The Unit Trust Corporation (UTC) will stop buying and selling foreign currencies by August, as the service is "not aligned with (the company's) core business," executive director Nigel Edwards said on Thursday. UTC's nine bureaux de change, which are located at its investment centres throughout the country, will be closed by August 1.
Edwards told viewers during the UTC's first virtual annual general meeting that since the organisation is not one of the registered licensed foreign exchange dealers under the Central Bank, it does not receive a mandatory allocation. All of its foreign exchange is earned either through trades at the bureaux or else bought from dealers. "The reality of the foreign exchange market for us is that there is very little supply and therefore little availability (for us)," he explained. The bureaux de change operations account for less than one per cent of the corporation's overall business, he added. The focus now will be on wealth creation for the corporation's 617,000 clients. The aim, Edwards said, will be to achieve the best results it can in 2020, despite the challenges in the local and international markets, brought on particularly by the covid19 pandemic. The AGM also marked the debut of new UTC chairman Gerry Brooks who said in his maiden speech that he hopes to "help shape a part of this great success story."
The UTC's outlook for 2020 was initially bright, riding on the momentum from 2019. The company’s net income for 2019 was $99.4 million – up from a $35 million loss in 2018. Then covid19 happened. In the first quarter of 2020, the net change in fair value of investment securities (now required to be reflected in the income statement according to IFRS 9) was down $508 million, as the US markets fell some 20 per cent and local markets, by 11 per cent. In 2019, for the same period, that value was $304 million. Net loss for the first quarter of 2020 was $46 million, compared to a profit of $38 million the same period last year. The company is, however, adamant that its investors should receive value and is striving to maintain a healthy distribution (dividend payment) rate. In 2018 total distributions were $250 million; in 2019 that went up to $265 million. And in the first quarter of 2020, despite making a loss, it increased distributions year on year by $10 million.