Bermuda-based Clarien Group Limited is looking to expand its loans and advances portfolio by BMD$150 million ($23.30 billion) in its 2022 financial year as it looks to deploy more capital to clients.

Clarien is a financial services group involved in community and commercial banking along with investment management, brokerage and advisory services and trust administration. It is a 50.10 per cent controlled subsidiary of NCB Financial Group Limited (NCBFG). NCBFG acquired the stake in the company in December 2017 for $4.15 billion.

Clarien Bank Limited’s (CBL) consolidated loan portfolio grew by eight per cent to BM$712.19 million ($103.94 billion) in 2021 after the portfolio declined in 2020. However, it still trails the BM$735.96 million balance in 2018. The bank wrote down a historic BM$8.40 million ($1.23 billion) in 2021 which was significantly above the BM$1.99 million in 2020. The bank’s non-performing loan portfolio closed 2021 at BM$84.02 million, which was above the BM$71.07 million in 2018.

“With regards to the loan growth, things have been relatively flat so far as our ability to grow our loan portfolio. However, in alignment with what Bob [Septimus Blake] has just reported, we’re forecasting our loan balances to increase to approximately BM$800 million from approximately BM$650 million a year ago. This will significantly improve our asset quality ratios. The primary focus and attention is around infrastructure-related facilities and those relating to sovereigns. From a risk adjusted return on capital perspective, this would be particularly lucrative to the group,” stated chief executive officer of CBL Ian Truran at NCBFG’s investor briefing on Tuesday.

CBL earned BM$6.49 million ($947.07 million) in net profit for 2021 which is still far from the BM$8.44 million earned in 2019. CBL’s total assets decreased by one per cent to BM$1.34 billion ($208.71 billion), which was funded by BM$1.21 billion in total liabilities which included BM$1.19 billion in customer deposits. Shareholders equity was BM$136.46 million.

When asked about the company’s plan to deal with the non-performing loans (NPL) balance, Truran said, “With regards to the NPL looking at the nominal values, I am pleased to report that based on a year-on-year movement, our NPL’s have reduced from a high of BM$91 million to BM$71 million, a 22 per cent year on year improvement. It is my expectation and forecast that we’ll see further improvement to the tune of approximately of BM$55 million within forecast which would be a year on year improvement of BM$36 million.”

NCBFG earned $9.91 billion in consolidated net profit with $7.79 billion attributable to shareholders. The non-controlling interest (NCI) of NCBFG amounted to $2.11 billion. Guardian Holding Limited earned TT$179.38 million ($4.16 billion) with 61.77 per cent attributable to NCBFG which amounts to $2.57 billion and $1.59 billion in NCI. This means Clarien Group more than likely contributed $521.85 million to the group’s NCI for its second quarter.

“So, from an earnings impact, Bermuda is encountering a slow economic recovery, but with that said, we’re managing our portfolio from an interest income perspective well. We have seen a 10 per cent year on year increase in our net interest income and with rising interest rates, we expect to see a limited expansion so far as our loan and investment portfolio that should enhance earnings,” Truran said regarding the outlook for the Bermudan economy and the group’s future.