensure that funds are available to a customer as required.
Guarantees and standby letters of credit carry the same credit risk as loans. Documentary and commercial
letters of credit (which are written undertakings by the Bank on behalf of a customer authorizing a third party
to draw drafts on the Bank up to a stipulated amount under specific terms and conditions) are collateralized
by the underlying shipments of goods to which they relate and therefore carry less risk than a direct loan.
Commitments to extend credit represent unused portions of authorizations to extend credit in the form of
loans, guarantees or letters of credit. With respect to credit risk on commitments to extend credit, the Bank is
potentially exposed to loss in an amount equal to the total unused commitments. However, the likely amount
of loss is less than the total unused commitments, as most commitments to extend credit are contingent upon
customers maintaining specific credit standards. The Bank monitors the term to maturity of credit
commitments because longer-term commitments generally have a greater degree of credit risk than shorter-
term commitments.
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December
For theinyear
(Expressed ended
Eastern December
Caribbean 31,
Dollars) 2019
4.2.3 Impairment and provisioning policies
The impairment provision shown in the statement of financial position at the reporting date is derived from
each of the five internal rating grades. The table below shows the percentage of the Bank’s on-balance sheet
items relating to loans and advances and the associated impairment provision for 2018 and expected credit
loss (ECL) for 2019 for each of the Bank’s internal rating categories:
2019 2018
Loans and ECL Loans and ECL
advances provision advances provision
Bank’s rating (%) (%)
Stage 1 - Pass 85.5% 15.5% 82.2 12.9
Stage 2 - Special mention 7.4% 25.0% 7.6 29.0
Stage 3 - Sub-standard, doubtful, loss 7.1% 59.5% 10.2 58.1
The internal rating tool assists management to determine whether objective evidence of impairment exists,
based on the following factors set out by the Bank:
• Delinquency in contractual payments of principal or interest;

• Cash flow difficulties experienced by the borrower (e.g. equity ratio, net income percentage of sales);
• Breach of loan covenants or conditions;
• Initiation of bankruptcy proceedings;
• Deterioration of the borrower’s competitive position; and
• Deterioration in the value of collateral.
The Bank’s policy requires the review of individual financial assets that are above materiality thresholds at
least annually or more regularly when individual circumstances require. Impairment allowances on
individually assessed accounts are determined by an evaluation of the incurred loss at the reporting date on a
case-by-case basis, and are applied to all individually significant accounts. The assessment normally
encompasses collateral held (including re-confirmation of its enforceability) and the anticipated receipts for
that individual account.
42
1 ST
NATIONAL
ST. LUCIA LIMITED
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31,
Dollars) 2019
4.2.4 Maximum exposure to credit risk before collateral held or other credit enhancements
Credit risk exposures relating to on-balance sheet assets are as follows:
Maximum exposure
2019 2018
$ $
Due from other banks 33,841,222 28,003,720
Treasury bills 31,311,935 36,422,936
Loans and advances to financial institutions -
Loans and advances to customers:

- Overdrafts 17,000,745 10,980,992
- Demand loans 343,780,091 316,103,997
- Promissory notes 7,956,117 8,294,196
- Mortgages 182,083,957 164,564,856
- Credit cards 2,248,773 2,163,104
Investment securities:
- Debt instrument at FVOCI 31,829,694 33,238,509
- Debt instrument at amortized cost 71,458,805 77,247,306
Other assets 2,474,687 5,554,989
723,986,026 682,574,605
Credit risk exposures relating to off-balance sheet items are as follows:

Financial guarantees 643,008 688,008
Loan commitments and other credit related facilities 62,427,167 45,937,540
63,070,175 46,625,548
At December 31 787,056,201 729,200,153
The above table represents a worst case scenario of credit risk exposure to the Bank at December 31, 2019
and 2018, without taking account of any collateral held or other credit enhancements attached. For on-
balance-sheet assets, the exposures set out above are based on net carrying amounts as reported in the
statement of financial position.
Loans and advances to customers comprise 76% of the total maximum exposure (2018 - 73%); investments
in debt securities comprise 14% (2018 - 17%).
43
1 ST
NATIONAL
ST. LUCIA LIMITED
December
For theinyear
(Expressed ended
Eastern December
Caribbean 31, 2019
Dollars)
4.2.4 Maximum exposure to credit risk before collateral held or other credit enhancements (cont’d)
Notwithstanding the current dynamics of the economy, management is fairly confident in its ability to
continue to control and sustain minimal exposure of credit risk to the Bank based on the following:
• 93% (2018 - 87%) of the loans and advances portfolio is categorized in the top two grades of the internal
rating system;
• 90% (2018 - 86%) of the portfolio is backed by collateral in the form of mortgage debentures, legal
mortgages, life and comprehensive insurances, bills of sale, cash and guarantees;
• 74% (2018 - 73%) of the total loans and advances portfolio is considered to be neither past due nor
impaired;
• The Bank continues to grant loans and advances in accordance with its lending policies and guidelines;
and
• 10% (2018 - 12%) of investments are rated above A-; no investments were rated CariA (2018 - 0%); 37%
(2018 - 36%) are rated above B- and below BBB+; 35% (2018 - 34%) are above CariBBB and below
CariA. Many issuers are not rated but only 18% (2018 - 17%) of investments in the portfolio are not
rated and none (2018 - 2%) are selective default.
4.2.5 Loans and advances
Loans and advances are summarized as follows:
2019 2018
$ $
Loans and advances to customers
Neither past due nor impaired 433,047,662 381,541,200
Past due but not impaired 97,254,572 91,744,124
Impaired 40,519,863 52,723,920
Gross 570,822,097 526,009,244
Less: allowance for impairment (Notes 10 and 11) (17,752,414) (23,902,099)
Net 553,069,683 502,107,145
44
1stST NATIONAL BANK ST. LUCIA LIMITED
1 National Bank St. Lucia Limited
Notes
Notes toto Financial
thethe Statements
For
For the year
theyear ended
ended December
December 31, 201931, 2019
(Expressed
(Expressed in
in Eastern
EasternCaribbean
CaribbeanDollars)
dollars)
4.2.5 Loans and advances (cont’d)
(a) Loans and advances neither past due nor impaired

The credit quality of the portfolio of loans and advances that were neither past due nor impaired can be assessed by reference to the internal rating
system adopted by the Bank.
Total loans
Promissory and advances

December 31, 2019 Overdrafts Credit Cards Demand loans notes Mortgages to customers
Loans and advances to customers $ $ $ $ $ $
Grades
1. Stage 1 - pass 16,048,101 1,875,045 270,173,233 5,969,170 129,475,273 423,540,822
2. Stage 2 - special mention 1,273,389 - 6,852,318 - 1,381,133 9,506,840
Total 17,321,490 1,875,045 277,025,551 5,969,170 130,856,406 433,047,662
Total loans
Promissory and advances
December 31, 2018 Overdrafts Credit Cards Demand loans notes Mortgages to customers
Loans and advances to customers $ $ $ $ $ $
Grades
1. Stage 1 - pass 10,093,619 1,666,924 246,963,145 7,026,980 101,601,847 367,352,515
2. Stage 2 - special mention 295,621 - 7,008,016 12,100 6,872,948 14,188,685
Total 10,389,240 1,666,924 253,971,161 7,039,080 108,474,795 381,541,200
45
1ST NATIONAL
1st National BANKLimited
Bank St. Lucia ST. LUCIA LIMITED
Notes Notes
to the
to Financial
the FinancialStatements
Statements
(a) Loans and advances neither past due nor impaired (cont’d)
Loans and advances to financial institutions
Loans and advances to financial institutions were graded as Pass as at December 31, 2019 and December
31, 2018.
(b) Loans and advances past due but not impaired

Loans and advances less than 90 days past due are not considered impaired, unless other information is
available to indicate the contrary. The gross amount of loans and advances by class to customers net of
unearned interest that were past due but not impaired were as follows:
Total loans and

Demand Promissory advances to
December 31, 2019 Credit cards loans notes Mortgages customers
$ $ $ $ $
Past due up to 30 days 455,505 50,397,885 1,673,055 29,900,808 82,427,253
Past due 30-60 days 124,121 2,610,568 293,012 5,008,310 8,036,011
Past due 61-90 days 92,951 4,302,172 132,976 2,263,209 6,791,308
Total 672,577 57,310,625 2,099,043 37,172,327 97,254,572
Fair value of collateral - 145,755,059 16,018,619 394,499,354 556,273,032
Total loans
Credit Demand Promissory and advances
December 31, 2018 cards loans notes Mortgages to customers
$ $ $ $ $
Past due up to 30 days 511,917 48,013,915 1,061,795 28,907,905 78,495,532
Past due 30-60 days 290,077 1,196,556 241,942 3,292,241 5,020,816
Past due 61-90 days 97,078 5,432,963 195,669 2,502,066 8,227,776
Total 899,072 54,643,434 1,499,406 34,702,212 91,744,124
Fair value of collateral - 122,282,535 1,886,894 86,653,710 210,823,139
46

1ST NATIONAL
1st National BANK
Limited
Notes to thetoFinancial
Notes the FinancialStatements
Statements
(c) Loans and advances individually impaired

The table below shows the gross amount of individually impaired loans and advances to customers by
grades before taking into consideration the cash flows from collateral held.
2019 2018
Individual impaired loans $ $
1. Stage 3 - Sub-standard, doubtful, loss 40,519,863 52,723,920
Total 40,519,863 52,723,920
Fair value collateral 80,790,013 97,908,236
(d) Loans and advances renegotiated

Restructuring activities include extended payment arrangements, approved external management plans,
modification and deferral of payments. Following restructuring, a previously overdue customer account
is reset to normal status and managed together with other similar accounts. Restructuring policies and
practices are based on indicators or criteria which, in the judgment of local management, indicate that
payment will most likely continue. These policies are kept under continuous review. Restructuring is
most commonly applied to term loans, in particular customer finance loans. Renegotiated loans that
would otherwise be past due or impaired as at December 31, 2019 amounted to $3,745,701 (2018 -
$6,964,579).
4.2.6 Debt securities, treasury bills and other eligible bills
The table below presents an analysis of debt securities, treasury bills and other eligible bills by rating
agency designation at December 31, 2019 and 2018, based on Caricris or their equivalent:
Debt Debt
Treasury Instruments at Instruments at Total
At December 31, 2019 bills FVOCI Amortized Cost
$ $ $ $
A- to A+ - 13,592,197 - 13,592,197
BBB- to BBB+ - 18,237,497 19,530,879 37,768,376
BB- to BB+ - - - -
B- to B+ 4,990,019 - 6,974,077 11,964,096
CariBBB+ - - 4,488,587 4,488,587
CariBBB 11,538,567 - 30,729,627 42,268,194
SD (selective default) - - - -
Unrated 14,783,349 - 9,735,635 24,518,984
Total 31,311,935 31,829,694 71,458,805 134,600,434
47
1ST NATIONAL
1st National BANKLimited
Notes Notes
to the
to Financial
the FinancialStatements
Statements
4.2.6 Debt securities, treasury bills and other eligible bills (cont’d)
Debt Debt
Treasury Instruments at Instruments at Total
At December 31, 2018 bills FVOCI Amortized Cost
$ $ $ $
A- to A+ - 17,644,775 - 17,644,775
BBB- to BBB+ - 15,593,734 22,340,548 37,934,282
BB- to BB+ 6,984,129 - 7,680,366 14,664,495
CariBBB+ - - 6,565,343 6,565,343
CariBBB 11,695,354 - 31,179,680 42,875,034
SD (selective default) 2,984,488 - - 2,984,488
Unrated 14,758,965 - 9,481,369 24,240,334
Total 36,422,936 33,238,509 77,247,306 146,908,751
4.2.7 Repossessed collateral
During 2019, the Bank obtained assets by taking possession of collateral held as security, as follows:
Carrying
amount
Nature of assets $
Vehicles 99,569
Repossessed vehicles are sold as soon as practicable with the proceeds used to reduce the outstanding
indebtedness.
48
Notes
thethe Statements
For
For the year
theyear ended
ended December
December 31, 201931, 2019
(Expressed
(ExpressedininEastern
EasternCaribbean
CaribbeanDollars)
dollars)
4.2.8 Concentration of risks of financial assets with credit risk exposure

(a) Geographical sectors
The Bank operates primarily in Saint Lucia and the exposure to credit risk is concentrated there.
(b) Industry sectors

The following table breaks down the Bank’s main credit exposure at their carrying amounts, as categorized by the industry sectors of counterparties.

Professional
Financial and other Other
institutions Manufacturing Tourism Government services Personal industries Total
$ $ $ $ $ $ $ $
Due from other banks 33,841,222 - - - - - - 33,841,222
Treasury bills - - - 31,311,935 - - - 31,311,935
Loans and advances to
customers:
- Overdraft 8 1,056,544 1,732,434 172,015 5,261,483 867,258 7,911,003 17,000,745
- Credit cards - - - - - 1,574,141 674,632 2,248,773
- Demand loans - 25,035,719 2,141,196 57,256,673 29,636,780 114,197,860 115,511,863 343,780,091
- Promissory notes - 60,294 - - 51,893 7,769,966 73,964 7,956,117
- Mortgages 1,645,179 589,734 1,540,085 - 7,145,287 134,583,945 36,579,727 182,083,957
- Debt instruments at FVOCI 15,519,966 - - 5,667,975 - - 10,641,753 31,829,694
- Debt instruments at
amortized cost 30,112,305 - - 41,243,401 - - 103,099 71,458,805
Other assets 2,474,687 - - - - - - 2,474,687
As at December 31, 2019 83,593,367 26,742,291 5,413,715 135,651,999 42,095,443 258,993,170 171,496,041 723,986,026
Credit commitments - 10,590,754 - - 16,370,200 24,218,234 11,890,987 63,070,175
49
Notes
thethe Statements
For
For the year
theyear ended
ended December
December 31, 201931, 2019
(Expressed
(Expressed in
in Eastern
EasternCaribbean
CaribbeanDollars)
dollars)
4.2.8 Concentration of risks of financial assets with credit risk exposure (cont’d)
(b) Industry sectors (cont’d)
Professional
Financial and other Other
institutions Manufacturing Tourism Government services Personal industries Total
$ $ $ $ $ $ $ $
Due from other banks 28,003,720 - - - - - - 28,003,720
Treasury bills - - - 36,422,936 - - - 36,422,936
- Overdraft 849 683,377 1,292,116 - 2,563,030 856,847 5,584,773 10,980,992
- Credit cards - - - - - 1,514,173 648,931 2,163,104
- Demand loans 1,135,742 16,048,252 2,099,089 61,139,942 28,269,476 101,034,195 106,377,301 316,103,997
- Promissory notes - - - - 21,609 8,220,763 51,824 8,294,196
- Mortgages 1,804,638 611,969 1,674,258 - 6,865,861 105,906,899 47,701,231 164,564,856
- Debt instruments at FVOCI 11,515,328 - - 5,459,919 - - 16,263,262 33,238,509
- Debt instruments at amortized cost 38,035,864 - - 39,109,295 - - 102,147 77,247,306
Other assets 5,554,989 - - - - - - 5,554,989
As at December 31, 2018 86,051,130 17,343,598 5,065,463 142,132,092 37,719,976 217,532,877 176,729,469 682,574,605
Credit commitments - 381,207 207,463 2,797,138 18,330,286 15,718,125 9,191,329 46,625,548
50

1ST NATIONAL
1st National Bank St.BANK
Lucia ST. LUCIA LIMITED
Limited
Notes totothe
Notes Financial
the Financial Statements
Statements
4.3 Market risk
Market risk is the risk that changes in market prices - e.g. equity prices, foreign exchange rates and credit
spreads (not relating to changes in the obligor’s/issuer’s credit standing) - will affect the Bank’s income or
the value of its holdings of financial instruments. The objective of the Bank’s market risk management is to
manage and control market risk exposures within acceptable parameters to ensure the bank’s solvency while
optimizing the return on risk.
The Bank’s exposures to market risks primarily arise from the interest rate management of the Bank’s retail
and commercial banking assets and liabilities and equity risks arising from the Bank’s available-for-sale
investments.
4.3.1 Other price risk
The Bank is exposed to equity securities price risk because of investments held by the Bank and classified in
the statement of financial position as equity instruments at fair value through other comprehensive income.
To manage its price risk arising from investments in equity securities, the Bank diversifies its portfolio.
At December 31, 2019, if equity securities prices had been 5% higher/lower with all other variables held
constant, comprehensive income for the year would have been $129,888 higher/lower (2018 -$145,359
higher/lower) as a result of a reasonably possible increase/decrease in fair value of available-for-sale equity
securities at the reporting date.
4.3.2 Foreign exchange risk
The Bank takes on exposure to the effects of fluctuations in the prevailing foreign currency exchange rates
on its financial position and cash flows. The Board of Directors sets limits on the level of exposure by
currency, and in total, which are monitored daily.
The Bank’s exposure to currency risk is minimal since most of its assets and liabilities in foreign currencies
are held in United States dollars. The exchange rate of the Eastern Caribbean dollar (EC$) to the United States
dollar (US$) has been formally pegged at EC$2.70 = US$1.00 since 1976. The rate of exchange of EC$1 for
relevant major currencies was as follows:
USD BBD CAD EUR GBP

$ $ $ $ $
At December 31, 2019 2.7000 1.3517 2.0694 3.0267 3.5474
At December 31, 2018 2.7000 1.3517 1.9834 3.0937 3.4490
The following table summarizes the Bank’s exposure to foreign currency exchange rate risk at December 31,
2019 and 2018. Included in the table, are the Bank’s financial instruments at carrying amount, categorized by
currency.
51
Notes
thethe Statements
For
For the year
theyear ended
ended December
December 31, 201931, 2019
(Expressed
(Expressed in
in Eastern
EasternCaribbean
CaribbeanDollars)
dollars)
4.3 Market risk (cont’d)
4.3.2 Foreign exchange risk (cont’d)
Concentration of currency risk - on and off balance sheet financial instruments
ECD CAD EURO USD GBP TTD BD Total

As at December 31, 2019
Financial assets
Cash and balances with Central Bank 62,514,606 143,370 424,278 1,486,080 138,657 - 133,485 64,840,476
Due from other banks 8,429,067 145,623 1,201,910 23,285,745 302,343 97,501 379,033 33,841,222
Treasury bills 31,311,935 - - - - - - 31,311,935
Loans and advances to customers 553,069,683 - - - - - - 553,069,683
- Debt instruments at FVOCI 31,829,694 - - - 31,829,694
- Debt instruments at amortized cost 68,209,917 - - 3,248,888 - - - 71,458,805
Other assets 2,474,687 - - - - - - 2,474,687
Total financial assets 726,009,895 288,993 1,626,188 59,850,407 441,000 97,501 512,518 788,826,502
Due to customers 687,354,955 - 712 8,644,180 - - - 695,999,847
Other liabilities 16,914,982 - - - - - - 16,914,982
Lease liabilities 7,491,598 146,008 - - - 7,637,606
Total financial liabilities 711,761,535 - 712 8,790,188 - - - 720,552,435
Net on-balance sheet positions 14,248,360 288,993 1,625,476 51,060,219 441,000 97,501 512,518 68,274,067
Credit commitments 63,070,175 - - - - - - 63,070,175
52

Notes
thethe Statements
For
For the year
the year ended
ended December
December 31, 2019
31, 2019
(Expressed
(ExpressedininEastern
EasternCaribbean
CaribbeanDollars)
dollars)
4.3.2 Foreign exchange risk (cont’d)
Concentration of currency risk - on and off balance sheet financial instruments (cont’d)
ECD CAD EURO USD GBP TTD BD Total


Financial assets
Cash and balances with Central Bank 54,244,936 198,823 546,080 2,514,666 171,803 - 183,129 57,859,437
Due from other banks 13,286,182 385,219 386,806 12,226,907 1,190,071 172,098 356,437 28,003,720
Treasury bills 36,422,936 - - - - - - 36,422,936
Loans and advances to customers 502,107,145 - - - - - - 502,107,145
- Debt instruments at FVOCI - - - 33,238,509 - - - 33,238,509
- Debt instruments at amortized cost 73,960,495 - - 3,286,811 - - - 77,247,306
Other assets 5,554,989 - - - - - - 5,554,989
Total financial assets 685,576,683 584,042 932,886 51,266,893 1,361,874 172,098 539,566 740,434,042
Due to customers 637,953,869 - 960 7,221,300 - - - 645,176,129
Other liabilities 23,368,014 - - - - - - 23,368,014
Total financial liabilities 661,321,883 - 960 7,221,300 - - - 668,544,143
Net on-balance sheet positions 24,254,800 584,042 931,926 44,045,593 1,361,874 172,098 539,566 71,889,899
Credit commitments 46,625,548 - - - - - - 46,625,548
53
Notes
thethe Statements
For
For the year
theyear ended
ended December
December 31, 201931, 2019
(Expressed
(Expressed in
in Eastern
EasternCaribbean
CaribbeanDollars)
dollars)
4.3.3 Interest rate risk (cont’d)
Cash flow interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. Fair
value interest rate risk is the risk that the value of a financial instrument will fluctuate because of changes in market interest rates. The Bank takes on
exposure to the effects of fluctuations in the prevailing levels of market interest rates on both its fair value and cash flow risks. Interest margins may
increase as a result of such changes but may reduce losses in the event that unexpected movements arise.
The table below summarizes the Bank’s exposure to interest rate risks. It includes the Bank’s financial instruments at carrying amounts, categorized
by the earlier of contractual repricing and maturity dates.
Up to 1 Non-interest
month 1-3 months 3-12 months 1-5 years Over 5 years bearing Total
As at December 31, 2019 $ $ $ $ $ $ $
Assets
Cash and balances with Central Bank - - - - - 64,840,476 64,840,476
Due from other banks 21,446,586 - - - - 12,394,636 33,841,222
Treasury bills 13,287,718 4,317,095 13,707,122 - - - 31,311,935
Loans and advances to customers 22,042,342 457,749 4,651,802 58,630,577 467,287,213 - 553,069,683
- Debt instruments at FVOCI 31,829,694 - - - - - 31,829,694
- Debt instruments at amortized cost 3,767,897 2,922,378 42,141,419 11,734,222 10,892,889 - 71,458,805
Other assets - - - - - 2,474,687 2,474,687
Total financial assets 92,374,237 7,697,222 60,500,343 70,364,799 478,180,102 79,709,799 788,826,502
Liabilities
Due to customers 455,724,196 19,416,724 149,862,520 426,047 - 70,570,360 695,999,847
Other liabilities - - - - - 16,914,982 16,914,982
Lease liabilities 54,044 164,312 377,158 2857,760 4,184,332 - 7,637,606
Total financial liabilities 455,778,240 19,581,036 150,239,678 3,283,807 4,184,332 87,485,342 720,552,435
Total interest repricing gap (363,404,003) (11,883,814) (89,739,335) 67,080,992 473,995,770 (7,775,543) 68,274,067
54

Notes
thethe Statements
For
For the year
theyear ended
ended December
December 31, 201931, 2019
(Expressed
(Expressed in
in Eastern
EasternCaribbean
CaribbeanDollars)
dollars)
month 1-3 months 3-12 months 1-5 years Over 5 years bearing Total
As at December 31, 2018 $ $ $ $ $ $ $
Assets

Cash and balances with Central Bank - - - - - 57,859,437 57,859,437
Due from other banks 18,608,122 - - - - 9,395,598 28,003,720
Treasury bills 13,333,346 11,067,396 12,022,194 - - - 36,422,936
Loans and advances to customers 18,291,602 815,588 4,940,597 52,538,190 425,521,168 - 502,107,145
- Debt instruments at FVOCI 33,238,509 - - - - - 33,238,509
- Debt instruments at amortized cost 3,789,156 9,112,330 34,705,845 19,992,032 9,647,943 - 77,247,306
Other assets - - - - - 5,554,989 5,554,989
Total financial assets 87,260,735 20,995,314 51,668,636 72,530,222 435,169,111 72,810,024 740,434,042
Liabilities
Due to customers 437,211,879 13,147,472 122,371,089 215,217 - 72,230,472 645,176,129
Other liabilities - - - - - 23,368,014 23,368,014
Total financial liabilities 437,211,879 13,147,472 122,371,089 215,217 - 95,598,486 668,544,143
Total interest repricing gap (349,951,144) 7,847,842 (70,702,453) 72,315,005 435,169,111 (22,788,462) 71,889,899
55
1ST NATIONAL
LuciaST.Limited
LUCIA LIMITED
Notes totothe
Notes Financial
Statements
The Bank’s fair value interest rate risk arises from debt securities classified as available-for-sale debt. At
December 31, 2019, if market interest rates had been 100 basis points higher/lower with all variables held
constant, comprehensive income for the year would have been $2,233,154 higher/$1,072,331 lower. At
December 31, 2018, if the same scenario was applied debt securities available for sale, comprehensive income
would be $1,717,947 higher and $66,863 lower as a result of the decrease/increase in fair value of available-
for-sale debt securities.
Cash flow interest rate risk arises from loans and advances to customers at variable rates. At December 31,
2019, if variable interest rates had been 100 basis points higher/lower with all other variables held constant,
post-tax profit for the year would have been $3,710,738 higher/lower (2018 - $3,303,918).
4.4 Liquidity risk
Liquidity risk is the risk that the Bank will encounter difficulty in meeting obligations associated with its
financial liabilities that are settled by delivering cash or another financial asset.
4.4.1 Liquidity risk management process
The Board of Directors establishes the strategy and policy for the management of liquidity risk. The Bank's
liquidity is managed by the Finance Department. The Bank’s approach to managing liquidity is to ensure, as
far as possible, that it will always have sufficient liquidity to meet its liabilities when they are due, under both
normal and stressed conditions, without incurring unacceptable losses or risking damage to the Bank’s
reputation. While a significant proportion of the Bank’s liabilities fall within the current category, the Bank
maintains approximately 26% (2018 - 31%) of assets to manage any payment obligations as history has shown
that the assets maintained to manage these outflows is adequate.
The key elements of the liquidity management process are as follows:

• Daily and weekly monitoring to ensure that requirements are met. This includes the replenishment of
funds as they mature or as borrowed by customers. The Bank ensures that sufficient funds are held in the
one to thirty day maturity bucket to satisfy liquidity requirements.
• Maintaining a portfolio of marketable assets that can easily be liquidated, as protection against any
unforeseen liquidity problems. Additionally, the investment portfolio is fairly diversified by currency,
geography, provider, product and term.
• Weekly monitoring of the statement of financial position liquidity ratios against internal and regulatory
requirements.
• Managing the concentration and profile of debt maturities.
• Reviewing sources of liquidity regularly to maintain a wide diversification by currency, geography,
provider, product and term.
56
1ST NATIONAL
Limited
Notes totothe
Notes Financial
Statements
4.4 Liquidity risk (cont’d)
4.4.2 Non-derivative cash flows
The table below presents the cash flows payable by the Bank under non-derivative financial liabilities and
assets held for managing liquidity risk by remaining contractual maturities at the reporting date. The amounts
disclosed in the table are the contractual undiscounted cash flows; the Bank manages the inherent liquidity
risk based on expected undiscounted cash inflows.
month 1-3 months 3-12 months 1-5 years Over 5 years bearing
As at December 31, 2019 $ $ $ $ $ $
Due to customers 526,006,292 15,701,951 152,529,917 425,771 - 694,663,931
Other liabilities 16,914,982 - - - - 16,914,982
Lease liabilities 109,842 329,526 801,951 5,377,439 5,240,571 11,859,329
Total financial liabilities
(Contractual maturity dates) 543,031,116 16,031,477 153,331,868 5,803,210 5,240,571 723,438,242
Assets held for managing

liquidity risk
month 1-3 months 3-12 months 1-5 years Over 5 years bearing
As at December 31, 2018 $ $ $ $ $ $
Due to customers 509,762,030 13,385,954 124,726,412 220,542 - 648,094,938
Other liabilities 23,368,014 - - - - 23,368,014
Total financial liabilities
(Contractual maturity dates) 533,130,044 13,385,954 124,726,412 220,542 - 671,462,952
Assets held for managing

liquidity risk
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Notes Financial
Statements
4.4 Liquidity risk (cont’d)
4.4.3 Assets held for managing liquidity risk
Assets available to meet all of the liabilities and to cover outstanding loan commitments include cash, Central
Bank balances, items in the course of collection, and treasury and other eligible bills, loans and advances to
financial institutions, and loans and advances to customers. In the normal course of business, a proportion of
customer loans contractually repayable within one year will be extended. The Bank would also be able to
meet unexpected net cash outflows by selling securities and accessing additional funding sources.
4.4.4 Off-balance sheet items
(a) Loan commitments

The dates of the contractual amounts of the Bank’s off-balance sheet financial instruments that commit it to
extend credit to customers and other facilities (Note 35), are summarized in the table below.
(b) Financial guarantees and other financial facilities

Financial guarantees (Note 35) are also included below based on the earliest contractual maturity date.
1 year 1-5 years Over 5 years Total

As at December 31, 2019 $ $ $ $
Loan commitments 61,801,764 610,862 14,541 62,427,167
Guarantees, acceptances and other financial
facilities 643,008 - - 643,008
Total 62,444,772 610,862 14,541 63,070,175

Loan commitments 45,521,020 268,532 147,988 45,937,540
Guarantees, acceptances and other financial
facilities 688,008 - - 688,008
Total 46,209,028 268,532 147,988 46,625,548
4.5 Operational risk
Operational risk is the risk of direct or indirect loss arising from a wide variety of causes associated with the
Bank’s processes, personnel, technology and infrastructure, and from external factors other than credit,
market, and liquidity risks - e.g. those arising from legal and regulatory requirements and generally accepted
standards of corporate behaviour. Operational risks arise from all of the Bank’s operations.
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Notes Financial
Statements
4.5 Operational risk (cont’d)
The Bank’s objective is to manage operational risk so as to balance the avoidance of financial losses and
damage to the bank’s reputation with overall cost effectiveness and innovation. In all cases, Bank policy
requires compliance with all applicable legal and regulatory requirements.
The Board of Directors has oversight of the operational risk management strategy and processes of the Bank,
delegated to the credit risk committee and the managing director. This responsibility is supported by the
development of overall standards for the management of operational risk in the following areas:
• Requirements for appropriate segregation of duties, including the independent authorization of

transaction;
• Requirements for the reconciliation and monitoring of transactions;
• Compliance with regulatory and other legal requirements;
• Documentation of controls and procedures;
• Requirements for the periodic assessment of operational risks faced, and the adequacy of controls and
procedures to address the risks identified;
• Requirements for the reporting of operational losses and proposed remedial action;
• Development of contingency plans;
• Training and development;
• Ethical and business standards; and
• Risk mitigation, including insurance where this is cost-effective.
Compliance with the Bank’s standards is supported by a programme of periodic reviews undertaken by
Internal Audit, which reports direct to the Audit Committee.
5. Fair values of financial assets and liabilities
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date in the principal or, in its absence, the most
advantageous market to which the Bank has access at that date. The fair value of a liability reflects its non-
performance risk. The following methods and assumptions were used to estimate the fair value of financial
instruments.
The fair values of cash resources, other assets and liabilities, cheques and other items in transit and due to
other banks are assumed to approximate their carrying values due to their short term nature.
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Notes Financial
Statements
5. Fair values of financial assets and liabilities (cont’d)
(i) Loans and advances to customers

Loans and advances are net of provisions for impairment. The estimated fair values of loans and advances
represent the discounted amount of estimated future cash flow expected to be received. Expected cash flows
are discounted at current market rate to determine fair value.
Where available, the fair value of loans and advances is based on observable market transactions. Where
observable market transactions are not available, fair value is estimated using valuation models such as
discounted cash flow techniques. Input into the valuation techniques includes the expected lifetime credit
losses, interest rates, prepayment rates and primary origination or secondary market spreads. For collateral-
dependent impaired loans, the fair value is measured based on the underlying collateral. Input into the models
may include data from third party brokers and information obtained from other market participants, which
includes observed primary and secondary transactions. To improve the accuracy of the valuation estimates,
loans are grouped into portfolios with similar characteristics such as the quality of collateral, repayment and
delinquency rates.
(ii) Investment securities

Investment securities include only interest-bearing assets held to maturity; assets classified as available-for-
sale are measured at fair value except for unlisted available-for-sale equity securities which are carried at cost
less impairment. The fair value of equity securities carried at cost less impairment is not disclosed as it cannot
be reliably estimated (Note 13). The fair value for held-to-maturity assets is based on market prices or
broker/dealer price quotations. Where this information is not available, fair value is estimated using quoted
market prices for securities with similar credit maturity and yield characteristics.
After January 1, 2019, the investment securities were reclassified per IFRS 9. The categories are explained
in Note 3.
(iii) Due to customers

The estimated fair value of deposits with no stated maturity, which includes non-interest bearing deposits, is
the amount repayable on demand. Deposits payable on a fixed date are at rates which reflect market conditions
and are assumed to have fair values which approximate carrying values.
(iv) Lease liabilities

The fair value of lease liabilities has been estimated using current observable interest rate data, a Level 2
input.
The table below summarizes the carrying amounts and fair values of those financial assets and liabilities not
presented on the Bank’s statement of financial position at their fair value:
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Notes Financial
Statements
Carrying amount Fair value

2019 2018 2019 2018
$ $ $ $
Financial assets
Due from other banks 33,841,222 28,003,720 33,841,222 28,003,720
- Overdrafts 17,000,745 10,980,992 17,000,745 10,980,992
- Demand loans 343,780,091 316,103,997 332,236,583 312,846,970
- Promissory notes 7,956,117 8,294,196 8,915,519 9,699,007
- Mortgages 182,083,957 164,564,856 172,248,278 163,263,212
- Credit cards 2,248,773 2,163,104 2,248,773 2,163,104
- Treasury bills 31,311,935 36,422,936 31,311,935 36,422,936
- Debt instruments at amortized cost 71,458,805 77,247,306 66,002,378 74,629,356
Due to customers:
- Time deposits 186,147,141 153,044,073 186,178,566 150,830,197
- Savings accounts 420,875,965 388,434,952 420,875,965 388,434,952
- Demand accounts 88,976,741 103,697,104 88,976,741 103,697,104
Fair value hierarchy
IFRS 7 specifies a hierarchy of valuation techniques based on whether the inputs to those valuation techniques
are observable or unobservable. Observable inputs reflect market data obtained from independent sources;
unobservable inputs reflect the Bank’s market assumptions.
These two types of inputs have created the following fair value hierarchy:
• Level 1 - Inputs that are quoted market prices (unadjusted) in active markets for identical instruments.
This level includes listed equity securities and debt instruments on exchanges.
• Level 2 - Inputs other than quoted prices included within Level 1 that are observable either directly (i.e.
as prices) or indirectly (i.e. derived from prices). This category includes instruments valued using: quoted
market prices in active markets for similar instruments; quoted prices for identical or similar instruments
in markets that are considered less than active; or other valuation techniques in which all significant inputs
are directly or indirectly observable from market data.
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Notes totothe
Notes the Financial Statements
Fair value hierarchy (cont’d)
• Level 3 - Inputs that are unobservable (not based on observable market data). This category includes all
instruments for which the valuation technique includes inputs that are not observable and the
unobservable inputs have a significant effect on the instrument’s valuation. This category includes
instruments that are valued based on quoted prices for similar instruments for which significant
unobservable adjustments or assumptions are required to reflect differences between instruments.
5.1 Assets measured at fair value
Level 1 Level 2 Level 3 Total

$ $ $ $
December 31, 2019
- Debt instruments at FVOCI 31,829,694 - - 31,829,694
- Equity instruments at FVOCI - 2,621,575 6,145,180 8,766,755
Total assets 31,829,694 2,621,575 6,145,180 40,596,449
December 31, 2018

- Debt instruments at FVOCI 33,238,509 - - 33,238,509
- Equity instruments at FVOCI - 2,932,180 2,273,588 5,205,768
Total assets 33,238,509 2,932,180 2,273,588 38,444,277
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Notes Financial
Statements
5.2 Financial instruments not measured at fair value
The following table sets out the fair values of financial instruments not measured at fair value, and analyses
them by the level in the fair value hierarchy into which each fair value measurement is categorized.
Total fair Total carrying

Level 1 Level 2 Level 3 values amounts
$ $ $ $ $
December 31, 2019
Financial assets
Cash and balances with Central Bank - 64,840,476 - 64,840,476 64,840,476
Treasury bills - 31,311,935 - 31,311,935 31,311,935
Due from other banks - 33,841,222 - 33,841,222 33,841,222
Loans and advances to customers - 532,649,898 - 532,649,898 553,069,683
Debt instruments at amortized cost - 66,002,378 - 66,002,378 71,458,805
Deposits from customers - 696,031,272 - 696,031,272 695,999,847
Other liabilities - 16,914,982 - 16,914,982 16,914,982
Lease liabilities - 7,637,606 - 7,637,606 7,637,606
- 1,449,229,769 - 1,449,229,769 1,475,074,556
Total fair Total carrying

Level 1 Level 2 Level 3 values amounts
$ $ $ $ $
December 31, 2018
Financial assets
Cash and balances with Central Bank - 57,859,437 - 57,859,437 57,859,437
Treasury bills - 36,422,936 - 36,422,936 36,422,936
Due from other banks - 28,003,720 - 28,003,720 28,003,720
Loans and advances to customers - 498,953,285 - 498,953,285 502,107,145
Debt instruments at amortized cost - 74,629,356 - 74,629,356 77,247,306
Deposits from customers - 642,962,252 - 642,962,252 645,176,129
Other liabilities - 23,368,014 - 23,368,014 23,368,014
- 1,362,199,000 - 1,362,199,000 1,370,184,687
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6. Capital management
The Bank’s objectives when managing capital, which is a broader concept than the “equity” on the face of
the statement of financial position, are:
• to comply with the capital requirements set by the Eastern Caribbean Central Bank;
• to safeguard the Bank’s ability to continue as a going concern so that it can continue to provide returns
for shareholders and benefits for other stakeholders; and
• to maintain a strong capital base to support the development of its business.
Capital adequacy and the use of regulatory capital are monitored daily by the Bank’s management, employing
techniques based on the guidelines developed by the Eastern Caribbean Central Bank (“the Central Bank”)
for supervisory purposes. The required information is filed with the Central Bank on a quarterly basis.
The Central Bank requires every bank within its regulatory jurisdiction to: (a) hold the minimum level of
paid up capital of $20,000,000, and (b) maintain a ratio of total regulatory capital to the risk-weighted assets
(the “Basel ratio”) at or above the minimum indicated in the prudential guidelines.
The Bank’s regulatory capital, as managed by management, is divided into two tiers:
• Tier 1 capital: share capital, retained earnings and reserves created by appropriations of retained earnings.
• Tier 2 capital: qualifying subordinated loan capital, collective impairment allowances and unrealized
gains arising on the fair valuation of equity instruments held as available for sale.
The risk-weighted assets are measured by means of a hierarchy of five risk weights classified according to
the nature of − and reflecting an estimate of credit, market and other risks associated with − each asset and
counterparty, taking into account any eligible collateral or guarantees. A similar treatment is adopted for off-
balance sheet exposure, with some adjustments to reflect the more contingent nature of the potential losses.
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6. Capital management (cont’d)
The table below summarizes the composition of regulatory capital and the ratios of the Bank for the years
ended December 31, 2019 and 2018. During those two years, the Bank complied with all of the externally
imposed capital requirements.
2019 2018
Tier 1 capital $ $
Share capital 20,000,000 20,000,000
Statutory reserve 12,593,934 10,666,264
Retained earnings 58,444,542 51,479,921
Total qualifying Tier 1 capital 91,038,476 82,146,185
Tier 2 capital
Other reserves 7,883,029 9,570,810
Revaluation reserve – FVOCI investments 904,478 (214,191)
Revaluation reserve – property and equipment 1,479,663 1,427,166
Total qualifying Tier 2 capital 10,267,170 10,783,785
Total regulatory capital 101,305,646 92,929,970
Risk-weighted assets:
On-balance sheet 481,464,495 487,745,900
Off-balance sheet 12,614,000 9,388,000
Total risk-weighted assets 494,078,495 497,133,900
Capital adequacy ratio - required 8% 8%

Capital adequacy ratio - actual 18% 17%
Basel ratio – required 8% 8%

Basel ratio - actual 21% 19%
The capital adequacy ratio is calculated as total qualifying Tier 1 capital divided by total risk-weighted assets.
The Basel ratio is calculated as total regulatory capital divided by total risk-weighted assets. It is in
compliance with the Banking Act.
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7. Cash and balances with Central Bank

2019 2018
$ $
Cash in hand 16,397,979 14,277,365
Balances with Central Bank other than mandatory reserve deposits 9,826,107 5,366,377
Included in cash and cash equivalents (Note 16) 26,224,086 19,643,742
Mandatory reserve deposits with Central Bank 38,616,390 38,215,695
64,840,476 57,859,437
The Bank is required to maintain in cash and deposits with the Central Bank, reserve balances in relation to
the deposit liabilities of the institution.
Mandatory reserve deposits are not available for use in the Bank’s day-to-day operations. The balances with
the Central Bank are non-interest bearing.
8. Due from other banks

2019 2018
$ $
Items in the course of collection from other banks 1,437,268 3,784,173
Placements with other banks 32,403,954 24,219,547
Included in cash and cash equivalents (Note 16) 33,841,222 28,003,720
The weighted average effective interest rate in respect of interest bearing deposits at December 31, 2019 was
1.34% (2018 – 1.3%).
9. Treasury bills
2019 2018
$ $
Treasury bills (Note 12) 31,311,935 36,422,936
The Bank has invested in treasury bills issued by the Government of Saint Lucia. The weighted average
effective interest rate of the treasury bills in 2019 was 3.58% (2018 – 3.61%). All treasury bills have fixed
interest rates, and they mature within one year of the end of the financial year.
The December 31, 2019 balance includes ECL of $178,728 (2018: $68,316).
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Notes Financial
Statements
10. Loans and advances to customers
2019 2018
$ $
Overdrafts 19,111,764 13,796,014
Demand loans 353,812,382 329,812,450
Promissory notes 10,770,422 11,428,663
Mortgages 188,591,932 172,749,497
Credit cards 2,556,163 2,635,005
574,842,663 530,421,629
Less: Deferred fees (2,224,455) (2,058,076)
Less: Interest earned not collected (1,796,111) (2,354,309)
570,822,097 526,009,244
Less: Impairment allowance on loans and advances (Note 11) (17,752,414) (23,902,099)
553,069,683 502,107,145
Current 24,448,281 24,047,785

Non-current 528,621,402 478,059,360
553,069,683 502,107,145
The weighted average effective interest rate on productive loans measured at amortized cost at December 31,
2019 was 6.64% (2018 – 6.93%) and the rate on productive overdrafts measured at amortized cost was
10.25% (2018 - 10.34%).
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Notes totothe
Notes Financial
Statements
11. Provision for impairment of loans and advances
Reconciliation of the allowance account for losses on loans and advances by class is as follows:
Credit Demand Promissory

Overdraft Cards Loans Notes Mortgage Total
$ $ $ $ $
Balance at December 31, 2018 2,815,022 471,900 12,160,544 799,260 7,655,373 23,902,099
Provision for ECL (Note 30) (695,327) (164,509) 148,869 198,391 4,559,794 4,047,218
Loans written off during the year - - (3,585,623) (31,739) (6,579,541) (10,196,903)
At December 31, 2019 2,119,695 307,391 8,723,790 965,912 5,635,626 17,752,414
Balance at December 31, 2017 254,023 - 14,440,290 532,053 9,029,381 24,255,747

Effect of adopting IFRS 9 at January 1,
2019 1,110,581 806,717 (2,929,043) 12,880 (2,799,266) (3,798,131)
Provision for ECL (Note 30) 1,450,418 (334,817) 876,483 254,327 2,620,621 4,867,032
Loans written off during the year - - (227,186) - (1,195,363) (1,422,549)
At December 31, 2018 2,815,022 471,900 12,160,544 799,260 7,655,373 23,902,099
The total impairment provision for loans and advances to customers is $17,752,414 (2018 - $23,902,099).
A breakdown of the staging of advances and the related ECLs for loans and advances is illustrated below:
Promissory
Demand Mortgages Notes Overdrafts Credit Cards Total
$ $ $ $ $ $
December 31, 2019
Net loans before provision 352,294,813 187,928,071 8,931,286 19,111,764 2,556,163 570,822,097
Stage 1: 12-month ECL (1,026,780) (369,368) (129,472) (378,454) (201,028) (2,105,102)
Stage 2: Lifetime ECL (1,919,727) (1,935,598) (133,723) (410,501) (97,923) (4,497,472)
Stage 3: Credit Impaired (5,777,283) (3,330,660) (702,717) (1,330,740) (8,440) (11,149,840)
Financial Assets - Lifetime ECL 343,571,023 182,292,445 7,965,374 16,992,069 2,248,772 553,069,683
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Notes totothe
Notes Financial
Statements
11. Provision for impairment of loans and advances (cont’d)
A breakdown of the staging of advances and the related ECLs for loans and advances is illustrated below
(cont’d)
Promissory Credit
Demand Mortgages Notes Overdrafts Cards Total
$ $ $ $ $ $
Stage 1: 12 month ECL
ECL allowance as at:
January 1, 2019 under IFRS 9 1,347,553 278,744 228,002 966,693 248,512 3,069,504
Credit loss movements, new
Loans, repayments, etc. (320,773) 90,624 (98,530) (588,239) (47,484) (964,402)
As at December 31, 2019 1,026,780 369,368 129,472 378,454 201,028 2,105,102
Stage 2: Lifetime ECL

ECL allowance as at: 3,520,652 2,920,408 175,850 179,372 154,381 6,950,663
January 1, 2019 under IFRS 9
Loans, repayments, etc. (1,600,925) (984,810) (42,127) 231,129 (56,458) (2,453,191)
As at December 31, 2019 1,919,727 1,935,598 133,723 410,501 97,923 4,497,472
Stage 3: Lifetime ECL

ECL allowance as at:
January 1, 2019 under IFRS 9 6,982,634 4,456,219 395,408 1,978,663 69,008 13,881,932
Loans; repayments; etc. 2,380,272 5,453,982 339,048 (647,923) (60,568) 7,464,811
Charge-offs and write-offs (3,585,623) (6,579,541) (31,739) - - (10,196,903)
As at December 31, 2019 5,777,283 3,330,660 702,717 1,330,740 8,440 11,149,840
Total 8,723,790 5,635,626 965,912 2,119,695 307,391 17,752,414
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12. Investment securities

2019 2018
Fair value through other comprehensive income (FVOCI) $ $
Equity securities – Listed 2,621,575 2,932,180
Equity securities – Unlisted 6,145,180 2,273,588
8,766,755 5,205,768
Debt securities - Listed 31,884,548 33,279,104

Allowance for impairment (54,854) (40,595)
31,829,694 33,238,509
Total securities: FVOCI 40,596,449 38,444,277
Amortized cost
Debt securities - Listed 45,596,408 48,756,995
Debt securities - Unlisted 26,255,185 28,788,073
Allowance for impairment (392,788) (297,762)
Total securities: amortized cost 71,458,805 77,247,306
Total investment securities 112,055,254 115,691,583

Current 89,428,143 86,051,608
Non-current 22,627,111 29,639,975
112,055,254 115,691,583
Unlisted equity securities totaling $6,145,180 (2018: $2,273,588) are carried at fair values.
70
Notes
thethe Statements
For the year ended December
For the year ended December 31, 201931, 2019
(Expressed in
(Expressed in Eastern
EasternCaribbean
CaribbeanDollars)
dollars)
12. Investment securities (cont’d)
All debt securities have fixed interest rates.
The movements in investment securities financial assets during the year are as follows:
Loans to
Fair value Amortized Treasury Financial Available-for- Held-to-
through OCI cost Bills Institutions sale maturity

At December 31, 2018 38,444,277 77,247,306 36,422,936 - - -
Additions 10,604,931 6,007,175 2,759,923 - - -
Disposals (sale and redemption) (9,166,955) (11,700,650) (7,760,512) - - -
Loss from changes in fair value (debt and equity securities) 1,118,669 - - - - -
Loss on disposal (390,214) - - - - -
Allowance for expected credit losses (14,259) (95,026) (110,412) - - -
At December 31, 2019 40,596,449 71,458,805 31,311,935 - - -
At December 31, 2017 - - 31,733,399 23,971,139 30,245,691 43,935,610

Impact of adopting IFRS 9 at January 1, 2018 27,087,728 70,869,636 (83,240) (23,971,139) (30,245,691) (43,935,610)
Restated balance at January 1, 2018 27,087,728 70,869,636 31,650,159 - - -
Additions 13,608,511 18,665,144 13,255,127 - - -
Disposals (sale and redemption) (1,094,195) (12,336,170) (8,497,274) - - -
Loss from changes in fair value (debt FVOCI securities) (1,159,554) - - - - -
Loss on disposal - - - - - -
Allowance for expected credit losses 1,787 48,696 14,924 - - -
At December 31, 2018 38,444,277 77,247,306 36,422,936 - - -
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12. Investment securities (cont’d)
The table below shows the credit quality and the maximum exposure to credit risk based on the Bank’s credit
rating system and year end stage classification for investments.
Stage 3
Credit Impaired
Stage 1 Stage 2 Financial Assets
12 Month ECL Lifetime ECL Lifetime ECL Total
$ $ $ $
December 31, 2019
Gross exposure 143,993,558 - - 143,993,558
ECL (626,370) - - (626,370)
Net exposure 143,367,188 - - 143,367,188
ECL allowance as at January 1, 2019

under IFRS 9 406,673 - - 406,673
ECL on new instruments issued during
the year 28,377 - - 28,377
Other credit loss movements, - -
Repayments and maturities 191,320 - - 191,320
At December 31, 2019 626,370 - - 626,370
The gross exposure and ECL balance as at December 31, 2019 above includes investment securities of
$112,055,254 [ECL - $447,642] as included in Note 12 and treasury bills of $31,311,935 [ECL - $178,728]
as included in Note 9.
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13. Property and equipment
Land and Furniture Motor Work in
building and Fixtures Equipment Vehicles progress Total
$ $ $ $ $ $
Year ended December 31, 2019
Opening net book amount 6,868,662 704,493 3,323,565 162,498 2,010,324 13,069,542
Additions 26,451 120,933 697,855 156,000 172,171 1,173,410
Disposals - (27,553) (231,604) - - (259,157)
Transfers 1,045,662 219,151 804,876 - (2,071,107) (1,418)
Depreciation on disposals - 18,880 208,262 - - 227,142
Depreciation (Note 27) (420,693) (95,539) (763,978) (33,516) - (1,313,726)
Closing net book amount 7,520,082 940,365 4,038,976 284,982 111,388 12,895,793
At December 31, 2019
Cost or valuation 10,634,136 1,893,439 10,972,179 441,000 111,388 24,052,142
Accumulated depreciation (3,114,054) (953,074) (6,933,203) (156,018) - (11,156,349)
Net book amount 7,520,082 940,365 4,038,976 284,982 111,388 12,895,793

Opening net book amount 9,281,623 630,166 2,646,981 198,811 96,511 12,854,092
Additions 105,491 153,712 1,307,096 - 2,026,340 3,592,639
Revaluation adjustment (2,829,142) - - - - (2,829,142)
Disposals - (39,259) (531,724) - - (570,983)
Transfers 95,107 - 17,420 (112,527) -
Depreciation on disposals - 29,434 460,214 - - 489,648
Revaluation Adjustment 554,310 - - - - 554,310
Depreciation (Note 27) (338,727) (69,560) (576,422) (36,313) - (1,021,022)
Closing net book amount 6,868,662 704,493 3,323,565 162,498 2,010,324 13,069,542
At December 31, 2018

Cost or valuation 9,562,023 1,580,908 9,701,052 285,000 2,010,324 23,139,307
Accumulated depreciation (2,693,361) (876,415) (6,377,487) (122,502) - (10,069,765)
Net book amount 6,868,662 704,493 3,323,565 162,498 2,010,324 13,069,542
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13. Property and equipment (cont’d)
The historical cost of land and buildings are:

2019 2018
$ $
Cost 6,640,276 6,640,276
Accumulated depreciation based on historical cost (3,606,232) (3,531,991)
Depreciated historical cost 3,034,044 3,108,285
Valuation techniques Significant unobservable inputs Inter-relationship between key

unobservable inputs and fair
value measurement
Market based approach: • Details of sales of comparable The estimated fair value would
The approach is based on the properties. increase/(decrease) if:
principle of substitution whereby
the purchaser with perfect • Conditions influencing the • Sale value of comparable
knowledge of the property market sale of the comparable properties were higher/(lower)
pays no more for the subject properties.
• Comparability adjustment
property than the cost of acquiring were added/(deducted).
• Comparability adjustment.
an existing comparable property,
assuming no cost delay in making
the substitution.
The approach requires comparison

of the subject property with others
of inter alia similar design and
utility, which were sold in the
recent past.
However, as no two properties are

exactly alike, adjustment is made
for the difference between
property subject to valuation and
comparable properties.
74
1ST NATIONAL Lucia
BANK Limited
ST. LUCIA LIMITED

14. Leases liabilities
Set out below, are the carrying amounts of the Company’s right-of-use assets and lease liabilities and the
movements during the period:
Right of Use
Property Total Lease Liability
$ $ $
As at 1 January 2019 8,208,319 8,208,319 8,208,319

Depreciation expense (907,000) (907,000) -
Principal payments - - (570,713)
As at 31 December 2019 7,301,319 7,301,319 7,637,606
The maturity analysis of lease liabilities is disclosed in Note 4.3.3.
15. Intangible assets

Software
$
Opening net book amount 614,282
Additions for the year -
Amortization (Note 27) (136,807)
Closing net book amount 477,475

Cost 3,329,721
Accumulated depreciation (2,852,246)
Net book amount 477,475

Opening net book amount 531,863
Additions for the year 233,029
Adjustment for cost written off -
Adjustment for depreciation written off -
Amortization (Note 27) (150,610)
Closing net book amount 614,282

Cost 3,329,721
Accumulated depreciation (2,715,439)
Net book amount 614,282
75
1ST NATIONAL
Limited
Notes totothe
Notes Financial
Statements

16. Cash and cash equivalents
For the purpose of the statement of cash flows, cash and cash equivalents comprise the following balances
with less than 3 months maturity:
2019 2018
$ $
Cash and balances with Central Bank (Note 7) 26,224,086 19,643,742
Due from other banks (Note 8) 33,841,222 28,003,720
60,065,308 47,647,462
17. Other assets

2019 2018
$ $
Accounts receivable 2,474,687 5,554,989
Inventories of stationery and supplies 227,765 246,810
Deferred expenditure 606,164 521,911
Prepayments 1,969,254 1,732,045
5,277,870 8,055,755
18. Due to customers

2019 2018
$ $
Time deposits 184,811,225 151,851,703
Savings accounts 420,875,958 388,434,945
Demand amounts 88,975,989 103,695,704
694,663,172 643,982,352
Interest payable 1,336,675 1,193,777
695,999,847 645,176,129
Current 695,574,076 644,960,912

Non-current 425,771 215,217
695,999,847 645,176,129
All deposits bear fixed interest rates.
The weighted average effective interest rate of customers’ deposits at December 31, 2019 was 1.93% (2018
- 1.86%).
76
1ST NATIONAL
Limited
Notes totothe
Notes Financial
Statements

19. Other liabilities
2019 2018
$ $
Manager’s cheques outstanding 6,113,333 8,797,683
Accounts payable and accrued expenses 9,889,211 13,710,072
Dividends payable on ordinary shares 912,438 860,259
16,914,982 23,368,014
20. Provisions
2019 2018
$ $
Provision for undrawn loan commitments 144,028 39,131
144,028 39,131
The Bank is required to allocate a provision for expected credit losses related to loan commitments issued
as a result of the implementation of IFRS 9.
21. Defined benefit asset
Net Asset in Statement of Financial Position
The amount recognized in the statement of financial position at the reporting date is determined as follows:
2019 2018
$ $
Present value of funded obligations 5,457,000 4,918,000
Fair value of plan assets (8,178,000) (7,661,000)
Net defined benefit asset (2,721,000) (2,743,000)
Movement in defined benefit obligations

2019 2018
$ $
Defined benefit obligation at start of year 4,918,000 4,445,000
Current service cost 145,000 135,000
Interest cost 338,000 309,000
Members’ contributions 68,000 65,000
Experience adjustments 131,000 20,000
Actuarial Losses 32,000 -
Benefits paid (175,000) (56,000)
Defined benefit obligation at end of year 5,457,000 4,918,000
77
1ST NATIONAL Lucia
BANK Limited
ST. LUCIA LIMITED

21. Defined benefit asset (cont’d)
The defined benefit obligation is allocated between the Plan’s members as follows:
(i) Active members 71% 82%

(ii) Deferred members 9% 10%
(iii) Pensioners 20% 8%
The weighted average duration of the defined benefit obligation at the end of the reporting period was 9.3
years (2018 - 10.4 years). 98% (2018 - 99%) of the benefits for active members are vested. 12% (2018 -
17%) of the defined benefit obligation for active members is conditional on future salary increases.
Movement in fair value of plan assets

2019 2018
$ $
Fair value of Plan Assets at start of year 7,661,000 6,991,000
Interest income 539,000 496,000
Return on Plan Assets, excluding interest income (114,000) (31,000)
Bank’s contributions 199,000 196,000
Members’ contributions 68,000 65,000
Benefits paid (175,000) (56,000)
Fair value of plan assets at end of year 8,178,000 7,661,000
Actual return on plan assets 425,000 465,000
Allocation of plan assets

2019 2018
$ $
Locally listed equities 720,000 850,000
Government issued bonds 7,474,000 5,522,000
Treasury Bills - 1,134,000
Cash and cash equivalents (16,000) 155,000
Fair value of plan assets at end of year 8,178,000 7,661,000
All asset values as at 31 December 2019 were provided by the Bank. Government bonds have been calculated
on fair value basis.
The Plan’s assets are invested in a strategy agreed with the Plan’s Trustees, which is largely driven by the
statutory constraints and asset availability. There are no asset-liability matching strategies used by the Plan.
Amounts Recognized in the Statement of Income

2019 2018
$ $
Current service cost 145,000 135,000
Net interest on net defined benefit asset (201,000) (187,000)
Net pension income (Note 29) (56,000) (52,000)
78
1ST NATIONAL Lucia
BANK Limited
ST. LUCIA LIMITED

Re-measurements recognized in Other Comprehensive Income
2019 2018
$ $
Experience losses 277,000 51,000
Reconciliation of opening and closing statement of financial position amounts
2019 2018
$ $
Net defined benefit asset at January 1 (2,743,000) (2,546,000)
Unrecognized gain charged to retained earnings - -
Opening defined benefit asset (2,743,000) (2,546,000)
Net pension income (56,000) (52,000)
Re-measurements recognized in Other Comprehensive Income 277,000 51,000
Bank contributions paid (199,000) (196,000)
Net defined benefit asset at December 31 2,721,000 (2,743,000)
Summary of principal actuarial assumptions as at December 31
2019 2018
% %
Discount rate 7 7
Future NIC earnings increases 2 2
Future Pension increases 0 0
Future salary increases 4 4
Assumptions regarding future mortality are based on published mortality tables. The life expectancies
underlying the value of the defined benefit obligation as at December 31, 2019 and 2018 are as follows:
Life expectancy at age 60 for current pensioner in years

- Male 21.7 21.0
- Female 26.0 25.1
Life expectancy at age 60 for current members age 40 in years

- Male 22.6 21.4
- Female 26.9 25.4
79
1ST NATIONAL
LuciaST.Limited
LUCIA LIMITED
Notes
Notestotothe Financial
Statements

Sensitivity analysis
The calculation of the defined benefit obligation is sensitive to the assumptions used. The following table
summarizes how the defined benefit obligation as at December 31, 2019 would have changed as a result of
a change in assumptions used.
1% p.a. 1% p.a.
decrease increase
Discount rate 523,000 (434,000)
Future salary increases (195,000) 241,000
An increase of 1 year in the assumed life expectancies shown above would have increased the defined benefit
obligation at December 31, 2019 by $52,000 (2018 - $51,000).
Funding
The Bank meets the balance of the cost of funding the defined benefit pension plan and the Bank must pay
contributions at least equal to those paid by members, which are fixed. The funding requirements are based
on regular (at least every 4 years) actuarial valuations of the Plan and the assumptions used to determine the
funding required may differ from those set out above. The Bank expects to pay $204,000 (2018 - $197,000)
to the Pension Plan during 2020.
22. Deferred income tax liability
Deferred income taxes are calculated on temporary differences between amounts for financial reporting
purposes and those for tax purposes, using a principal tax rate of 30%.
2019 2018
$ $
At beginning of year (309,399) (797,594)
(Charge)/ Recovery for the year (Note 31) (329,035) 488,195
Deferred income tax liability at end of year (638,434) (309,399)
The deferred income tax liability comprises the following temporary differences:
2019 2018
$ $
Accelerated capital allowances 592,886 1,711,670
Defined benefit asset (2,721,000) (2,743,000)
(2,128,114) (1,031,330)
Deferred tax liability at income tax rate of 30% (638,434) (309,399)
80

1ST NATIONAL
LuciaST.Limited
LUCIA LIMITED
Notes
Notestotothe Financial
Statements

23. Share capital
2019 2018
No. of Shares $ No. of Shares $
Authorized:
7,000,000 ordinary shares of no par value
Issued and fully paid:
At beginning of year 6,372,452 20,000,000 6,372,452 20,000,000
Stock dividend 177,013 - - -
6,549,465 20,000,000 6,372,452 20,000,000
Transfer from retained earnings - - - -
At end of year 6,549,465 20,000,000 6,372,452 20,000,000
In accordance with the provisions of Section 44 (1)(a) of the Banking Act of Saint Lucia No. 3 of 2015, the
Bank is required to hold a minimum level of paid up capital of $20,000,000. During 2017, in order to be in
compliance with this requirement, the Bank temporarily transferred an amount of $12,028,546 from retained
earnings to paid-up capital. $3,000,000 of this amount was issued as bonus shares on September 1, 2017,
giving each existing shareholder one share for every five shares held.
Further to this, the Bank sought and received approval from shareholders at a Special Meeting dated
December 17, 2016 to pursue an additional public offering (‘APO’) of 1,000,000 shares at $10.00 per share
to augment its capital base. At the same time, shareholders also approved the transfer of $9,028,546 from
paid up capital back to retained earnings upon the sale of these 1,000,000 shares.
During 2017, 372,492 shares, equating to capital of $3,724,920 were sold over the subscription period of
September 4 to November 13, 2017. At the completion of that process, 627,508 shares remained
unsubscribed. At a Special Meeting of Shareholders held on May 30, 2019, the Shareholders approved a
stock dividend in the ratio of one share for every thirty-six shares held. 177,013 of these shares were issued
as a result, leaving 450,495 shares remaining unsubscribed. A plan to address the balance of these shares
has been agreed by the Board of Directors.
24. Reserves
2019 2018
$ $
Statutory reserve 12,593,934 10,666,264
Revaluation reserve - property and equipment 1,479,663 1,427,166
Revaluation reserve for interest on non-performing loans 3,096,366 4,563,142
Revaluation reserve for loan impairment 1,786,663 5,007,668
Revaluation reserve - investment securities 904,478 (214,191)
Resiliency reserve 3,000,000 -
22,861,104 21,450,049
81
1ST NATIONAL
Limited
Notes totothe
Notes Financial
Statements

24. Reserves (cont’d)
Statutory reserve
2019 2018
$ $
Balance at beginning of year 10,666,264 8,680,478
Transfer from profit after taxation 1,927,670 1,985,786
Balance at end of year 12,593,934 10,666,264
Section 45 (1) of the Banking Act #3 of 2015, which was enacted in November 2015, requires all banks to
maintain a reserve fund - Every licensed financial institution shall maintain a reserve fund and shall, out of
its net profits of each year, transfer to that fund a sum equal to not less than twenty per cent of profits
whenever the amount of the reserve fund is less than a hundred per cent of the paid-up or, as the case may
be, assigned capital of the licensed financial institution.
Revaluation reserve - Property and equipment

2019 2018
$ $
Depreciation transfer 52,497 (6,675)
Decline in reserve due to revaluation of land and buildings - (2,274,832)
The revaluation reserve relates to the revaluation of property and equipment above its previous carrying
amount. The Bank transfers a portion of the reserve to retained earnings annually as the asset is used by the
Bank. The value of the transfer is the difference between depreciation based on the revalued carrying amount
of the asset and depreciation based on the asset’s original cost.
Any declines in value upon revaluation are initially applied to the existing reserve amount and any amounts
in excess are taken to profit or loss.
Revaluation reserve for interest on non-performing loans

2019 2018
$ $
(Decrease)/increase in reserve for regulatory purposes (1,466,776) 1,345,882
This reserve is created to set aside interest accrued on non-performing loans where certain conditions are
met in accordance with International Financial Reporting Standards. The Eastern Caribbean Central Bank,
however, does not allow for the accrual of such interest. The interest is therefore set aside in a reserve and
is not available for distribution to the shareholders.
82
1ST NATIONAL
Limited
Notes totothe
Notes Financial
Statements

24. Reserves (cont’d)
Reserve for loan impairment

2019 2018
$ $
Balance at beginning of year 5,007,668 -
(Decrease) Increase in reserve for regulatory purposes (3,221,005) 5,007,668
This reserve is created to set aside the amount by which the loan loss provision calculated under the
Prudential Guidelines of the Eastern Caribbean Central Bank exceeds the loan loss provision calculated in
accordance with IFRS 9. The excess is therefore set aside in a reserve and is not available for distribution to
the shareholders.
Revaluation reserve – FVOCI securities
2019 2018
$ $
Balance at beginning of year (214,191) 945,363
Increase/(decrease) in market value of FVOCI 1,118,669 (1,159,554)
Balance at end of year 904,478 (214,191)
This reserve comprises the fair value reserve related to financial assets measured at FVOCI.
Resiliency reserve
2019 2018
$ $
Balance at beginning of year - -
Transfer from retained earnings 3,000,000 -
Balance at end of year 3,000,000 -
This reserve was established at a Special Meeting of Shareholders of Bank held on Thursday May 30th, 2019
for the eventualities associated with natural disasters and for the investments in necessary assets and key
strategic initiatives which shall strengthen the Bank’s response to internal and external shocks.
83
1 NATIONAL
ST
LuciaST.Limited
LUCIA LIMITED
Notes totothe
Notes Financial
Statements

25. Net interest income
2019 2018
$ $
Interest and similar income
Loans and advances 34,035,527 31,972,028
Deposits with banks 66,811 430,645
Investment securities 5,857,413 5,938,522
39,959,751 38,341,195
Interest expense and similar charges
Time deposits 3,092,047 2,663,665
Savings deposits 8,745,242 8,201,934
Demand deposits 135,344 131,474
Interest on lease liabilities 696,987 -
12,669,620 10,997,073
Net interest income 27,290,131 27,344,122
26. Other operating income

2019 2018
$ $
Commission and other income 7,141,192 6,706,259
Foreign exchange gains 4,409,240 3,483,712
Bad debts recovered 3,022,893 2,727,809
Loss on disposal of property and equipment (27,807) (79,985)
Loss on disposal of investment (390,214) -
Fee income 107,487 103,908
Dividend income 193,893 162,243
14,456,684 13,103,946
27. Other expenses

2019 2018
$ $
Administrative expenses (Note 28) 11,487,920 10,712,464
Staff costs (Note 29) 9,843,982 8,748,325
Depreciation and amortization (Notes 13 and 15) 1,450,533 1,171,632
Depreciation on right-of-use assets (Notes 14) 907,000 -
Operating lease rental (Note 2e) - 1,249,389
23,689,435 21,881,810
84

1ST NATIONAL
Limited
Notes totothe
Notes Financial
Statements

28. Administrative expenses
2019 2018
$ $
Card services expense 2,239,720 2,156,412
Computer expense 1,362,035 1,530,674
Other operating expenses 1,670,879 1,234,803
Postage, telephone and telexes 857,608 815,718
Security expenses 651,647 506,792
Utilities 618,761 606,404
Repairs and maintenance 522,995 502,870
Advertising 652,194 702,981
Other professional fees 1,023,355 757,972
Bank charges 690,252 793,657
Directors’ fees and expenses 321,445 248,481
Stationery 231,299 235,972
Audit fees 229,500 203,424
Insurance 187,554 185,988
Bank license 200,000 200,000
Rates and taxes 28,676 30,316
Total administrative expenses 11,487,920 10,712,464
29. Staff costs

2019 2018
$ $
Salaries and wages 7,696,385 7,225,393
Other employee benefits 1,896,416 1,283,487
Social security costs 307,181 291,445
Pension income (Note 21) (56,000) (52,000)
9,843,982 8,748,325
30. Impairment losses

2019 2018
$ $
Impairment losses from loans and advances (Note 11) 4,047,218 4,867,032
Impairment /(recovery of impairment) on investments (Note 12) 219,697 (65,407)
Impairment /(recovery of impairment) on undrawn loan commitments 104,896 (77,700)
4,371,811 4,723,925
85
1ST NATIONAL
Limited
Notes totothe

31. Income tax expense
2019 2018
$ $
Current tax 3,718,181 4,401,598
Deferred tax charge/ (recovery) (Note 22) 329,035 (488,195)
4,047,216 3,913,403
Tax on the Bank’s profit before income tax differs from the theoretical amount that would arise using the
statutory tax rate of 30% (2018 - 30%) as follows:
2019 2018
$ $
Profit before income tax 13,685,569 13,842,333
Tax calculated at the statutory tax rate of 30% 4,105671 4,152,700
Tax effect of exempt income (2,029,882) (1,888,764)
Tax effect of non-deductible expenses 1,971,031 2,617,174
Tax incentives 396 (967,707)
4,047,216 3,913,403
Effective tax rate 29.6% 28.3%
32. Earnings per share

2019 2018
$ $
Weighted average no. of shares 6,475,750 6,372,452
Earnings per share 1.49 1.56
Basic and diluted
Earnings per share of $1.49 (2018: $1.56) for the year ended December 31, 2019 is calculated by dividing
the net profit for the year attributable to shareholders of $9,638,353 (2018: $9,928,930) by the weighted
average number of ordinary shares in issue for the year of 6,475,750 (2018 - 6,372,452). The weighted
average number of shares for the year is calculated as follows:
2019 2018
Issued ordinary shares at beginning of year 6,372,452 6,372,452

Effect of shares issued during the year – stock dividend 103,298 -
Weighted average number of ordinary shares at end of year 6,475,750 6,372,452
86
1ST NATIONAL
Limited
Notes totothe

33. Dividends
During the year, a total of $1,593,113 (2018 - $1,274,490) representing $0.25 (2018: $0.20) per share, was
appropriated from retained earnings relating to dividends declared in respect of the year ended December
31, 2018. Additionally, a stock dividend was also distributed equivalent to one share for every thirty six
shares held. As at December 31, 2019, $1,542,248 (2018 - $1,122,315) of this amount had been paid.
The dividend proposed in respect of the 2019 financial year end is a combination of a cash and share
dividend. The Board approved a cash dividend of $0.10 for each unit of paid up share capital, or EC$654,947
and a distribution of shares in lieu of a cash dividend at a ratio of one share for every thirty seven shares held
or 1:37. The financial statements for the year ended December 31, 2019 do not reflect this proposed cash
dividend which, if ratified, will be accounted for in equity as an appropriation of retained earnings in the
year ending December 31, 2020.
34. Related party balances and transactions
Related party definition
A related party is a person or entity that is related to the Bank.
(a) A person or a close member of that person’s family is related to the Bank if that person:
(i) has control or joint control over the Bank;
(ii) has significant influence over the Bank; or
(iii) is a member of the key management personnel of the Bank or of a parent of the Bank.
(b) An entity is related to the Bank if any of the following conditions applies:
(i) The entity and the Bank are members of the same group (which means that each parent,
subsidiary and fellow subsidiary is related to the others).
(ii) One entity is an associate or joint venture of the other entity (or an associate or joint venture of
a member of a group of which the other entity is a member).
(iii) Both entities are joint ventures of the same third party.
(iv) One entity is a joint venture of a third entity and the other entity is an associate of the third
entity.
(v) The entity is a post-employment benefit plan for the benefit of employees of either the Bank or
an entity related to the Bank.
(vi) The entity is controlled, or jointly controlled by a person identified in (a).
(vii) A person identified in (a) (i) has significant influence over the Bank or is a member of the key
management personnel of the Bank (or of a parent of the Bank).
(viii) The entity, or any member of a group of which it is part, provides key management personnel
services to the Bank or its parent.
87
1ST NATIONAL
Limited
Notes totothe
Notes Financial
Statements

34. Related party balances and transactions (cont’d)
A related party transaction is a transfer of resources, services or obligations between related parties,
regardless of whether a price is charged.
The related party transactions, outstanding balances at the year-end and related expenses and income for
the year are as follows:
Loans and advances to Directors and related entities

2019 2018
$ $
Loans outstanding at beginning of year 1,711,399 4,546,483
Net loans issued/(repaid) during the year 93,437 (2,835,084)
Loans outstanding at end of year 1,804,836 1,711,399
Interest income earned 97,014 90,067
Loans and advances to key management personnel

2019 2018
$ $
Loans outstanding at beginning of year 1,277,279 3,229,612
Net loans issued/(repaid) during the year 1,937,195 (1,952,333)
Loans outstanding at end of year 3,214,474 1,277,279
Interest income earned 174,056 158,317
The loans and advances to directors and other key management personnel are secured over property of the
respective borrowers.
No specific allowance has been made for impairment losses on balances with directors or key management
personnel and their immediate relatives at the reporting date (2018: nil).
Deposits from Directors and related entities

2019 2018
$ $
Deposits at beginning of year 7,717,166 7,545,516
Net deposits received during the year 2,448,992 171,650
Deposits outstanding at end of year 10,166,158 7,717,166
Interest expense on deposits 136,478 73,150
Deposits from key management personnel

2019 2018
$ $
Deposits at beginning of year 1,277,280 570,831
Net deposits (withdrawals)/received during the year (51,393) 706,449
Deposits outstanding at end of year 1,225,887 1,277,280
Interest expense on deposits 26,268 29,367
88
1ST NATIONAL
Limited
Notes totothe
Notes Financial
Statements

34. Related party balances and transactions (cont’d)
Key management personnel compensation
Key management personnel are those persons that have authority and responsibility for directly or indirectly
planning, directing and controlling the activities of the Bank.
2019 2018
$ $
Salaries and other short-term benefits 1,635,448 1,632,709
Post and other employment benefits 283,252 225,121
1,918,700 1,857,830
At the end of the financial year, directors’ holding of shares totaled 54,980 (2018 - 64,796) or 0.84% (2018
- 1.02%) of shares outstanding.
35. Contingent liabilities and commitments
Loan commitments, guarantees and other financial facilities
At December 31, 2019, the Bank had contractual off-balance sheet financial instruments in respect of (i)
commitments to extend credit to customers, (ii) guarantees, and (iii) other facilities, as follows:
2019 2018
$ $
Undrawn loan commitments 62,427,167 45,937,540
Guarantees and standby letters of credit 643,008 688,008
63,070,175 46,625,548
The Bank is currently in discussions with the Inland Revenue Department of Saint Lucia (IRD) on a matter
related to previous tax filings. The outcome is subject to a final assessment by the IRD and cannot be
determined at this stage. Accordingly, no provisions have been made in these financial statements for any
likely liability which may arise.
Other Commitments
The Bank has entered into an agreement to purchase the Royal Bank of Canada owned operations in St.
Lucia and St. Vincent. These transactions are subject to regulatory approval and other customary closing
conditions and are expected to be finalized in the coming months.
89
1ST NATIONAL
Limited
Notes totothe
Notes Financial
Statements

36. Subsequent event
Since the start of January 2020, global financial markets have been monitoring and reacting to the novel
coronavirus (COVID-19) and in late February and early March 2020 there was sharp reaction to the news
that the virus had spread to many other countries. In Saint Lucia, cases of the virus were first reported in
March 2020. Due to the on-going containment efforts, there are resulting concerns regarding the economic
impact this may have on a global, regional and local scale given the significant disruption to business
operations in particular for entities in highly exposed sectors.
The full extent of the impact of the COVID-19 outbreak on the financial performance of the Bank will
depend on future developments, including the duration and spread of the outbreak, related advisories and
restrictions and its impact on the financial markets and the overall economy, all of which are highly uncertain
and cannot be predicted.
In order to address the expected disruption at a regional level, on March 20, 2020, a joint media release by
the Eastern Caribbean Central Bank and the Eastern Caribbean Currency Union (ECCU) Bankers
Association, announced that due to the unprecedented situation and the likely impact on individuals and
businesses across the region, a support programme would be implemented by all member banks in the
ECCU. The programme will facilitate a loan repayment moratorium for an initial period of up to six (6)
months with a possible extension upon review. The Bank being a member of this Association will be
participating in this initiative.
If the financial markets and/or the overall economy are impacted for an extended period, the Bank's future
results may be materially adversely affected. The Bank continues to monitor this situation closely.
90
Notes

Notes

Notes

P.O. Box 168
Bridge Street, Castries, Saint Lucia
Tel : 1.758.455.7000 Fax : 1.758.453.1630
www.1stnationalbankonline.com
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ANNUAL

Èmèjé Èksèlans | 1st National Bank RAPPORT ANNUAIRE 2019 1

Èmèjé Èksèlans | 1st National Bank RAPPORT ANNUAIRE 2019 3

1st National Bank St. Lucia Limited, a prudent, innovative, customer-

To improve our customers’ financial well-being by providing high

Pwenmyé Bank Nasyonal dé Sent Lisi sé an Bank pokosyon enové,

Èmèjé Èksèlans | 1st National Bank RAPPORT ANNUAIRE 2019 5

• Mrs. Brenda Floissac-Fleming – who will not be seeking re-election

BY ORDER OF THE BOARD

Carleen Jn. Baptiste-St. Marthe

6 1st National Bank Annual Report 2019 | EMERGING EXCELLENCE

We, the undersigned Shareholders of the above Bank nominate ……………………................………………………………...............................of

……………………................………………………………............................... as a candidate for election as a Director of the Bank at the

Annual Meeting of Shareholders scheduled for ……………………………………………………………………................………………………………

Candidate’s Contact No. …………………………………................... Email Address.…………………………………......................................

Print Name Print Name

Tele. Contact No. .……………………….……….……….……….............. Tele. Contact No. .……………………….……….……….………..............

Email Address ………………….……….……….……….......................... Email Address ………………….……….……….………..........................

Please refer pages 8 - 9 for the Guidelines on minimum criteria

Èmèjé Èksèlans | 1st National Bank RAPPORT ANNUAIRE 2019 7

8 1st National Bank Annual Report 2019 | EMERGING EXCELLENCE

(a) committed an offence involving fraud or other dishonesty or violence;

Further, a person nominated as a candidate for Directorship must:

Èmèjé Èksèlans | 1st National Bank RAPPORT ANNUAIRE 2019 9

A person appointed by proxy need not be a shareholder.

I.....……………………………………………….......................................... of .....………………………………………………....................................... being

a shareholder of the above company, hereby appoint……….....………………………………………………..................................................of

……………..….....………………………………………………....................or failing him/her…….....………………………………………………....................

of …………………………………………………………..my proxy to vote for me and on my behalf at the meeting

of shareholders of the above company to be held on …………………............................... the …………...................................... day of

………………………......................., 20…...........and at any adjournment or adjournments thereof.

Signed this.....………………………………………………....................................... day of ……………………………….................., 20…...................…

10 1st National Bank Annual Report 2019 | EMERGING EXCELLENCE

Rodney Bay Branch Johnson Cenac

Èmèjé Èksèlans | 1st National Bank RAPPORT ANNUAIRE 2019 11

Net Loan &

12 1st National Bank Annual Report 2019 | EMERGING EXCELLENCE

Gross income 54,416 51,445 43,869 38,821 40,055

Interest income 39,960 38,341 32,960 29,340 30,976

Interest expense 12,670 10,997 10,995 10,557 12,374

Net interest income 27,290 27,344 21,965 18,783 18,602

Other income 14,457 13,104 10,909 9,481 9,079

Other operating expenses 23,689 21,882 20,311 17,241 17,274

Profit after tax 9,638 9,929 3,545 1,457 1,028

Balance sheet data

Customer deposits 696,000 645,176 580,957 540,515 506,388

Common share capital 20,000 20,000 20,000 7,971 7,971

Total shareholder equity 101,306 92,930 84,712 77,289 76,006

Total assets 823,792 764,567 671,688 626,269 588,367

Weighted average shares ('000) 6,476 6,372 5,410 5,000 5,000

Cash dividends declared 0.10 0.25 0.20 0.11 0.10

Earnings per share 1.49 1.56 0.66 0.29 0.21

Book value per share 15.47 14.58 13.29 15.46 15.20

Return on average assets 1.21% 1.38% 0.55% 0.24% 0.18%

Return on average equity 9.92% 11.18% 4.38% 1.90% 1.36%

Net interest margin 3.44% 3.81% 3.38% 3.09% 3.26%

Cost efficiency 56.7% 54.1% 61.8% 61.0% 62.4%

Èmèjé Èksèlans | 1st National Bank RAPPORT ANNUAIRE 2019 13

14 1st National Bank Annual Report 2019 | EMERGING EXCELLENCE

Èmèjé Èksèlans | 1st National Bank RAPPORT ANNUAIRE 2019 15

board JOINT AUDIT

Geraldine Lendor-Gabriel | 1st Vice-President

board JOINT AUDIT