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The Unit Trust Corporation will close its Bureau de Charge business come August.

At the Unit Trust Corporation’s 2020 Annual General Meeting (AGM), the company’s executive director, Nigel Edwards said: “After careful analysis, we have decided to discontinue the operations of the Bureau de Change, effective 1st August 2020.”

The Bureau de Change, Edwards noted, was introduced in 1995, 25 years ago, as a way for unitholders to access foreign exchange, where its business is to purchase cash currency from members of the public and then that cash currency, could be sold back to other members of the public.

He indicated that the reality of the foreign exchange market for UTC has been that, there is very little supply of cash currency to be purchased and consequently, very little to make available to the public.

Edwards also highlighted, that unlike the commercial banks, UTC is not a primary dealer of foreign currency, and is, therefore, not in receipt of an allocation from the Central Bank of Trinidad and Tobago (CBTT). It’s supply of USD is entirely dependent on what we purchase from customers, and buy from other financial institutions.

Currently, UTC operates nine Bureau de Change from each Investment Centre location, but it represents less than one per cent of the corporation’s business. “Most importantly,” Edwards, said, “the Bureau de Change is not aligned to our core business function, which is, the creation of wealth for our unitholders.”

During a subsequent Q&A session which was streamed online, Edwards indicated that no employees would be impacted from this decision. He said that there are two UTC employees on average, per investment centre, who work within the Bureau de Change.

Edwards noted that those people, would be re-deployed into other areas. At the moment, the Executive Director indicated that the Bureau de Change does not require full time use of the employees, so they would be reassigned to functions that are more service oriented.

The UTC executive director said that the corporation has applied on multiple occasions for a foreign exchange dealers license, but was unsuccessful. Additionally, the closure of the Bureau de Change would not impact its US income funds, said Edwards.

For 2020, the UTC reported a loss of $45.8 million for Quarter 1 (Q1). Edwards said that the losses was made in the context of bearish financial markets. He noted that he US market fell by 20 per cent in the first quarter of 2020, against the bullish ten years of consecutive positive results while T&T’s stock market for Q1 2020, fell by some 11.5 per cent.

In Q1 of 2020, UTC also focused on reducing operating expenses and reduced expenses by $2 million from $70 million in 2019 to $68 million this year. It also increased its distribution to unitholders by $16 million in 2019, up from $249 million in 2018 to $265 million; and so far this year, it increased its distribution by $11 million from $43 million last year to $54 million in 2020. In 2019, the UTC’s Total Income grew by $1 billion from $0.3 billion in 2018 to $1.3 billion. Inclusive of all funds, UTC generated a total Net Income of $1.1 billion. In addition, UTC recorded an increase in Total Distributions to Unitholders of $16 million to $265 million from $249.3 million in 2018.

The corporation’s total assets grew by 3.9 per cent, from $22 billion in 2018 to $22.8 billion and it retained a significantly enhanced cash position of $1.2 billion from $2.1 billion in 2018 to $3.3 billion.

Edwards recalled that in 2019, UTC spoke about the potential for volatile earnings from one period to the next. This was driven primarily by the new accounting standard, IFRS 9, which required fund issuers to put changes in the fair value of securities through the statement of consolidated income.